IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated 09..7..2008 Coram: The Hon'ble Mr. Justice K.CHANDRU W.P. Nos. 746 and 747 of 1999 The Management of North Arcot District Co-operative Central Bank Ltd. Vellore .. Petitioner in both W.Ps. vs. 1. The Presiding Officer Labour Court Vellore 2. R. Jyothiramalingam .. Respondent in W.P. No. 746/99
3. M. Munusamy .. Respondent in W.P. No. 747/99
Petitions filed under Article 226 of the Constitution of India seeking for issuance of writ of Certiorari calling for the records of the first respondent in awards dated 20.3.1998 and made in I.D. Nos. 840 of 1993 and 7 of 1994 respectively and quash the same.
For Petitioner : Ms. Narmada Sampath
for Mr. R. Parthiban For R2 in W.P. No. 746/99: Mr. Ajay Khose
For R2 in W.P. No.747/99 : Mr. J. Saravanavel
C O M M O N O R D E R
Both the writ petitions have been filed by the Management of the North Arcot District Co-operative Central Bank Ltd., Vellore. W.P. No. 746 of 1999 is filed challenging the Award dated 20.3.1998 passed by the first respondent Labour Court in I.D. No. 840 of 1993. By the aforesaid Award, the Labour Court directed reinstatement of the second respondent therein, with full backwages, continuity of service and other attendant benefits. In W.P. No. 747 of 1999, the challenge is to the Award dated 20.3.1998 made in I.D. No. 7 of 1994 granting the benefit of reinstatement with backwages, continuity of service and other attendant benefits to the second respondent.
2. Pending the writ petitions, in W.P. No. 746 of 1999, interim stay was granted on 22.01.1999 and it was continued until further orders by an order dated 04.3.1999 and further modified by an order dated 16.10.2000. In W.P. No. 747 of 1999, this Court, by an order dated 04.3.1999, granted interim stay. Subsequently, on an application taken by the workman, wages at the rate of Rs. 2800/- per month under Section 17B of the Industrial Disputes Act, 1947 [for short, ‘I.D. Act’] was directed to be made and also the Management was directed to deposit Rs.3 lakhs to the credit of I.D. No. 840 of 1993. On such deposit, the second respondent in that case was directed to withdraw Rs. 1 lakh and the balance amount of Rs. 2 lakhs was directed to be reinvested for a period of four years and quarterly interest was also directed to be paid.
3. In W.P. No. 746 of 1999, the second respondent was working as a Cashier and the cash chest was under double lock system with one key being retained by the second respondent and the other key with the Branch Manager and unless both keys are used, the chest cannot be opened. It was submitted that without the co-operation and collusion between the Cashier and the Manager, the safe room and the respective cash chests cannot be handled.
4. During May 1989, the second respondent was the Cashier for the second shift. But on that day, he worked for both the shifts since the other Cashier had gone on leave. On 20.5.1989 which happened to be a Saturday, he handled the cash chest of both the shifts and also the keys including that of the Manager. The then Branch Manager was in the habit of coming late to the branch and he always used to attest the signature of the staff without verifying the same and he left the place even before the closing of the shift at 4.00 pm. Since Sunday happened to be a holiday, on Monday, i.e., on 22.5.1989, when the Bank was opened, it was found though it was properly sealed, but a sum of Rs. 4.35 lakhs was found to be short in the cash chest. Thereafter, a departmental enquiry was held against the second respondent, the Branch manager and the peon and in the separate domestic enquiries held, the second respondent was dismissed from service. As against the same, the second respondent raised an industrial dispute before the Labour Court and it was taken on file as I.D. No. 840 of 1993.
5. A counter statement has been filed seeking permission to substantiate the charges in case the Labour Court holds that the enquiry conducted by the Management was vitiated.
6. Before the Labour Court, in I.D. No. 840 of 1993, entire enquiry proceedings were filed and marked as Exs. M1 to M.7. The Labour Court, without framing an issue as to whether the enquiry was fair and proper, held that the charges were not proved. In paragraph 6, it held that the charge of theft was not proved by supporting evidence both oral and documentary. In paragraph 7, the Labour Court also held that mere production of document is inconsistent and Exs. M.1 to M.7 are nothing but documents relating to domestic enquiry. In that view of the matter, it granted relief to the second respondent.
7. In W.P. No. 747 of 1999, the second respondent was the Branch Manager and he was dismissed for the theft in the
cash chest and a criminal case was also filed against him. He raised an industrial dispute, which was taken on file as I.D. No. 7 of 1994. In the statement dated 06.6.1989 given to the Bank, he had admitted his negligence of not maintaining the records properly.
8. In the counter statement filed in I.D. No. 7 of 1994, a specific stand was taken by the Management that he being the Manager of the Bazaar Branch, Vellore, is not a “workman” within the meaning of Section 2(j) of the I.D. Act and, therefore, the industrial dispute is not maintainable. In paragraph 12 of the counter, an opportunity was also sought for adducing fresh evidence and it reads as follows:-
“The respondent submits that by way of abundant caution that if for any reason, this Hon’ble court finds that the enquiry conducted against the petitioner was vitiated in any manner or in any detail, the respondent craves leave to adduce evidence afresh and examine all witnesses afresh to prove the charges and substantiate and justify the punishment imposed on the petitioner.”
9. Before the Labour Court, in I.D. No. 7 of 1994, 13 documents were filed on the side of the second respondent which were marked as Exs. W.1 to W.13 and on the side of the Management, 10 documents were filed and they were marked as Exs. M.1 to M.10. They were marked through the evidence of M.W.1 Venkatesan. The Labour Court in paragraph 8 of the Award held that mere production of document is inconsistent and, therefore, the second respondent is not responsible for the loss. In that view of the matter, it had granted the relief to him as noted already.
10. Mrs. Narmada Sampath, learned counsel for the petitioner placed reliance upon the judgment of a Constitution Bench of the Supreme Court in Karnataka State Road Transport Corporation v. Lakshmidevamma [2001 (5) SCC 433] wherein it was held that once an opportunity is sought for to lead fresh evidence, it should be furnished to the Management. She relied upon the following passages found in paragraphs 18 to 20 of the said judgment:-
Para 18: “There is one other reason why we should accept the procedure laid down by this Court in Shambhu Nath Goyal case. It is to be noted that this judgment was delivered on 27-9-1983. It has taken note of almost all the earlier judgments of this Court and has laid down the procedure for exercising the right of leading evidence by the management which we have held is neither oppressive nor contrary to the object and scheme of the Act. This judgment having held the field for nearly 18 years, in our opinion, the doctrine of stare decisis requires us to approve the said judgment to see that a long-standing decision is not unsettled without a strong cause.
Para 19: For the reasons stated above, we are of the opinion that the law laid down by this Court in the case of Shambhu Nath Goyal v. Bank of Baroda is the correct law on the point.
Para 20: In the present case, the appellant employer did not seek permission to lead evidence until after the Labour Court had held that its domestic enquiry was vitiated. Applying the aforestated principles to these facts, we are of the opinion that the High Court has rightly dismissed the writ petition of the appellant, hence, this appeal has to fail. The same is dismissed with costs.”
11. Learned counsel also submitted that the Labour Court, without deciding the validity of the enquiry, held that the enquiry was not fair and proper. This approach of the labour Court is completely erroneous and it is incumbent upon the Labour Court to frame a preliminary issue with reference to the enquiry conducted by the Management.
12. The Supreme Court vide its judgment in Union Bank of India v. Tamil Nadu Banks Deposit Collectors Union and another [2008 AIR SCW 642] reviewed the previous case laws relating to Section 11-A of the I.D. Act and observed in paragraphs 8 to 10 as follows:-
Para 8: “In Workmen of Motipur Sugar Factory (Private) Limited v. Motipur Sugar Factory [(1965) 3 SCR 588] it was observed as follows:
“It is now well-settled by a number of decisions of this Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it. In such a case the employer would not have the benefit which he had in cases where domestic inquiries have been held. The entire matter would be open before the tribunal which will have jurisdiction not only to go into the limited questions open to a tribunal where domestic inquiry has been properly held (see Indian Iron & Steel Co. v. Their workmen [[1958] S.C.R. 667] but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or discharge was justified. We may in this connection refer to M/s Sasa Musa Sugar Works (P) Limited v. Shobrati Khan [[1959] Supp. S.C.R. 836], Phulbari Tea Estate v. Its Workmen and Punjab National Bank Limited v. Its Workmen. There three cases were further considered by this court in Bharat Sugar Mills Limited. v. Shri Jai Singh, and reference was also made to the decision of the Labour Appellate Tribunal in Shri Ram Swarath Sinha v. Belaund Sugar Co. [[1954] L.A.C. 697]. It was pointed out that “the import effect of commission to hold an enquiry was merely this : that the tribunal would not have to consider only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have really been made out”. It is true that three of these cases, except Phulbari Tea Estate’s case were on applications under Section 33 of the Industrial Disputes Act, 1947. But in principle we see no difference whether the matter comes before the tribunal for approval under Section 33 or on a reference under Section 10 of the Industrial Disputes Act, 1947. In either case if the enquiry is defective or if no enquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that its order of dismissal or discharge was proper. Phulbari Tea Estate’s was on a reference under s. 10, and the same principle was applied there also, the only difference being that in that case, there was an enquiry though it was defective. A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper.
Para 9: Again in Delhi Cloth and General Mills Co.Vs. Ludh Budh Singh [1973(3) SCR 29] this Court held as follows:
“When a domestic enquiry has been held by the management and the management relies on the same, it is open to the latter to request the Tribunal to try the validity of the domestic enquiry as a preliminary issue and also ask for an opportunity to adduce evidence before the Tribunal, if the finding on the preliminary issue is against the management. However elaborate and cumbersome the procedure may be, under such circumstances, it is open to the Tribunal to deal, in the first instance, as a preliminary issue the validity of the domestic enquiry. If its finding on the preliminary issue is in favour of the management, then no additional evidence need be cited by the management. But. if the finding on the preliminary issue is against the management, the Tribunal will have to give the employer an opportunity to cite additional evidence and also give a similar opportunity to the employee to lead evidence contra, as the request to adduce evidence had been made by the management to the Tribunal during the course of the proceedings and before the trial has come to an end. When the preliminary issue is decided against the management and the latter leads evidence before the Tribunal, the position, under such circumstances, will be, that the management is deprived of the benefit of having the finding of the domestic Tribunal being accepted as prima facie proof of the alleged misconduct. On the other hand, the management will have to prove, by adducing proper evidence, that the workman is guilty of misconduct and that the action taken by it is proper. It will not be just and fair either to the management or to the workman that the Tribunal should refuse to take evidence and thereby as the management to make a further application, after holding a proper enquiry, and deprive the workman of the benefit of the Tribunal itself being satisfied, on evidence adduced before it, that he was or was not guilty of the alleged misconduct.”
Para 10: In Workmen of Fire Stone Tyre Rubber Company v. Management [1973(1)LLJ 78] it was inter alia held as follows:
“4. Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.
(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.
(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective.
(7) It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.
(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving an opportunity to an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct.
(9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except in cases where the punishment is so harsh as to suggest victimization.”
[Emphasis added]
13. Mrs. Narmada Sampath also submitted that in W.P. No. 747 of 1999, a further issue has already been raised regarding the status of the second respondent as to whether he is a workman or not.
14. In this context, a reference was made to Vallamalai Estate, Valparai v. Workers of Vallamalai Estate, Valparai and another [1973 (1) L.L.J. 273]. In that case,
this Court held that if a joint reference is made under Section 10(2) of the I.D. Act by consent, even then the Labour Court will have to decide whether a particular person is a ‘workman’, under the I.D. Act so as to have jurisdiction over the said issue. The following passage found in paragraph 4 of the said judgment may be usefully extracted:
Para 4: “We are clear, therefore, that the presiding officer’s jurisdiction being entire basically dependant on an existing or an apprehended industrial dispute, the appellant was not estopped in this case from contending lack of jurisdiction in the presiding officer notwithstanding that the reference was made on a joint application under S. 10(2) of the Industrial Disputes Act.”
15. In this case, the Labour Court had committed a jurisdictional error by not deciding the issue relating to validity of the domestic enquiry as well as the status of the second respondent in W.P. No. 747 of 1999.
16. In the light of the above, both the writ petitions will stand allowed and the respective Awards will stand set aside. The matter is remitted to the Labour Court for fresh disposal. However, there will be no order as to costs. The Labour Court shall dispose of the same within a period of twelve weeks from the date of receipt of a copy of this order after giving opportunity to both sides. The Labour Court shall first decide the validity of the enquiry and in case it decides that the enquiry is invalid, it shall give opportunity to both sides to lead evidence to substantiate the charge.
17. In addition to it, in I.D. No. 7 of 1994, the Labour Court will decide whether the second respondent is a workman within the meaning of Section 2(s) of the I.D. Act. In case, it decides that he is not a workman, the Industrial Dispute will have to be necessarily rejected without going into other issues.
18. Since the Management had deposited amounts in I.D. No. 840 of 1993 pending W.P. No. 746 of 1999, the same shall be continued to be in deposit. Depending upon the outcome of the Industrial Dispute, the amount can be withdrawn by the party which succeeds in the Industrial Dispute.
09..7..2008
Index : Yes
Internet : Yes
gri
To
The Presiding Officer
Labour Court
Vellore
Note to Registry:-
Dispatch the Labour Court
records in a week’s time.
K.CHANDRU, J.
gri
Pre-Delivery Common Order in
W.P. Nos. 746 & 747 of 1999
Delivered on
09..7..2008