1 IN THE HIGH COURT OF JUDICUATURE AT MUMBAI ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 636 OF 2002 Shri Ramchandra S. Joshi ) the Then Chief Manager of Bank ) of Baroda, having its Branch ) Office at Walkeshwar Road, ) Mumbai, presently residing at ) 111, New Building Shastri Hall, ) Tardeo Road, Mumbai-400 007. ) ... ... Petitioner. VERSUS Bank of Baroda, ) a Body Corporate constituted ) under the Banking Companies ) (Acquisition & Transfer of ) Undertakings) Act, 1970, having ) its Head Office at Mandvi, Baroda, ) State of Gujarat and its Central ) Office at Walchand Hirachand ) Marg, Ballard Pier, Mumbai - ) 400 001, and Zonal Office (GMZ) ) at New Stock Exchange Building, ) 19th Floor, Dalal Street, Fort, ) Mumbai – 400 001. ) ... ... Respondent. Mr. Mahesh Joshi i/by M/s. O. P. Soni & Co., for the Petitioner. Mr. S. K. Talsania, Sr. Counsel i/by M/s. Sanjay Udeshi & Co., for the Respondent. 2 CORAM : F. I. REBELLO and A. A. SAYED, JJ. DATED : 5TH APRIL, 2010 JUDGMENT ( Per F. I. Rebello, J.) : 1. The petitioner was served with a charge sheet in terms of the Bank of Baroda Officer Employees' (Discipline and Appeal) Regulations, 1976 (hereinafter referred to as “the Appeal Regulations”) alleging major misconducts. What constitutes `major misconduct' is set out under the provisions of the Bank of Baroda Officer Employees' (Conduct) Regulations, 1976 (hereinafter referred to as “the Conduct Regulations”). Regulation 3 sets out generally what an Officer should do in the course of his employment. Regulation 24 of the Conduct Regulations sets out that a breach of any of the provisions of the Regulations shall be deemed to constitute a misconduct punishable under the Appeal Regulations. Petitioner replied to the charge sheet. An inquiry was conducted. The Inquiry Officer submitted his report and held in terms of his findings as recorded in the inquiry report, that in respect of some of the items they were not proved and the other charges were proved. The 3 Disciplinary Authority by his communication of 10th March, 2000 informed the petitioner that he disagreed with the findings of the Inquiry officer and annexed a copy of the order as to why he disagreed with the findings as set out therein. The Disciplinary Authority also observed that the act and commission on the part of the petitioner has resulted in financial loss to the bank to the extent of Rs.149 lacs as the bank had to file law suits against the firm for recovery of dues. It is also recorded that there are no securities available to cover the outstanding and that the petitioner before disbursing the facilities should have ensured that the securities were properly charged to the bank and that the bank's charge was enforceable. The petitioner was, therefore, called upon to remain present for hearing. 2. The petitioner thereafter filed his representation dated 28th March, 2000. By order of 10th May, 2000 the Disciplinary Authority was pleased to record a finding that the loss occasioned to the Bank was upto Rs.149 lacs and consequently imposed the penalty of dismissal from the date of the order. The period of suspension was confirmed as period not spent on duty and not to be counted for 4 increment purposes. It was also ordered that since the financial loss is quantified at Rs.149 lacs, the same be recovered from Bank's contribution and interest thereon from the Provident Fund of the petitioner and the entire amount of gratuity payable to him. 3. The petitioner aggrieved preferred an appeal dated 22nd May, 2000. In the appeal the petitioner has raised no grounds as to the validity or illegality of Inquiry conducted on the ground that it was not in terms of the Appeal regulations and for that matter that there was any violation of the principles of natural justice and/or fair play while conducting the inquiry. In further submission to the appeal, the appellant worked out a figure of the expected loss and in his opinion at the highest the loss would be to the extent of Rs.126.43 lacs and as there were others, who had been charge sheeted for the similar act of misconduct, if the same was worked out proportionately it would be in the sum of about Rs.30 lacs. From the another document dated 16th December, 2000 of the petitioner, according to his quantification, the bank's contribution to the provident fund was in the sum of Rs.5 lacs and gratuity would be Rs.5 lacs. The Appellate Authority by his order of 27th January, 2001 found that there is no 5 merit in the appeal. The Appellate Authority also dealt with the contentions made by the petitioner that the loss was not attributed to him as not acceptable and also rejected the contention that the same should not be recovered from his terminal benefits. 4. The petitioner preferred a review petition, described as review appeal. Again no grounds were raised that the inquiry was not fair or proper or was in violation of the Appeal Regulations or the principles of natural justice and fair play. The petitioner was informed by the communication of 11th September, 2001 that the Reviewing Authority has rejected his review. 5. It is against this order that the petitioner filed the present writ petition. In the grounds raised challenging the imposition of punishment the petitioner has not raised any specific ground that the inquiry conducted was in contravention of Regulations or the principles of natural justice. Major challenge is on the ground of non- application of mind and that the punishment was harsh and/or disproportionate to the misconduct alleged and proved. 6 6. At the hearing of this petition on behalf of the petitioner, learned Counsel has first raised a contention, that the order of the Superior Authority has punished him twice for the same misconduct. It is submitted that the charge sheet served upon him was for major misconduct, however, he has also been imposed a minor punishment without following the procedure. Our attention is invited to Appeal Regulations. Regulation 4 of the Appeal Regulations, which sets out the minor misconduct and also includes provisions for recovery from pay or such other amount as may be due to him of the whole or part of any pecuniary loss caused to the bank by negligence or breach of orders if minor misconduct is proved. It is, therefore, submitted that to that extent a minor punishment has been imposed without opportunity and at any rate for the same misconduct there could not have been two punishment. The order imposing punishment by way of recovery from his provident fund dues and gratuity dues are without authority of law and hence liable to be quashed and set aside. It was next sought to be contended that the inquiry was conducted in violation of the principles of natural justice and fair play inasmuch as though the petitioner had applied for documents at the stage of inquiry they were not made available, that the inquiry 7 report was not reasoned and that the documents furnished by the petitioner and his evidence had not been considered by the Inquiry Officer. As we have noted earlier, the petitioner has not raised any objection that the inquiry was vitiated on account of non-compliance with the Appeal Regulations or the principles of natural justice in his representation to the Disciplinary Authority, in the Appeal Memo, in the Review and/or in this petition. 7. In order to satisfy ourselves that no injustice has been occasioned to the petitioner in the conduct of inquiry, we had called upon the learned Counsel for the petitioner to show to us any document by which he had asked for the document and for examining the witnesses which had been denied. Learned Counsel, after perusing the record, points out that there is no such document on record. Learned Counsel has also not been able to point out any serious infirmity in the conduct of the inquiry. In our opinion, therefore, the challenge on the ground of violation of the Appeal Regulations and/or principles of natural justice has to be rejected. 8. The other limb of the argument is that the defense evidence 8 and documents have not been considered. This at the highest would be non-application of mind on the part of the Inquiry Officer. In the instant case, the Disciplinary Authority disagreed with the findings of the Inquiry Officer and recorded his own findings and after making available the reasons why he disagreed with the findings of the Inquiry Officer and giving an opportunity to the petitioner to give his say thereafter imposed punishment of dismissal after considering the record. This is a matter of appreciation of evidence. It will not be possible for this Court to interfere with the findings of fact recorded unless those findings are vitiated being perverse and/or non- consideration of material evidence both oral and documentary. Learned Counsel is unable to show to us any evidence to indicate that the findings of the Authorities below are perverse and/or have not considered the material document and evidence which ought to have been considered. In other words, they failed to exercise jurisdiction which is available to them in law. This Court in the exercise of its extra ordinary jurisdiction does not act like a Court of appeal to reappreciate findings. Such an exercise in jurisdiction is not done in the exercise of the extra ordinary jurisdiction. The Court only interfers if the findings are so perverse which would result in 9 manifest injustice. On that count the challenge has to be rejected. 9. The main issue, therefore, is whether an inquiry ought to have been conducted, if employers contribution to Provident Fund and Gratuity dues were to be denied to the petitioner. It is contended on behalf of the respondent employer that the matter is governed by Section 4(6) of the Payment of Gratuity Act, 1972 (hereinafter referred to as “the Gratuity Act”). We may gainfully reproduce Section 4(6), which reads as under: “(6) Notwithstanding anything contained in sub-section (1), (a) the gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused: (b) the gratuity payable to an employee may be wholly or partially forfeited, (c) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (d) if the services of such employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.” 10 The Respondent Bank has also framed some internal guidelines for the payment of gratuity. Guidelines provide for forfeiture of gratuity. These are more or less follow the same language as Section 4(6) of the Gratuity Act and hence we need not reproduce the same. Learned Counsel draws our attention to the judgment of the Karnataka High Court in the case of M/s. Bharath Gold Mines Ltd. v/s The Regional Labour Commissioner (Central), Bangalore & Ors., reported in 1986 Lab.I.C.1976 wherein one of the issue for consideration was the deduction of gratuity. The learned Division Bench of the Karnataka High Court was of the view that before an employer takes steps to forfeit the entire gratuity, the employer has to take an independent decision after the termination of the service of an employee as to whether the gratuity payable should at all be forfeited and that decision must depend on the facts and circumstances of the case. Our attention was also invited to the judgment of the Division Bench of this Court in the case of Smt. Kamla Rameshchandra Sharma v/s Maharashtra Rajya Wakhar Mahamandal, Pune, reported in 2009 (121) FLR 87, where the learned Division Bench of this Court was pleased to observe that the penalty for recovery from pay of the whole or part of the pecuniary 11 loss caused to the Corporation must be the actual pecuniary loss occasioned, by the misconduct of the employee. In that case the learned Bench noted that the penalty imposed on the delinquent refers to future events, which may or may not result in causing of loss to the Corporation and in that case the loss had not been quantified. 10. As we have noted earlier, the Payment of Gratuity Act itself provides the circumstances under which an employer can forfeit gratuity which can be to the extent of the damage or loss suffered. Apart from that under Section 6(4)(b), gratuity can also be forfeited if services of such employee have been terminated for any act which constitutes an offence involving moral turpitude. As to what constitutes `moral turpitude', we may gainfully reproduce from paragraphs 7 and 8 of the judgment of the Division Bench of the Karnataka High Court in M/s. Bharath Gold Mines Ltd. (supra), which has considered same definitions. “7. Sri B. V. Acharya, learned counsel, invited our attention to the relevant passage in Words and Phrases, Permanent Edition, Vol. 27A at page 186. They read: “ 'Moral turpitude' is anything done contrary to justice, 12 honesty, modesty or good morals. In re Williams. 167 p. 1149, 1152, 64 CKL 316. xxx xxx xxxx xxxx `Moral turpitude' includes all acts done contrary to justice, honesty, modesty or good morals. Neibling v. Terry, 117 SW 2d 502 503 352 Mo.396, 152. A.L.R. 249” (Underlined by us) Learned counsel submitted that the Court should decide as to whether an offence involved moral turpitude or not, in the light of the meaning given to those words as above. 8. From the above passage, it is clear that anything done contrary to justice, honesty, modesty or good morals involves moral turpitude. Dishonesty is one of the essential ingredients of the offence of theft. If there is no dishonesty in removing or taking a property belonging to another, it constitutes no offence of theft. Therefore, it is clear that when a person is found guilty of the charge of theft, it means, he has acted dishonestly and from this it follows that he has committed an offence involving moral turpitude.” 11. In the case of The Management of Tournamulla Estate v/s Workmen, AIR 1973 SC 2344, before the enactment of the Gratuity Act, the Supreme Court noted that in Delhi Cloth & General Mills Co. Ltd. v/s Workmen, AIR 1970 SC 919, noted the object of having a gratuity scheme which is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer, and 13 therefore, it was not correct to say that no misconduct, however grave, may not be visited with forfeiture of gratuity. Various kind of misconducts were thereafter noted, which were (1) technical misconduct which leaves no trail of indiscipline, (2) misconduct resulting in damage to the employer's property which might be compensated by forfeiture of gratuity or part thereof, and (3) serious misconduct such as acts of violence against the management or other employees or riotous or disorderly behaviour in or near the place of employment, which, though not directly causing damage, is conducive to grave indiscipline. The Court observed that the first should involve no forfeiture, the second may involve forfeiture of the amount equal to the loss directly suffered by the employer in consequences of the misconduct and the third will entail forfeiture of gratuity due to the workman. Thus, it would be clear that even before the Gratuity Act has come into force, the Supreme Court had noted that gratuity could be forfeited. Object of paying gratuity has been sufficiently set out in the judgment of the Supreme Court in the case of U. P. State Sugar Corporation Ltd. & Ors. v Kamal Swaroop Tondon, 2008 II CLR 563, where the Court observed as under: “It is well-settled that retiral benefits are earned by an 14 employee for long and meritorious services rendered by him/her. They are not paid to the employee gratuitously or merely as a matter of boon. It is paid to him/her for his/her dedicated and devoted work.” Reference was made to several judgments dealing with gratuity and the circumstances under which the gratuity could be forfeited. 12. In these circumstances, the question is whether the respondent bank could have withheld the gratuity or deducted the amount towards the loss suffered. In the instant case, insofar as causing loss to the bank is concerned, the Disciplinary Authority had given notice to the petitioner in the matter of issue of loss occasioned to the bank. Thereafter, the petitioner replied to the same. The Disciplinary Authority recorded a finding and directed forfeiture of the employer's contribution of provident fund and the gratuity from the terminal benefits payable to the petitioner. Section 4(6) by itself specifically does not provide for a show cause notice in the matter of forfeiture of gratuity. But considering that forfeiture of gratuity involves a civil liability, and having civil consequences, in our opinion, the principles of natural justice would require it to be followed. Thus an opportunity must be made available to the delinquent employee to 15 give his say as to why his gratuity should not be forfeited. In the instant case, as we have pointed out earlier, this is not a case where money is sought to be recovered on account of establishment of minor misconduct, but on account of major misconduct under the Conduct Regulations. The petitioner, in our opinion, had an opportunity. Even in cases where there be some procedural infirmity, in our opinion, it is not necessary that the High Court must always in the course of its extra ordinary jurisdiction interfere with the action taken. The law on the subject has been summarised by the Supreme Court in U.P. State Sugar Corporation Ltd. v/s Kamal Swaroop Tondon (supra). The law as summarised notes that their powers under Article 226 of the Constitution of India are purely discretionary and though no limits can be placed upon that discretion it must be exercised along recognised lines and not arbitrarily and that Court will not allow themselves to be turned into court of appeal or revision to set right mere errors of law which do not occasion injustice in a broad and general sense. Though no legislature can impose limitations on these constitutional powers it is a sound exercise of discretion to bear in mind the policy of the legislature to have disputes about these special rights decided as speedily as may 16 be. The writs referred to in Article 226 of the Constitution of India are obviously intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise jurisdiction vested in them, or there is an error apparent on the face of the record and such act, omission, error, or excess has resulted in manifest injustice. 13. In the facts of the present case, we find that there is a clear finding that the respondent employer has suffered a loss to the extent of nearly Rs.149 lacs. Suits have been filed for recovery of that amount of money. Misconduct against the petitioner has been established on that count. The petitioner, in his appeal, himself noted that if the loss is apportioned amongst all charge-sheeted employees, his liability at the highest would be Rs.30 lacs. According to the petitioner himself the amount he would have received at the highest would have been Rs.10 lacs. (This we are saying without having the actual figures on record and for the sake of argument.) It is, therefore, not possible to hold that there has been any manifest injustice in deducting the gratuity amount. 17 14. Insofar as the provident fund is concerned, Rule 18 of the Bank of Baroda Provident Fund Rules provides for deduction of the employer's contribution in a case where the member is dismissed for misconduct causing financial loss to the bank. In our opinion, therefore, the respondent bank was within its jurisdiction in making deduction from the employer's contribution towards the provident fund payable to the petitioner. 15. We had called on the learned Counsel for the petitioner to inform us the outcome of the proceedings of the civil suits filed for recovery of the amounts which had been transferred to the Debt Recovery Tribunal. Leaned Counsel has been unable to tell us the exact position. However, in the event any amounts have been recovered pursuant to any decree or award of the Debt Recovery Tribunal and that covers the loss suffered and/or if there be any shortfall, to the extent of any proportionate shortfall, the right of the petitioner to claim refund of the gratuity amount is left open. 16. In view of the above, the Rule discharged. In the 18 circumstances of the case, there shall be no order as to costs. Writ Petition is dismissed. Sd/- (F.I. REBELLO,J.) Sd/- (A. A. SAYED, J.)