SCA/8556/2003 1/17 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 8556 of 2003 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD Sd/- ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO ========================================================= MANAGERSHRI G S R T CORPORATION - Petitioner(s) Versus D M TANDEL - Respondent(s) ========================================================= Appearance : MS SEJAL K MANDAVIA for Petitioner(s) : 1, RULE SERVED for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 09/01/2008 CAV JUDGMENT 1. Heard learned advocate Ms. Sejal K. Mandavia appearing on behalf of petitioner – Corporation. 2. Rule issued by this Court has already been served to respondent. SCA/8556/2003 2/17 JUDGMENT 3. In the present petition, petitioner – Corporation has challenged the award passed by Industrial Tribunal in Reference (IT) No.72 of 1996 dated 24th October 2002. The Tribunal has set aside the punishment order imposed by reviewing authority and second appellate authority and granted the benefit to respondent workman the consequential benefits whichever is available to the workman. The Tribunal has confirmed the order of punishment dated 6th January 1990 imposed by competent authority of stoppage of five increments with cumulative effect. 4. Learned advocate Ms. Mandavia submitted that Tribunal has committed gross error in setting aside the order of reviewing authority and also the order of second appellate board. She also submitted that workman was working as conductor. His bus was checked by checking staff on 13th October 1989 and misconduct was committed by workman, therefore, charge-sheet was served and after completion of departmental inquiry, the charge is proved against workman, therefore, competent authority has imposed punishment of stoppage of five increments with cumulative effect by order dated 6th January 1990, against which, the departmental appeal was filed. During which, the reviewing authority has reviewed the punishment and issue show cause notice and dismiss the workman from service on 4th May 1991. Against which, second appeal was filed by workman, therefore appellate authority has set aside the order of review and granted SCA/8556/2003 3/17 JUDGMENT reinstatement of respondent workman in the post of conductor, but, to put him in minimum time scale of conductor post. Therefore, she submitted that Industrial Tribunal has committed gross error in setting aside the order passed by reviewing authority and second appellate board. For that, Tribunal has no jurisdiction. 5. I have considered the submissions made by learned advocate Ms. Mandavia appearing on behalf of petitioner – Corporation and I have perused the award passed by Industrial Tribunal. The Tribunal has considered the submissions made by both the learned advocates appearing on behalf of respective parties and on the basis of the record produced by Corporation. The legality and validity of departmental inquiry was not challenged by workman before the Industrial Tribunal. The Industrial Tribunal has considered the pleadings of both the parties and come to conclusion that finding recorded by competent authority is legal and valid. The Tribunal has also come to conclusion that looking to the misconduct proved against the workman, punishment imposed by competent authority is proper and no disproportionate, however, Tribunal has considered that no appeal was filed by workman, even though, in absence of appeal, review authority has enhanced the punishment without giving any reasons in support of its conclusion. The reviewing authority has not given any reason that how the conclusion of competent authority is bad or wrong. The reviewing authority SCA/8556/2003 4/17 JUDGMENT has not given finding that on what basis, the dismissal order is passed. The Tribunal has also come to conclusion that second appellate board who has set aside the order passed by reviewing authority and reinstatement is granted in favour of respondent workman, but, punishment is imposed to put him in minimum time scale of conductor category without giving any backwages of interim period. Therefore, Tribunal has examined the question of penalty as to whether it is proportionate or not imposed by second appellate board. The Tribunal has compared three punishments imposed by three different authorities; one is competent authority, second is reviewing authority and third is second appellate board. The Tribunal has considered the gravity of misconduct and come to conclusion that punishment imposed by competent authority is just and proper, therefore, rest of the punishment imposed by both the authorities have been set aside. The Tribunal has given cogent reason in support of is conclusion. The Tribunal has jurisdiction under Section 11A of the Industrial Disputes Act, 1947 that in case, when Tribunal is satisfied that punishment imposed by authority is disproportionate and unjust, then, Tribunal can interfere with such punishment and impose proper punishment. 6. In this case, similarly, Tribunal is having three different punishment in one misconduct, therefore, considering the gravity of misconduct, according to Tribunal while keeping in mind the SCA/8556/2003 5/17 JUDGMENT conduct of workman, punishment imposed by competent authority is found to be just and proper, therefore, Tribunal has rightly set aside the punishment imposed by reviewing authority and appellate authority. For that, Tribunal has not committed any error which requires interference by this Court. 7. The reviewing authority has power to enhance punishment as view taken by Division of this Court in Reference No.1 of 2007, but, before enhancing the punishment, some legal procedure is to be followed by reviewing authority which has not been followed by reviewing authority, therefore, Tribunal has rightly set aside the punishment, for that, Tribunal has not committed any error which requires interference by this Court under Article 227 of the Constitution of India. 8. The respondent workman raised various contentions against review proceedings including no power to enhance the punishment. The question of enhancement of punishment is decided by the Division Bench of this Court in Reference No.1 of 2007. Therefore, rest of the contentions of the respondent raised before the Court/Tribunal is examined by this court as matter is old and avoid decision on technical ground. There are basic error in review proceedings which is considered by this Court. 9. Therefore, the submissions made by learned advocate Ms. Sejal K. Mandavia cannot be accepted, SCA/8556/2003 6/17 JUDGMENT hence, rejected. 10. The law on the subject has been examined in identical situation where the inquiry officer exonerated the delinquent and disciplinary authority is not agree with such finding then, finding of disagreement must have to be communicated to the concerned delinquent. The reasons for disagreement provided for the first time with the order of punishment which has been held to be violative of principles of natural justice and settled canons of law. 11. In this case also, the punishment imposed by competent authority for which reviewing authority is not agree and the reviewing authority wanted to enhance the punishment during the pendency of appeal filed by workman. The decision of review cannot be taken during the pendency of appeal. When the reviewing authority is not agree with punishment imposed by the competent authority and the reviewing authority is deferring with the decision of competent authority then the reviewing authority should have to give reasons that how the competent authority is wrong in imposing the punishment to the workman. No such reasons are given by reviewing authority. Along with the review show cause notice, no finding is given by reviewing authority to the workman. The punishment imposed by the competent authority is found inadequate but on what basis and without disclosing the reason, explanation was called for SCA/8556/2003 7/17 JUDGMENT from the workman. After reply of the review show cause notice and personal hearing of the workman, no further finding was given and straightway, punishment was enhanced by the reviewing authority. Even the reviewing authority has not given reason along with the punishment order. Therefore, the order passed by reviewing authority is basically contrary to the principles of natural justice and also settled law laid down by the Apex Court. The view taken by the Division Bench of the Bombay High Court in case of Food Corporation of India Employees Association, West Zone and Anr. v. Food Corporation of India and Ors. reported in 2007 III LLJ 385. Relevant observations made in Para.9 which are quoted as under : "9. The learned counsel appearing for the petitioners has relied upon the judgments of the Supreme Court in the cases (i) Punjab National Bank and Others v. Kunj Behari Mishra, AIR 1998 SC 2713 : (1998) 7 SCC 84 : 1998-II-LLJ-809 and (ii) Yoginath d. Gagde v. State of Maharashtra and others, AIR 1999 SC 3734 : (1999) 7 SCC 739 in support of his contention that the entire departmental proceedings would stand vitiated on this ground. In the case of Punjab National Bank and Others v. Kunj Behari Mishra (supra), the Court held as under 1998-II-LLJ-809 at pp.817, 818 & 819 : "16. In Karunakar case (1993) 4 SCC 727 : 1994-I-LLJ-162 the question arose whether after the 42nd Amendment of the Constitution, when the enquiry officer was other than a disciplinary authority, was the delinquent employee entitled to a copy of the enquiry report of the enquiry officer before the disciplinary authority takes decision on the SCA/8556/2003 8/17 JUDGMENT question of guilt of the delinquent. It was sought to be contended that in that case that as the right to show cause against the penalty proposed to be levied had been taken away by the 42nd Amendment, therefore, there was no necessity to give to the delinquent a copy of the enquiry report before the disciplinary authority took the final decision as to whether to impose a penalty or not. Explaining the effect of the 42nd Amendment the Constitution Bench observed that : "All that has happened after the Fortysecond Amendment of the Constitution is to advance the point of time at which the representation of the employee against the enquiry officer's report would be considered. Now, the disciplinary authority has to consider the representation of the employee against the report before it arrives as its conclusion with regard to his guilt or innocence of the charges." The Court explained that the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusion on the basis of the evidence, the enquiry officer's report and the delinquent employee's reply to it. The second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. It is the second right which was taken away by the 42nd Amendment but the right of the charged officer to receive the report of the enquiry officer was an essential part of the first stage itself. This was expressed by the Court in the following words : The reason why the right to receive the report of the enquiry officer is considered an essential part of the reasonable opportunity at the first stage and also a principle of natural justice is that the findings recorded by the enquiry officer from an important material before the disciplinary authority which along with the evidence is taken into SCA/8556/2003 9/17 JUDGMENT consideration by it to come to its conclusions. It is difficult to say in advance to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions. The findings further might have been recorded without considering the relevant evidence on record, or by misconstruing it or unsupported by its. If such a finding is to be one of the documents to be considered by the disciplinary authority, the principles of natural justice require that the employee should have fair opportunity to meet, explain and controvert it before he is condemned. It is negation of the tenets of justice and a denial of fair opportunity to the employee to consider the findings recorded by a third party like the enquiry officer without giving the employee an opportunity to reply to it. Although it is true that the disciplinary authority is supposed to arrive at its own findings on the basis of the evidence recorded in the inquiry. It is also equally true that the disciplinary authority takes into consideration the findings recorded by the enquiry officer along with the evidence on record. In the circumstances, the findings of the enquiry officer do constitute an important material before the disciplinary authority which is likely to influence its conclusions. If the enquiry officer were only to record the evidence and forward the same to the disciplinary authority, that would not constitute an additional material before disciplinary authority of which the delinquent employee has no knowledge. However, when the enquiry officer goes further and records his findings, as stated above, which may or may not be based on the evidence on record or are contrary to the same or in ignorance of it, such findings are an additional material unknown to the employee but are taken into consideration by the disciplinary authority while arriving at its conclusions. Both the dictates of the reasonable opportunity as well SCA/8556/2003 10/17 JUDGMENT as the principles of natural justice, therefore, require that before the disciplinary authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the inquiry officer's findings. The disciplinary authority is then required to consider the evidence, the report of the enquiry officer and the representation of the employee against it." 17. These observations are clearly in tune with the observations in Bimal Kumar Pandit IR 1963 SC 612 : 1963-I-LLJ-295 quoted earlier and would be applicable at the first stage itself. The aforesaid passages clearly bring out the necessity of the authority which is to finally record an adverse finding to give a hearing to the delinquent officer. It if enquiry officer had given an adverse finding, as per Karunakar (supra) case, the first stage require an opportunity to be given to an employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the enquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be over turned by the disciplinary authority then no opportunity should be granted. The first stage of the inquiry is not completed till the disciplinary authority has recorded its finding. The principles of natural justice would demand that the authority which proposes to decide against the delinquent officer must give him a hearing. When the enquiry officer holds the charges to be proved, then that report has to be given to the delinquent officer, who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer. When, like in the present case, the enquiry report is in favour of the delinquent officer but if the disciplinary authority proposes to defer with such conclusions, then that authority which is deciding against the delinquent officer must give him an opportunity of being SCA/8556/2003 11/17 JUDGMENT heard for otherwise he would be condemned unheard. In departmental proceedings, what is of ultimate importance is the finding of the disciplinary authority. (emphasis supplied) 18. Under Regulation 6, the enquiry proceedings can be conducted either by an enquiry officer or by the disciplinary authority itself. When the inquiry is conducted by the enquiry officer, his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stands concluded with the decision of the disciplinary authority. It is the disciplinary authority which can impose penalty and not the enquiry officer. Where the disciplinary authority itself holds an inquiry, an opportunity of hearing has to be granted by him. When the disciplinary authority defers from the view of the enquiry officer and proposed to come to a different conclusion, there is no reason as to why an opportunity of hearing should not be granted. It will be most unfair and iniquitous that where the charge officer succeed before the enquiry officer, they are deprived of representing to the disciplinary authority before that authority defers with the enquiry officer's report and, while recording a finding of guilt, imposes punishment on the officer. In our opinion, in any such situation, the charged officer must have an opportunity to represent before the disciplinary authority before final findings on the charges are recorded and punishment imposed. This is required to be done as a part of the first stage of inquiry as explained in Karunakar (supra). 19. The result of the aforesaid discussion would be that the principles of natural justice have to be read into Regulation 7(2). As a result thereof, whenever the SCA/8556/2003 12/17 JUDGMENT disciplinary authority disagrees with the enquiry authority or any article of charge, then before it records its own findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the enquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the enquiry officer. The principles of natural justice, as we have already observed, require the authority which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file a representation before the disciplinary authority records its findings on the charges framed against the officer. 20. The aforesaid conclusion which we have arrived at is also in consonance with the underlying principle enunciated by this Court in the case of Institute of Chartered Accountants (1986) 4 SCC 537. While agreeing with the decision in Ram Kishan case (1995) 6 SCC 157 we are of the opinion that the contrary view expressed in S.S.Koshal 1994 Supp. (2) SCC 468 and M.C. Saxena (State of Rajasthan v. M.C.Saxena, (1998) 3 SCC 385 : 1998-I-LLJ-1244) cases do not lay down the correct law." 12. The effect of non-application of mind and non-reasoned order passed by the administrative authority which has been discussed by the Apex Court in case of Cyril Lasrado (Dead) by Lrs. and others v. Juliana Maria Lasrado and Anr. reported in (2004) 7 SCC 431. Relevant Para.11 and 12 are quoted as under: SCA/8556/2003 13/17 JUDGMENT "11 Reasons introduce clarity in an order. On plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge. The absence of reasons has rendered the High Court's judgment not sustainable. 12. Even in respect of administrative orders Lord Denning, M.R. in Breen v. Amalgamated Engg. Union observed : (All ER p.1154h) "The giving of reasons is one of the fundamentals of good administration." In Alexander Machinery (Dudley) Ltd. v. Cabtree it was observed : "Failure to give seasons amounts to denial of justice. Reasons are live links between the mind of the decision-taker tot he controversy in question and the decision or conclusion arrived at." Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The "inscrutable face of the sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance." 13. In view of the law as discussed above, the Industrial Tribunal has rightly examined the matter on merits and is perfectly justified while exercising the power under Section 11A of the I.D.Act,1947 to SCA/8556/2003 14/17 JUDGMENT set aside the punishment order. The Industrial Tribunal has rightly granted the back wages of interim period. Therefore, the Industrial Tribunal has not committed any error while granting the relief in favour of respondent workman. Learned advocate Ms. Mandavia is not able to point out any infirmity in the award. This Court is having very limited jurisdiction to interfere with award while exercising the power under Article 227 of the Constitution of India. The view taken by the Delhi High Court in case of Sushila Sharma v. Pawan Sharma reported in 2007 II LLJ 865. Relevant observations are made in Para.11 and 12 which are quoted as under : "11. The settled position of law in respect of interference by the writ courts under Article 226 of the Constitution of India in matters of this nature is that a writ court exercises its powers of judicial review well within certain parameters. A series of judgments have been rendered by the Supreme Court in this context, as mentioned below: (i) Sadhu Ram Vs. Delhi Transport Corporation Learned AGP Mrs.Pathak requests for some time. Therefore, matter is adjourned to 3.12.2007. Ad-interim relief granted earlier to continue till then. 1984 Learned advocate Mr..... has filed leave note / sick note. Therefore, matter is adjourned to 24.7.2007. 1967. (ii) Harbans Lal Vs. Jag Mohan, , (1985) 4 SCC 333. (iii) Calcutta Port Shramik Union Vs. Calcutta River Transport Association and Ors. 1988 (supp.) SCC 768. SCA/8556/2003 15/17 JUDGMENT (iv) Ramniklal N.Butta and another Vs.State of Maharashtra and others, (1997) 1 SCC 134. (v) Indian Overseas Bank Vs. I.O.B.Staff Canteen Workers’ Union and Anr. (vi) Master Marine Services (P) Ltd. Vs. Metcalfe and Hodgkinson (P) Ltd. and Anr. , (2005) 6 SCC 138. 12. All the above judgments, if read collectively, clearly indicate that the High Courts should not interfere with the awards of the Industrial Tribunal or the Labour Court on mere technicalities. Interference is permissible only if the order of the Subordinate Court suffers from an error of jurisdiction, breach of principles of natural justice or is vitiated by a manifest or apparent error of law. Reappraisal of evidence without sufficient reason in law to arrive at a finding of fact contrary to those arrived at by the Subordinate Court is not the intent of exercising judicial review. It is only in cases where overwhelming public interest requires interference and cases of the nature where there is an error of jurisdiction or law as referred to hereinabove, should the court interfere, particularly in view of the fact that the object of enacting Industrial Disputes Act and of making a provision therein to refer disputes to tribunals for settlement, is to bring about industrial peace and in all such cases, an attempt should be made by the courts in exercise of their powers of judicial review, to sustain as far as possible, the awards made by the Industrial Tribunals and Labour Courts, instead of picking holes in the awards on rival points and frustrating the entire adjudication process." 14. Recently, in Special Civil Application No. SCA/8556/2003 16/17 JUDGMENT 888 of 2004 filed by GSRTC V/s. Maganbhai L. Makwana, decided by this Court on 14.12.2007 and in Special Civil Application No.1648 of 2004 decided on 24.12.2007, similar question was examined by this Court after considering the following decisions and after considering the decisions, said petition was dismissed by this Court. 1. 2005 II CLR 449 Cal in case of Babban Ram v/s. UCO Bank & Ors. 2. 2006 AIR SCW 2177 Ranjit Singh v. Union of India 3. 2006 4 MLJ 274 in case of