CWP No. 8775 of 1993 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 8775 of 1993 Date of decision: 25.05.2010 Gian Chand s/o Sh. Hirda Ram ........Petitioner VERSUS The Presiding Officer, Labour Court,Patiala and another ......Respondents CORAM: HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present: Mr. Dinesh Kumar, Advocate, for the petitioner. Mr. K S Sidhu, Sr.Advocate, with Mr. Vikrant Oberoi, Advocate, for respondent No. 2. *** AUGUSTINE GEORGE MASIH, J. The challenge in the present writ petition has been posed to the Award passed by the Labour Court, Patiala dated 30.03.1993 (Annexure P-9), vide which the reference preferred by the petitioner against his alleged termination stands rejected holding the petitioner not entitled to any relief. Counsel for the petitioner contends that the petitioner was appointed as a Conductor with respondent No.2–Corporation. He had 18 years of service at his credit when his services were terminated illegally vide order dated 19.11.1990 (Annexure P-8). He contends that the finding returned by the Enquiry Officer is based on no evidence and, therefore, the CWP No. 8775 of 1993 2 order of termination based on the finding recorded in the enquiry report cannot be sustained and deserves to be set aside. His contention is that the charge-sheet itself is mis -conceived and the allegations made therein are based on conjectures and surmises which cannot be made the basis for proceeding departmentally against the petitioner. According to the statement of allegations, the petitioner had mis- appropriated tax to the extent of Rs.57.40 and had embezzled an amount of Rs.194.70. He referred to the charge-sheet dated 19.03.1990 (Annexure P-4) in this regard. His further submission is that respondent No. 2– Management failed to prove the contents of the enquiry file which was produced before the Labour Court as the person, who had produced the same, had no personal knowledge about the enquiry proceedings held against the petitioner and, therefore, the same could not have been taken into consideration by the Labour Court. The evidence of the Chief Inspector and the Inspectors, who had checked his bus, was based on purely hearsay evidence as no passenger had stated before the petitioner about the non–refund of the tax amount of the refunded tickets. No name of the passenger or details thereof was mentioned or recorded either in the complaint or in the enquiry proceedings. He contends that such evidence cannot be taken into consideration for returning a finding of guilt against the petitioner. In support of this contention, he relies upon the Full Bench judgment of this Court in the case of State of Haryana and others vs. Sh. Ram Chander, 1976 (2 ) SLR 690. In any case, he submits that even if the factum that the petitioner had resold the returned tickets to the passengers, who were refunded the amount of the fare as well as the tax, was not in accordance with the Rules since there is no misappropriation and embezzlement on the part of the petitioner. The punishment of dismissal is CWP No. 8775 of 1993 3 disproportionate to the misconduct proved against the petitioner and the learned Labour Court should have interfered under Section11-A of the Industrial Disputes Act in the matter of quantum of punishment. He, on this basis, prays that the present writ petition be allowed and the petitioner be reinstated in service with full back wages and all consequential benefits. On the other hand. counsel for respondent No. 2 submits that there is no error in the departmental proceedings held against the petitioner. The Enquiry Officer conducted the proceedings in accordance with the statutory Rules and, therefore, the Court should not interfere in the finding so recorded, which is based on the evidence. There is no bar to the admissibility of the hearsay evidence in a departmental proceeding. The inspector, who had appeared before the Enquiry Officer, had stated that one passenger, who was travelling in Bus No. 7531 which was being conducted by Gurnam Singh, informed them that the petitioner, who was conductor of Bus No. 7630, had returned the tickets on 7.10.1989 because of strike by the bus operators after deducting the tax but the said passenger did not accept that and did not return his ticket and was thus now travelling from Abohar to Bathinda on 08.10.1989 on same ticket in Bus No. 7531. The evidence of the passenger is not necessary before the Enquiry Officer when such a statement is made by the Inspector, who had checked the Bus and has been informed by the passenger in this regard. He contends that the misappropriation of tax by the petitioner of Rs. 57.40 stood proved against him. That apart, the returned tickets, for which refund was made by the petitioner valuing at Rs 199.00, were found in the custody of the petitioner and since there was shortage of Rs. 4.30 in the cash bag of the petitioner, an excess amount of Rs. 194.70 was found on him and had rightly been taken into consideration as such and was treated CWP No. 8775 of 1993 4 as embezzlement on his part . He, on this basis, contends that the findings recorded by the Labour Court do not call for any interference by this Court. Accordingly, he prays for dismissal of the present writ petition. I have heard the counsel for the parties and have gone through the records of the case. The petitioner was working as a conductor with respondent No. 2-Corporation. On 7.10.1989, the petitioner was conducting Bus No. 7630 from Patiala to Abohar. On reaching Abohar, this very bus was to take the return trip at 11:45 A.M. Tickets were duly issued by the petitioner before the start of the return journey but at about 11:30 A.M., for certain reasons, the private Bus Operators went on lightening strike and all the entry and exit points of the Bus Stand were blocked. No buses were allowed to enter or exit the Bus Stand . Efforts were made to pacify them and to bring about normalcy but the same did not yield any result. The passengers were kept awaiting till 3 P.M. but when the situation did not improve, the passengers became restless and asked either to take the bus out of the Bus Stand and if the same was not possible, the amount of the tickets be refunded to them. The petitioner along with the driver of the Bus Harbhajan Singh approached the Adda Incharge and appraised him of the situation. The Adda Incharge allowed the refund of the total amount of the tickets, if the passengers so desired. The petitioner submitted a written application for permission to refund the amount charged for the tickets. The said permission was granted by the Adda Incharge. Accordingly, the total ticket amount i.e. the fare including the tax of the passengers was refunded and the tickets, which were issued, were taken back from the passengers by the petitioner. The bus was not allowed to move out from the Bus Stand and the petitioner as well as the driver had to stay back at Abohar for the CWP No. 8775 of 1993 5 night. On the next day i.e. 08.10.1989, the bus was allowed to move from Abohar Bus Stand. The petitioner sold some of the tickets collected from the passengers on 7.10.1989, for which refund had been made to the passengers. The petitioner still had tickets worth Rs. 199/- in his hand, for which refund had already been made to the passengers on 7.10.1989 which the petitioner was either to sell or deposit it with the head office. When the bus reached Malout, the bus was checked by the Flying Squad. The way bill of the tickets sold was handed over to the flying squad at the time of checking along with the tickets. The petitioner was made to hand over the cash bag, the way bill and all the tickets to the Chief Inspector. At the time of checking of the cash bag and on comparing it with the way bill of the tickets sold, Rs. 4.30 were found to be short in the cash bag. Total cash on the petitioner was found to be Rs. 1366.20 (Annexure P-2). Details of tickets sold prepared from the way bill of the petitioner came to Rs. 1370.50 (Annexure P-3). Thus, there was a shortage of Rs. 4.30 in the cash bag of the petitioner. In addition to this, unsold return tickets collected from the passengers on 7 .10 .1989 valuing at Rs.199/- were found on the petitioner which the checking staff considered it as cash in hand and after deducting Rs. 4.30 which was the short amount in the cash bag, termed it as an excess amount of Rs. 194.70. On the basis of this report, charge-sheet dated 19.03.1990 (Annexure P-4) was issued to the petitioner, which reads as follows:- “ You,Gian Chand Con. No. 673, were on duty on bus No. 7630 on 8.10.1989. On reaching Malout, you gave your passengers of your bus to bus No. 7531, which was being conducted by Gurnam Singh, Con.No. 41, which bus was going from Abohar to Chandigarh. Bus No. 7531 was checked at Gidderbaha by CWP No. 8775 of 1993 6 Sarvshri Mukand Singh Inspector, Het Ram Inspector, Gurcharan Singh Inspector at 5.45 O'Clock. During checking, the conductor told that these passengers had been given tickets by the conductor of bus No.7630 on which you were on duty. He told that your bus had remained stationed in the Abohar bus stand on 7.10.1989 because of the strike by private bus operators, and that you had returned the tickets on that day and resold them on the next day on 8.10.1989.One of the passengers told that the conductor had returned the tickets to the passengers after deducting the tax, but that passenger did not do that, who was travelling from Abohar to Bathinda. Thus, you misappropriated tax to the extent of Rs. 57.40. After waiting, the checking staff went to Malout and reached the bus stand and enquired from you about your not moving from there, then you tried to evade the issue, and said that you would start after some time. When your cash and ticket books were taken into custody, some more tickets, which had been returned, were also found in your possession value of which was Rs. 199.00. Cash in hand was Rs. 1366.20, but according to way bill the tickets sold were Rs. 1370.50.Thus there was a shortage of Rs 4.30. But he had more tickets of the value of Rs.199.00. Thus there was an excess of Rs.194.70 with him. 19.03.1990 Sd/- Depot Manager P.R.T.C. Patiala Depot, Patiala .” CWP No. 8775 of 1993 7 A perusal of the charge-sheet would show that Bus No.7531 conducted by Gurnam Singh Con. No.41 was checked at Gidderbaha by three Inspectors at about 5:45 P.M. Gurnam Singh during checking informed that some passengers had been given tickets by the petitioner Gian Chand Con.No.673 of Bus No. 7630 from Abohar Bus Stand who were carrying tickets issued by the petitioner which were returned by the passengers on 7.10.1989 because of strike by private bus operators and were resold by him on 8.10.1989 i.e. the day of checking. One of the passengers amongst those ticket holders told that the petitioner had returned tickets to the passengers after deducting the tax but he did not do that and was travelling from Abohar to Bathinda on the earlier issued ticket to him . On the basis of the returned tickets, for which refund was made by the petitioner, it was alleged that he had misappropriated tax to the extent of Rs. 57.40. Tickets, which were returned by the passengers on 7.10.1989 and were found in the possession of the petitioner amounting to Rs. 199.00/- which was also taken as cash in hand and since there was a shortage of Rs. 4.30, an excess of Rs. 194.70 was alleged to be found on him. To this charge-sheet, the petitioner submitted his reply. Not satisfied with the same, the disciplinary authority ordered a regular departmental enquiry against the petitioner. Sh. Mukand Singh, Inspector, who had checked Bus No.7531 conducted by Gurnam Singh, Con.No. 41 and Bus No. 7630 conducted by the petitioner along with Sh. Het Ram, Inspector and Sh. Gurcharan Singh, Inspector, appeared before the Enquiry Officer and reiterated the allegations as made in the charge-sheet. The said statement along with the cross- examination conducted by the workman-petitioner is at Annexure P- 5. A perusal of the same would show that one passenger, who was CWP No. 8775 of 1993 8 travelling by Bus No. 7531, had stated that the petitioner had refunded the money after deducting the tax and was now issuing the tickets by charging the full amount for the tickets. It is apparent that when this passenger gave his statement before the inspectors, who were checking Bus No. 7531 which was conducted by Gurnam Singh, Con.No.41, the petitioner was not present. In the cross–examination, Mukand Singh, Inspector admitted that no written statement was taken from any passenger and also stated that no address of any passenger was taken or noted down by the checking staff. It would not be out of way to mention here that Gurnam Singh, Con. No.41 was not produced before the Enquiry Officer as a witness by the department. Thus, the evidence of the departmental witness before the Enquiry Officer during the enquiry proceedings which was relied upon by him to return the finding against the petitioner with regard to misappropriation of tax amounting to Rs.57.40, is based on pure hearsay evidence. The Full Bench of this Court in the case of State of Haryana and others vs. Ram Chander (Supra) has, in para 4 thereof, held as follows:- “4. We are, therefore, of the view that while there is no bar against the reception of hearsay evidence by domestic tribunals, the extent to which such evidence may be received and used must depend on the facts and circumstances of the case and the principles of natural justice. The learned counsel for the respondent invited our attention to the decision of the Supreme Court in Jagannath Prasad Sharma vs. The State of Uttar Pradesh and others, A.I.R. 1961 S.C. 1245, where the learned Judges of the Supreme Court compared the U.P. Police Regulations and the U.P. Disciplinary Proceedings CWP No. 8775 of 1993 9 (Administrative Tribunal) Rules and observed as follows:- “ There is no substantial difference between the procedures prescribed for the two forms of enquiry. The enquiry in its true nature is quasi-judicial. It is manifest from the very nature of the enquiry that the approach to the materials placed before the enquiring body should be judicial. It is true by Regulation 490, the oral evidence is to be direct, but even under rule 8 of the Tribunal rules, the Tribunal is to be guided by rules of equity and natural justice and is not bound by formal rules of procedure relating to evidence. It was urged that whereas the Tribunal may admit on record evidence which is hearsay, the oral evidence under the Police regulations must be direct evidence and hearsay is excluded. We do not think that any such distinction was intended. Even though the Tribunal is not bound by formal rules relating to procedure and evidence it cannot rely on evidence which is purely hearsay, because to do so in an enquiry of this nature would be contrary to rules of equity and natural justice.” The learned counsel for the respondent wanted us to read the observations of the Supreme Court as laying down that hearsay evidence was altogether inadmissible in CWP No. 8775 of 1993 10 domestic enquiries also. We do not think that we can so read the observations of the Supreme Court. The sentence underlined by us for emphasis clearly shows that the Supreme Court was emphasizing the general unreliability of hearsay evidence and the violation of the Rules of natural justice involved in relying upon pure hearsay. We venture to illustrate the position as follows: If half a dozen persons go to the office of the Haryana Roadways and complain that the conductor of a certain bus collected fare from them but did not issue tickets to them and if later on the passengers are not examined as witnesses, a finding of guilt based solely upon the complaint given by the passengers would amount to a finding based on pure hearsay and would involve violation of principles of natural justice. On the other hand, where a bus is checked and it is found that tickets have not been issued to several passengers and the passengers state in the presence of the conductor that they paid the fare, the enquiry officer would be justified in acting upon the evidence of the checkers stating these facts even though the passengers themselves are not examined as witnesses. A finding of guilt arrived at by him would not be based on pure hearsay. It would be based on (1) the evidence of the Checker that he found passengers travelling without tickets and (2) the statements made by the passengers to the checker at the time of checking. The second item of evidence alone would be hearsay but it would be hearsay of high probative value because of the circumstance that statements were made in the presence of the conductor and on the spot. In such a case, it cannot be CWP No. 8775 of 1993 11 said that the enquiry officer's findings are based on pure hearsay or hearsay of unreliable nature. We, do not, therefore, think that the decision of the Supreme Court in Jagannath Prasad Sharma's case supports the argument of the learned counsel for the respondent. The decision is no way inconsistent with the view expressed by us. In the view we have taken, we overrule the observations to the contrary in Tarlochan Singh's case.” In view of the above, the findings recorded by the Enquiry Officer in the enquiry report submitted to the disciplinary authority, cannot be said to be evidence which would be admissible and cannot be relied upon for holding the petitioner guilty of embezzlement in misappropriation of tax. As regards allegation against the petitioner of excess of Rs.194.70 with him is concerned, suffice it to say that as per the charge- sheet itself, according to the way bill, the tickets valued at Rs. 1370.50 were sold whereas the cash in hand on the petitioner was found to be Rs.1366.20 i.e. a shortage of Rs. 4.30. The old returned tickets by the passengers on 7.10.1989 which were found in possession of the petitioner were valued at Rs. 199.00. These tickets were taken by the respondents as cash in hand, which is totally unreasonable and unjustified . Thus, it cannot be said that there was excess amount of Rs. 194.70 with the petitioner at the time of checking. This charge also cannot be sustained . It is true that while exercising jurisdiction under Article 226 of the Constitution of India, the scope and ambit is restricted but where in a departmental enquiry held by the Management, the findings are based on no evidence or inadmissible evidence, the same cannot be said to be in CWP No. 8775 of 1993 12 accordance with law which has led to manifest injustice and violation of principles of natural justice. The Full Bench of this Court in the case of State of Haryana and others vs. Ram Chander (Supra) fortifies the conclusion drawn by this Court as the finding of guilt against the petitioner in the departmental enquiry is based upon pure hearsay evidence in violation of the principles of natural justice. In view of the above, the Award passed by the Labour Court dated 30.03.1993 (Annexure P-9) cannot be sustained. A perusal of the evidence led by the parties before the Labour Court would show that as per the Rules, refund could be made for the tickets sold but the same could not be resold and were required to be deposited back by the petitioner. It can thus be said that an irregularity was committed by the petitioner and had violated the instructions in this regard especially when the tickets, which were resold on 8.10.1989 by the petitioner after giving refund to the passengers on 7.10.1989, were duly reflected in the way bills as is apparent from Annexure P-1 to P-3. For the misconduct committed by the petitioner, the punishment of dismissal was not called for and the interest of justice would be duly served by imposing a punishment of stoppage of two increments with cumulative effect. It is by now settled that reinstatement per see does not mandate the grant of full back wages. In view of the fact that the petitioner would not have remained unemployed all through from the date of his termination as he has to sustain his family and thus would have taken up some work during this period, the interest of justice would be duly served by awarding 40% back wages to the petitioner from the date of his termination till his reinstatement or super-annuation, whichever is earlier. Accordingly, the present writ petition is allowed. The impugned Award dated 30.03.1993 (Annexure P-9) is herby set aside. The CWP No. 8775 of 1993 13 punishment of stoppage of two increments with cumulative effect is imposed on the petitioner with effect from 19.11.1990. He is entitled to reinstatement in service with continuity thereof and 40% back wages from 19.11.1990 till the date of his reinstatement or super-annuation, whichever is earlier. (AUGUSTINE GEORGE MASIH) May 25, 2010 JUDGE pj