M. L. Singla v. Punjab National Bank and Anr.
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.1-Bank and quashed the award dated
30.05.2006 passed by the Presiding Officer, Central Government
Industrial Tribunal-cum-Labour 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.1-
Punjab 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.1-Bank also found
shortage of Rs.35,000/- in daily cash balance on verification of the daily
accounts.
6. Respondent No.1-Bank, therefore, decided to hold a
departmental inquiry to probe the aforementioned two charges against
the appellant as per the service rules.
7. A charge-sheet 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 Cashi er
Incharge at BO, Jind City, at about 01.30 p.m. you had asked
Shri Hakikat Rai, Peon-cum-Guard 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 Cashi er
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 no rmal
business hours, you had also received Rs.16,473.98 as direct
receipt from customers and Rs.1,08,690/- from the As st.
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Cashier to meet the payment. In all, you made tota l
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 t he
cash in the cash safe total receipt made by Asstt. Cash ier
during the day of the closing balance should have b een
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 neglige nce
involving the Bank in serious loss. Further, on your request
you were advance Rs.35,000/- from the suspense accoun t
to meet the shortage of Rs.35,000/- occurred on that day
due to your gross negligence.”
8. Respondent No.1-Bank on 06.12.1985 appointed an Enquiry
Officer and the Presenting Officer. The appellant on being served with
the charge-sheet submitted his reply on 29.10.1985. Respondent No.1-
Bank and the appellant then participated in the enquiry and adduc ed
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:
“CHARGE-I 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, Peon-cum,-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 dra wer
consumed the same, stands fully substantiated and he nce,
proved.
CHARGE-II The charge that on 21.03.84 at BO Jind, a
shortage of Rs.35,000/- occurred in the cash handle d 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. ”
M. L. SINGLA v. PUNJAB NATIONAL BANK AND ANR.
[ABHAY MANOHAR SAPRE, J.]
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.
12. The appellant then approached the State Government praying
for making an Industrial Reference to the Labour Court to de cide 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 accordingl y
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. Bo th 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 held that the finding of the Enquiry
Officer on Charge-I and II is perverse and, therefore, it was set aside.
It was further held that since no evidence was adduced by r espondent
No.1-Bank 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, howev er, did not
decide the question as to whether the domestic enqu iry is legal
and proper.
463
15. Respondent No.1-Bank 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 29.08.1987 was held legal and proper
and was accordingly upheld.
16. It is against this order, the employee has felt aggrie ved 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.1-
Bank.
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 th e
“conclusion” arrived at by the High Court, but on our reasoning mentioned
infra .
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 Court committed more than one
jurisdictional error in answering the Reference.
20. The first error was that it failed to decide the validi ty 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 cha rges or is
disproportionate requiring interference in its quan tum by the
Labour Court.
M. L. SINGLA v. PUNJAB NATIONAL BANK AND ANR.
[ABHAY MANOHAR SAPRE, J.]
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.1-Bank. This the Labour Court could do by
taking recourse to the powers under Section 11-A 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 as-what is the nature of the cha rge(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 servi ce 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 justice thereby causing prejudice to the rights of the employee,
respondent No.1-Bank was under legal obligation to prove the misconduct
(charges) alleged against the appellant (employee) befor e 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.1-Bank was able to prove the charges against the appellant on merits
or not.
27. If the charges against the appellant were held proved, t he
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 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 includin g 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
465
like an Appellate Court, appreciated the evidence adduced befo re the
Enquiry Officer and the one adduced before it and then c ame to a
conclusion that the findings of the Enquiry Officer are pervers e. 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 evid ence on merits in
support of the charges yet, in our opinion, it was obligatory u pon the
Labour Court to first frame the preliminary issue on the q uestion 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 shou ld have
proceeded to decide the next questions. The Labour Court while deciding
the preliminary issue could only rely upon the evidence, wh ich 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 w ould
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.
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 a fter 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.1-Bank too was entitled to
adduce evidence to prove otherwise. ( See- M.P. State Electricity
Board vs. Jarina Bee(Smt.) , (2003) 6 SCC 141, 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
M. L. SINGLA v. PUNJAB NATIONAL BANK AND ANR.
[ABHAY MANOHAR SAPRE, J.]
Board & Anr., (2009) 15 SCC 327) and Deepali Gundu Surwase vs.
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 Secti on
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 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 co nclusion that
the reasoning of the Labour Court on Charge-I 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 Charge-I and restored that of the Enquiry Officer. The High
Court then held that since the Charge-I is proved, it is enough to sustain
the dismissal order and, therefore, it is not necessary to e xamine the
merits and demerits of Charge-II.
40. We cannot concur with the approach and the reasoning of the
Labour Court or/and the High Court 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, Management of Ritz Theater (P) Ltd. vs. Its Workmen
(1963) 3 SCR 461, Workmen of Motipur Sugar Factory Pvt. Ltd. vs.
467
Motipur Sugar Factory (1965) 3 SCR 588, State Bank of India vs.
R.K. Jain (1972) 4 SCC 304, Delhi Cloth & General Mills Co. vs.
Ludh Budh Singh (1972) 1 SCC 595, Workmen vs. 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 Shankar Chakravarti vs.
Britannia Biscuit Co. Ltd. (1979) 3 SCC 371.
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 to ask for from the Court by a ny 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 20 to
33, are based on the law laid down in aforementioned cases, which are
approved in Shankar Chakravarti’s case (supra).
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.
M. L. SINGLA v. PUNJAB NATIONAL BANK AND ANR.
[ABHAY MANOHAR SAPRE, J.]
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 ex amine 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 r aised any
objection complaining causing of any prejudice of any nature t o him
before the Enquiry Officer; Third, he received all the papers/documents
filed and relied upon by respondent No.1-Bank 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.
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 na ture.
54. So far as Charge-I is concerned, it was proved in the enquiry
that the appellant had consumed liquor while on duty. No empl oyer
would ever allow or tolerate such behavior of his employee w hile on
duty. The employer had, therefore, every right to initiate domestic enquiry
against such employee for such reprehensible conduct and behavior.
469
55. So far as Charge-II is concerned, that a shorta ge of
Rs.35,000/- cash was found in cash balance on the particular d ay 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, theref ore, directly
responsible for the shortage found in the cash.
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 dismiss al 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.
Ankit Gyan Appeal dismissed.
M. L. SINGLA v. PUNJAB NATIONAL BANK AND ANR.
[ABHAY MANOHAR SAPRE, J.]