C.W.P. No.3319 of 1987 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No.3319 of 1987 Date of Decision: 01.12.2009 2. C.W.P. No.1232 of 1991 Darshan Singh .....Petitioner Versus The Dharor Cooperative Agri. Service Society Ltd., Dharor and another ....Respondents Present: Mr. K.G. Chaudhary, Advocate for the petitioner. Mr. Sukhjit Singh, Advocate for respondent No.1. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? No 2. To be referred to the Reporters or not ? No 3. Whether the judgment should be reported in the Digest? No -.- K. KANNAN J.(ORAL) 1. Both the writ petitions are between the same parties. C.W.P. No.3319 of 1987 challenges the award passed by the Labour Court rejecting the reference sought at the instance of the workman that he had been terminated from services vide resolution dated 15.07.1980 passed by the respondent-society. The contention of the workman was that the termination order was made without conducting any enquiry relating to the so- called misconduct of misappropriation and the order was in brazen violation of the rules. The contention on behalf of the C.W.P. No.3319 of 1987 -2- management was that the workman had been guilty of under- selling the fertilizer at a rate less than the stipulated rate and the amount realised from out of the sale to the tune of Rs.7627.50 had been retained by the management and therefore, he had committed embezzlement. It was also management's contention that the workman had deliberately locked up the premises and the records from the society premises could not be verified and disciplinary action by constitution of an enquiry was not getting delayed. The management further contended that the society was put to immense hardship by the premises having been closed by the workman and retaining the keys, which necessitated the management to break open the lock and take control over the premises. The workman had deliberately absented himself from duty despite notices sent to him and therefore, his services were terminated on 15.07.1980. It was also the contention of the management that the proceedings were taken before the Arbitrator for recovery of the amount of Rs.7627.50, which was the amount of loss caused by the workman and the award (Ex.M-10) itself was proof of the fact of the embezzlement. The Labour Court found by reference to the award that the charge against the workman of embezzlement had been proved and basing reliance on the award Ex.M-10, the Labour Court found that it was justified in passing the order of dismissal from service. 2. The petitioner-workman who is aggrieved against the C.W.P. No.3319 of 1987 -3- order of dismissal, which was affirmed by the Labour Court, is the writ petitioner before this Court. According to him, the fertilizer was sold @ Rs.300/- on 07.06.1980, but the rates had been increased only on 08.06.1980 and he had not been guilty of any wrongful act. The management joined issue on this aspect by pointing out that in an inspection carried out on 09.06.1980, the fertilizer stocks were still found and the sale itself had been effected only subsequently but the workman had ante-dated the same although the sale was effected only subsequent to the increase. It transpires that during the course of the proceedings, the shortfall in the price of fertilizer had been recovered from the purchasers and the amounts had also been paid to the society with interest. 3. Before me, the only issue for consideration is whether the termination order issued by the society was justified and whether misconduct of embezzlement could be discerned from the award for recovery of Rs.7627.50. It is admitted that the Punjab State Cooperative Agricultural Service Society Rules, 1986 governed the rights of parties in relation to the manner of enquiry and the punishment that could be imposed on the workman. Rule 12 of the aforesaid Rules sets out the duties and norms of conduct and sub-clause 3 of the said rule enumerates the several acts, which would constitute misconduct on the part of the employee. Sub-clause 3(8) sets out that official's absence from duty or C.W.P. No.3319 of 1987 -4- overstaying after the expiry of sanctioned leave without sufficient cause and prior intimation to the society is one of the instances of misconduct. Sub-clause 3(1) refers to any action of fraud in connection with the business, property or other pecuniar affairs or interest of the society or any of its members as also constituting misconduct. Penalty which the rules set out through Rule 14 included removal or dismissal from service. The penalty may be imposed as per the rules "for good and sufficient reasons for the misconduct established on his part". As per the said Rule, in addition to the penalty of removal or dismissal from service, the Committee may also order the recovery from his pay of the whole or part of the pecuniary loss caused by him to the society by negligence or by any willful act of omission or commission. 4. The bye laws of the society also empower the Managing Committee to appoint, suspend, dismiss or punish employees subject to any conditions laid down by the Registrar from time to time. Against an order of dismissal, the aggrieved person may file an appeal before the concerned Assistant Registrar within 30 days of the order of dismissal. The order passed in appeal shall be final. Both the 1986 Rules and the bye laws, which I have referred to, make provision for the punishment of dismissal on the "misconduct (being) established." It is an elementary principle of natural justice that a misconduct would be said to be established only on a duly constituted enquiry. It cannot be merely a C.W.P. No.3319 of 1987 -5- unilateral decision of the Managing Committee to find that the conduct of the workman had resulted in loss and that the workman had deliberately absented himself from duty and thereby caused loss. While the contention that the society had the powers to dismiss the employee could be easily conceded by reference to rules, it should still be understood that such a power could be exercised only by following the rudimentary principle of establishing the misconduct by such enquiry as the law contemplates. 5. In this case, if the workman had committed a wrong of selling fertilizers at a rate less than what was notified and the entries of the sale had been wrongly made by the workman to create evidence as though the sale had been effected even prior to the notification for change of price of fertilizer, it was perfectly possible for the management to take action on such a misconduct after giving notice to the workman. In this case, the two notices which the management had issued during the relevant time purport to show that the workman had locked up the premises and the management had warned against the workman the prospect of setting up an enquiry, if he would not immediately resume duty and open the premises. Even the notices do not contemplate an immediate dismissal. It, on the other hand, refers to a contemplated enquiry into the allegation of misconduct. It is an admitted fact that no charge sheet had been prepared and served C.W.P. No.3319 of 1987 -6- on the workman. No enquiry had also been made. If the workman had deliberately closed the premises and retained the keys on 10.06.1980 and continued to remain elusive, that itself ought to have been seen as a misconduct for taking appropriate action. What the management, however, has chosen to do is to bring a denouement by dismissing him from service and misconduct attributed to the workman. 6. Removal from service is the maximum punishment that a workman could suffer and in a system of administration of justice through rule of law, no person could be condemned without being heard. The precipitative action of removal from service was wholly unjustified, even if the management had materials to prove that there had been misconduct on the part of the workman. The misconduct cannot be a matter of mere assumption without even going through a formal enquiry. The alleged preparation of wrong entries to make it appear as though the sales had been made even prior to the upward revision of sale price of fertilizer and the alleged locking of the premises from 10.06.1980 cannot be assumed to be true, when the workman had denied the same and unless charges had been specifically framed and action taken by the management pursuant to a duly constituted enquiry. The Labour Court had been carried away by the fact that the award had been passed by the Arbitrator for the loss alleged to have been caused by the sale of fertilizer for a C.W.P. No.3319 of 1987 -7- lower rate than what was notified. The award cannot mean anything more than fixing a particular financial liability by a member or an employee. It cannot prove the misconduct itself. The dismissal order is, under the circumstances, untenable in the eye of law and would require to be set aside. 7. From the date when the order was passed on 17.06.1980 to the date when this writ petition is disposed of, it is nearly three decades and the question, therefore, would be whether the workman shall be entitled to reinstatement. The workman had been drawing a salary of Rs.485/- per month in the year 1980 when he was dismissed from service. The workman had put in two years and three months at the time when the order of termination was effected. It has been authoritatively laid down that a person shall not entitle to reinstatement merely because the termination is found to be bad. In this case, having regard to the fact that the workman had put in two years and three months service at that time and three decades have passed, instead of awarding to the workman the relief of reinstatement, in my view a provision for compensation for the illegal termination will be appropriate and having regard to the salary that he was drawing in the year 1980 and what he would have earned over a period of time, the workman shall be entitled to Rs.3.5 lacs, which amount shall be paid by the society within a period of eight weeks from the date of this order. It shall carry interest @9%, if the amount is C.W.P. No.3319 of 1987 -8- not deposited as stipulated. 8. The award of the Labour Court is, under the circumstances, set aside and the workman shall have the benefit of a compensation of Rs.3.5 lacs with interest as specified above. 9. The C.W.P. No.1232 of 1991 is a writ petition filed at the instance of the workman against alleged action for recovery of alleged embezzlement. Learned counsel for the petitioner states that the workman has also been paid the amount with interest in respect of the claim referred to in writ petition. Civil Writ Petition No.1232 of 1991 is, therefore, dismissed as infructuous. 10. Civil Writ Petition No.3319 of 1987 is allowed on the above terms. (K. KANNAN) JUDGE December 01, 2009 Pankaj*