A) ABSTRACT / HEADNOTE

This Supreme Court judgment in Martin Burn Ltd. v. R. N. Banerjee (1958 SCR 514) is a landmark decision elucidating the powers and jurisdiction of the Labour Appellate Tribunal under Section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950. The central issue revolved around whether the employer, Martin Burn Ltd., could discharge an employee, R. N. Banerjee, for unsatisfactory conduct without a formal inquiry and whether the Labour Appellate Tribunal had jurisdiction to set aside its ex parte order granting such discharge permission. The Court extensively examined the procedural rights of employees and the standard required to establish a prima facie case justifying discharge under industrial jurisprudence. It also reaffirmed that tribunals must act judiciously and are not to substitute the employer’s judgment unless mala fides, victimisation, or unfair practices are evident. The Tribunal’s decision to refuse the employer’s discharge application stood validated due to the lack of a formal inquiry and insufficient proof. The judgment remains a cornerstone in defining the delicate balance between employer’s disciplinary powers and workers’ rights under industrial law.

Keywords: Industrial Disputes, Labour Appellate Tribunal, Discharge, Prima Facie Case, Ex parte Order, Section 22, Jurisdiction, Procedural Fairness, Termination, Employment Law

B) CASE DETAILS

i) Judgement Cause Title: Martin Burn Ltd. v. R. N. Banerjee
ii) Case Number: Civil Appeal No. 92 of 1957
iii) Judgement Date: 20th September 1957
iv) Court: Supreme Court of India
v) Quorum: Justice Bhagwati, Justice S.K. Das, and Justice Gajendragadkar
vi) Author: Justice N.H. Bhagwati
vii) Citation: AIR 1958 SC 514; 1958 SCR 514
viii) Legal Provisions Involved:

• Section 22, Industrial Disputes (Appellate Tribunal) Act, 1950

• Sections 9(1) and 9(10) of the same Act

• Order 41 Rule 21, Order 9 Rule 13, Order 47 Rule 1, and Section 151 of the Code of Civil Procedure, 1908
  ix) Judgments Overruled: None
  x) Law Subjects: Labour and Industrial Law, Administrative Law, Civil Procedure

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This appeal emerged from a protracted disciplinary issue involving a clerical employee of Martin Burn Ltd. The employer alleged repeated acts of negligence, disobedience, and poor conduct by the employee R. N. Banerjee. Due to his unsatisfactory conduct, the employer sought to terminate his services under Section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950, which mandates permission from the Labour Appellate Tribunal during the pendency of industrial disputes. Initially, the Tribunal permitted the termination ex parte due to non-appearance of the respondent. However, the employee successfully applied for a review, and upon a full hearing, the Tribunal found no prima facie case for discharge. The employer’s appeal to the Supreme Court raised substantial questions about the Tribunal’s jurisdiction to review its orders and its role in assessing evidence in such applications. This judgment became critical in defining the contours of tribunal powers and principles of natural justice in industrial adjudication.

D) FACTS OF THE CASE

The respondent, appointed in 1945, was employed as a pay-clerk by the appellant. From 1949 onwards, his performance deteriorated. Repeated oral and written warnings, including multiple reports by the Chief Cashier and department heads, highlighted negligence, absenteeism, insubordination, and general misconduct. A formal charge-sheet was initially served in 1949, followed by a suspension and subsequent departmental interview. The employer provided repeated chances for improvement, including transferring him to another department. However, issues persisted through 1951–1954, including chatter in office, sleeping on duty, and disobedience. The company issued final warnings and stopped his annual increment. Eventually, on 10th May 1954, it offered two choices: retrenchment compensation or reference to the Labour Tribunal for permission to terminate. On refusal, the employer approached the Fifth Industrial Tribunal, but the tribunal became functus officio. Subsequently, the employer filed an application under Section 22 before the Labour Appellate Tribunal. The application was initially granted ex parte but later reviewed and dismissed upon a full hearing, as the Tribunal found no prima facie case for discharge.

E) LEGAL ISSUES RAISED

i) Whether the Labour Appellate Tribunal had the jurisdiction to set aside its ex parte order and restore the application under Section 22.
ii) Whether the Tribunal exceeded its jurisdiction under Section 22 by evaluating evidence minutely and concluding that a prima facie case for termination was not made out.
iii) Whether the lack of formal enquiry and charge-sheet invalidated the employer’s claim.
iv) Whether the discharge was merely an administrative decision or a punitive action necessitating procedural safeguards.

F) PETITIONER/APPELLANT’S ARGUMENTS

i) The counsels for the petitioner/appellant submitted that the Labour Appellate Tribunal had no jurisdiction to review or set aside its own ex parte order under any provision of the Industrial Disputes (Appellate Tribunal) Act, 1950. They contended that once the Tribunal had granted permission ex parte on 14th October 1955, it became functus officio. Moreover, they argued that the Tribunal applied an unjustified standard of proof and substituted its own judgment in place of the employer’s satisfaction regarding the respondent’s misconduct. The appellant also claimed that under Section 22, the Tribunal was only expected to check for mala fides or victimisation—not re-evaluate facts in detail. The employer stressed that ample opportunities had been given, and the final decision was a necessary administrative measure, not vindictive or punitive in nature. They cited Atherton West & Co. Ltd. v. Suti Mill Mazdoor Union (1953 SCR 780), The Automobile Products of India Ltd. v. Rukmaji Bala (1955 SCR 1241), and Lakshmi Devi Sugar Mills v. Pt. Ram Sarup (1956 SCR 916) to substantiate their limited burden under Section 22.

G) RESPONDENT’S ARGUMENTS

i) The counsels for the respondent submitted that the Tribunal rightly reviewed its order under Order 41 Rule 21 CPC, as the respondent had not been served correctly and was prevented by sufficient cause. They further argued that no formal enquiry or due process preceded the discharge, and hence, the action violated principles of natural justice. The employee had no real opportunity to rebut allegations, and the employer’s conduct amounted to unfair labour practice. The respondent emphasized that without a proper charge-sheet or hearing, even repeated administrative warnings could not form a basis for a lawful discharge. The Tribunal, therefore, rightly scrutinized the evidence to ensure that the employer had not acted arbitrarily.

H) RELATED LEGAL PROVISIONS

i) Section 22, Industrial Disputes (Appellate Tribunal) Act, 1950: Restricts changes to service conditions or termination without Tribunal’s permission during the pendency of proceedings.
ii) Sections 9(1) and 9(10): Confer powers akin to civil courts and enable procedural regulation and application of CPC provisions.
iii) Order 41 Rule 21 CPC: Allows restoration of appeals heard ex parte if respondent shows sufficient cause.
iv) Order 9 Rule 13, Order 47 Rule 1, Section 151 CPC: Permit setting aside ex parte decrees, review, and inherent powers respectively.

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Supreme Court held that the Tribunal had jurisdiction under Sections 9(1) and 9(10) of the Act to set aside its own ex parte orders by invoking Order 41 Rule 21 CPC and inherent powers akin to Section 151 CPC. It ruled that a prima facie case requires a threshold level of evidence sufficient to justify intervention in an ongoing service. The Tribunal is not to decide merits but must assess if termination stems from mala fide, unfair practice, or victimisation. Since the employer neither held a formal enquiry nor produced credible evidence of employee misconduct before the Tribunal, the claim failed. The Tribunal rightly concluded that a prima facie case had not been made out.

b. OBITER DICTA

i) The Court noted that while employers have the liberty to administer disciplinary control, they cannot sidestep due process. A prima facie case should be more than administrative dissatisfaction—it must be substantiated if fairness is to be upheld. An absence of due process invites judicial scrutiny even under ostensibly administrative decisions.

c. GUIDELINES 

• The Labour Appellate Tribunal can invoke CPC provisions where not inconsistent with the Act.

• Even in non-penal discharge cases, natural justice must be upheld.

• An ex parte order is not conclusive and may be set aside upon sufficient cause.

• Employer’s burden is limited but cannot be arbitrary.

• Tribunal must verify the absence of mala fides, victimisation, or unfair labour practices.

J) REFERENCES

a. Important Cases Referred
i) Atherton West & Co. Ltd. v. Suti Mill Mazdoor Union, (1953) SCR 780
ii) The Automobile Products of India Ltd. v. Rukmaji Bala, (1955) 1 SCR 1241
iii) Lakshmi Devi Sugar Mills v. Pt. Ram Sarup, (1956) SCR 916
iv) Buckingham and Carnatic Co. Ltd., (1952) LAC 490
v) Burmah Shell Oil Storage Case, (1953) LAC 522
vi) New Union Mills Ltd. Case, (1954) LAC 252

b. Important Statutes Referred
i) Industrial Disputes (Appellate Tribunal) Act, 1950
ii) Code of Civil Procedure, 1908
iii) Industrial Disputes Act, 1947