IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:21.12.2009 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI WRIT PETITION NO.673 OF 2008 K.Damodaran .. Petitioner vs. 1.The Presiding Officer Labour Court Vellore. 2.The Management Tiruvalam Primary Agricultural Co.operative Bank Tiruvallam Vellore District. .. Respondents Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorarified Mandamus calling for the records of the 1st respondent award in ID No. 6 of 1995 dated 28.03.2007 and quash the same with respect to the findings on issue NO. 1, 4, 5 and 6 only consequently direct the 2nd respondent to reinstate the petitioner in service with back wages, continuity of service and attendant benefits as stated therein. For petitioner : Mr.J.Saravanavel For respondents : Mr.P.S.Sivashanmugasundaram for R.2 ORDER The writ petition is directed against the award passed by the Labour Court, Vellore in I.D.No.6 of 1995 dated 28.03.2007 in so far as it relates to the finding relating to issue Nos.1,4,5 and 6 and consequently to direct the second respondent to reinstate the petitioner in service with back-wages, continuity of service and attendant benefits. 2. The facts leading to raising of the dispute by the petitioner are as follows: (a) The petitioner was appointed as a Salesman during 1992 at https://hcservices.ecourts.gov.in/hcservices/ Kemparajapuram Fair Price Shop under the second respondent Co.operative Bank. It is stated that he was given the additional charge of another Fair Price Shop in Kuppathu Mottur in December,1992 and that the petitioner requested for increase of salary, for which the Sub-Registrar of Co.operative Stores demanded money, about which the petitioner made a complaint to the Special Officer and therefore, he was refused employment from 03.11.1993 and directed to hand over the charge to one D.Rathinam, Salesman on 03.11.1993 itself and accordingly, the petitioner handed over the charge and thereafter, raised the industrial dispute before the Labour Officer, Vellore on 08.11.1993. Since the Management did not appear before the Conciliation Officer, the matter was adjourned and even then there was no appearance on behalf of the Management before the Conciliation Officer. (b) In the meantime, the Management issued two memos dated 10.01.1994, which were marked as Exs.M.15 and M.16 before the Labour Court, by which it has stated that as per the letter of the Joint Registrar No.I, the petitioner should pay two times the value of the deficit in stock stated to have been detected on 03.11.1993, failing which appropriate disciplinary proceedings would be initiated. The petitioner in his letter dated 18.01.1994 marked as Ex.M.5, denied the allegation stating that from 03.11.1993 onwards he was denied employment and in fact he raised a dispute and the charge was handed over on 03.11.1993 itself and there was no deficit in stock. (c) It is the case of the petitioner that even before the expiry of the time granted in the said memo to explain, a charge memo dated 13.01.1994, marked as Ex.M.4 was issued by the Management, containing four charges against the petitioner. The charges are relating to, (i)Causing stock deficit by improper maintenance to an extent of Rs.1,861.75; (ii)Preparing false bills; (iii)Issuing more than the prescribed quantity of goods; and (iv)Failing to remit the sale proceeds to non-levy items and committing misappropriation thereof. (d) The said charge memo was stated to have been received by the petitioner on 24.01.1994, for which he replied on 31.01.1994, marked as Ex.M.6, denying the charges, reiterating that the charge was handed over on 03.11.1993 itself and for the denial of employment, the matter has been referred to Conciliation, and therefore, the charge memo is nothing but an act of victimisation. (e) It is stated that the Enquiry Officer, who was appointed, by his report dated 28.03.1994, marked as Ex.M.9, held that the fourth https://hcservices.ecourts.gov.in/hcservices/ charge was not proved and that other charges stood proved. It is the case of the petitioner that prior to the date of enquiry on 26.03.1994, he sent a letter dated 21.03.1994, marked as Ex.W.1 to the Enqiry Officer, requesting for list of witnesses and copies of documents to be relied upon by the Management and also seeking permission for taking the assistance of Trade Union leader during the course of enquiry. (f) The said letter was acknolwedged, which was marked as Ex.W.2 and without furnishing the materials, the Enquiry Officer submitted his report and thereafter, the Management issued a show cause notice dated 16.04.1994, proposing to impose the punishment of dismissal, for which a reply was given on 07.06.1994 and ultimately, without considering the contents of the same, by order dated 23.06.1994, the petitioner was dismissed from service. (g) Since the conciliation proceedings ended in failure, the petitioner raised a dispute before the Labour Court. It is stated that in the meantime the petitioner approached the concerned authorities under the Payment of Subsistence Allowance Act, in which there was some order passed and at the time of order of dismissal passed by the Management, the said proceedings were pending. (h) In the impugned award passed by the first respondent dated 10.10.2000, a direction was issued to the second respondent to pay the back-wages and all other attendant benefits to the petitioner from the date of his dismissal, but rejected the prayer for reinstatement. It is stated that against the said portion of the award, directing to pay back-wages and all other attendant benefits, the Management filed W.P.No.19699 of 2000 and as against the portion rejecting the reinstatement, the petitioner filed W.P.No.3046 of 2001. (i) By a common order dated 20.01.2006, both the writ petitions were decided against the petitioner, against which the petitioner filed Writ appeals in W.A.Nos.1596 and 1597 of 2006 and the Hon'ble First Bench of this Court, by a common Judgemnt dated 20.12.2006, disposed of the writ appeals, directing the Labour Court to consider the materials on record already submitted by the Management in the light of the power conferred on the Labour Court under Section 11-A of the Industrial Disputes Act,1947, as interpreted by the Supreme Court. (j) It was, after remand, the Labour Court framed fresh issues as to the correctness of the findings recorded in the domestic enquiry regarding three charges stated to have been proved and as to whether the petitioner was entitled for reinstatement. The Labour Court, in the impugned award dated 28.03.2007, held that, charge No.1, viz., causing stock deficit by improper maintenance totalling Rs.1681.75 was alone proved and that in respect of Charge Nos.2 and 3, there was no substance, however, confirmed the punishment of https://hcservices.ecourts.gov.in/hcservices/ dismissal from service. 3. Against the award, the present writ petition is filed on various grounds, including non-appreciation of evidence in respect of the first charge, which was framed as issue No.1 by the Labour Court on remand. It is stated that Section 11-A of the Industrial Disputes Act,1947 as well as the guidelines issued by the Apex Court has not been properly exercised; that the various factors like the age of the petitioner, gravity of the offence have not been taken into consideration for deciding the proportionality of the punishment; that the Labour Court has relied upon the judgment which relates to misappropriation; that the Labour Court failed to appreciate the stock deficit, which was to a negligible amount of Rs.1681.75 in a Fair Price Shop on additional duty; that when the proceedings before the statutory authority for Subsistence Allowance were pending, the charge issued is mala fide; that the reliance placed on the Stock Registers marked as Exs.M.52 and M.53, which pertain to the period from 01.04.1993 is not permissible, since there is no possibility of independent assessment of the materials on record and that the request of the petitioner under Ex.W.1 to the Enquiry Officer to have the assistance of a Trade Union leader and for the list of witnesses and documents, has not been considered. 4. Mr.J.Saravanavel, learned counsel appearing for the petitioner would submit that ultimately the Labour Court has held that only the first charge stood proved, which is without appreciation of materials on record. It is his submission that the first charge, which is stated to have been proved relates to the negligence and not misappropriation and therefore, dismissal is a disproportionate punishment. He would also rely upon the judgment of the Supreme Court in Life Insurance corporation of India vs. R.Suresh (2008 (11) SCC 319) to substantiate his contention that the Labour Court has passed the award without application of mind. He would rely upon the judgment in U.P.State Road Transport Corporation and others vs. Shivaji (2006 (13) SCC 637). It is also his contention that the register seized by the squad, which is stated to reveal the irregularities has not been placed before the Labour court and that vital aspect has not been taken into consideration. 5. On the other hand, Mr.P.S.Sivashanmugasundaram, learned counsel appearing for the second respondent Management would submit that when the Labour Court has found on appreciation of evidence that Charge No.1 has been proved, the quantum of shortage is immaterial and therefore, this Court can not be made to appreciate the evidence as an appellate authority. He would rely upon the judgment in Regional Manager, U.P.S.R.T.C. Etawah and others vs. Hoti Lal and another (2003 II LLJ 267) and his contention is that the punishment in this case cannot be said to be shockingly disproportionate. It is his submission that the Labour Court decided the case on merit by relying upon the judgment, which requires no interference, for which https://hcservices.ecourts.gov.in/hcservices/ he relied upon the judment in U.P.State Road Transport Corporation vs. Vinod Kumar (2008 (1) SCC 115). It is his further submission that in respect of pilferage, no sympathy should be shown, for which he relied upon the judgment in Divisional Controller, N.EK.R.T.C. vs. Amaresh (2006 III LLJ 232). It is also his submission that when the Labour Court has found that the domestic enquiry was fair, proper and in accordance with the principles of natural justice, no interference is required, for which he relied on the judgment in Tata Engineering and Locomotive Company Ltd., vs. N.K.Singh (2007 (1) L.L.N. 148). He has submitted that since there is a proved charge against the petitioner, he has lost confidence of the employer and therefore no useful purpose would be served by ordering reinstatement, by relying on the judgment in Rajesh Prasad vs. Bihar State Food Civil Supplies Corporation and others (2009 III LLJ 675). 6. I have heard the learned counsel for the petitioner as well as respondents and given my anxious thoughts to the issue involved in this case on hand. 7. When originally the Labour Court has passed award on 10.10.2000, refusing reinstatement, but directing payment of back- wages and the learned single Judge in the writ petitions has remanded the matter back to the Labour Court for fresh disposal, directing that the Labour Court need not conduct fresh enquiry except for clarification, the Hon'ble First Bench in Writ appeal Nos.1596 and 1597 of 2006 in the judgment dated 20.12.2006, by relying upon the judgment of the Supreme Court in the Workmen of M/s.Firestone Tyre and Rubber Co. of India (Pvt.)Ltd., vs. The Management and others (1973 (1) SCC 813), especially in paragraph 36 and 37 of the said judgment, in the context of the changes effected to Section 11-A of the Industrial Disputes Act, held that the Tribunal has the power to reappreciate the evidence in domestic enquiry and if as a preliminary issue, the Tribunal holds the domestic enquiry was valid and in favour of the Management, there is no additional evidence required from the Management,but in cases where the finding is against the Management, the Tribunal has to give the employer an opportunity to cite additional evidence. While ultimately upholding the remand made by the learned single Judge to the Labour Court, the First Bench held as follows: " 11. In the light of the above, we hereby clarify that the Labour Court should confine itself to the materials on record already recorded by the first respondent employer produced before the Labour Court and consider the same in the light of the power conferred on the Labour Court under Section 11-A of the I.D.Act and as interpreted by the supreme Court quoted above. The Writ Appeal shall stand disposed of accordingly and the amount of deposit made by the employer shall continued to be kept with the Labour Court pending the outcome of the proceedings in I.D.No.6 of https://hcservices.ecourts.gov.in/hcservices/ 1995. We also hereby direct the second respondent Labour Court, Vellore to dispose of I.D.No.6 of 1995 within a period of two months from the date of receipt of a copy of this order since it is a dispute of 11 years old. However, there will be no order as to costs. ...." 8. It was subsequently the impugned award came to be passed by the Labour Court by framing the issues for consideration. In respect of three charges stated to have been proved in the domestic enquiry and particularly in respect of the charge of causing stock deficit of commodities, the Labour Court on appreciation of evidence has found that in the domestic enquiry the charge No.1 relating to the stock deficit was proved, for which the dismissal order was upheld. By relying upon the judgment in Regional Manager, U.P.S.R.T.C. Etawah and others vs. Hoti Lal and another [2003 II LLJ 267 (SC)], the Labour Court held that considering the gross negligence, no interference is called for in respect of the punishment imposed on the petitioner. The Labour Court has also found that the stand of the petitioner that an illegal demand was made by the Sub-Registrar for increasing the salary of the petitioner and when such demand was not acceded to, the charges were framed with mala fide intention has not been proved. In respect of other two charges, the Labour Court concluded that the documents like the family cards distribution registers and the alleged false bills were not produced and that there is no evidence that the family cards were inspected and distribution of excess quantity of sugar and rice was found in the inspection of such family cards. The Labour Court has therefore rejected the finding of the domestic enquiry regarding Charge Nos.2 and 3 as unfair. 9. In Life Insurance corporation of India vs. R.Suresh (2008 (11) SCC 319) relied upon by the learned counself for the petitioner in fact the Supreme Court has held that in terms of Section 11-A of the Industrial Disputes Act, the powers of the Industrial Tribunals are discretionary and held as follows: " 31. An Industrial Court in terms of Section 11-A of the Act exercises a discretionary jurisdiction. Indisputably, discretion must be exercised judiciously. It cannot be based on whims or caprice. 32. Indisputably again, the jurisdiction must be exercising having regard to all relevant factors in mind. In exercising such jurisdiction, the nature of the misconducts alleged, the conduct of the parties, the manner in which the enquiry proceeding had been conducted may be held to be relevant factors. A misconduct committed with an intention deserves the maximum punishment. Each case must be decided on its own facts. In given cases, even the doctrine of proportionality may be invoked. https://hcservices.ecourts.gov.in/hcservices/ 33. In fact this Court in Union of India vs. J.Ahmed (1979) 2 SCC 286 opined that negligence by itself may not be held to be a misconduct. The Court stated: (SCC p.293, para 11) "11. ... It is, however, difficult to believe that lack of efficiency or attainment of highest standards in discharge of duty attached to public office would ipso facto constitute misconduct. There may be negligence in performance of duty and a lapse in performance of duty or error or judgment in evaluating the developing situation may be negligence in discharge of duty but would not constitute misconduct unless the consequences directly attributable to negligence would be such as to be irreparable or the resultant damage would be so heavy that the degree of culpability would be very high. An error can be indicative of negligence and the degree of culpability may indicate the grossness of the negligence. Carelessness can often be productive of more harm than deliberate wickedness or malevolence." 34. This Court in ITC Ltd., vs. Presiding Officer, Labour Court (1978) 3 SCC 504 opined that negligence by itself cannot be held to constitute misconduct stating (SCC p.517, para 16) "16. ..... Mr.Pai submitted that even neglect of work simpliciter can be a misconduct within the meaning of sub-clause (1) of clause (ii) of Standing Order 20 apart from its being a fault within the meaning of sub-clause (b) of clause (i) of the said Standing Order as the word 'habitual' in the former merely qualifies the word 'negligence' and not the expression 'neglect of work'. This argument has to be stated merely to be rejected. Mere neglect of work cannot be both. If it is so, it is a fault. If it is habitual, that is, if it is repeated several times then only it is misconduct. It may well be that fault of one kind or the other as enumerated in sub-clauses (a) to (g) of Standing Order 20(i) if repeated more than once may be habitual within the meaning of the Standing Order 20(a), but on the facts of this case,there was no charge against respondent 3 that he was guilty of habitual neglect of work. Moreover the Labour Court found that the negligence of the workman was not of a serious https://hcservices.ecourts.gov.in/hcservices/ kind. Some others in the factory also contributed to it. We, therefore, reject Point 2." 35. The jurisdiction of the Industrial Court being wide and it having been conferred with the power to interfere with the quantum of punishment, it could go into the nature of charges, so as to arrive at a conclusion as to whether the respondent had misused his position or his acts are in breach of trust conferred upon him by his employer. 36. It may be true that quantum of loss may not be of much relevance as has been held in Suresh Pathrella v. Oriental Bank of Commerce (2006) 10 SCC 572, but there again a question arose as to whether he was in position of trust or not." It was in the context that whether the respondent before the Supreme Court in that case, viz., the Development Officer of the Life Insurance Corporation, is in position of the trust or not, the Supreme Court has made the passing reference stating that the quantum of loss may not be much relevant for deciding the punishment. 10. It is true that in U.P.State Road Transport Corporation and others vs. Shivaji (2006 (13) SCC 637), the Hon'ble Apex Court has applied the doctrine of proportionality to the facts of the said case, wherein the driver was charged to have intentionally caused injuries to another employee by not stopping the bus when the barrier was lowered and passed the following order. " 14. In a case of this nature, doctrine of proportionality would also be applicable. Doctrine of irrationality is now giving way to doctrine of proportionality. (See Commr. of Police v. Syed Hussain (2006) 3 SCC 173. The Labour Court also did not consider this aspect of the matter. If only a charge of negligence had been proved against him, we are of the opinion that the interest of justice would be subserved if he is directed to be reinstated in service with 25% back wages." 11. In Regional Manager, U.P.S.R.T.C., Etawah and others vs. Hoti Lal and another [2003 II LLJ 267 (SC)],the Supreme Court has held that in cases of officials holding fiduciary capacity, such misconduct has to be dealt with severely and the mere statement that the punishment is disproportionate is not sufficient. The relevant portion is as follows: "10. .... A merely statement that it is disproportionate would not suffice. A party appearing before a Court, as to what it is that the Court is https://hcservices.ecourts.gov.in/hcservices/ addressing its mind. It is not only the amount involved but the mental set up, the type of duty performed and similar relevant circumstances which go into the decision-making process while considering whether the punishment is proportionate or disproportionate. If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with, with iron hands. Where the person deals with public money or is engaged in financial transactions or acts in a fiduciary capacity, highest degree of integrity and trustworthiness is must and unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and restore order of learned single Judge upholding order of dismissal." 12. It is well established principle of law that the writ Court cannot sit in appeal over the order passed by the disciplinary authorities unless the order is perverse in nature. Once it is held by the Labour Court that the domestic enquiry has been conducted properly and that one of the charge is proved, it cannot be said that the punishment cannot be imposed in such circumstances. In U.P.State Road Transport Corporation vs.Vinod Kumar (2008 (1) SCC 115), while dealing with the case of misappropriation has held as follows: " 10. As stated in the preceding paragraphs, the respondent had confined his case only to the conclusions reached by the enquiry officer as well as the quantum of punishment. Therefore, since the respondent had not challenged the correctness, legality or validity of the inquiry conducted, it was not open to the Labour Court to go into the findings recorded by the enquiry officer regarding the misconduct committed by the respondent. This Court in a number of judgments has held that the punishment of removal/dismissal is the appropriate punishment for an employee found guilty of misappropriation of funds; and the courts should be reluctant to reduce the punishment on misplaced sympathy for a workman. That, there is nothing wrong in the employer losing confidence or faith in such an employee and awarding punishment of dismissal. That, in such cases, there is no place for generosity or misplaced sympathy on the part of the judicial forums and interfering with the quantum of punishment.... " 13. In the Divisional Controller, N.E.K.R.T.C. vs. Amaresh (2006 III LLJ 232), while dealing about the loss of confidence in a case where the excess amount carried by the employee was not explained, it was held that punishment of dismissal cannot be interfered with, as https://hcservices.ecourts.gov.in/hcservices/ follows: " 18. In the instant case, misappropriation of the funds by the delinquent employee was only Rs.360.95. This Court has considered the punishment that may be awarded to the delinquent employees who misappropriated funds of the Corporation and the factors to be considered. This Court in a catena of judgments held that the loss of confidence as the primary factor and not the amount of money misappropriated and that the sympathy or generosity cannot be a factor which is impermissible in law. When an employee is found guilty of pilferage or of misappropriating a Corporation's funds, there is nothing wrong in the Corporation losing confidence or faith in such an employee and awarding punishment of dismissal. In such cases, there is no place for generosity or misplaced sympathy on the part of the judicial forums and interfering therefore with the quantum of punishment. The judgment in Karnataka State Road Transport Corpn. vs. B.S.Hullikatti (supra) was also relied on in this judgment among others. Examination of passengers of vehicle from whom the said sum was collected was also not essential. In our view, possession of the said excess sum of money on the part of the respondent, a fact proved, is itself a misconduct and hence the Labour Court and the learned Judges of the High Court misdirected themselves in insisting on the evidence of the passengers which is wholly