IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD MONDAY, THE FIFTH DAY OF SEPTEMBER TWO THOUSAND AND ELEVEN PRESENT THE HONOURABLE SRI JUSTICE G.CHANDRAIAH W.P. No.26581 of 1999 Between: A.P.S.R.T.C., Represented by its Depot Manager, Jeedimetla Depot, Ranga Reddy District. … Petitioner and Sri L.Narsimha … Respondent THE HONOURABLE SRI JUSTICE G.CHANDRAIAH W.P. No.26581 of 1999 ORDER: Today, this matter has been listed under the caption of interlocutory to be taken up the W.P.M.P. No.28392 of 2011, to hear the writ petition as out of turn for its final disposal. The learned counsel on either side submitted that since the short question falls for consideration, this matter may be heard and dispose of the main writ petition itself. In view of the above, W.P.M.P. No.28392 of 2011 is ordered and the main writ petition itself is taken up for hearing. This writ petition has been filed by the A.P.S.R.T.C., (Corporation), seeking for issuance of Writ of Certiorari calling for the records relating to the award dated 07.04.1999 passed in I.D. No.117 of 1996 by the Labour Court, III, Hyderabad and to quash the same as illegal and arbitrary. The respondent herein is the workman, Conductor. Consequent to the check exercised by the Corporation authorities on 17.12.1994, the workman was charged with the following charges. “1. For having made an entry of only one digit out of usual last three digits of a ticket number in statistical return No:6321150 dt.17.12.94 and kept the remaining two digits blank instead of entering all the last three digits of tickets Nos.114/595844 to 850 (Total seven tickets) of Rs.3/- den., issued to seven individual passengers at their boarding point itself i.e. Sec’bad station who were found traveling from Sec’bad station to Jeedimetla, Ex-stages 1 to 10 right from against stage No: 2 to 10, which constitutes misconduct in terms of Reg.28 (xxxi) of APSRTC Employee’s Conduct Reg, 1963. 2. For having punched the ticket No:114/595850 of Rs.3/- den., issued to a passenger at his boarding point itself who was found traveling from Sec’bad station to Jeedimetla ,ex-stages 1 to 10 on stage No: 10 in down journey instead of on stage No: 1 in up journey which constitutes misconduct in terms of Reg, 28 (xxxii) of APSRTC Employee’s Conduct Reg, 1963.” After giving an opportunity to the workman, an enquiry was conducted by appointing an Enquiry Officer and the Enquiry Officer submitted his report holding that the charges leveled against the workman are proved. Based on the said enquiry report, by following the due procedure, the competent authority i.e., the Depot Manager, passed order dated 21.04.1995, removing the workman from service, and the said order was confirmed by the appellate authority in the appeal vide order dated 03.07.1995 and was also confirmed by the reviewing authority by order dated 23.03.1996. Aggrieved by the same, the workman raised industrial dispute in I.D. No.117 of 1996 under Section 2-A (2) of the Industrial Disputes Act, 1947 (for short ‘the Act’) on the file of the Labour Court-III, Hyderabad. After considering the case elaborately, the Labour Court vide its award dated 07.04.1999 set aside the order of removal of the workman and directed the Corporation to reinstate the workman into service with continuity of service with all attendant benefits and granted 15% of back wages. Aggrieved by which, the Corporation filed the present writ petition. The learned standing counsel appearing for the Corporation vehemently contended that in the process of conducting domestic enquiry, followed the due process of law and arrived at a conclusion that the charges leveled against the workman are proved. Thereupon, following the due process of law, the original authority imposed the punishment of removal of the workman and the appellate and the reviewing authorities also confirmed the said order of removal. Further, it is not the case where there is any violation on the part of the Corporation in conducting the domestic enquiry nor any procedure is being deviated. Therefore, as the charges leveled against the workman are proved, he was imposed with the punishment of removal. He further submitted that once the statutory authority, based on the evidence on record, imposed the punishment, the Labour Court, while exercising the powers under Section 11-A of the Act cannot interfere with the same unless there is any violation of principles of natural justice. He further submitted that the Labour Court has the power to defer with the punishment imposed by the statutory authority where the charges are not proved but where the charges are proved, the Labour Court cannot interfere with the punishment. In the instant case, having held that the charges leveled against the workman are proved, the Labour Court ought to have confirmed the order of dismissal. He further submitted that in view of the interim order dated 28.12.1999, passed by this Court, the workman was reinstated into service with continuity of service and with all attendant benefits. But, eventually, he submits that grant of 15% back wages, awarded by the Labour Court, may be deferred. In support of his contentions, he placed reliance in the case of J.K. SYNTHETICS LTD. v. K.P. AGRAWAL AND ANOTHER[1]. On the other hand, the learned counsel appearing for the workman submits that there is no absolute rule that if the Labour Court agrees with the finding of the Enquiry Officer that the charges leveled against the workman are proved, the Labour Court cannot interfere with the punishment imposed by the authorities under statute. The Labour Court, while exercising the powers under Section 11-A of the Act, not only re-appreciate the evidence on record and defer with the finding of the Enquiry Officer but also can defer with the punishment imposed by the authorities under statute. In reply to the contention of the learned standing counsel, the learned counsel for the workman would submit that subsequent to insertion of Section 11-A of the Act, by way of amendment of the Act, the Labour Court, under Section 11-A of the Act, while considering the application made by the claimant under Section 2-A (2) of the Act, has got ample power not only to re-appreciate the evidence on record but also substitute the punishment imposed by the statutory authority with lesser punishment by setting aside the major punishment. In support of his contention he placed reliance in the case of DIVISIONAL MANAGER, APSRTC AND ANOTHER v. E.RAJA REDDY AND ANOTHER[2] and in the case of RAJASTHAN STATE ROAD TRANSPORT CORPORATION AND ANOTHER v. BHIK NATH[3] and submitted that the workman is entitled even to back wages also, as awarded by the Labour Court. Heard the learned standing counsel for the Corporation and the learned counsel for the workman and perused the material on record. Having regard to the submission made by the learned standing counsel for the Corporation that his argument is confining only to the extent of deffering to grant of 15% of back wages, therefore, it suffice to see whether grant of 15% back wages to the workman is justified or not. Admittedly, the workman is an employee of the Corporation, who was removed from the service on the ground of certain cash and ticket irregularities. Thereafter, the workman preferred an appeal and review that were dismissed by the respective authorities. Questioning which, the workman filed I.D. No.117 of 1996 wherein the Labour Court while setting aside the order of removal directed the Corporation to reinstate the workman into service with continuity of service with all attendant benefits and granted 15% of back wages. Assailing the same, the Corporation filed the present writ petition. Though the learned standing counsel for the Corporation argued the matter elaborately but eventually confined his arguments only opposing to grant of 15% back wages and in support of contention he placed reliance in the case of J.K.SYNTHETICS (one supra) and the relevant paras reads as under: “19. But the cases referred to above, where back- wages were awarded, related to termination/retrenchment which were held to be illegal and invalid for non-compliance with statutory requirements or related to cases where the court found that the termination was motivated or amounted to victimization. The decisions relating to back wages payable on illegal retrenchment or termination may have no application to the case like the present one, where the termination (dismissal or removal or compulsory retirement) is by way of punishment for misconduct in a departmental inquiry, and the court confirms the finding regarding misconduct, but only interferes with the punishment being of the view that it is excessive, and awards a lesser punishment, resulting in the reinstatement of employee. Where the power under Article 226 or section 11A of the Industrial Disputes Act (or any other similar provision) is exercised by any Court to interfere with the punishment on the ground that it is excessive and the employee deserves a lesser punishment, and a consequential direction is issued for reinstatement, the court is not holding that the employer was in the wrong or that the dismissal was illegal and invalid. The court is merely exercising its discretion to award a lesser punishment. Till such power is exercised, the dismissal is valid and in force. When the punishment is reduced by a court as being excessive, there can be either a direction for reinstatement or a direction for a nominal lump sum compensation. And if reinstatement is directed, it can be effective either prospectively from the date of such substitution of punishment (in which event, there is no continuity of service) or retrospectively, from the date on which the penalty of termination was imposed (in which event, there can be a consequential direction relating to continuity of service). What requires to be noted in cases where finding of misconduct is affirmed and only the punishment is interfered with (as contrasted from cases where termination is held to be illegal or void) is that there is no automatic reinstatement; and if reinstatement is directed, it is not automatically with retrospective effect from the date of termination. Therefore, where reinstatement is a consequence of imposition of a lesser punishment, neither back- wages nor continuity of service nor consequential benefits, follow as a natural or necessary consequence of such reinstatement. In cases where the misconduct is held to be proved, and reinstatement is itself a consequential benefit arising from imposition of a lesser punishment, award of back wages for the period when the employee has not worked, may amount to rewarding the delinquent employee and punishing the employer for taking action for the misconduct committed by the employee. That should be avoided. Similarly, in such cases, even where continuity of service is directed, it should only be for purposes of pensionary/retirement benefits, and not for other benefits like increments, promotions etc. 20. But there are two exceptions. The first is where the court sets aside the termination as a consequence of employee being exonerated or being found not guilty of the misconduct. Second is where the court reaches a conclusion that the inquiry was held in respect of a frivolous issue or petty misconduct, as a camouflage to get rid of the employee or victimize him, and the disproportionately excessive punishment is a result of such scheme or intention. In such cases, the principles relating to back-wages etc. will be the same as those applied in the cases of an illegal termination. 21. In this case, the Labour Court found that a charge against the employee in respect of a serious misconduct was proved. It, however, felt that the punishment of dismissal was not warranted and therefore, imposed a lesser punishment of withholding the two annual increments. In such circumstances, award of back wages was neither automatic nor consequential. In fact, back wages was not warranted at all.” On the other hand, the learned counsel for the workman placed reliance in the case of Divisional Manager (2 supra), relevant paras 24 and 25 reads as under: “For the above decisions the following principles broadly emerge: (a) The Labour Court/Indistrial Tribunal after introduction of Section 11-A of the Industrial Disputes Act, 1947, is clothed with necessary power and jurisdiction to reappraise the material available on record and substitute its own findings for that of the disciplinary authority. The power exercised by the Labour Court/Industrial Tribunal is akin to that of an appellate Court. (b) The Labour Court/Industrial Tribunal is duty bound to reappreciate the evidence even in cases where the workman files a memo conceding as to the validity of the domestic inquiry. (c) The Labour Court/Tribunal even after holding that the domestic inquiry was held in accordance with the principles of natural justice may, yet, interfere with the findings and substitute its own findings; on the basis of the every same evidence it can reach its own conclusion by recording its won findings and may reverse the findings arrived at by the disciplinary authority and hold that the charges are not established. (d) The Labour Court/Tribunal can also find that the evidence and material available on record justifies the findings of misconductr arrived at by the disciplinary authority and still hold that the order ofdischarge or dismissal is not justified under the circumstances of a particular case and accordingly only lesser punishment. 25. In fact the Labour Court/Tribunal is duty bound to examine the question as to what would be the appropriate punishment in every case including in cases where it concurs with the findings arrived at by the disciplinary authority.” Further, the counsel for the workman also placed reliance in the case of Rajasthan State Road Transport (3rd supra), relevant paras 6, 10, 11, 12 and 13, reads as under: “6) Before the Labour Court, both the parties consented that the Labour Court could decide the case on the basis of evidence and material available on the file of the domestic inquiry without seeking to adduce any additional evidence and on that basis the Labour Court heard the arguments of the parties and examined the evidence that was brought on record at the time of the departmental inquiry. It also examined the order made by the Disciplinary Authority and after discussing the evidence it came to the specific conclusion that the finding of the Inquiry Officer that though the respondent had not issued tickets to certain passengers, he had no intention to cause loss to the Corporation and the explanation for non- issuance was justified, therefore, the respondent could not have been found guilty of the misconduct charged against him. It incidentally also recorded a finding that the Disciplinary Authority did not give an opportunity to the respondent before reversing the finding of the inquiry officer and that the order of the Disciplinary Authority was not a speaking order since it did not contain adequate and suitable reasons for differing from the opinion of the Inquiry Officer. In view of the above finding the Labour Court set aside the termination of the services of the respondent workman holding it to be illegal and unjustified. It also directed the appellant to reinstate the respondent in service with continuity of service and full back wages from the date of dismissal from service. As a matter of fact a perusal of the award clearly shows that both the parties addressed arguments on merits and demerits on the basis of evidence on record and after considering the same Labour Court by a reasoned order agreed with the Inquiry Officer that though in the two cases in regard to which an inquiry was conducted the respondent workman has not issued tickets to 3 and 2 passengers respectively, the material on record and explanation given by the respondent sufficiently proved that had good reasons for not having issued the tickets when the checking staff came for checking and the respondent workman had no intention of defrauding the Corporation. This is a finding of fact based on material on record accepted by the Inquiry Officer, the Labour Court and the Division Bench and we find no reason whatsoever to differ from this finding. We are also of the opinion that since the Labour Court had formed an opinion that Disciplinary Authority had not properly considered the evidence on record while coming to a contrary conclusion Labour Court was justified in going into the question of fact that too as consented by the parties and giving a finding. 11) The learned counsel for the appellant had referred to certain circulars which according to him give rise certain presumptions as to is appropriation of the funds of the Corporation by non-issuance of tickets, we have not been shown any such circular. Be that as it may, assuming that there is such a circular which at the most can give rise to a presumption and in the instant case for the reasons already recorded by accepting the explanation given by the respondent workman that presumption, if any, has been rebutted. 12) In view of the above view taken by us the other argument urged by the learned counsel for the appellant does not arise for consideration. 13) In view of the above said we find no merit in this appeal and the same is dismissed.” From the above case 2 supra, it is clear that the Labour Court, after introduction of Section 11-A of the Act, is empowered to reappraise the material available on record and substitute its own findings for that of the disciplinary authority and the power exercised by the Labour Court is akin to that of an appellate Court. Further, in the case of 3 supra, the Labour Court by a reasoned order agreed with the inquiry officer that though in the two cases in regard to which an inquiry was conducted the respondent workman has not issued tickets to 3 and 2 passengers respectively, the material on record and explanation given by the respondent sufficiently proved that he had good reasons for not having issued the tickets when the checking staff came for checking and the respondent workman had no intention of defrauding the Corporation. Eventually, dismissed the appeal confirming the award of reinstatement of the workman into service with continuity of service and full back wages from the date of dismissal from service. In the instant case, the workman had categorically admitted that he could not properly endorse the seven tickets issued to the passengers in the S.R., for which he gave his explanation that at the time of issuing tickets, some passengers have entered into the bus through the back door and were standing at the foot board and therefore, he requested them to come inside the bus, thereby there was some heated exchange of words and the said passengers also abused the workman in filthy language, therefore, he was disturbed his peace of mind and could not properly endorse in the S.R. In support of explanation given by the workman, one independent witness was examined to prove that he had heated argument with one of passengers in the bus. It is not the instant case that the workman did not issue tickets to the passengers by collecting the fare. It is the case that he issued tickets and while making endorsement in the S.R. he found some passengers boarded the bus through the back door and requested them to come inside the bus and thereafter, there was exchange of heated words and the workman was abused in filthy language. Therefore, the workman was disturbed his peace of mind and could not endorse in the S.R. properly. Taking into consideration the said explanation, the Labour Court came to the conclusion that though the allegations leveled against the workman are proved, he clearly established his bona fide intention by way of cogent and convincing evidence. Therefore, the order of removal passed by the Corporation authorities held as not proper and the same was set aside and directed the Corporation to reinstate the workman into service with continuity of service with full attendant benefits and 15% of back wages. The learned standing counsel for the Corporation is deferring with grant of 15% back wages, placing reliance in the case of J.K. SYNTHETICS LTD, one supra, wherein the Apex Court held that the Labour Court found that a charge against the employee, in respect of a serious misconduct, was proved, but however, felt that the punishment of dismissal was not warranted and therefore, imposed lesser punishment of withholding the two annual increments. In such circumstances, held that the award of back wages was neither automatic nor consequential and in fact, back wages was not warranted at all. But, in the instant case, the Labour Court specifically awarded 15% of back wages. It is not the case of the workman that he is automatically entitled to entire back wages retrospectively consequent to his reinstatement into service. Therefore, it is to be noticed here that having agreed with the enquiry officer, the Labour Court imposed lesser punishment of loss of 85% of back wages. Under those circumstances, I am of the view that the case one supra, inter alia, deals with the aspect where the reinstatement is a consequence of imposition of a lesser punishment, neither back wages nor continuity of service nor consequential benefits, follow as a natural or necessary consequence of such reinstatement. Therefore, the case of one supra is not applicable to the present case. Having regard to the facts and circumstances of the case, submissions made by the learned counsel on either side and for the above reasons, this Court is of the view that the Labour Court had rightly justified in passing the impugned award and therefore, I do not see any reason to differ with grant of 15% of back wages and accordingly, the writ petition is liable to be dismissed. Accordingly, this writ petition is dismissed. There shall be no order as to costs. _________________________ JUSTICE G.CHANDRAIAH Date: 05.09.2011 LSK [1] (2007) 2 Supreme Court Cases 433 [2] 1999 (5) ALD 735 [3] (2005) 2 Supreme Court Cases 369