Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.1841 OF 2010
M.L. Singla ….Appellant(s)
VERSUS
Punjab National Bank and Anr. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) This appeal is directed against the final
judgment and order dated 23.08.2007 passed by the
High Court of Punjab and Haryana at Chandigarh in
C.W.P. No.16286 of 2006 whereby the Division Bench
of the High Court allowed the writ petition filed by
respondent No.1Bank and quashed the award dated
30.05.2006 passed by the Presiding Officer, Central
Signature Not Verified
Digitally signed by
ANITA MALHOTRA
Date: 2018.09.20
16:51:14 IST
Reason:
1
Government Industrial TribunalcumLabour Court,
New Delhi in I.D. No.103/98.
2) In order to appreciate the controversy involved
in the appeal, it is necessary to set out the relevant
facts in detail infra .
3) The appellant herein was the employee of
respondent No.1Punjab National Bank (PNB).
4) The appellant, at the relevant time, was working
as Cashier in the PNB, Branch Office at Jind
(Punjab).
5) On 21.03.1984, the appellant while on duty was
found consuming liquor in the Branch. On the same
day, respondent No.1Bank also found shortage of
Rs.35,000/ in daily cash balance on verification of
the daily accounts.
6) Respondent No.1Bank, therefore, decided to
hold a departmental inquiry to probe the
aforementioned two charges against the appellant as
per the service rules.
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7) A chargesheet was accordingly served on the
appellant on 11.10.1985. The charges read as under:
“1. That on 21.03.84 while you were working
as Cashier Incharge at BO, Jind City, at about
01.30 p.m. you had asked Shri Hakikat Rai,
PeoncumGuard to bring a glass of water and
one Mathi which were provided to you by him
and you took out a bottle of liquor from your
drawer and consumed the same.
2. That on 21.03.84 while you were working
as Cashier Incharge, you withdrew a sum of
Rs.4,28,124.74 on different occasions leaving
Rs.1,40,900/ in the cash safe of the Bank
after the said withdrawals. Besides this
during normal business hours, you had also
received Rs.16,473.98 as direct receipt from
customers and Rs.1,08,690/ from the Asst.
Cashier to meet the payment. In all, you
made total payment of Rs.3,31,417.68 during
the day and at the close of the day, there
should have been a cash balance of
Rs.2,21,871.04 with you. Besides this at
closing of the day, you received Rs.95,448.35
on account of the balance of receipt made by
the Assistant Cashier. Thus, including the
cash in the cash safe total receipt made by
Asstt. Cashier during the day of the closing
balance should have been Rs.4,58,219.39
with you whereas the actual balance was only
Rs.423,219.39 with you showing a shortage
of Rs.35,000/ and thus you acted in a
manner which is prejudicial to the interest of
the Bank or gross negligence involving the
Bank in serious loss. Further, on your
request you were advance Rs.35,000/ from
the suspense account to meet the shortage of
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Rs.35,000/ occurred on that day due to your
gross negligence.”
8) Respondent No.1Bank on 06.12.1985
appointed an Enquiry Officer and the Presenting
Officer. The appellant on being served with the
chargesheet submitted his reply on 29.10.1985.
Respondent No.1Bank and the appellant then
participated in the enquiry and adduced evidence in
support of their respective stands.
9) On 12.02.1987, the Enquiry Officer submitted
his Enquiry Report. He held that both the charges are
proved against the delinquent employee (appellant
herein). The eventual conclusion on the two charges
reads as under:
“CHARGEI The charge that on 21.03.84,
while working as Cashier Incharge, BO Jind
City at about 01.30 p.m., Shri Singla asked
Shri Hakikat Rai, Peoncum,Guard to bring a
glass of water and one ‘Mathi’, which were
provided to him and he took out a bottle of
liquor from the drawer consumed the same,
stands fully substantiated and hence, proved.
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CHARGEII The charge that on 21.03.84 at
BO Jind, a shortage of Rs.35,000/ occurred
in the cash handled by Shri M.L. Singla while
working as Cashier Incharge due to gross
negligence on his part, thus, causing bank a
serious loss, also stands fully substantiated,
hence, proved.”
10) Respondent No.1 then sent a show cause notice
along with the Enquiry Report on 25.07.1987 to the
appellant proposing therein to inflict the punishment
of dismissal from service. The appellant filed his
reply. On 29.08.1987, the Competent Authority, on
perusal of the Enquiry Report and the reply,
concurred with the findings of the Enquiry Officer
and accordingly passed a dismissal order dated
29.08.1987.
11) The appellant, felt aggrieved by his dismissal
order, filed appeal before the Appellate Authority as
provided in service rules. The Appellate Authority, by
order dated 26.02.1988, dismissed the appeal finding
no merit therein.
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12) The appellant then approached the State
Government praying for making an Industrial
Reference to the Labour Court to decide the legality
and correctness of his dismissal order under the
Industrial Dispute Act, 1947 (hereinafter referred to
as “the ID Act”. The State Government acceded to
the request of the appellant and accordingly made
the following Reference on 16.08.1989 to the Labour
Court under Section 10 of the ID Act:
“Whether the action of the management of
Punjab National Bank in dismissing from
service Shri M.L. Singla is justified? If not, to
what relief is the workman entitled?”
13) The Labour Court, on receipt of the Reference,
issued notices to the parties. The parties filed their
statements. The Labour Court then asked both the
parties to adduce their evidence. Both the parties
accordingly adduced their evidence.
14) By award dated 30.05.2006, the Labour Court
answered the Reference in appellant's favour. It was
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held that the finding of the Enquiry Officer on
ChargeI and II is perverse and, therefore, it was set
aside. It was further held that since no evidence was
adduced by respondent No.1Bank to prove that the
appellant (employee) was gainfully employed
elsewhere after his dismissal, he was entitled to claim
50% back wages along with the relief of
reinstatement. With these findings, the Labour Court
set aside the dismissal order dated 29.08.1987 and
answered the Reference in appellant’s favour. The
Labour Court, however, did not decide the question
as to whether the domestic enquiry is legal and
proper.
15) Respondent No.1Bank felt aggrieved and filed
writ petition in the High Court. The High Court, by
impugned order, allowed the writ petition and set
aside the award of the Labour Court. As a
consequence thereof, the dismissal order dated
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29.08.1987 was held legal and proper and was
accordingly upheld.
16) It is against this order, the employee has felt
aggrieved and filed the present appeal by way of
special leave in this Court.
17) Heard Mr. Daya Krishna Sharma, learned
counsel for the appellant and Mr. Rajesh Kumar,
leaned counsel for respondent No.1Bank.
18) Having heard the learned counsel for the parties
and on perusal of the record of the case, we find no
good ground to interfere in the “conclusion” arrived
at by the High Court, but on our reasoning
mentioned infra .
18) It is necessary to examine the legality and
correctness of the award of the Labour Court in the
first instance and then the impugned order.
19) When we examine the award in the light of
detailed facts set out above, we find that the Labour
8
Court committed more than one jurisdictional error
in answering the Reference.
20) The first error was that it failed to decide the
validity and legality of the domestic enquiry. Since
the dismissal order was based on the domestic
enquiry, it was obligatory upon the Labour Court to
first decide the question as a preliminary issue as to
whether the domestic enquiry was legal and proper.
21) Depending upon the answer to this question,
the Labour Court should have proceeded further to
decide the next question.
22) If the answer to the question on the preliminary
issue was that the domestic enquiry is legal and
proper, the next question to be considered by the
Labour Court was whether the punishment of
dismissal from the service is commensurate with the
gravity of the charges or is disproportionate requiring
interference in its quantum by the Labour Court.
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23) If the answer to this question was that it is
disproportionate, the Labour Court was entitled to
interfere in the quantum of punishment by assigning
reasons and substitute the punishment in place of
the one imposed by respondent No.1Bank. This the
Labour Court could do by taking recourse to the
powers under Section 11A of the ID Act.
24) While deciding this question, it was not
necessary for the Labour Court to examine as to
whether the charges are made out or not. In other
words, the enquiry for deciding the question should
have been confined to the factors such aswhat is the
nature of the charge(s), its gravity, whether it is
major or minor as per rules, the findings of the
Enquiry Officer on the charges, the employee's overall
service record and the punishment imposed etc.
25) If the Labour Court had come to a conclusion
that the domestic enquiry is illegal because it was
conducted in violation of the principles of natural
10
justice thereby causing prejudice to the rights of the
employee, respondent No.1Bank was under legal
obligation to prove the misconduct (charges) alleged
against the appellant (employee) before the Labour
Court provided he had sought such opportunity to
prove the charges on merits.
26) The Labour Court was then under legal
obligation to give such opportunity and then decide
the question as to whether respondent No.1Bank
was able to prove the charges against the appellant
on merits or not.
27) If the charges against the appellant were held
proved, the next question to be examined was in
relation to the proportionality of the punishment
given to the appellant.
28) If the charges against the appellant were held
not proved, the appellant was entitled to claim
reinstatement with back wages either full or partial
11
depending upon the case made out by the parties on
the issue of back wages.
29) The second error was that the Labour Court
called upon the parties to lead evidence on all the
issues including the charge of misconduct in the first
instance itself.
30) The third error committed by the Labour Court
was that it proceeded to examine the findings of the
Enquiry Officer on the charges like an Appellate
Court, appreciated the evidence adduced before the
Enquiry Officer and the one adduced before it and
then came to a conclusion that the findings of the
Enquiry Officer are perverse. This the Labour Court
could not do.
31) Assuming that the Labour Court had the
jurisdiction to direct the parties in the first instance
itself to adduce evidence on merits in support of the
charges yet, in our opinion, it was obligatory upon
the Labour Court to first frame the preliminary issue
12
on the question of legality and validity of the
domestic enquiry and confined its discussion only for
examining the legality and propriety of the enquiry
proceedings.
32) Depending upon the finding on the preliminary
issue on the legality of the enquiry proceedings, the
Labour Court should have proceeded to decide the
next questions. The Labour Court while deciding the
preliminary issue could only rely upon the evidence,
which was relevant for deciding the issue of legality of
enquiry proceedings but not beyond it.
33) In other words, the Labour Court failed to see
that it would have assumed the jurisdiction to
examine the charges on the merits only after the
domestic enquiry had been held illegal and secondly,
the employer had sought permission to adduce
evidence on merits to prove the charges and on
permission being granted he had led the evidence.
13
34) The fourth error was award of 50% back wages
to the appellant. While awarding 50% back wages,
the Labour Court did not examine the question as to
whether the appellant had pleaded and proved with
the aid of evidence that he was not gainfully
employed after his dismissal from service.
35) In order to claim back wages, it was necessary
for the appellant to plead and prove that he was not
gainfully employed after his dismissal with the aid of
evidence. Respondent No.1Bank too was entitled to
adduce evidence to prove otherwise. ( See M.P. State
, (2003) 6 SCC 141,
Electricity Board vs. Jarina Bee(Smt.)
G.M. Haryana Roadways vs. Rudhan Singh , (2005) 5 SCC
591, U.P. State Brassware Corporation vs. Uday Narain
Pandey , (2006) 1 SCC 479, J.K. Synthetics Ltd. vs. K.P.
Agrawal & Anr. , (2007) 2 SCC 433, Metropolitan Transport
Corporation vs. V. Venkatesan , (2009) 9 SCC 601, Jagbir
Singh vs. Haryana State Agriculture Marketing Board &
, (2009) 15 SCC 327) and
Anr. Deepali Gundu Surwase vs.
14
Kranti Junior Adhyapak Mahavidyalaya(D.Ed.) & Ors.,
(2013) 10 SCC 324.
36) The aforementioned four errors, in our opinion,
go to the root of the matter and being jurisdictional in
nature and against the law laid down by this Court in
a number of decisions, as detailed infra , render the
award in question unsustainable.
37) Now coming to the reasoning of the High Court,
we find that the High Court having referred to few
decisions of this Court on the subject, which were
mostly on the powers of the Court under Section 11A
of the ID Act, failed to notice the aforementioned
jurisdictional errors committed by the Labour Court.
Indeed, in our view, these errors were apparent in the
award of the Labour Court and, therefore, should
have been noticed for being corrected by clarifying
the legal position keeping in view the law laid down
by this Court in several decisions and the matter
15
should have been remanded to the Labour Court for
deciding it afresh.
38) The High Court instead proceeded to examine
the findings of the Labour Court and the Enquiry
Officer on two charges on merits in its writ
jurisdiction by entering into the factual arena which,
in our opinion, was not permissible and on its
appreciation came to a conclusion that the reasoning
of the Labour Court on ChargeI is perverse whereas
the finding of the Enquiry Officer on the said charge
is proper.
39) The High Court accordingly reversed the finding
of the Labour Court on ChargeI and restored that of
the Enquiry Officer. The High Court then held that
since the ChargeI is proved, it is enough to sustain
the dismissal order and, therefore, it is not necessary
to examine the merits and demerits of ChargeII.
40) We cannot concur with the approach and the
reasoning of the Labour Court or/and the High Court
16
detailed above which, in our view, does not appear to
be in conformity with the law laid down by this Court
in a number of decisions.
41) The law on this subject was examined by this
Court in several decisions beginning from
Bharat
Sugar Mills Ltd . vs. Jai Singh (1962) 3 SCR 684,
vs.
Management of Ritz Theater (P) Ltd. Its
Workmen (1963) 3 SCR 461, Workmen of Motipur
vs.
Sugar Factory Pvt. Ltd. Motipur Sugar
Factory (1965) 3 SCR 588, State Bank of India vs.
(1972) 4 SCC 304,
R.K. Jain Delhi Cloth & General
Mills Co. vs. Ludh Budh Singh (1972) 1 SCC 595,
vs.
Workmen Firestone Tyre & Rubber Company
of India (1973) 1 SCC 813 and Cooper Engineering
Ltd. vs. P.P. Mundhe (1975) 2 SCC 671.
42) All the aforementioned decisions were examined
in detail by a Bench of Three Judges of this Court in
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Shankar Chakravarti vs. Britannia Biscuit Co.
(1979) 3 SCC 371.
Ltd.
43) Though in Shankar Chakravarti’s case
(supra), the question was when the domestic enquiry
is held illegal and improper by the Labour Court,
whether the Labour Court is duty bound to afford an
opportunity to the employer to lead evidence to prove
the charge against the workman on merits before the
Labour Court.
44) This Court while answering the aforesaid
question held that it is for the employer to ask for
such opportunity to lead evidence to prove the charge
of misconduct and once such prayer is made in any
form, i.e., orally or by application or in the pleading,
the same cannot be denied to the employer. It has to
be granted to enable him to prove the misconduct.
This Court further held that no duty is cast upon the
Court to offer such opportunity to the employer suo
motu , if he does not ask for it. In other words, he has
18
to ask for from the Court by any of the three modes
mentioned above.
45) While examining the aforementioned question,
this Court also took note of several decision of this
Court wherein this Court examined the questions in
extenso , namely, where dismissal is based on
enquiry, or no enquiry or illegal enquiry, how the
Court should decide the legality of dismissal. We
have mentioned these cases in Para 41.
46) In our view, the reasoning, which we have given
while dealing with the first three errors committed by
the Labour Court in Paras 2o to 33, are based on the
law laid down in aforementioned cases, which are
approved in Shankar Chakravarti’s case (supra).
46) Having examined the approach, reasoning and
the conclusion arrived at by the Labour Court and
the High Court which is not legally sustainable, the
next question which arises for consideration is what
course should be adopted to decide the case.
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47) We are, however, not inclined to remand the
case to the Labour Court after lapse of a long period
of more than a decade. It is more so when we have
examined the entire case on merits also.
48) As mentioned above, there was no categorical
finding recorded by the Labour Court and the High
Court as to whether the domestic enquiry was legal
or proper. We, therefore, proceed to examine this
issue in the first instance.
49) Having perused the enquiry proceedings along
with the Enquiry Report, we are of the view that no
fault of any nature can be noticed in the domestic
enquiry proceedings for more than one reason.
50) First, the appellant was given full opportunity at
every stage of the proceedings which he availed;
Second, he never raised any objection complaining
causing of any prejudice of any nature to him before
the Enquiry Officer; Third, he received all the
papers/documents filed and relied upon by
20
respondent No.1Bank in support of the charge
sheet; Fourth, he filed reply, cross examined the
employer’s witnesses, examined his witnesses in
defense, attended the proceedings and lastly, the
Enquiry Officer appreciated the evidence and
submitted his reasoned report running in several
pages holding the appellant guilty of both the
charges.
51) In short, in our opinion, no case is made out to
hold that the domestic enquiry suffers from any
procedural lapse or was conducted in violation of the
principle of natural justice thereby causing any
prejudice to the rights of the appellant.
52) Once it is held that the domestic enquiry is legal
and proper, the next question arises for consideration
is as to whether the punishment imposed on the
appellant is just and legal or it is disproportionate to
the gravity of the charges.
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53) It is not in dispute that both the charges were
held proved in domestic enquiry. One cannot possibly
argue that the charges were simple in nature. In
other words, both the charges were of a serious
nature.
54) So far as ChargeI is concerned, it was proved in
the enquiry that the appellant had consumed liquor
while on duty. No employer would ever allow or
tolerate such behavior of his employee while on duty.
The employer had, therefore, every right to initiate
domestic enquiry against such employee for such
reprehensible conduct and behavior.
55) So far as ChargeII is concerned, that a shortage
of Rs.35,000/ cash was found in cash balance on
the particular day was also held proved. It is not in
dispute that the appellant was working as Cashier.
He was on duty on that day. He was, therefore,
directly responsible for the shortage found in the
cash.
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56) In our opinion, both the charges being serious
in nature, therefore, the order of dismissal passed
against the appellant cannot be faulted with and nor
it can be said to be, in any way, disproportionate to
the gravity of charges. In other words, punishment of
dismissal was proportionate with the gravity of the
charges and hence deserves to be upheld.
57) In view of the foregoing discussion, though we
agree with the conclusion arrived at by the High
Court, which also resulted in upholding of the
dismissal order, but this we do so on our reasoning
detailed above.
58) The appeal thus found to be devoid of any merit.
It fails and is accordingly dismissed.
………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[S. ABDUL NAZEER]
New Delhi;
September 20, 2018
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