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Supreme Court of India
State Bank Of India vs Tarun Kumar Banerjee And Ors on 19 September, 2000
Bench: S. Rajendra Babu, D.P. Mohapatra
           CASE NO.:
Appeal (civil)  3151 of 1997



DATE OF JUDGMENT: 19/09/2000




2000 Supp(3) SCR 313

The Judgment of the Court was delivered by

RAJENDRA BABU, J. A charge-sheet issued to respondent no. 1 reads that at
about 11 a.m. on June 23, 1973 Smt. Parul Rani Chowdhury, a customer of the
appellant-Bank, handed over to respondent no.l a sum of Rs. 3,002.40p along
with two draft applications each for Rs. l,001.20p that even though
respondent no.l received excess amount of Rs. 1,000 over Rs. 2,002.40p, he
neither refunded the same nor asked the customer as to the matter in which
the said amount was to be disposited either by depositing the same in the
savings bank account or deposit the same in the Sunday deposits account;
that instead he retained the said money with him with intention of
misappropriating the same; that thereafter Smt. Parul Rani Chowdhury
returned at about 1.30 p.m. on the same day and demanded the said amount of
Rs. 1,000 handed over to respondent no.l in excess, which he flatly denied;
that on a report being made to the Branch Manager by Smt. Parul Rani
Chowdhury he inquired about the matter; that when a preliminary search
failed to trace the amount and a physical search of all the employees was
being conducted, respondent no.l threw away the said amount of Rs. 1,000 on
the floor that thereby he retained the amount with him with a criminal
intent to misappropriate the same and thus lowered the image of the
appellant-Bank and thus acted in a manner highly prejudicial to the
interest of the appellant-Bank. Respondent No. 1 replied to the said
charge-sheet by stating that on a memorandum being issued to him directly
involving him in an alleged misappropriation of the said sum on June 23,
1973 he was compelled to sign a statement which he was not allowed to go
through even. Thereafter, he was placed under suspension. He alleged that
he is a victim of serious conspiracy specially while after his recent
promotion from Messenger to Cashier he has looking forward for a bright
future and he denied all the charges levelled against him and he claimed to
be innocent.

A domestic enquiry was held against him and three witnesses were examined.
Respondent No. I did not adduce any evidence nor he examined himself. On
the basis of the evidence recorded in the domestic enquiry by a report made
finding him guilty of charges against him, on January’ 27, 1976 respondent
no. I was asked to show cause as to why an appropriate punishment should
not be imposed upon him and he was heard in the matter. The Regional
Manager thereafter communicated to the respondent No. I the decision to
dismiss him. On dismissal being made an industrial dispute was raised which
was referred to the Central Industrial Tribunal (hereinafter referred to as
‘the Tribunal’). The Presiding Officer held that the domestic enquiry
conducted was just, fair and proper. However, on examination of the
material on record the Presiding officer came to the conclusion that the
finding of guilt against the first respondent was not just on the evidence
on record and, therefore, he set aside the same. This award was challenged
by a writ petition which was allowed by learned single Judge of the High
Court and the award given by the Presiding Officer was quashed. On a
further appeal the Division Bench of the High Court held that the learned
single Judge could not have interfered with the award made by the Tribunal
and set aside the same and restored the award made by the Tribunal. Hence
this appeal by special leave.

The Tribunal having held that the domestic enquiry was fair and valid the
scope of interference was very limited. This Court in Workmen of Messrs.
Firestone Tvre & Rubber Company of India (P) Ltd. v. Management & Ors.,
[1973] 3 SCR 587, stated the law as follows.

“(1) The right to take disciplinary action and to decide upon the quantum
of punishment are mainly managerial functions, but if a dispute is referred
to a Tribunal, the latter has power to see if action of (he employer is

(2) Before imposing the punishment, an employer is expected to conduct a
proper enquiry in accordance with the provision of the Standing Orders,
if applicable, and principles of natural justice. The enquiry should not be
an empty formality.

(3) When a proper enquiry has been held by an employer, and the finding of
misconduct is a plausible conclusion flowing from the evidence adduced at
the said enquiry, the Tribunal has no jurisdiction to sit in judgment over
the decision of the employer as an appellate body. The interference with
the decision of the employer will be justified only when the findings
arrived at in the enquiry are perverse or the management is guilty of
victimisation, unfair labour practice or mala fides.

(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, has to give an opportunity to
the employer and the 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 of 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

(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 victimisation.

(10) In a particular case, after setting aside the order of dismissal,
whether a workman should be reinstated or paid compensation is, as held by
this Court in The Management of Panitole Tea Estate v. The Workmen, [1971]
1 SCR 742, within the judicial discretion of a Labour Court or Tribunal.
The above was the law as laid down by this Court as on 15.12.1971
applicable to all industrial adjudication arising out of orders of
dismissal or discharge.”

Prior to the insertion of Section 11-A where a proper domestic enquiry had
been held before the passing of the order of punishment, the Tribunal had
no power to interfere with its findings on the misconduct recorded in the
domestic enquiry unless it was vitiated by one or other infirmities pointed
out in Indian Iron & Steel Co Ltd. & Anr. v. Their Workmen, [1958] SCR 667,
case. The conduct of the disciplinary proceedings and imposition of the
punishment were all considered to be managerial functions with which the
Tribunal had no power to interfere unless the findings were perverse or the
punishment was so harsh as to lead to an inference of victimisation or
unfair labour practice. Now, the position is different. In the course of
adjudication proceedings if the Tribunal is satisfied that the order of
discharge or dismissal was not justified, it can reappraise the evidence
adduced in the domestic enquiry and satisfy itself whether the evidence
relied upon by the employer establishes the misconduct alleged against the
workman. The criticism advanced against the award of the Tribunal is that
evidence of three witnesses recorded at enquiry being sufficient to record
the guilt of respondent No. 1, that evidence has been ignored and
irrelevant considerations such as non-examination of complainant Smt. Parul
Rani Chowdhury, non-production of money and non-availability of other
evidence not on record is taken note of and, therefore, its award is
vitiated. The Division Bench too fell in the same error, it is contended.

If we look at the evidence adduced in the present case, it is given by
three witnesses who are the officers of the appellant-Bank – (i) Shri A.R.
Dutt, the Branch Manager, (ii) Shri S.K. Mitra, Head Clerk and (iii) the
present Bank Manager. The evidence of Shri A.R. Dutt is that on the date of
occurrence a lady depositor produced two pay-in-slip consisting of draft
application forms and a saving bank deposit form, each for Rs. 1,000 only
plus Bank’s commission for draft application form which were passed by the
Accounts clerk for deposit in cash department. The amount was received by
the first respondent’ who Was acting as Head Cashier. The lady customer did
not produce the savings bank pay-in-slip at the cash counter but delivered
Rs. 3,000 as told by her to him with two draft application forms. At about
1 p.m. the lady with her husband came to him and complained that she had
deposited Rs. 3,000 and odd with the cashier but did not receive the
savings Bank pay-in-slip nor the excess amount refunded to her by the
Cashier. On the receipt of the information he personally went to the cash
department and checked the cash but did not find any excess amount therein.
On asking the first respondent about the amount received by him he
completely denied the same. He asked the Accountant to check the cash in
the strong room and searched the Cashier concerned whether he has any cash
of Rs. 1,000 with him. There was no excess cash found in the strong room.
When at about 4.30 p.m. he asked the Accountant to search the Cashier,
respondent No. 1, the Accountant then started checking him, he personally
went out of room and saw the first respondent throwing the bundles of notes
by the side of the wall in the accounts department, the possession of which
was taken by him and he questioned respondent No. 1 about the same.
Respondent No. 1 told him that he had put the money in his socks. On next
Monday he took a statement in writing duly signed by the first respondent
and reported the matter to the Head Office and thereafter respondent No. 1
was put under suspension under instructions from Head Office. In the cross-
examination nothing worthwhile was elicited to tilt the evidence tendered
in the examination-in-chief. This statement of Shri A.R. Dutt is
corroborated by Shri S.K. Mitra who was Head Clerk at the relevant time.
Again nothing worthwhile is elicited in his cross-examination except to
state he belonged to S.B.S.S.A. The Tribunal, however, went on to say that
even though the first respondent had not examined himself nor was any
cross-examination directed at the witnesses to the question of his being a
victim of conspiracy by the employees of the appellant-Bank who are members
of another rival Union to which he belonged and placed heavy reliance on
non-examination of complainant, non-production of money, non-production of
so-called confessional statements and non-production of any evidence which
may have been available. But as far as the evidence tendered by the two
witnesses is concerned who actually saw the incident having taken place in
the manner referred to earlier, the charge of misconduct against the first
respondent stood proved to the hilt and we fail to appreciate as to how the
Tribunal could have taken any other view.

A customer of the Bank need not be involved in a domestic enquiry conducted
as such a course would not be conducive to proper Banker customer
relationship and, therefore, would not be in the interest of the Bank.
Further, when money was secured a prudent banker would deposit the same in
the account of the customer complaining of loss of money and, therefore,
non-production of money also would not be of much materiality. When in the
course of the domestic enquiry no reliance was placed on the so-called
confessional statement made by the first respondent, then non-production of
the same is also of no significance. Thus, in our opinion, these
circumstances are irrelevant and the Tribunal could not have placed
reliance on the same to reach the conclusion it did and, therefore, the
learned single Judge was justified in interfering with the same. In the
writ appeal the learned Judges on the Division Bench reiterated the view
expressed by the Tribunal which we have found to be fallacious.

At this stage, it is necessary to notice one argument that was urged on
behalf of the first respondent, namely, that in the course of the order
dismissing the first respondent from service it is noticed as follows :

“In summing up after going through the issue raised by Shri Banerjee in
detail, I am of opinion that a domestic enquiry like ours does not give any
scope for producing all evidences whether having direct bearing in the case
or not as is being done in a Court.”

It is submitted that even if evidence is withheld, the conclusion of the
inquiry officer would be correct is a perverse approach. We do not think
so. What is stated therein is that when sufficient evidence was produced to
conclude one way or the other, the evidence not produced will not be of any
significance unless there was such evidence which was withheld would have
tilted the evidence adduced in the course of domestic enquiry. No such
evidence is forthcoming in this case. Therefore, this argument deserves to
be rejected.

For the foregoing reasons, we have no hesitation in setting aside the order
made by the Division Bench of the High Court and restore that of the
learned single Judge.

For the aforesaid reasons, this appeal is allowed as stated above.

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