1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1606 OF 1997 The Ichalkaranji Urban Co-op. Bank Ltd. .. Petitioner. Vs. Deepak Bapusaheb Jagtap ..Respondent. .... Mr. K.S. Bapat i/b Mr. T.S. Ingale for the Petitioner. Mr. R.D. Soni for the Respondent. .... CORAM: DR. D.Y. CHANDRACHUD, J. 26th June, 2008. P.C. : 1. The Respondent was appointed as a clerk with the Petitioner which is an Urban Co-operative Bank. On 27th November, 1981, after having served at one station for nearly 17 years he was transferred to a branch of the bank at Kavathe Guland. At the material time the Respondent was a senior clerk and was performing the duties of a cashier. On 14th December, 1981 the Branch Manager was on leave. The head office of the bank had deputed an officer by the name of Mr. Kole to function as a Branch Manager incharge during the absence of the Branch 2 Manager. Mr. Kole, it is alleged, passed a cheque tendered by a customer, Mr. Ketkale, and he was given a token for receiving his payment. It was alleged that the Respondent despite receiving a “pay cash order” refused to make payments to the customer. The customer lodged a complaint recording the inconvenience that was caused to him as a result of the refusal of the Respondent to make payment. An explanation was sought from the Respondent and eventually a charge-sheet came to be issued on 16th February, 1982 by which the Respondent was served with the allegations in a disciplinary enquiry. The Enquiry Officer after the disciplinary enquiry which was held came to the conclusion in his report of 26th July, 1983 that the misconduct was duly established. The board of directors concluded in a meeting of 19th August, 1983 that the finding of misconduct warranted an order of discharge. The Respondent was discharged on 29th August, 1983. 2. The Respondent filed an application under the Bombay Industrial Relations Act, 1946 in order to challenge the penalty which was imposed upon him. By its judgment dated 9th April, 3 1987 the Labour Court held that the enquiry was fair and proper. In a subsequent judgment of 22nd December, 1989 the Labour Court permitted the Respondent to lead evidence to establish the allegation of victimization and the question of perversity of the findings and the quantum of the penalty imposed. By a judgment dated 30th March, 1993 the Labour Court came to the conclusion that there was a perversity in the findings of the Enquiry Officer and an order of reinstatement together with backwages was passed. 3. On behalf of the Petitioner it has been urged that the Labour Court was manifestly in error in interfering with the findings of the Enquiry Officer particularly in view of the fact that it is now a settled position in law that the Labour Court in a proceeding under Sections 78/79 of the Bombay Industrial Relations Act, 1946 does not have the powers vested in a Labour Court exercising jurisdiction under Section 11-A of the Industrial Disputes Act, 1947. That apart, it was urged that in the present case evidence was adduced before the Enquiry Officer both of the officer, Mr. Kole who was deputed to act in the absence of the then Branch 4 Manager for one day, as well as of the customer. Learned counsel submitted that it has come in the evidence that despite a cheque being passed by Mr. Kole, the Respondent as a cashier declined to effect payment though he was requested to do so. Learned counsel submitted that it has come in the evidence and the Labour Court has recorded a finding that the Respondent had a grudge in respect of his posting at Kavathe Guland branch and soon after resuming charge he had addressed a letter asking for the time of cash hours and a specimen signature of the authorized persons. Refusal to pay cash to a customer whose cheque had been duly cleared by a person who was acting in place of the Branch Manager who was on leave was an act of misconduct and it was submitted that the bank was justified in taking a serious view thereof and imposing a penalty of discharge. In any event, it was submitted that absolutely no case was made out for the grant of backwages on the basis of the misconduct proved against the Respondent. 4. On behalf of the Respondent it has been urged by 5 learned counsel that as the Labour Court found : (i) The manager on leave was not examined in the evidence; (ii) Mr. Kole who was deputed by the bank in place of the Branch Manager did not produce his authority for passing cheques; (iii) This was a situation where a customer had sought cash against a cheque which was yet to be cleared and (iv) The Respondent was penalized for one isolated incident. 5. In evaluating the merits of the rival contentions it needs to be emphasized at the outset that even the Labour Court which accepted the case of the Respondent had treated it as no longer in dispute that the Respondent himself was not happy with his posing from Ichalkaranji to the Kavathe Guland Branch. The grudge which the Respondent held, noted the Labour Court, was spelt out by him during the course of the enquiry and was borne out by the enquiry papers. Upon resuming charge the Respondent had addressed a letter to the bank asking for the timing of the cash hours and the specimen signatures of authorized persons. The incident in question took place on 14th December, 1981. The Branch Manager 6 was on leave on that day. Mr. S.K. Kole who was deputed by the Head office in place of the Branch Manager deposed in evidence during the course of the enquiry. The evidence of Mr. Kole was that on 14th December, 1981 when he went to the bank he had assumed charge and that thereafter he had taken out cash from safe custody. Mr. Kole deposed that he had thereafter passed certain cheques which had been produced by the customers of the bank for payment. Despite his having passed those cheques, the Respondent declined to effect payment. Mr. Kole stated that though he had personally asked the Respondent to effect payment and that he would be responsible for that, the Respondent declined to effect payment. As a result the head office had to be informed, another person was deputed and the charge of the cash was entrusted to another employee. The customer who was aggrieved by the Respondent having declined to make payment (Shri Jagtap) was examined in evidence. 6. There is merit in the submission which has been urged on behalf of the Petitioner that while appreciating the evidence, the 7 Labour Court applied a standard akin to the function of the Court while presiding over a criminal trial. It is a settled position in law that the powers under Section 11-A of the Industrial Disputes Act, 1947 are not conferred upon the Labour Court while deciding an application under Sections 78 or 79 of the Bombay Industrial Relations Act, 1946. (Municipal Corporation of Greater Bombay v. S.E. Phadtare1). It was not in dispute that Mr. Kole as an officer had been deputed to the Branch at Kavathe Guland in place of the Branch Manager who was on leave. The cheque was cleared by Mr. Kole. The persistent refusal of the Respondent to effect payment despite the cheque having been passed could justifiably have been regarded by the bank as an act of misconduct. The Labour Court has reappreciated the evidence at great length on the question as to whether Mr. Kole possessed the authority or a document to show that he was asked by the head office to act in the place of the then Branch Manager and on whether Mr. Kole had removed cash from safe custody with the key that was possessed by him. There is merit in the submission that in the present case, having regard to the evidence of Mr. Kole as well as 1 1994 I CLR 301. 8 of the customer of the bank there was sufficient material to indicate that though the cheque had been cleared by an officer who had been deputed by the Head Office in place of the Branch manager, the Respondent had obdurately declined to effect payment by questioning the authority of Mr. Kole. This plainly constitutes an act of misconduct. The Labour Court transgressed the limits on its jurisdiction by reappreciating the evidence and by substituting a conclusion which appeared to the Court be a proper conclusion for the conclusion which was arrived at on the basis of the evidence by the Enquiry Officer. On the issue of victimization it is a well settled position that once a finding of misconduct is sustainable on the basis of the evidence on the record, the charge of victimization as such must fail. Proved misconduct is the antithesis of the victimization. 7. After the judgment of the Industrial Court which confirmed the judgment of the Labour Court the Petitioner moved these proceedings under Articles 226 and 227 of the Constitution. On 2nd April, 1997 a Learned Single Judge of this Court granted 9 interim relief and the order for the payment of backwages was stayed. There was no stay of reinstatement. As a result, the Court has been informed, the Respondent was reinstated in service and after discharging his duties, attained the normal age of superannuation. At this stage, since the Respondent has now attained the age of superannuation, nothing further needs to be added on that aspect of the matter. In view of the circumstance that this Court has arrived at a finding that the misconduct has been proved and the Labour Court and the Industrial Court were not justified in interfering therewith, the orders passed by the Labour Court and the Industrial Court are unsustainable and would have to be quashed and set aside. There shall be an order in these terms. 8. Counsel appearing for the Respondent however urged that in any event having regard to the nature of the misconduct, the imposition of a penalty of discharge from service was not warranted. This aspect of the matter can be looked at from two points of view. First, the Petitioner is an urban co-operative bank. 10 The refusal of the Respondent to discharge his obligation as cashier to pay the amount directed to a customer upon the passing of a cheque can be regarded as a serious act of misconduct. Banks exist to render service to their customers. An employee of a bank cannot be heard to say that his dereliction in the performance of his duties as a casher by failing to pay an amount to a customer despite a due authorization on the cheque should be condoned as the lapse has occurred for the first time. The lapse in the present case was not unintentional but there was an element of obduracy on the part of the Respondent in failing to pay the amount due under the cheque despite repeated requests by the person who was acting as Branch Manager in the place of the existing Branch Manager who was on leave. Secondly, and in the alternative, even if the argument of the Respondent were to be accepted that the misconduct in question being the first act of misconduct in a service of 14 years should not to have resulted in the imposition of the extreme penalty of discharge, the grant of backwages was in any event not warranted in the interests of justice. The question as to whether backwages should be awarded is a matter which has to 11 be decided on the basis of the facts and circumstances and as a matter of judicial discretion. Having regard to the proved act of misconduct, no case was made out for the grant of backwages in the facts of the present case. 9. For the reasons aforesaid, the Petition will have to be allowed and is accordingly allowed. Rule is made absolute by setting aside the order of the Industrial Court dated 21st February, 1997 and the order of the Labour Court dated 30th March, 1993. The application filed by the Respondent before the Labour Court shall stand dismissed. However, it is clarified that since the Respondent has, in the meantime in pursuance of the interim order passed in these proceedings, been reinstated in service and has attained superannuation, there would be no question of any recoveries in that regard of the wages which have been paid to the Respondent for the work which has been rendered. ***** 12