Full Judgment Text
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CASE NO.:
Special Leave Petition (civil) 13668-13669 of 1999
PETITIONER:
JANATHA BAZAR (SOUTH KANARA CENTRAL
Vs.
RESPONDENT:
VS.
DATE OF JUDGMENT: 21/09/2000
BENCH:
M.B. Shah, & D.P. Mohapatra.
JUDGMENT:
Shah, J.
Leave granted.
Heard learned counsel for the parties exhaustively.
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The question involved in these appeals isWhether High
Court was justified in confirming the order passed by the
Labour Court reinstating the respondents-workmen with 25%
back wages inspite of specific finding of fact that the
charges of breach of trust and misappropriation of goods for
the value given in the said charges had been clearly
established. Apparently, it would be an unjustified
direction to reinstate an employee against whom charge of
misappropriation is established. A proved act of
misappropriation cannot be taken lightly even though number
of such misappropriation cases remain undisclosed and such
employees or others amass wealth by such means. In any
case, misappropriation cannot be rewarded or legalised by
reinstatement in service with full or part of back wages.
The matrix of the facts as culled out from the case are
thatthe appellant is a Co-operative Society registered
under the Karnataka Co- operative Societies Act, 1959. The
Management charged four of its employees, namely Smt.
Seetha B., Sri D. Chandrashekhar, Sri Madhukar Shetty and
Sri B. Damodhar Naik, with breach of trust and
misappropriation of the value of goods amounting to
Rs.24,239.97 and Rs.19,884.06 during the period 1.7.1977 to
30.6.1978. The said charges were based on shortage of goods
noticed on stock verification for the above said period.
After holding an enquiry, the management dismissed all the
above employees. Thereafter, the employees Union raised an
industrial dispute and on 26.6.1981 a reference was made by
the Government to the Labour Court, Managalore, under
Section 10 of the Industrial Disputes Act, 1947 (hereinafter
referred to as the Act) in I.D. No.45/1981. The Labour
Court considered the documentary evidence produced by the
Management; the audit report for the relevant period from
1.7.1977 to 30.6.1978; the admissions of the indicted
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workmen who deposed that the goods were sent to their
counters for sale by means of supply slips and the fact that
they have not accounted for the shortage of goods noticed,
the value of which is given in the audit report, and
recorded the finding that the charges of breach of trust and
misappropriation of the goods entrusted to them of the value
given in the charges have been clearly established. In the
award passed by the Labour Court, there is a thorough
discussion of the evidence adduced by the Management and the
Workmen and sufficient reasons are given in support of the
finding that the charges alleged against the workmen are
proved. After recording evidence and hearing both the
sides, the Labour Court vide its award dated 30.1.1995 held
that the charges of breach of trust and misappropriation by
the employees were proved. However, the Labour Court in
exercise of its discretionary power under Section 11A of the
Act ordered their reinstatement with 25% of back wages. The
Labour Court further ordered for continuity of their service
by imposing penalty of stoppage of 5 increments with
cumulative effect and for fixing their pay on the basis of
imposition of such penalty from the date of their dismissal
till the date of reinstatement. Against the award of the
Labour Court, both the parties filed writ petitions before
the High Court of Karnataka. The Learned Single Judge
confirming the award passed by the Labour Court dismissed
both the writ petitions.
Being aggrieved by the common order passed by the
learned Single Judge, both the parties filed Writ Appeals
No. 8795 of 1996 and 1954 of 1997 before the Division Bench
of the High Court. The Division Bench found that the Labour
Court had arrived at its conclusion after thoroughly
considering the entire evidence and, therefore, it did not
call for any interference. Further, with regard to the
question whether the Labour Court was justified in
interfering with the order of dismissal passed by the
Disciplinary Authority in exercise of its powers under
Section 11A of the Act, the High Court came to the
conclusion that the Labour Court gave reasons for coming to
its conclusion and those reasons could be considered as
justifiable and sufficient grounds to interfere with the
punishment imposed by the employer. By common judgment and
order dated 18.9.1998, the writ appeals were dismissed.
Hence, these appeals by special leave.
As stated above, the learned Single Judge and the
Division Bench in writ appeals confirmed the findings given
by the Labour Court that charges against the workmen for
breach of trust and misappropriation of funds entrusted to
them for the value mentioned in the charge-sheet had been
established. After giving the said findings, in our view,
the Labour Court materially erred in setting aside the order
passed by the Management removing the workmen from the
service and reinstating them with 25% back wages. Once act
of misappropriation is proved, may be for a small or large
amount, there is no question of showing uncalled for
sympathy and re- instating the employees in service. Law on
this point is well settled. [Re.: Municipal Committee,
Bahadurgarh v. Krishnan Behari and Others (1996) 2 SCC
714]. In U.P. State Road Transport Corporation v. Basudeo
Chaudhary and Another [(1997) 11 SCC 370] this Court set
aside the judgment passed by the High Court in a case where
a conductor serving with the U.P. State Road Transport
Corporation was removed from service on the ground that
alleged misconduct of the conductor was attempt to cause
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loss of Rs. 65/- to the Corporation by issuing tickets to
23 passengers for a sum of Rs.2.35 but recovering @ Rs.5.35
per head and also by making entry in the waybill as having
received the amount of Rs.2.35, which figure was
subsequently altered to Rs.2.85. The Court held that it was
not possible to say that Corporation removing the conductor
from service has imposed a punishment which is
disproportionate to his misconduct. Similarly in Punjab
Dairy Development Corporation Ltd. and Another v. Kala
Singh and Others [(1997) 6 SCC 159], this Court considered
the case of a workman who was working as a Dairy
Helper-cum-Cleaner for collecting the milk from various
centres and was charged for the misconduct that he inflated
the quantum of milk supplies in milk centres and also
inflated the quality of fat contents where there were less
fat contents. The Court held that in view of proof of
misconduct a necessary consequence will be that Management
has lost confidence that the workman would truthfully and
faithfully carry on his duties and consequently the Labour
Court rightly declined to exercise the power under Section
11A of the I.D. Act to grant relief with minor penalty.
In view of the aforesaid settled legal position, the
High Court materially erred in confirming the directions
given by the Labour Court in reinstating the
respondent-workmen with 25% back wages. For giving the
aforesaid direction, the Labour Court considered that there
is no evidence regarding past misconduct by the employees
and, therefore, it can be observed that they have rendered
several years of service without any blemish and to some
extent, there was lapse on the part of the Management.
In case of proved misappropriation, in our view, there
is no question of considering past record. It is the
discretion of the employer to consider the same in
appropriate cases, but the Labour Court cannot substitute
the penalty imposed by the employer in such cases.
In the result, the appeals are allowed. The impugned
order passed by the High Court confirming the award dated
30.1.1995 passed by the Labour Court is set aside. There
shall be no order as to costs.