BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 27/01/2011 CORAM THE HONOURABLE MR.JUSTICE M.VENUGOPAL W.P(MD)No.9607 of 2005 The Management, A 876, Cumbum Urban Co-operative Society, Nehruji Street, Cumbum, Theni District - 625 516. ... Petitioner Vs. 1.The Presiding Officer, Labour Court, District Court Buildings, Melur Road, Madurai - 625 020. 2.M.Dhinakaran ... Respondents Prayer Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari to call for the records relating to the impugned order of the first respondent in his file I.D.No.159/97 and quash the order dated 27.10.2004. !For Petitioner ... Mr.M.Seenivasagam ^For Respondents ... Mr.T.Ravichandran for R.2 R1 - Court. * * * * * :ORDER
The petitioner has filed this writ petition seeking a Writ of Certiorari
to call for the records relating to the impugned order of the first respondent
in his file I.D.No.159/97 and quash the order dated 27.10.2004.
2. The petitioner’s/Society’s object is to extend the financial assistance
to its members at their need. They also grant jewel loan by means of mortgage
of the jewels. For the maintenance of stock and accountance, a set of employees
has been allotted with specific duties and responsibilities. The procedure for
receipts and issues are backed by supporting vouchers, etc.
3. The case of the petitioner/Society is that the second
respondent/employee has been serving as a clerk in the petitioner/Society. He
has been assigned with the pledged jewels on joint custody with the Secretary.
As per the procedure, on receipt of the cash for redemption of jewels, the clerk
has to make a note of the receipt in the jewel loan ledger with the help of the
Secretary by using the other key after satisfying that the entries therein are
tallying with each other. The second respondent/employee as a custodian of the
jewels has equal responsibility to look into the transactions carefully. It is
impossible to do any mischief without the knowledge or connivance of the second
respondent/employee. The Special Officer of the petitioner/Society on
27.12.1995, has verified the accounts and stocks of jewels and found that 33
items of jewels have not been in the stock. Whereas there is no entry in the
respective books of accounts about the clearing of the loans.
4. It is the case of the petitioner/Society that there is no possibility
for the jewels to cross the door without the knowledge of the second
respondent/employee. However, he has not explained in detail as to the release
of the jewels when accounts have not been closed. Thus, his connivance with the
Secretary is a open secret parting with those jewels under pledge.
5. The learned Counsel for the petitioner/Society submits that
Rs.3,65,761.65 have been still outstanding and the petitioner/Society has
incurred a heavy loss. Also, it is found that Rs.1,400/- on 10.08.1994 has not
been brought to the account of the Society.
6. The second respondent/employee has been suspended followed by a detail
charge memo dated 21.03.1996 and he has been directed to submit his explanation
within a week. He acknowledged the charge memo on 22.03.1996 and sent his
explanation dated 10.04.1996 which has been found to be unsatisfactory and a
domestic enquiry has been conducted against the second respondent/employee and
Thiru.C.G.Pethanaraj, Advocate, has been appointed as Enquiry Officer. The
second respondent/employee, on 27.07.1996 attended the enquiry and pleaded
guilty unconditionally. However, to provide adequate opportunity to him to
defend the charges, the Enquiry Officer decided to proceed with the enquiry on
24.09.1996. The second respondent/employee again admitted the charges by his
statement with supportive documents. When he has been given an opportunity to
cross-examine the Management witness, K.Paramasivam, he reiterated once again
that he admitted his guilt and need not cross-examine the witness. Therefore,
the enquiry has been concluded.
7. The Enquiry Officer submitted his finding dated 07.12.1996 holding that
all the charges levelled against the petitioner mentioned in the charge memo
have been proved beyond doubts and the charges levelled against the second
respondent/employee are as follows:
“(a) That he failed to make necessary entries in the records of the
society for the receipt of Rs.3,65,761-65/= towards redemption of jewel loans,
released the pledged jewels from custody, thereby, he connived with the
secretary in misappropriation of those amount;
(b) That he, by suppressing the above misdeeds from the knowledge of the
Special Officer, he derelict from his duties and responsibilities;
(c) That he, failed to transact the receipt of Rs.1,400/- on 10.08.1994,
reduced the cash balance, thereby, helped the secretary to commit
misappropriation of the said amount;
(d) That he, by his willful acts and omissions undermined the morale and
discipline of the society;
(e) That, by his above commissions and omissions, the management lost
confidence that reposed on him.”
8. The petitioner/Society decided to agree with the finding of the Enquiry
Officer and in view of the proved serious misconducts of the second
respondent/employee, the petitioner/Society resolved to dismiss him. A second
show cause notice dated 10.12.1996 proposing the punishment of dismissal along
with the copy of the Enquiry Officer’s finding have been sent to the second
respondent/employee to offer his explanation. The second respondent/employee by
his reply dated 16.12.1996 admitted his guilt, but prayed for admonition. The
petitioner/Society has not been in a position to reconsider the proposed
punishment in view of the seriousness of the proved misconduct and therefore,
by means of an order dated 16.05.1997 dismissed the second respondent from
service taking effect from the date of suspension on 29.02.1996.
9. The second respondent/employee filed I.D.No.159 of 1997 raising a
dispute as per Section 2-A(2) of the Industrial Disputes Act, 1947, before the
first respondent/Labour Court, Madurai. After contest, the first
respondent/Labour Court, without considering or interfering with the quantum of
punishment has incorrectly relied upon the order passed in the surcharge
proceedings initiated against the second respondent/employee and also improperly
misconstrued the exoneration of his liability to exonerate himself from the
charges held that no charge has been made out and passed an award of setting
aside the dismissal order passed by the petitioner/Society dated 16.05.1997 and
further, directed to reinstate the second respondent/employee and that too, with
backwages.
10. The learned Counsel for the petitioner/Society contends that the first
respondent/Labour Court in paragraph 22 of the award in I.D.No.159 of 1997 dated
27.10.2004, when admittedly the second respondent/employee has conceded that the
enquiry has been conducted properly and that the propriety of enquiry need not
be gone into, has proceeded to find out that the charge of connivance of the
second respondent in misappropriation has been proved and thereby traversed
beyond the pleadings, written arguments and without a issue being framed thereto
when it is not at all the issue or pleading or a point in controversy and that
the procedure adopted by the first respondent is not in accordance with law.
11. Advancing his arguments, it is the submission of the learned Counsel
for the petitioner/Society that the second respondent/employee in his
explanation to the charges – Ex.M.3, in his confession statement – Ex.M.9,
during questioning in the domestic enquiry and in his deposition in the domestic
enquiry – Ex.M.35, all along admitted his guilt and there is no need to go into
the question that the charge of connivance has been proved or not.
12. Proceeding further, the learned Counsel for the petitioner/Society
urges before this Court that the first respondent/Labour Court has taken shelter
on Ex.W.1, the order of the Deputy Registrar of Co-operative Societies passed in
the surcharge proceedings initiated against the second respondent along the co-
accused which is not an admissible document as it is not related to the
disciplinary action or relied upon during the domestic enquiry and thereby,
relied on an extraneous material beyond the documents pertaining to disciplinary
action/domestic enquiry to which he is not empowered.
13. Expatiating his submissions, the learned Counsel for the
petitioner/Society submits that the first respondent/Labour Court has failed to
appreciate that the Arbitrator in his order in Ex.W.1, exonerated the second
respondent/employee from the liability of repayment of the loss on the ground
that the co-delinquent conceded to remit the amount as he has been the
beneficiary of misappropriation and his admission of guilt or the exoneration of
the second respondent/employee from the liability cannot absolve the second
respondent from the charge of connivance in the misappropriation.
14. The learned Counsel for the petitioner/Society submits that it is
admitted that without repayment of loan and without any entry in the loan ledger
on the redemption of loan, the second respondent/employee co-operated with the
Secretary to get the release of the pledged jewels by using the key in his
possession and thereby, with his knowledge, the jewel has crossed the locker
illegally which amounts to clear connivance in the misdeeds and misuse of power
and position, besides gross dereliction from his duties coupled with breach of
trust.
15. The learned Counsel for the petitioner/Society takes a plea that the
first respondent/Labour Court has failed to note that the second respondent has
been charged for connivance and not for misappropriation and when the charge of
the connivance when proved amounts to the offence committed, the second
respondent/employee is to be awarded with punishment for misappropriation.
16. In short, the contention of the learned Counsel for the
petitioner/Society, is that the reasons assigned by the first respondent/Labour
Court to set aside the order of dismissal passed by the petitioner/Society dated
16.05.1997 in its award in I.D.No.159 of 1997, are against facts, biased and
totally against the well settled principles of law and as such, the award is to
be quashed by means of allowing this writ petition.
17. In response, the learned Counsel for the second respondent/employee
submits that the second respondent/ employee has been levelled with the
allegations that he has connived with the Secretary of the petitioner/Society in
regard to the misappropriation of jewel loan amount and further that, he has
misappropriated the receipt amount of Rs.1,400/-, but the Secretary of the
petitioner/ Society, K.Kottaimayan, has categorically admitted that he alone is
liable for misappropriation and that he himself repaid the full amount and that
the Enquiry Officer himself found that he has recorded the alleged receipt of
Rs.1,400/- in the rough cash book and thereby he has not committed any mistake.
18. It is the contention of the learned Counsel for the second
respondent/employee that the Deputy Registrar of the Co-operative Societies,
Uthamapalayam, has deleted the name of the second respondent/employee from the
surcharge proceedings as per Section 87 of the Tamil Nadu Co-operative Societies
Act and when the petitioner/Society has dismissed the second respondent/employee
as per order dated 16.05.1997, the petitioner filed I.D.No.159 of 1997 in which
the award has been passed by the first respondent/Labour Court on 27.10.2004,
wherein a direction has been issued to the petitioner/Society to reinstate the
second respondent/employee with continuity of service and backwages.
19. According to the learned Counsel for the second respondent/employee,
the petitioner/Society has not reinstated the second respondent/employee though
various letters have been written by him and ultimately, the petitioner/Society
has filed the present writ petition, whereas in W.P.M.P.(MD)No.10317 of 2005,
this Court has directed the petitioner/Society on 25.10.2005 to deposit the
entire backwages within the period of three weeks, but the petitioner/Society
has not made any deposit.
20. The second respondent/employee filed W.P.M.P(MD) No.11032 of 2005 as
per Section 17(B) of the Industrial Disputes Act, 1947 and this Court on
01.02.2006, in W.P.M.P(MD)No.11032 of 2005 has directed the petitioner/ Society
to pay the monthly wages to the second respondent/employee as per Section 17(B)
of the Industrial Disputes Act, 1947. When the petitioner/Society has not
complied with the order passed by this Court in W.P.M.P(MD)No.11032 of 2005
dated 01.02.2006, the second respondent/employee sent a notice dated 20.06.2006
for the contempt committed by the petitioner/Society, and only from the month of
April 2006, the petitioner/Society is paying the monthly wages and that too, not
regularly. The categorical stand of the second respondent/employee is that only
for the record purpose, the petitioner/Society has given fixed liability on the
second respondent/ employee for jewel loan key. Practically, the Secretary,
Kottaimayan, has been fully dealing with the jewel loan individually and this
has been accepted by him at the enquiry held by the petitioner/Society, but that
document has been suppressed.
21. Further, the Secretary, Kottaimayan has admitted that he alone
committed the misappropriation in jewel loan and the second respondent/employee
has no hand in it before the Deputy Registrar of the Co-operative Societies,
Uthamapalayam and therefore, the second respondent/ employee has been exonerated
from liability by the Deputy Registrar. Also, the fact that the Secretary,
Kottaimayan, will get money and redeem the jewel, goes to show that the second
respondent/employee is no way practically concerned with it.
22. Inasmuch as the Secretary, Kottaimayan is fully responsible for the
jewel loan and when he has paid the loss admitting his guilt, there is no
connivance on the part of the second respondent/employee. Added further, the
Enquiry Officer in his report has clearly stated that ‘likewise, on different
dates, when the jewel loan has been redeemed, the loan amount received by the
Secretary has been misappropriated by him and that the jewel loan in -charge,
Dinakaran (second respondent/employee) has not informed the illegal/cheating
acts to the higher officials.’
23. The learned Counsel for the second respondent/ employee submits that
the second respondent/employee is no way helped or connived with the Secretary
Kottaimayan, to commit misconduct and there is no evidence also that the second
respondent/employee released any jewel and when the Secretary Kottaimayan has
admitted his guilt and also repaid the amount, there is no loss to the
petitioner/Society. In regard to the receipt of Rs.1,400/- on 10.08.1994, the
second respondent/employee has recorded the receipt in the rough cash book and
in the domestic enquiry, it is observed that ‘in the Day Book Register, Ex.P.6,
on 10.08.1995, a sum of Rs.1,000/- and Rs.400/- totally a sum of Rs.1,400/- has
not been credited into the account. However, in the Subsidiary Day Book
Register, the same has been credited and that the Subsidiary Day Book Register,
Ex.P.7, has been maintained by the delinquent and that after receiving the cash
amount, the same has not been credited into the savings account and the
Secretary has misappropriated.’
24. Relying on the aforesaid observation in the enquiry report, the
learned Counsel for the second respondent/employee vehemently contends that the
misappropriation has been committed only by the Secretary, Kottaimayan. That
apart, it is the submission of the learned Counsel for the second
respondent/employee that even in the explanation dated 21.12.1996, furnished by
the second respondent/employee to the second show cause notice, it has been
clearly mentioned that the Secretary has committed all the misconducts and he
has accepted the same and paid back the loss amount and therefore, the second
respondent/employee is innocent. Furthermore, the second respondent/employee in
not objecting to the conduct of enquiry will not amount to admission of the
guilt by him. The purported confession of the second respondent/ employee
obtained through coercion, ought not to be given importance and that too, when
in the explanation to the second show cause notice, the second
respondent/employee has stated that the Secretary, Kottaimayan has committed
misconduct and as such, he is innocent.
25. The learned Counsel for the second respondent/ employee puts forward
the argument that the facts mentioned in Ex.W.1 go to show that the Secretary,
Kottaimayan, paid the misappropriated amount in full and therefore, this will
prove that he alone is responsible for the misconduct and further that the
charge of connivance or criminal breach of trust against the second
respondent/employee have not been proved and the loss of confidence can never be
attributed against the second respondent/employee in the present case.
26. The sum and substance of the submission of the learned Counsel for the
second respondent/employee is that the first respondent/Labour Court has rightly
mentioned in the award in I.D.No.159 of 1997 that if at all, the mischief
committed by the second respondent/employee is that he has not informed the act
to the superiors, etc and therefore, the writ petition is liable to be
dismissed.
27. The learned Counsel for the petitioner/Society submits that the order
of dismissal passed by the President of the petitioner/Society on 16.05.1997
against the second respondent/employee is a valid one and in fact, the second
respondent/employee on 28.12.1995 has given a confessional statement before the
Special Officer of the petitioner/Society inter alia stating that the Special
Officer of the petitioner/Society has inspected the petitioner/Society on
27.12.1995 and found that for the jewel loan Nos.150, 152, 310, 365, 371, 382,
463, 723, 826, 945, 659, 717, 1056, 1204, 1229, 1237, 1362, 1374, 38, 648, 518,
1163 and 1859, the principal amount of Rs.3,37,700/- and the interest thereto
along with the other expenditure have been received in cash by the
petitioner’s/Society’s Secretary, Kottaimayan from the members concerned and for
which, the receipts have not been issued, but the same has been entered into the
jewel loan ledger and the jewels have been returned and the fact that the
principal amount, interest and other expenditures have been utilised by the
Secretary without issuing receipts which is known to him very well and since the
Secretary is a higher officer and further, he has assured him that the aforesaid
amounts will be remitted by him to the petitioner/Society and as such, he has
not informed the Special Officer of the petitioner/Society.
28. In the aforesaid confessional statement of the second
respondent/employee dated 28.12.1995, it is clearly mentioned by the second
respondent/employee that he has given the aforesaid confessional statement
without anybody’s inducement and he has given the same in a good disposition
state of mind and also that, the Domestic Enquiry Officer in his findings, has
clearly found that the charges 1 to 5 levelled against him have been held to be
proved and as such, the award passed by the first respondent/Labour Court in
directing the reinstatement of the second respondent/employee with continuity of
service and backwages is not valid in law.
29. The petitioner/Society cites the decision of the Honourable Supreme
Court in Suresh Pathrella v. Oriental Bank of Commerce reported in (2007) 1
Supreme Court Cases (L&S) 224, at page 231, wherein it is held as follows:
“22. In the present case the appellant acted beyond his authority in
breach of the Bank’s regulation. Regulation 3(1) of the Bank’s Regulations
required that every officer of the Bank at all times takes all possible steps to
protect the interest of the Bank and discharge his duties with utmost integrity,
honesty, devotion and diligence and do nothing which will be unbecoming of a
bank officer. It is a case of loss of confidence in the officer by the bank. In
such a situation, it would be a futile exercise of judicial review to embark
upon the decision of the disciplinary authority removing the officer from
service, preceded by an enquiry, and to direct the bank to take back the officer
in whom the bank has lost confidence, unless the decision to remove the officer
is tainted with mala fides, or in violation of principles of natural justice and
prejudice to the officer is made out. No such case is made out in the present
case.
23. In the result, this appeal being devoid of merits is, accordingly,
dismissed. There will be no order as to costs.”
30. He also relies on the decision of the Honourable Supreme Court of
India in State Bank of India and others v. Ramesh Dinkar Punde reported in 2007
LLR 1, wherein it is laid down thus:
“It was impermissible for the High Court to re-appreciate the evidence as
produced in the enquiry which was duly considered by the enquiry officer,
disciplinary authority and the appellate authority as such the finding of the
High Court on facts, runs to the teeth of the evidence on record hence the
impugned judgment of the High Court in setting aside the orders of disciplinary
authority and the appellate authority which are restored by the Apex Court.
A bank officer holds a position of trust where honesty and integrity are
inbuilt requirements of functioning and it would not be proper to deal with the
matter leniently.
If a bank officer commits a misconduct pertaining to his personal needs
against the interest of the bank and the depositors, he must be dealt with iron
hands and does not deserve to be dealt with leniently.”
31. Per contra, it is the contention of the learned Counsel for the second
respondent/employee that after the insertion of Section 11-A of the Industrial
Disputes Act, 1947, the first respondent/Labour Court, Madurai, has a right to
sit in appeal over the findings of the Enquiry Officer and since the findings of
the first respondent/ Labour Court, Madurai, are finding of fact in I.D.No.159
of 1997, they need not be interfered with in the writ jurisdiction. To lend
support to his contention, he places reliance on the decision of this Court in
Management of United India Shoe Corporation Pvt. Ltd. v. Presiding Officer,
Labour Court and another reported in 2006-I-LLJ-958, at page 959, at paragraphs
3 to 5, it is observed as hereunder:
“3. After the insertion of Section 11-A in the Industrial Disputes Act,
the Labour Court has a right to sit in appeal over the findings of the enquiry
officer which it earlier could not do. Hence the Labour Court can re-assess and
re-appreciate the evidence and it has done so in this case. The findings of the
Labour Court are findings of fact and we cannot interfere with the findings of
fact in writ jurisdiction.
4. Learned counsel for the appellant then submitted that the Labour Court
has not set aside the findings on the charge of pasting posters in the toilet.
A perusal of the award of the Labour Court shows that the Labour Court has
observed that this charge appears to be very trivial.
5. On the facts of the case, while we dismiss this writ appeal we give a
warning to the workman concerned not to commit such acts in future. No costs.
Consequently, WAMP No.3667/2004 is also dismissed.”
32. In the explanation submitted by the second respondent/employee dated
10.04.1996, it is mentioned that as per the charge of the Special Officer of the
petitioner/Society dated 21.03.1996, he being the Clerk having the joint
responsibility along with the Secretary in respect of jewel loan, without
verifying the Jewel Loan Register as to whether proper receipts have been made
and the same being entered into the Register in regard to the redeeming of
jewels, has released the jewels to the members concerned by fully believing the
Secretary of the petitioner/Society and this misconduct has been committed by
him out of ignorance based on belief and further, the act of not entering the
Savings Account amount as found in the Day Book Register, in the Cash Register,
is a mistake committed by him on account of his negligence.
33. The Domestic Enquiry Officer, in his enquiry report dated 07.12.1996,
has found that the second respondent/employee who is jointly responsible for the
jewel loan, has not informed the cheating acts of the Secretary of the
petitioner/Society on different dates to the higher officials and to the Special
Officer of the petitioner/Society and only during inspection of the Special
Officer on 27.12.1995, these misdeeds have been found out and further that, the
jewel loan redeeming amounts have not been credited in the Day Book Register and
the Subsidiary Day Book Register and a sum of Rs.3,65,861.65 being the jewel
loan redeeming amount together with interest and other items, have been
received, but the same has not been brought into the petitioner’s/Society’s
account and for the misappropriation done by the Secretary, the second
respondent/employee has connived with him.
34. Further, the second respondent/employee has admitted this charge and
in the course of evidence, has deposed that he has known the misdeeds committed
by the Secretary of the petitioner/Society, but he has not informed the same to
the higher officials and when the Special Officer has found out the misdeeds of
the Secretary, then on 28.12.1995, he has accepted the charges and has given a
voluntary confessional statement and therefore, the first charge levelled
against the second respondent/employee has been proved.
35. Also, the second charge levelled against the second
respondent/employee is based on the first charge and as such, the second charge
levelled against the second respondent/employee by the petitioner/Society is a
correct one as held by the Domestic Enquiry Officer.
36. As regards the third charge that the second respondent/employee has
connived or aided with the Secretary by not bringing a sum of Rs.1,400/- dated
10.08.1994 from the Subsidiary Day Book Register to the Cash Register and also
shown less amount on hand, the Enquiry Officer has come to the conclusion that
this charge has been admitted by the second respondent/employee in his evidence
and as such the third charge has been proved on the basis of the Management
documents and also on the admission of the second respondent/employee.
37. In regard to the fourth charge that because of the charges 1 to 3, the
second respondent/employee has violated the petitioner’s/Society’s discipline
and conduct rules and further in regard to the fifth charge that the second
respondent/employee is responsible for the petitioner/Society losing confidence
on him, the Enquiry Officer has come to the conclusion that these charges are
based on the charges 1 to 3 and inasmuch as the charges 1 to 3 have been proved
against the second respondent/employee, the charges 4 and 5 levelled against him
by the petitioner/Society are found to be a proper one.
38. The Deputy Registrar of Co-operative Societies, Uthamapalayam, in his
surcharge proceedings under Section 87 of the Tamil Nadu Co-operative Societies
Act, 1983, dated 30.06.1999, has among other things stated that the former
Secretary of the Society, Thiru.K.Kottaimayan, in his statement dated
22.06.1999, has admitted that for the interest amount of Rs.44,472.70, he is
fully responsible and has exonerated the second respondent/employee from the
surcharge proceedings. Further, for the interest sum of Rs.44,472.70,
Thiru.K.Kottaimayan, has been directed to pay the interest at 18% from
01.03.1997 till the date of payment being made to the petitioner/Society.
Significantly, K.Kottaimayan, in his statement dated 22.06.1999, has stated that
a sum of Rs.44,472.70 mentioned in the surcharge notice towards interest will
have to be paid by him and that will be paid by him before 15.07.1999 and this
has been made mention of by the Deputy Registrar of Co-operative Societies,
Uthamapalayam in his proceedings dated 30.06.1999.
39. At this stage, this Court aptly points out the decision of the
Division Bench in Vittal M. v. Disciplinary Authority & R.M., Region I,
Hyderabad Zonal Office, State Bank of Hyderabad reported in 2003-I-LLJ-811,
wherein it is held thus:
“Appellant-bank employee could no where make out a case of innocence on
his part, either in the domestic enquiry or before a single Judge or even before
the present Division Bench which heard this writ appeal. It observed that none
of the contentions raised by the appellant merited any consideration. The
appellant’s fraud of withdrawing a little over Rs.8400/- from the account of a
dead customer was clearly established.
There was no substance in the plea of the appellant that no opportunity
was given to him at the time of enquiry. The punishment of the appellant was
also held to be not excessive.”
40. Also, this Court worth recalls the decision in Subhash Chand Jain v.
Regional Manager, Punjab National Bank and another reported in 2003-III-LLJ-396,
wherein it is laid down as follows:
“Petitioner who was in the employment of the Hindustan Bank (which merged
with respondent-Punjab National Bank) impugned in this petition an adverse award
of the Industrial Tribunal, granting him no relief against dismissal from
service. The High Court dismissed the petition. It observed that the reliance of
the petitioner on clause 19.4 of the Bipartite Settlement was misplaced. The bar
under that clause against initiation of departmental proceedings for one year
from the date of misconduct would not operate if the charges of misconduct in
such proceedings were different from those for which the delinquent official was
prosecuted before the criminal Court. In this case the charges against the
petitioner in the criminal trial were cheating and fraud, whereas in the
departmental enquiry the charges against him were negligence and dereliction of
duties.”
41. Further, a bank employee is required to exercise higher standard of
honesty and integrity when he deals with money. If a bank employee works
against the interest of the bank, then his dismissal is a justifiable one, in
the considered opinion of this Court.
42. Normally, a Court of law does not substitute the punishment unless
they are shockingly disproportionate to the gravity of the offence committed.
Moreover, the award of punishment is a primary function of a disciplinary
authority. The High Court will not interfere with the quantum of punishment
awarded when it is based on evidence. The quantum of amount misappropriated by
an employee is an irrelevant one when there is fiduciary relationship between
the employer and the employee. When an employer has lost the confidence of an
employee in employment, then the employee’s retention should not be directed by
a Court of law, as opined by this Court.
43. It is well settled that once the charges against a delinquent employee
have been proved, the quantum of punishment is to be decided by the employer.
When the major charges are proved against the bank employee, then the compassion
has no role to play. As a matter of fact, the jurisdiction of a Court of law to
interfere with the quantum of punishment would be exercised only when inter
alia it is found that the said punishment is found to be grossly
disproportionate, as per the decision in Hombe Gowda Educational Trust and
another v. State of Karnataka and others reported in 2006(1) L.L.N.461.
44. If an enquiry is fair, a Labour Court has no power to interfere
punishment as per the decision in General Secretary, South India Cashew
Factories Workers Union v. Managing Director, Kerala State Cashew Development
Corporation, Ltd. reported in AIR 2006 S.C.2208.
45. Further, this Court pertinently quotes the decision of the Honourable
Supreme Court in Mahindra and Mahindra, Ltd. v. N.B.Naravade reported in 2005(1)
L.L.N. 1074, wherein it is observed thus:
“A Labour Court should interfere with the punishment under S.11A of the
Industrial Disputes Act only when it is disturbing to the conscience and it is
highly disproportionate to the misconduct.”
46. It is to be borne in mind that as per Section 11A of the Industrial
Disputes Act, 1947, a Labour Court should act as a revisional Court and not an
appellate Court, in the considered view of this Court.
47. As far as the present case is concerned, the charges levelled against
the second respondent/employee to the effect that “(A) he failed to make
necessary entries in the records of the society for the receipt of Rs.3,65,761-
65/= towards redemption of jewel loans, released the pledged jewels from
custody, thereby, he connived with the secretary in misappropriation of those
amount;(B) That he, by suppressing the above misdeeds from the knowledge of the
Special Officer, he derelicted from his duties and responsibilities; (C) That
he, failed to transact the receipt of Rs.1,400/- on 10.08.1994, reduced the cash
balance, thereby, helped the secretary to commit misappropriation of the said
amount; (D) That he, by his willful acts and omissions undermined the morale and
discipline of the society; and (E) That, by his above commissions and
omissions, the management lost confidence that reposed on him;” have been held
to be proved in the Domestic Enquiry by the Domestic Enquiry Officer.
48. However, the first respondent/Labour Court, Madurai, while passing an
award in I.D.No.159 of 1997 filed by the second respondent/employee dated
27.10.2004, has among other things, at paragraph 30 observed that ‘the
respondent Management Deputy Registrar the competent authority have issued a
proceeding fixing the liability on the then Secretary K.Kottaimayan and
absolving the liability of the petitioner.
49. Therefore what else remains to proceed against the petitioner (second
respondent/employee) terming its as a misconduct. Hence it is under these
circumstances the word used in the counter against the petitioner namely
connivance is unwanted. Moreover the irregularity has happened on one occasion.
It is subsequently found that the petitioner (second respondent/employee) acted
in connivance with the Secretary goes to show that the irregularity committed by
the petitioner is only after the commission of an offence by the Secretary. The
mischief committed by the petitioner is that he has not informed the act of the
Secretary to the higher officials, etc. and further the loss to the respondent
Management (writ petitioner) has been paid by the Secretary. Hence it I under
these circumstances no misconduct would arise on the part of the petitioner in
regard to the charges levelled against him.’
50. Also, in paragraph 31, the first respondent/Labour Court has stated
the following:
“31. It is no doubt the petitioner has not committed in fraud
misappropriation and grave misconduct. The non-information of the circumstances
for committing fraud misappropriation has let to the Management to fix the
liability on the petitioner. The punishment for the connivance of the petitioner
along with the Secretary is the termination even after the payment of the full
amount by the Secretary Kottaimayan.”
and has held that the punishment of termination passed by the
respondent/Management (writ petitioner) against the petitioner (second
respondent/employee) is not proportionate and therefore, the first
respondent/Labour Court inclined to invoke Section 11(A) of the Industrial
Disputes Act, to interfere with the quantum of punishment and found that the
punishment awarded to the petitioner (second respondent/employee) is
disproportionate to the guilt committed by him and consequently, set aside the
termination order passed against the second respondent/employee dated 16.05.1997
and directed his reinstatement with continuity of service and backwages and
thereby allowed the I.D.No.159 of 1997.
51. It is to be pointed out that in the instant case on hand, in the
Domestic Enquiry, the charges levelled against the second respondent/employee by
the petitioner/ Society have been found to be proved and as such, it is for the
petitioner/Society to decide the quantum of punishment to be awarded to the
second respondent/employee and in the preset case on hand, the writ
petitioner/Society has issued the order of dismissal dated 16.05.1997 to the
second respondent/employee. The conduct of the Domestic Enquiry Officer against
the second respondent/employee is a fair and reasonable one and when that be the
case, the first respondent/Labour Court has misdirected itself while passing the
award in I.D.No.159 of 1997 to interfere with the punishment of dismissal dated
16.05.1997 ordered by the petitioner/Society. Moreover, the principles of
natural justice have been followed in the Domestic Enquiry.
52. Causing a financial loss either by direct act of a particular employee
or by the act of connivance or committing or abetting another person and
committing deliberate irregularities will entail punishment of dismissal and the
said punishment cannot be said to be shockingly disproportionate. To put it
precisely, the second respondent/employee (as a Clerk) with the
petitioner/Society acts in a fiduciary relationship between the writ
petitioner/Society (employer) and himself, by conniving or aiding or abetting
the misconduct of K.Kottaimayan, the Secretary of the petitioner/Society.
Further, this Court points out that a blame worthy conduct of an employee is a
misconduct.
53. The second respondent/employee has not informed the higher officials
about the misdeeds of the Secretary of the petitioner/Society, K.Kottaimayan and
only through his confessional statement/admission statement dated 28.12.1995
when the Special Officer of the petitioner/ Society has made a surprise
inspection to the petitioner/ Society, the act of misappropriation done by
K.Kottaimayan by not remitting the principal amount of Rs.3,37,700/- and
interest etc., which have been received from the Members for which no receipt
has been prepared, but in the Day Book Register, the same has been credited into
and that the jewels have been returned, has been found out and the second
respondent/employee has also stated that because of the fact that the
petitioner’s Secretary is his higher official and further, since the Secretary
has assured him that he will remit the amount into the petitioner/Society, he
has not informed the same to the Special Officer of the petitioner/Society, goes
to show that the second respondent/employee has connived or aided or abetted the
misdeeds or misconducts of the said Secretary of the petitioner/Society and
certainly, he has lost confidence of his employer and if he is retained in
employment, then it will be against the interest of the petitioner/Society and
as such, the reinstatement of the second respondent/employee with continuity of
service and backwages as ordered by the first respondent/Labour Court in
I.D.No.159 of 1997 dated 27.10.2004 is a perverse and unreasonable one and not
based on proper appreciation of material, oral and available evidence on record,
in the considered opinion of this Court.
54. In a case of this nature, it is the loss of confidence which is the
primary factor for awarding the quantum of punishment and the second
respondent/employee being the employee of the petitioner/Society, has not
exercised an impeccable standard of honesty and integrity and has acted against
the interest of the petitioner/Society and therefore, the petitioner/Society has
rightly dismissed the second respondent/employee from service, as opined by this
Court.
55. When the petitioner/Society has lost the confidence upon the second
respondent/employee, then in such an event, the first respondent/Labour Court
cannot exercise its discretion and set aside the order of termination dated
16.05.1997 and to order reinstatement of the second respondent/employee with
continuity of service and backwages, it is not a prudent one, in the considered
opinion of this Court and since the Domestic Enquiry has been conducted in a
fair and reasonable manner and also followed by the principles of natural
justice, this Court comes to an inevitable conclusion that the first
respondent/Labour Court has not power to interfere with the punishment awarded
by the petitioner/Society and the contra view taken by the first
respondent/Labour Court in setting aside the order of termination dated
16.05.1997 and passing an award by directing the petitioner/Society to reinstate
the second respondent/employee, is an illogical and illegal one and this Court
interferes with the award of the first respondent/Labour Court in I.D.No.159 of
1997 dated 27.10.2004, in the writ jurisdiction and sets aside the same to
prevent an aberration of justice and restores the punishment of dismissal dated
16.05.1997 imposed by the petitioner/Society and allows this writ petition to
promote the substantial cause of justice.
56. In the result, the writ petition is allowed leaving the parties to
bear their own costs and the award passed by the first respondent/Labour Court
in I.D.No.159 of 1997 dated 27.10.2004 is set aside by this Court for the
reasons assigned by this Court in this writ petition. Resultantly, the
punishment of dismissal dated 16.05.1997 imposed on the second
respondent/employee by the petitioner/Society is restored.
rsb
To
1.The Presiding Officer,
Labour Court,
District Court Buildings,
Melur Road,
Madurai – 625 020.