DAKSHIN GUJARAT VIJ COMPANY LTD v. RAMANBHAI MATHURBHAI TADVI

C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 8525 of 2025

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK

================================================================ Approved for Reporting Yes No ================================================================ DAKSHIN GUJARAT VIJ COMPANY LTD.

Versus

RAMANBHAI MATHURBHAI TADVI

================================================================ Appearance:

MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1 KRISHNAN M GHAVARIYA(8133) for the Respondent(s) No. 1 MS ASHLESHA M PATEL(6127) for the Respondent(s) No. 1 ================================================================ CORAM:HONOURABLE MR. JUSTICE HEMANT M.

PRACHCHHAK

Date : 03/03/2026

JUDGMENT

1. RULE returnable forthwith. Learned counsel Mr. Kris hnan Ghavariya, waives service of notice of Rule for and on behalf of the respondent-workman.

2. Present petition is $led by the petitioner - Daks hin Gujarat Vij Company Ltd. under Articles 226 & 227 of the Constitu tion of India read with the provisions of the Industrial Disputes Act, 1947 (hereinafter be referred to as “the Act”) challenging the judgment and award dated 01.01.2025 passed by the learned Presiding O8cer, Industrial Tribunal, Vadodara (hereinafter be referred to as “the Tribunal”) in Reference (I.T.) No. 14 of 2023 seeking following reliefs :

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C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 “(A) This Hon'ble Court may pleased to issue mandam us and/or nature of a a writ be of writ in the mandamus and/or any other appropriate writ, order or direction to quash and set aside the impugned Re ference Order dated 04.02.2023 at Annexure-J to the petition as also the impug ned award dated 01.01.2025 passed by learned Industrial Tribunal, Vadodara in Reference (I.T.) No.14 of 2023 at Annexure-A to the petition and further may be pleased to reject the Reference of the respondent in full;

(B) Pending the admission hearing and 4nal disposal of this petition, this Hon'ble Court may be pleased to stay the execution, implementation and operation of the impugned award dated 01.01.2025 passed by learned Industrial Tribunal, Vadodara in Reference (I.T.) No.14 of 2023 at Annexure- A;

(C) Any other and further relief or reliefs to which this Hon'ble Court deemed 4t, in the interest of justice; may kindly be granted;”

3. Brief facts giving rise to the present petition are that, the respondent was working as Surveyor in the Ankleshwar Rural Division O8ce of the petitioner. That, for the serious act of misconduct committed by the respondent, which amounts dishonesty , misappropriation to fraud, and cheating with the pe titioner, charge sheet was issued against him on 24.05.2012. That, t he respondent attained the age of superannuation on 27.06.2014 and accordingly, as per Service Regulation 72, the respondent was relie ved from service.

That, the inquiry was conducted after giving full o pportunity to the respondent and the inquiry o8cer submitted his $ndings. That, second show-cause notice was issued to the respondent and the inquiry report was supplied to the respondent. That , penalty order was issued, whereby the respondent was in@icted penalty of forfeiture of leave encashment and gratuity and therefore, the respondent preferred departmental appeal before the competent au thority challenging the said penalty order. After hearing th e respondent, the appeal of the respondent was dismissed and therefor e, the respondent approached this Court by way of $ling Special Civil Page 2 of 9 C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 Application No.6835 of 2019 against the order of dis missal of the appeal, whereby, this Court dismissed the petition preferred by the respondent vide order dated 03.02.2022. That therea fter, the respondent approached Commissioner of Labour by writ ten application. That, the conciliation o8cer submitted his failure report and accordingly, the Reference was made to the learn ed Industrial Tribunal, Vadodara City at Bharuch, whereby, the lea rned Tribunal without passing Part I award whereby validity of the inquiry was required to be decided, straightway, passed the impugned award dated 01.01.2025, whereby the inquiry against the r espondent has been held to be illegal and the petitioner is thus directed to pay leave encashment and gratuity with 68 interest from 01.07.2014.

4. Being aggrieved and dissatis$ed with the impugned award dated 01.01.2025 passed by the learned Presiding O8c er, Industrial Tribunal, Vadodara in Reference (I.T.) No. 14 of 202 3, the petitioner has preferred this petition.

5. Heard Mr. Dipak R. Dave, learned counsel appearing for the petitioner-Company and Mr. Krishnan Ghavariya, learned counsel appearing for the respondent-workman.

6. Learned counsel Mr. Dave has submitted that the i mpugned judgment and award passed by the Tribunal is illegal, unjust, arbitrary, erroneous and contrary to the facts and evidence on record and the provisions of the Act and therefore, the same is required to be quashed and set aside. He has submitted that the Tribunal has committed a serious error of law and on facts while allowing the reference of the respondent-workman and directing t he petitioner to pay leave encashment and gratuity with 6% interest. He has further Page 3 of 9 C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 submitted that in the earlier round of litigation, t he order passed by the petitioner was challenged by the respondent bef ore this Court by way of preferring Special Civil Application No.6835 of 2019 challenging the powers of the petitioner to withhol d the amount of leave encashment and gratuity, wherein, this Court a fter considering the submissions and after hearing all the concerned parties, has dismissed the petition observing that the respondent-workman having alternative e8cacious remedy under the provisions of the I.D. Act can challenge the order of withholding. He has submitte d that this Court has also observed that under the provisions of the Service Regulation No. 72 of the petitioner-Company, the petitioner has powers to withhold and forfeit the amount of leave encashment and gratuity, however, while dealing with the submissions, the Tribunal has illegally interpreted the order passed by the Co-ordinate Benc h as referred in para-7 of the impugned award, the issue no.1 but, th e Tribunal has not discussed about the directions and the powers o f the petitioner, which are discussed by the Co-ordinate Bench in par as-17 and 18 and therefore, the impugned award passed by the Tribunal is illegal, erroneous and unjust and thereby, the Tribunal has exceeded its jurisdiction which is not vested in it while passing the impugned award. He has further submitted that the Tribunal on ce came to the conclusion that the inquiry was bad and it was decl ared illegal, then the course of action should be that the Tribunal ought to have granted permission to the petitioner to lead evidence and pr ove the charges levelled against the respondent-workman as if, the r eference was to be considered under Section 10 of the Act, instead o f that, without giving any opportunity and without even considering the settled legal principles enunciated by the Hon’ble Apex Court way back in the year 1965 in case of Motipur Sugar Factory (Private) Limited vs.

Rikhdeo Prasad, reported in AIR 1965 SC 1803 and subsequently, Page 4 of 9 C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 which is reiterated by the Hon’ble Apex Court in a number of decisions in case of Workmen Of Indian Express Newspaper Private Limited vs. Management Of Indian Express Newspaper Private Limited , reported in 1969 (1) SCC 228 the Tribunal has passed the impugned award, which is illegal, erroneo us and unjust, and under such circumstances, learned counsel Mr. Dav e has urged that the present petition be allowed and the matter be remanded back to the concerned authority for deciding the issue afresh.

7. In the order dated 30.06.2025, this Court has rec orded that in view of the observations made by the Hon’ble Apex Cou rt in case of Cooper Engineering Limited vs. Shri P.P. Mundhe , reported in AIR 1975 SC 1900, the preliminary issue has to be decided $rst with regard to the legality and validity of the inquiry and thereafter, the Tribunal ought to have proceeded further to decide the issue and in view of the same, this Court has issued notice. Today, learned counsel Mr. Ghavariya, appearing for the respondent-workman w as unable to give any answer on this legal aspect.

8. I have heard the learned counsel appearing for th e respective parties and perused the material placed on record. I have also gone through the impugned judgment and award passed by the Tribunal.

The disputed facts involved in the present case is that as to whether the Tribunal was right and justi$ed in passing the $nal award without giving proper opportunity to the petitioner to lead evidence once the Tribunal has held that the inquiry against the resp ondent-workman was illegal and null and void and without aFording any opportunity to lead evidence, can the Tribunal pass the $nal award in favour of the respondent-workman or not; whether the impugned award passed by the Tribunal is against the settled legal principle s or not; whether the Page 5 of 9 C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 Tribunal was justi$ed in passing the $nal award and thereby directing the petitioner thought he subject matter was alread y decided by the Co-ordinate Bench of this Court or not.

9. It transpires from the record that the respondent -workman was facing serious charges of moral turpitude and for t hat, inquiry was held by the petitioner under the Service Regulation No.72 of the petitioner-Company and in the proceedings before thi s Court $led by the respondent-workman being Special Civil Applicatio n No. 6835 of 2019, the Co-ordinate Bench of this Court, while de aling with the powers of the petitioner-Company, has observed in pa ras-17 and 18 thus :

“17. As observed hereinabove, the Service Regulation No.72 of the respondent-Company permits the forfeiture of the gr atuity and terminal bene4ts after the retirement. The Supreme Court has held that it is not only for pecuniary loss caused the proceedings can conti nue after the date of superannuation, but an employee can be proceeded ag ainst for a grave misconduct. The Apex Court has expressed disapprova l of the interpretation of Section 4(6) of the Act in the ma nner as contended by the petitioner, which suggests that “in case after superannuation of the employee, there cannot be any dismissal i.e. termination of service as contemplated in Section 4(6) of the Act, and hence, there can be no recovery of pecuniary loss caused by employee or fo rfeiture of gratuity wholly or partially as that can only to be done in the event of termination of services on charges found established.”

18. Thus, a conjoint reading of the observations made by the Apex Court and Service Regulation No.72 justi4es the action of the respondent authorities in forfeiting the amount of leave encashment and gratuity of the petitioner as it empowers the respondent-Company to forfeit the same in case of proved misconduct against the employee, after holding the departmental proceedings. There is no requirement o f passing actual order of termination since the Apex Court has observed that such order of termination of service of the employee could not be passed after retirement of the employee. Thus, merely because the petitione r has reached the age of superannuation and no termination order is passe d; the same will not dilute the powers of the respondent-Company of forf eiting the amount of gratuity and leave encashment under its Regulation.”

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C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 9.1 In view of above, once this Court has held that the petitioner having powers under Service Regulation No.72 of the petitioner- Company to withhold / forfeit the amount of leave enc ashment and gratuity and that order became $nal since it was not further challenged by the respondent herein, however, the T ribunal, as if, sitting in appeal over the said judgment, held that the petitioner has no powers to withhold the amount of leave encashment and gratuity as the Tribunal has declared the inquiry legal and void ab initio but, at the same time, the Tribunal has failed to consider th e ratio laid down by the Hon’ble Apex Court in case of Cooper Engineering Limited (Supra), wherein, the Hon'ble Apex Court has observed that the preliminary issue challenged to dismissal or re-agit ation at the 4nal hearing on merits, absence of inquiry or defective i nquiry, once there is a question of violation of the principles of nat ural justice, Court ought to have decided as a preliminary issue and tha t preliminary issue is required to be decided 4rst and once that issue is decided and the employer choose not to lead any evidence, the e mployer would not agitate again but, herein the present case, without aFording tha t opportunity to lead the evidence, the Tribunal has passed the $nal order, without following the principles laid down b y the Hon’ble Apex Court in paras-21 to 23, which was subsequently fol lowed in case of Panchmahal Steel Limited vs. Ranjitsinh Udaysing Parmar (Deceased) & Ors. , reported in [2024] LawSuit (Guj) 616 the observations made in para-9.

9.2 Subsequently, the Hon’ble Apex Court in case of Karnataka State Road Transport Corporation vs. Lakshmidev Amma (Smt.) and Another, reported in [2001] 5 SCC 433, more particularly the observations made in paras-8 to 24 , 31 and 45. The relevant observations made in para-45 is reproduced hereunder :

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C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 “45. It is consistently held and accepted that strict rules of evidence are not applicable to the proceedings before labour court / tribunal but essentially the rules of natural justice are to be observed in such proceedings. Labour courts / tribunal have power to call for any eviden ce at any stage of the proceedings if the facts and circumstances of the case demand the same to meet the ends of justice in a given situation.”

9.3 So far as the direction issued by the Tribunal w ith regard to release of the amount of leave encashment and gratuity are concerned, that amount is already forfeited by the r espondent and that was not challenged further by the respondent a nd therefore, it is not open for the Tribunal to pass the order with re gard to release of the amount towards leave encashment and gratuity. The refore, in view of above referred decisions and the ratio laid down by the Hon’ble Apex Court, I am of the opinion that the impu gned award passed by the Tribunal is required to be quashed an d set aside and the matter is required to be remanded back to the Tri bunal for fresh consideration, as the petitioner has not give up his right to lead evidence and therefore, without giving an opportuni ty to the petitioner to lead evidence to prove the correctnes s and legality of the inquiry, the Tribunal cannot pass the $nal orde r as laid down by the Hon’ble Apex Court.

10. In the result, the present petition is partly al lowed. The impugned judgment and award dated 01.01.2025 passed by the learned Presiding O8cer, Industrial Tribunal, Vadodar a in Reference (I.T.) No. 14 of 2023 is hereby quashed and set asi de. The matter is remanded back to the Tribunal for deciding the issu e afresh, after giving proper opportunity to the petitioner to lead evidence. It is open for the parties to raise all the contentions availa ble in the eye of law and the same shall be decided by the Tribunal in accordance with law, Page 8 of 9 C/SCA/8525/2025 JUDGMENT DATED: 03/03/2026 after aFording proper opportunity to all the concer ned parties, as expeditiously as possible, preferably within a peri od of six months from the date of receipt of writ of this Order. Rule is made absolute to the aforesaid extent. There shall be no order as to costs.

Direct service is permitted.

(HEMANT M. PRACHCHHAK,J)

Dolly

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Original copy of this order has been signed by the Hon'ble Judge.

Digitally signed by: DOLLYBEN CHETANBHAI VADUKAR(HC01392), PRIVATE SECRETARY, at High Court of Gujarat on 09/03/2026 17:45:25