IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 23-01-2009 Coram: The Honourable Mr.Justice M.JAICHANDREN W.P.No.8980 of 2003 Tamilnadu Mercantile Bank Limited rep. By its Chairman, Tuticorin. .. Petitioner. Versus 1.The Deputy Commissioner (Labour) (Appellate Authority under the Tamil Nadu Shops and Establishments Act) 5/2, Co-operative Buildings, Anna Nagar, East Madurai-20. 2.P.R.Gokhale .. Respondents. Prayer: Petition filed seeking for a writ of Certiorari to call for the records relating to the order passed by the first rsepondent in TNSE Appeal No.8 of 1995, dated 2.4.97, and to quash the same. For Petitioner : Mr.S.Sanjay Mohan for Mr.Ramasubramaniam Associates For Respondents : Mr.P.Muthukumar Government Advocate (R1) Ms.Vaigai for Mr.Balan Haridas (R2) O R D E R Heard the learned counsel appearing for the petitioner and the learned counsels appearing for the respondents. 2. This writ petition has been filed praying for a writ of certiorari to call for the records relating to the order, dated 2.4.97, passed by the first respondent in TNSE Appeal No.8 of 1995 and quash the same. https://hcservices.ecourts.gov.in/hcservices/ 3. It has been stated that the second respondent had been issued with the charge memo, dated 15.9.93, wherein, certain allegations of grave misconducts were alleged against him relating to the sanctioning of some loans under the THADCO and IRDP Schemes meant for the benefit of the weaker sections of the society for the purchase of sheep, bullocks, cycles, sewing machines etc. The charges levelled against the second respondent read as follows: "You have shown in the records that on 25.1.91, 10 persons were granted loans for purchasing sheep. Each loan is to the tune of Rs.7,000/- including the Government subsidy of Rs.3,000/-. On the basis of the 10 loans, you should have released a total sum of Rs.70,000/- (Rs.40,000/- as loan from the Bank and Rs.30,000/- being the Govt. subsidy) and the entire sum of Rs.70000/- ought to have utilised for the purchase of sheep by each person for whom the loan and the subsidy amount were intended. But Rs.40000/- has been given in cash in the name of Mr.Nallu vide slip No.110 and you have credited the Savings Bank Account of C.Paulsamy wih Rs.10000/- and the fixed deposit account of Vaigai Sports Club with Rs.10,000/- out of the subsidy amount of Rs.30000/-. b. On 4.2.91, another 10 person loans of Rs.7000/- each including Govt. subsidy of Rs.3000/- were shown by you in the records of the book as disbursed. But Rs.40000/- has been given in cash in the name of an illiterate borrower M.Perumayee as per voucher No.21 and a sum of Rs.2000/- has been credited to the Savings Bank account No.1143 of one K.Kumar and Rs.10000/- to the Savings Bank account No.1188 of E.Manoharan. Obviously in this case also, sheep have not been brought for Rs.70000/- in the name of the 10 borrowers and no asset was created. On the other hand, the Bank's fund of Rs.40000/- has been temporarily misappropriated by you and the Government subsidy has been falsely shown as credited in the S.B. account of 3 individuals. Thus, you have again acted in breach and violation of the guidelines, Rules and Regulations in this regard. c) It is seen from the accounts that in respect of the 10 loans released on 25.1.91, 4 accounts have been closed within 2 to 4 months, while the other accounts are outstanding with the accumulated interest. Further, the subsidy has been credited and adjusted against the loans on the same day of the disbursement of loans. This clearly shows that you have manipulated the loan and subsidy accounts without purchasing sheep and thereby creating no asset. d) In respect of the second set of loans released on 4.2.91, 8 loans were closed within 2 to 5 months. Out of these 3 accounts in respect of 6 accounts the remittance Chalan has been signed by one K.Mukkaian who is said to be a cooly. This would clearly establish that the entire transactions were fictitious intended for your personal benefit. https://hcservices.ecourts.gov.in/hcservices/ e) You have misused the discretionary power given to you by granting a loan of Rs.7000/- on 7.6.91 to one P.Murugan for purchasing sheep, while another loan of Rs.6000/- was granted on the same day to one Mr.A.Raj for purchasing bullocks. But the Government subsidy of Rs.3000/- for each of the loan had been credited on the same day into their respective accounts. This shows that the loan amounts were not actually disbursed for purchase of sheep and bullock resulting in the temporary misappropriation of funds belonging to the Bank as well as the Government subsidy. This view is further confirmed by the fact that the loans have been closed by debiting the amounts of P.Murugan and A.Raj with the outstandings on 26.6.91, i.e. within 18 days from the days of the disbursement of the loans. f) On 25.6.91, you have granted a term loan Rs.4000/- to R.Muthu of Eluvanampatti. The subsidy of Rs.2000/- had been credited in his account on the same day. The account was closed within 40 days from the date of release of the loan. The purpose of loan was to start cycle shop. But it appears that the beneficiary had never opened a cycle shop. On the other hand, the account was closed by paying the outstanding amount in cash by one Mr.K.Kumar who is stated to be a milk vendor. g) You have granted on 25.6.91, loans of Rs.7500/- each to V.Perumal and R.Erulappan of Eluvanampatti for starting brick units. The subsidy amount of Rs.3000/- each has been adjusted on the same day. The S.B. account of K.Kannan (No.1143) had been credited with the entire amounts of Rs.15000/-_ and the accounts were closed on 27.9.91 within 65 days. h) You have sanctioned on 27.9.91 a loan of Rs.5,000/- to P.Raman to do cut piece business and Rs.9000/- to P.Pappa to start a Bunk shop. But the entire amount of Rs.14,000/- had been credited to the S.B.account of K.Mukkaian, a cooly doing spraying work in the fields. The subsidy amounts of Rs.2500/- and Rs.4,500/- respectively have been credited to the loan accounts on the same day and thereafter the loan accounts were closed on 27.9.91 itself by debiting the S.B.account of K.Mukkaian. Obviously, the loan amounts were not utilised for the purpose they were sanctioned." 4. Based on the above mentioned charges levelled against the second respondent an enquiry was held in which the second respondent had fully participated, availing the opportunities afforded to him. The enquiry officer, by his findings, dated 27.2.95, had held that the charges alleged against the second respondent had been proved beyond doubt and that he was guilty of the misconducts alleged against him. Thereafter, the management of the petitioner Bank had issued a second show cause notice to the second respondent, asking him to show as to why he should not be dismissed from service, based on the proved acts of misconduct. Thereafter, by an order, dated 24.6.95, the second respondent had been dismissed from service. Challenging the order of dismissal, dated https://hcservices.ecourts.gov.in/hcservices/ 24.6.95, the second respondent had filed an appeal before the first respondent, the designated Appellate Authority, under the provisions of the Tamilnadu Shops and Establishments Act, 1947. 5. A detailed reply had been filed on behalf of the petitioner Bank justifying the dismissal order passed against the second respondent. The first respondent Appellate Authority after hearing the submissions made on behalf of the parties concerned passed an order, dated 2.4.97, setting aside the order of termination passed by the petitioner Bank terminating the services of the second respondent. Challenging the order of the first respondent, dated 2.4.97, the present writ petition has been preferred before this Court, by the petitioner Bank, under Article 226 of the Constitution of India. 6. The allegations made in the affidavit filed on behalf of the petitioner Bank had been denied by the learned counsel appearing for the second respondent. It has been stated that the first respondent Appellate Authority had rightly set aside the illegal order of dismissal passed by the petitioner Bank against the second respondent. It has been further stated that the second respondent had joined the services of the petitioner Bank during the year, 1972, as a Clerk. While the second respondent was working as a manager of the Viralipatti Branch in the year, 1991, the petitioner Bank had issued a charge memo, dated 15.9.93, alleging certain irregularities in the disbursement of THADCO loans and IRDP loans, as the Branch Manager of the Viralipatti Branch. On 8.10.93, the second respondent had been suspended from service. On 15.10.93, the second respondent had submitted an explanation denying the charges levelled against him. Thereafter, the management of the petitioner Bank had conducted a domestic enquiry without paying the subsistence allowance due to the second respondent during the period of his suspension from service. Even though the second respondent had been suffering due to financial constraints he was forced to participate in the domestic enquiry held at Madurai. Based on the findings of the enquiry officer the second respondent had been dismissed from service by an order, dated 24.6.95, passed by the petitioner Bank. Challenging the order of dismissal the second respondent had filed an appeal before the first respondent, under Section 41(2) of the Tamilnadu Shops and Establishments Act, 1947, in TNSE Appeal No.8 of 1995. After an elaborate enquiry the first respondent, by an order, dated 2.4.97, had held that the charges levelled against the second respondent had not been proved and that the order of dismissal, dated 24.6.95, issued by the petitioner Bank, dismissing the second respondent from service, is bad in law. The petitioner Bank had filed the present writ petition before this Court challenging the order of the first respondent Appellate Authority, dated 2.4.97, made in TNSE Appeal No.8 of 1995. 7. Mr.Sanjay Mohan, the learned counsel appearing on behalf of the petitioner Bank had submitted that the impugned order of the first respondent, dated 2.4.97, suffers from errors apparent on the face of the https://hcservices.ecourts.gov.in/hcservices/ record and therefore, it is liable to be set aside. The first respondent Appellate Authority had failed to exercise the jurisdiction vested in him by virtue of Section 41(2) of the Tamilnadu Shops and Establishments Act, 1947. He had clearly failed to examine all the aspects of the matter, including the questions of fact before coming to his conclusions. He had not properly appreciated the evidence available on record before passing the impugned order resulting in grave miscarriage of justice. The first respondent Appellate Authority was duty bound to consider the important question as to whether or not the second respondent had been negligent in discharging his duties in accordance with the rules and guide lines of the petitioner Bank. The first respondent Appellate Authority had failed to note that the second respondent had sanctioned the loan granted to the cycle shop without even looking into the Inspector's Report and without attempting to find out as to whether the cycle shop was in existence or not. Further, the first respondent Appellate Authority had failed to realise that the second respondent was liable for gross negligence as he had not seen that various amounts drawn in favour of one person were actually deposited in the accounts of others, under his signature. The first respondent Appellate Authority had failed to appreciate the factual findings of the enquiry officer, who had found that the charges levelled against the second respondent had been proved beyond doubt, based on the available evidence. The first respondent ought to have seen that the second respondent did not let in any evidence in his defence and that he did not subject himself to cross examination by the management of the petitioner Bank. The first respondent ought to have seen that the enquiry officer had given clear reasons while holding that the second respondent was guilty of the serious charges levelled against him. Further, he had failed to give proper reasons to come to the conclusion that the second respondent was not guilty of the charges. Therefore, the findings of the first respondent Appellate Authority is perverse and contrary to law and the facts of the case. 8. The learned counsel had also contended that the first respondent Appellate Authority ought to have seen that the second respondent was holding a responsible position as the manager of the Viralipatti Branch of the petitioner Bank and that he was the authority to sanction the loans under the THADCO and IRDP Schemes meant for the weaker sections of the society. Therefore, it was his duty to satisfy himself that the loans were not only obtained for the purposes for which they were meant but also to ensure that the amounts granted as loans are spent for the purposes for which they had been obtained. The first respondent Appellate Authority ought to have noted that according to Charge No.1 levelled against the second respondent that the entire sum of Rs.70,000/- ought to have been utilised for the purchase of sheep, instead a sum of Rs.40,000/- had been given in cash in the name of one Mr.Nallu, vide Slip No.110, and a sum of Rs.10,000/- had been credited to the Savings Bank Account of one C.Paulchamy and a sum of Rs.10,000/- had been credited to the Fixed Deposit account of Vaigai Sports Club, clearly showing that the second respondent had connived with certain persons and had adjusted the https://hcservices.ecourts.gov.in/hcservices/ amounts by producing fictitious names. The first respondent ought to have seen that according to the second charge levelled against the second respondent the subsidy amount had been credited to the accounts who are not even the borrowers of the loan amounts. Further, there was no proof to the effect that the sheep had been purchased out of the amounts disbursed as loans. The first respondent ought to have seen that it was the duty of the second respondent to ensure that the loan amounts disbursed by the Bank, along with the subsidies given by the Government, were properly utilised for the purposes for which they were meant. The first respondent ought to have seen that there was no evidence to show that the sheep had been purchased utilising the loan amounts sanctioned and disbursed for the said purpose. 9. It has also been contended that the first respondent ought to have seen that in Charge No.3 levelled against the second respondent it has been alleged that the remittances had been made in the name of Mukkaian who was a common coolie and the documents which were produced before the Enquiry Officer, as well as before the first respondent, would show that the said Mukkaian was not at all a borrower of the loans and that the 10 transactions were only fictitious in nature. Further, the first respondent Appellate Authority had failed to note that according to Charge No.5, levelled against the second respondent the amount collected for the purchasing of the sheep and the bullocks were repaid, within 18 days from the date of the disbursement of the loan amounts. It would clearly show that the amounts disbursed as loans had not been utilised for the purposes for which they were granted. Hence, it is clear that the second respondent had failed in his duties to ensure that the loans sanctioned and disbursed were effectively utilised for the purposes for which they were given. 10. It has also been contended that the first respondent Appellate Authority ought to have seen that, with regard to the charges 6, 7 and 8, levelled against the second respondent, loans disbursed for the starting of a cycle shop, bricklyn units, cut piece business and bunk shops had not been properly utilised. It is clear that there was no proof to the effect that the said amounts were disbursed as loans only after the necessary investigations had been made. However, the first respondent Appellate Authority had erroneously held that it was for the petitioner bank to establish that the amounts disbursed as loans had not been utilised for the purposes for which they were granted. No records were available with the Bank to show that the amounts sanctioned and disbursed as loans were utilised for the purposes for which they were meant. No efforts were taken by the second respondent to prove that the loans were sanctioned only after due investigations had been made. In such circumstances, it could be validly presumed that the second respondent had been involved in the monetary dealings relating to the sanctioning and the disbursement of the loan amounts. https://hcservices.ecourts.gov.in/hcservices/ 11. The learned counsel for the petitioner had further stated that the statement made by the delinquent officer, admitting that all the prescribed procedures had not been followed as that was the practice being followed by many of the officers of the Bank, ought to have been taken note of the by the Appellate Authority in coming to his final conclusions. 12. The learned counsel for the petitioner had relied on the decision of the Supreme Court in Shama Prashant Raje Vs. Ganpatrao & Ors. (2000(7) SCC 522), wherein it has been held that the jurisdiction of the High Court is supervisory in nature and that it does not act as a Court of appeal to examine for itself the correctness of the decision impugned and to decide what is the proper view to be taken or an order to be made. Notwithstanding the same, on a mere perusal of the order of an inferior Tribunal, if the High Court comes to a conclusion that such Tribunal has committed a manifest error by misconstruing certain documents or that the High Court comes to the conclusion that on the materials available it is not possible for a reasonable man to come to the conclusion arrived at by the inferior Tribunal or that the said Tribunal had ignored to take into consideration certain relevant materials or has taken into consideration certain materials which are not admissible, then the High Court would be fully justified in interfering with the findings of the inferior Tribunal. 13. The learned counsel for the petitioner had submitted that in the domestic enquiry conducted against the delinquent officer the probabilities of the case would also be relevant. Even though the management witness P.Annamalaisamy had stated that there has been a breach of procedure, no suggestions had been made by the delinquent officer stating that there has been no breach of regulations. In fact the delinquent officer did not examine himself during the domestic enquiry, nor did he examine any witness on his side to substantiate his claim, with regard to the loanees authorising some specific individuals to collect the payments. No third parties had been examined by the delinquent officer in support of his claims that there were specific directions to the Bank to disburse the loan amounts to third parties. 14. The learned counsel had further stated that the order of termination can be sustained on the simple fact that the manager of the Bank concerned had deviated from the rules and regulations relating to the granting of the loans, as it is clear from his own explanation submitted with regard to the charges levelled against him. The delinquent officer had not let in any evidence in support of his claim that the loan amounts had been disbursed at the instance of the borrowers, who were led by Nallu and Paulchamy, after obtaining the necessary documents from all the persons concerned. If the amounts had not been paid to the applicants, as per the Bank records and if they were paid to some other persons there should be clear evidence available on record to show as to https://hcservices.ecourts.gov.in/hcservices/ how the amounts had been paid to Nallu and Paulchamy, especially, in view of the fact that the delinquent officer had admitted that the loan amounts were not credited to the accounts of the borrowers. Further, no evidence had been let in regarding the arrangements made amongst the applicants for the loans of Perumayee, Kannan and Manoharan. The authority concerned had concluded that since goods had been purchased the allegations made against the petitioner had not been proved. The Appellate Authority had lost sight of the departure of the petitioner from the prescribed Rules and Regulation of the Bank. He had also lost sight of the fact that the Veterinary doctor had himself claimed that he did not know as to whom the money had been paid for the purchase of the goats. The loan sanctioned in the name of Perumal and Erulappan had been credited in the Savings Bank Account of K.Kannan and the loan sanctioned to P.Raman and Pappa had been credited to Mukkaian. However, there is no evidence with regard to the consent given by the loanees to credit the amounts in the name of other persons. In some cases, the loan amounts sanctioned had been disbursed, without cross checking the merits of the claims. 15. With regard to the non-production of the regulations by the petitioner management at the time of the domestic enquiry, it has been stated that when no suggestion had been made to the management witness, who had spoken about the regulations that such regulations do not exist, or that the regulations permitted the payment of the loan amounts to persons other than the loanees, there would be no necessity to produce the said regulations. Even though the management witness had specifically stated that the rules and regulations had not been followed, they have not been cross examined by the petitioner. The statement of the delinquent officer that he had followed the practice of his predecessors would clearly show that he was aware that the regulations of the Bank do not permit payments to be made to other persons, except the loanees. Even though no regulations had been produced by the petitioner management the Appellate Authority should have considered the other relevant aspects to come to the conclusion that the delinquent officer had deviated from the prescribed regulations of the bank in disbursing the loan amounts to persons other than the loanees. 16. The learned counsel appearing for the petitioner had relied on the following decisions in support of his contentions. 16.1. In Orissa Mining Corporation and another Vs. Ananda Chandra Prusty (90 FJR 28), it was held that there is no such thing as an absolute burden of proof always lying upon the department or the employer in the disciplinary enquiry. The burden of proof depends upon the nature of the charges and the nature of the explanation put forward by the delinquent officer or the employee. The burden may be shifted to the delinquent officer depending upon his explanation. 16.2. The Supreme Court in Disciplinary Authoirty-cum-Regional Manager and others Vs. Nikunja Bihari Patnaik (1996(9) SCC 69) had held https://hcservices.ecourts.gov.in/hcservices/ that if a person had acted beyond his authority, such an act cannot be condoned for not being actuated by ulterior motives or extraneous considerations. The fact that actual loss had not been incurred by the appellant Bank cannot be a reason to hold that the charge of misconduct had not been established. 16.3. The Supreme Court, in State Bank of India & Others Vs. T.J.Paul (1999(4) SCC 759), had held that proof of serious loss to the Bank is not necessary and the likelihood of loss is sufficient to impose the punishment on the officer of the Bank. 16.4. In State Bank of India Vs. Tarun Kumar Banerjee and Others (2000(8) SCC 12), it had been held that prior to the insertion of Section 11A of the Industrial Disputes Act, 1947, the Tribunal had no power to interfere with the findings on misconduct, recorded in a proper domestic enquiry, unless it is found that the enquiry was vitiated. However, after the insertion of Section 11A the position had become different. In case it is found by the Tribunal, during the course of the adjudication proceedings, 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