IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 9.6.2008 CORAM THE HONOURABLE MR. JUSTICE K. CHANDRU W.P. Nos. 4911 and 14633 of 1998 Tamil Nadu Civil Supplies Corporation Ltd. Rep. by the Senior Regional Manager Thiruvannamalai .. Petitioner in both W.Ps. Vs. 1. A.P. Kathirvelu .. R1 in W.P. No. 4911 of 1998 2. R. Vijayarangam .. R1 in W.P. No. 14633 of 1998 3. The Labour Court Vellore .. R2 in both W.Ps. Petitions filed for issuance of writ of Certiorari calling for the records of the second respondent relating to the Award passed in I.D. No. 418 of 1992 dated 04.11.1997 published in Tamil Nadu Government Gazette, Part II Section 2 dated 24.12.1997 and I.D. No. 400 of 1992 dated 18.3.1998 respectively quash the same. For Petitioner : Mr. A. Arumugam For Respondent 1 in : Mr. S. Venkataraman W.P. No. 4911 of 1998 For Respondent 1 in : Mr. Bharath Chakravathy W.P. No. 14633 of 1998 for M/s Sai, Bharath and Ilan COMMON ORDER Heard the arguments of Mr. A. Arumugam, learned counsel for the petitioner and Mr. S. Venkataraman, learned counsel appearing for the first respondent in W.P. No. 4911 of 1998 and Mr. Bharath Chakravarthy, learned counsel for the first respondent in W.P. No. 14633 of 1998 and perused the records. 2. The petitioner is the Tamil Nadu Civil Supplies Corporation Ltd. represented by its Senior Regional Manager, Thiruvannamalai. It is a wholly owned Government Company registered under Section 617 of the Companies Act. In W.P. No. 4911 of 1998, the writ petition https://hcservices.ecourts.gov.in/hcservices/ is directed against the Award dated 04.11.1997 passed by the Labour Court made in I.D. No. 418 of 1992 wherein and by which, the petitioner was directed to reinstate the first respondent (A.P.Kathirvelu) with full backwages, continuity of service and all other attendant benefits. In W.P. No. 14633 of 1998, the writ petition is directed against the Award dated 18.3.1998 passed by the second respondent Labour Court made in I.D. No. 400 of 1992 wherein and by which the first respondent (R. Vijayarangan) was directed to be reinstated with full backwages and other attendant benefits. 3. The writ petitions were admitted on 03.4.1998 and 22.9.1998 respectively. Pending the writ petitions, by an order dated 29.6.1998, this Court directed the petitioner to pay Rs.1400/- from April 1998 every month pending disposal of the writ petition in terms of Section 17B of the Industrial Disputes Act [for short, 'I.D. Act']. By another order dated 29.6.1998, this Court directed the petitioner to deposit a sum of Rs.1,12,000/- in a Nationalised Bank and on such deposit, the first respondent was directed to withdraw quarterly interest. 4. In W.P. No. 14633 of 1998, by an order dated 12.11.1998, similar orders were passed in respect of first respondent R.Vijayarangam. It is now stated that the said Vijayarangam reached the age of superannuation on 31.5.2003. 5. In view of the fact that the arguments addressed in both the writ petitions were common, these matters were dealt with together and a common order is being passed. 6. The first respondents in both the writ petitions were working as Junior Assistants and when they were working in Thiruvannamalai Godown, there was a heavy shortage of various commodities and they were solely responsible for the same. Both of them were suspended by an order dated 05.10.1984. Notwithstanding their explanation, an additional charge-memo dated 16.5.1985 was given to them directing them to show cause as to why a sum of Rs.22,26,629.20 should not be recovered from them besides taking further disciplinary action on the said issue. The first respondents denied the responsibility for the loss and requested for inspection of the records. An enquiry was conducted in which their statements alone were recorded by the Enquiry Officer, who held that the charges were proved on the basis of the explanation submitted by them. The first respondents were dismissed by an order dated 01.8.1991 by the petitioner. Also, recovery proceedings were initiated demanding a sum of Rs.27,02.978.50. Out of this, A.P. Kathirvelu was held responsible for loss caused to the extent of Rs.6,43,491.40 and R. Vijayarangam was held to have caused a loss of Rs.5,15,705.85. https://hcservices.ecourts.gov.in/hcservices/ 7. The first respondents filed writ petition before this Court being W.P. No. 10762 of 1992 and the same was dismissed by an order dated 05.10.1999. This Court granted liberty to the petitioner Corporation to seek civil remedy for the recovery of amount. Likewise, in the recovery notice dated 14.6.1992, recovery of a sum of Rs. 7,35,994.20 was also caused against D.Viswanathan, Quality Inspector. The said Viswanathan was also dismissed from service by an order 17.7.1991. He filed two writ petitions before this Court being W.P. Nos. 5050 of 1992 and 9393 of 1992 challenging both the dismissal and the recovery order. P. Sathasivam, J. (as he then was), by a judgment dated 24.3.2000, allowed the writ petitions and in the operative portion found in paragraph 8, observed as follows:- ".... Therefore, the order challenged in this writ petition dismissing the writ petitioner from the service which was affirmed by the appellate authority is set aside. However, liberty is given to the competent authority to proceed afresh against the writ petitioner in accordance with Regulation 4. As observed by R.Balasubramanian, J., in the said decision that the Senior Regional Manager has no authority to commence and complete the disciplinary enquiry upto the stage of punishment as has been done in this case, the materials so concluded by him during such course have to be eschewed from the records. In view of the setting aside the order of dismissal, the writ petitioner is entitled to reinstatement with all attendant monetary benefits. The respondents are directed to implement the order regarding reinstatement with attendant monetary benefits as mentioned above on or before 31.5.2000...." 8. The said matter was taken on appeal by the petitioner Corporation in W.A. Nos. 796 and 797 of 2000. A Division Bench of this Court presided by R. Jayasimha Babu, J. upheld the order of the learned Judge. But, however, the said Viswanathan had passed away in the meanwhile and this Court disposed of the writ appeals with the following observations: Para 3: "In this case, the writ petitioner being no more, no question of reinstatement in service can arise. Having regard to the nature of the charges, we have in other similar matters declined to grant backwages. By reason of the writ petitioner being no more, this case cannot be treated any differently. His heirs will not be entitled to receive any amount as backwages to the deceased employee. Had he been alive, he would have been reinstated with liberty to the employer to hold a fresh enquiry against him. Para 4: So far as the amount ordered to be recovered is concerned, it is submitted by counsel at bar, that no https://hcservices.ecourts.gov.in/hcservices/ part of that sum had so far been recovered. Counsel for the heirs of the employee says that the employee has not left any property. The liabilities of the legal representatives is only limited to the property owned by the deceased and which property is in their hands. The question of recovery from the legal representatives does not arise. These writ appeals are accordingly disposed of." 9. In the meanwhile, the first respondents also proceeded with criminal action before the Judicial Magistrate, Thiruvannamalai in C.C. No. 1013 to 1016 of 1987. After a trial, which took nearly 18 years, the first respondents were acquitted by the learned Judicial Magistrate vide judgment dated 07.7.2005. The said order was not appealed and it had become final. As against the dismissal, the first respondents raised a dispute before the Government Labour Officer and finally the matters were taken by the second respondent Labour Court as I.D. Nos. 418 of 1992 and 400 of 1992 respectively. 10. In I.D. No. 418 of 1992, on behalf of the first respondent, 14 documents were filed and they were marked as Exs. W.1 to W.14 and on behalf of the petitioner Management, 10 documents were filed and they were marked as Exs. M.1 to M.10. Likewise, in I.D. No. 400 of 1992, which was tried along with two other disputes, 64 documents were filed on behalf of the workmen and they were marked as Exs. W.1 to W.64 and on behalf of the petitioner Management, 12 documents were filed and they were marked as Exs. M.1 to M.12. In both the disputes, no oral evidence was let in by the parties. In the counter statements filed in both the I.Ds., the petitioner Corporation did not seek for any alternative prayer, viz., that in the event of the Labour Court coming to the conclusion that the enquiry held by them was vitiated, they should be allowed to lead fresh evidence before the Labour Court. 11. The Labour Court, after going through the oral and documentary evidence, came to the conclusion that the domestic enquiry held against the first respondents were not in accordance with the principles of natural justice. It also held that the petitioner Corporation has one main godown and 33 satellite godowns and since in the domestic enquiry, no witnesses were produced and no exhibits were marked, the dismissal of the two workmen was not legal and proper. It also held that even though the charges were based upon registers and records, they were not marked in the enquiry and that the link between the first respondents and the shortage was not established. It also held that one Raghavan, Bill Clerk, who was similarly charge-sheeted, was restored by the Management vide order dated 19.9.1996 marked as Ex. W.14. Since the petitioner https://hcservices.ecourts.gov.in/hcservices/ Corporation had not asked for any opportunity to lead fresh evidence, the Labour Court passed the two Awards holding that the first respondents were not guilty of any misconduct and, therefore, they are entitled for reinstatement with backwages as noted already. It is against these Awards, the present two writ petitions have been filed as noted already. 12. When these matters came up for final hearing, a learned Judge passed an interim order dated 22.6.2007 and called for fresh findings from the Labour Court after giving opportunity to both parties. It is necessary to refer to paragraphs 3 to 5 of the said order. Para 3: "On a perusal of the charge memo issued to the respective first respondents, I find that the proved allegations resulted in mishandling and monetary loss of Rs. 22,26,629.20 to the petitioner. It may be that the concerned authorities of the petitioner did not produce relevant materials before the second respondent – Labour Court, at the time when the disputes were taken up for hearing. But on that score, I feel that the respective first respondents cannot be allowed to go scotfree in spite of serious allegations of malfeasance or misfeasance in respect of the essential commodities meant for public distribution, that too, to the value of more than Rs. 22 lakhs. Para 4: I therefore feel that a final opportunity can be extended to the petitioner to establish the charges before the second respondent – Labour Court, by calling for a finding from the second respondent – Labour Court as regards the proof of misconduct alleged against the respective first respondents in the charge memo dated 20.9.1984 and the additional charge memo dated 16.5.1985. The above course has to be adopted, since the allegations relate back to the year 1984 and it will not be appropriate to remand the cases to the Labour Court. Para 5: In the circumstances, the petitioner is directed to appear before the second respondent – Labour Court. The Registry is directed to send back the records to the second respondent – Labour Court and the second respondent – Labour Court shall reopen the disputes and permit the petitioner to to let in necessary additional evidence in support of the charges levelled against the respective first respondents in the charge memo dated 20.9.1984 and 16.5.1985. It is also open for the respective first respondents herein to let in https://hcservices.ecourts.gov.in/hcservices/ necessary rebuttal evidence on their side to disprove the charges. The second respondent – Labour Court shall render a finding and submit its findings to this Court within three months from the date of receipt of the records from the Registry of this Court." 13. Pursuant to the interim order, the second respondent Labour Court recorded evidence both oral and documentary. In I.D. 418 of 1992 (A.P. Kathirvelu), 16 documents were filed and they were marked as Exs. W.1. To W.16 and on the side of the petitioner Corporation, 83 documents were filed and they were marked as Exs. M.1 to M.83. While the first respondent examined himself as W.W. 1, on the side of the petitioner Corporation, four witnesses were examined as M.W.1 to M.W. 4. Likewise, in I.D. No. 400 of 1992 (R. Vijayarangan), 70 documents were filed and they were marked as Exs. W.1 to W.70 and on the side of the petitioner Corporation, 139 documents were filed and they were marked as Exs. M.1 to M.139. While the first respondent examined himself as W.W. 1, the petitioner Corporation examined the very same four witnesses as M.W.1 to M.W. 4. The Labour Court, by its order dated 07.01.2008, in both the I.Ds., held as follows:- "... that the charges, about mishandling of registers of godown and causing loss of stock of commodities for misappropriating such commodities, along with other staff, levelled against the petitioner – workmen under the charge Memos dated 20.9.1984 and 16.5.1985 have been proved." 14. After the findings along with the original records were sent to this Court, the matter was listed and final arguments were heard in the writ petitions. 15. Learned counsel for the first respondents pressed into service the following arguments:- (a) This Court, by its interim order dated 22.6.2007, ought not to have called for any new findings when the employer had not sought for any such relief before the Labour Court. (b) The Constitution Bench of the Supreme Court has held while interpreting Section 11-A of the I.D. Act that unless the employer seeks for an opportunity in the form of a pleading found either in the counter statement or in any other petition before the arguments, the Labour Court has no power to ask the parties to lead evidence afresh. (c) The Labour Court even in the order of remit, relied upon the materials and documents which were referred to in the original enquiry proceedings and no reliance can be placed on any materials, which were recorded in a vitiated enquiry. https://hcservices.ecourts.gov.in/hcservices/ (d) The findings rendered by the Labour Court on remand, is not based upon any record and the Labour Court had not discussed the entire evidence before rendering the finding. (e) In any event, the fact that the first respondents were acquitted by the Criminal Court on the same charges, must be taken note of by this Court before imposing punishment. (f) The fact that another similarly charge-sheeted workman by name, A. Raghavan, Bill Clerk, was taken into service by order dated 19.9.1996 (Ex. W.14) marked before the Labour Court, was not considered before passing the impugned order. (g) The Quality Inspector D. Viswanathan for whose benefit, the two workmen had helped, directly approached this Court against his dismissal along with recovery proceedings in W.P. Nos. 5050 of 1992 and 9393 of 1992 and the same was set aside vide order dated 24.3.2000. The said order of the learned Judge was also upheld by the Division Bench in W.A. Nos. 706 and 707 of 2000 vide judgment dated 26.9.2003. Therefore, the petitioners for merely having gone to the Labour Court, should not be penalised. (h) One of the worker had also reached the age of superannuation on 31.5.2003 during the pendency of the proceedings and leniency must be shown in their cases also. 16. However, Mr. R.Arumugam, learned counsel appearing for the petitioner Corporation, submitted that the long arm of this Court is vested with power under Article 226 of the Constitution is broad enough to call for findings from the Labour Court and all opportunities were given to the workmen. He also submitted that this being heavy loss to the Corporation, they should be dealt with severely and no sympathy should be shown to them. 17. Learned counsel for the petitioner relied upon the judgment of the Supreme Court in U.P. State Road Transport Corporation v. Suresh Pal, [(2006) 8 SCC 108] and referred to the following passage found in paragraph 7 of the said judgment:- Para 7: "Short question for our consideration in the present case is whether the punishment which has been modified by the learned Single Judge is justified or not? The learned Single Judge found that the punishment awarded in the present case is disproportionate to the guilt of the delinquent. So far as the guilt of the petitioner is concerned, in the domestic enquiry it has been found that the petitioner is guilty of not issuing tickets to the twenty passengers and the same finding of the domestic enquiry has been upheld by the https://hcservices.ecourts.gov.in/hcservices/ Labour Court and the High Court. The petitioner was a Conductor and holding the position of trust. If an incumbent like the petitioner starts misappropriating the money by not issuing a ticket and pocketing the money thereby causing loss to the Corporation then this is a serious misconduct. It is unfortunate that the petitioner was appointed in 1988 and in the first year of service he started indulging in malpractice then what can be expected of him in the future. If this is the state of affairs in the first year of service and if such persons are allowed to be let off with the light punishment then this will be a wrong signal to the other persons similarly situated. Therefore, in such cases the incumbent should be weeded out as fast as possible and the same has been upheld by the Labour Court. We are firmly of the view that such instances should not be dealt with lightly so as to pollute the atmosphere in the Corporation and other co-workers." 18. In the light of the rival contentions, it must be stated that in the absence of the employer (petitioner) pleading before the Labour Court seeking for opportunities to lead fresh evidence, the Labour Court has no power to record any evidence. 19. A Constitution Bench of the Supreme Court in Karnataka State Road Transport Corporation v. Lakshmidevamma [(2001) 5 SCC 433] has taken the said view as can be seen from the following passages found in paragraphs 18 to 20 of the said judgment:- Para 18: "There is one other reason why we should accept the procedure laid down by this Court in Shambhu Nath Goyal case. It is to be noted that this judgment was delivered on 27-9-1983. It has taken note of almost all the earlier judgments of this Court and has laid down the procedure for exercising the right of leading evidence by the management which we have held is neither oppressive nor contrary to the object and scheme of the Act. This judgment having held the field for nearly 18 years, in our opinion, the doctrine of stare decisis requires us to approve the said judgment to see that a long-standing decision is not unsettled without a strong cause. Para 19: For the reasons stated above, we are of the opinion that the law laid down by this Court in the case of Shambhu Nath Goyal v. Bank of Baroda is the correct law on the point. Para 20: In the present case, the appellant employer did not seek permission to lead evidence until after the Labour Court had held that its domestic enquiry was vitiated. https://hcservices.ecourts.gov.in/hcservices/ Applying the aforestated principles to these facts, we are of the opinion that the High Court has rightly dismissed the writ petition of the appellant, hence, this appeal has to fail. The same is dismissed with costs." 20. Even earlier, the Supreme Court in Neeta Kaplish v. Presiding Officer, Labour Court and another [(1999) 1 SCC 517] has held that no part of the records found in a vitiated enquiry can be relied upon by the Labour Court and if the employer does not make the request to lead fresh evidence, they will have to suffer for the consequences. This position has been made clear by referring to the following passages found in paragraphs 24 to 27 of the said judgment:- Para 24: "In view of the above, the legal position as emerges out is that in all cases where enquiry has not been held or the enquiry has been found to be defective, the Tribunal can call upon the management or the employer to justify the action taken against the workman and to show by fresh evidence that the termination or dismissal order was proper. If the management does not lead any evidence by availing of this opportunity, it cannot raise any grouse at any subsequent stage that it should have been given that opportunity, as the Tribunal, in those circumstances, would be justified in passing an award in favour of the workman. If, however, the opportunity is availed of and the evidence is adduced by the management, the validity of the action taken by it has to be scrutinised and adjudicated upon on the basis of such fresh evidence. Para 25: In the instant case, the appellant had questioned the domestic enquiry on a number of grounds including that her own answers, in reply to the questions of the Presiding Officer, were not correctly and completely recorded and that the Enquiry Officer was not impartial and was biased in favour of the respondent. It was further contended that her own witnesses were not called and she was not given the opportunity to lead evidence. The Labour Court has discussed a few of these grounds but has not given any finding on the bias of the Enquiry Officer or the ground relating to incorrectly recording the statement of the appellant. The Labour Court, however, found that the enquiry was not fairly and properly held. It was after recording this finding that the Labour Court called upon the Management to lead evidence on merits which it did not do. https://hcservices.ecourts.gov.in/hcservices/ Para 26: Learned counsel for the appellant (sic respondent) contended that in spite of the direction by the Labour Court to the respondent-Management to lead evidence, it was open to the Management to rely upon the domestic enquiry proceedings already held by the Enquiry Officer, including the evidence recorded by him, and it was under no obligation to lead further evidence, particularly as the Management was of the view that the charges, on the basis of the evidence already led before the Enquiry Officer, stood proved. It was also contended that under Section 11-A, the Labour Court had to rely on the “materials on record” and since the enquiry proceedings constituted “material on record”, the same could not be ignored. The argument is fallacious. Para 27: The record pertaining to the domestic enquiry would not constitute “fresh evidence” as those proceedings have already been found by the Labour Court to be defective. Such record would also not constitute “material on record”, as contended by the counsel for the respondent, within the meaning of Section 11-A as the enquiry proceedings on being found to be bad, have to be ignored altogether. The proceedings of the domestic enquiry could be, and were in fact, relied upon by the Management for the limited purpose of showing at the preliminary stage that the action taken against the appellant was just and proper and that a full opportunity of hearing was given to her in consonance with the principles of natural justice. This contention has not been accepted by the Labour Court and the enquiry has been held to be bad. In view of the nature of objections raised by the appellant, the record of enquiry held by the Management ceased