SCA/9158/2004 1/18 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 9158 of 2004 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= G.S.R.T.C. THRO' ITS LEGAL ADVISOR - Petitioner(s) Versus HARJIBHAI DHANJIBHAI GAMETI - Respondent(s) ========================================================= Appearance : MR ASHISH M DAGLI for Petitioner(s) : 1, None for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 8/1/2008 CAV JUDGMENT 1. Heard learned advocate Mr.A.M.Dagli for the petitioner. SCA/9158/2004 2/18 JUDGMENT 2. In the present petition, the petitioner has challenged the award passed by the Labour Court, Himmatnagar in Reference No.1 of 2001 dated 19.3.2004 whereby the Labour Court has set aside the order of dismissal dated 18.12.1997 and granted the reinstatement with continuity of service and consequential benefits but, without back wages of interim period. 3. Learned advocate Mr.Dagli submitted that the respondent was working as Conductor at Talod Depot in Himmatnagar Division, committed misconduct on 12.8.1995 when he was on route from Bhiloda to Una, vaya Gondal. That his bus was checked by checking staff, at that occasion, because of the doubt checking staff checked tray bag of conductor and it was found that one empty way bill bearing No.457938 as well as old way bills were found from the possession of the conductor. The charge sheet was served and after completion of departmental inquiry, the competent authority has imposed the punishment of stoppage of 4 increments with cumulative effect by order dated 31.7.1996. Thereafter, case of respondent was reviewed by the reviewing authority on 15.10.1996 and punishment was reviewed from stoppage of 4 increments with cumulative effect to dismissal by order dated 18.12.1997. The conductor has not replied to the charge sheet and also not replied to show cause notice but, he personally remained present during the hearing of show cause notice. He also SCA/9158/2004 3/18 JUDGMENT submitted that the Labour Court has committed gross error in granting the reinstatement to the respondent workman. He further submitted that reviewing authority has power to enhance the punishment and accordingly, the reviewing authority has enhanced the punishment. He submitted that the Labour Court has committed gross error in coming to conclusion that reviewing authority has no power to enhance the punishment. Therefore, the award passed by the Labour Court is required interference by this Court. 4. I have considered the submissions made by learned advocate Mr.Dagli and have also perused the award passed by the Labour Court, Himmatnagar. Before the Labour Court, statement of claim was filed by the workman and written statement was also filed by the petitioner Corporation. Thereafter, the documents were produced by both the parties and workman has not challenged the legality and validity of the departmental inquiry but, has challenged the finding given by the competent authority. The workman was examined vide Exh.27 and no witness was examined by the petitioner. Thereafter, the Labour Court has heard both the learned advocates and considered the merits of the matter. The Labour Court has considered that allegations which have been made against the conductor that old way bills as well as empty way bill were found and on 12.8.1995 as per arrangement made on the basis of duty list, 2.15 Bornala to Chhatidara night, was mentioned. Accordingly, workman was prepared to report at schedule but another SCA/9158/2004 4/18 JUDGMENT conductor was not available, he was sent on route from Bhiloda - Una Express Bus. Therefore, he was not sent on regular route but, as the conductor of Bhiloda - Una was not available, he was sent on that route. Therefore, the workman was not aware that his duty was in crew change and he was first time going to Bhiloda - Una route. Therefore, he was not able to take up double way bill and no information was given to the workman and way bill was prepared upto Bhiloa - Gondal by the conductor and at Gondal when crew change conductor was demanding way bill from the workman, meanwhile he was filling up the way bill by noting down numbers of the tickets which have been issued, one checking inspector having doubt, therefore, report was made against the conductor. Ultimately, the statement which was made by workman in departmental inquiry was not disputed or challenged by reporter. However, the competent authority has not believed the statement of the workman and come to different conclusion to the effect that workman has misappropriated Rs.88/-. The reporter was an important witness to prove the charge against the conductor, was not examined by the competent authority. Therefore, the Labour Court has relied upon the decision of the Allhabad High Court reported in 1991 FLR 268. The Labour Court has also considered that in absence of examination of the reporter, charge levelled against the workman cannot be found to be proved. However, the competent authority has imposed the punishment by order dated 31.7.1996, four years increments with cumulative SCA/9158/2004 5/18 JUDGMENT effect. Against which departmental appeal was filed by the respondent workman. During that pendency of appeal, the decision of review was taken by the reviewing authority issuing review show cause notice which was replied by the workman on 20.10.1997 and pointed out that all the defences were taken before the competent authority. However, that part has been ignored and he was dismissed from service on 18.12.1997. The Labour Court has also considered that reviewing authority has not given any reason while deferring with the finding in respect to the punishment imposed by competent authority. The Labour Court has also considered that during the pendency of appeal, decision of review is also contrary to the Rules and principles of natural justice. The reviewing authority is also not justified in reviewing the punishment of dismissal and also considered the additional evidence which was not considered by the competent authority. The past record was not produced before the competent authority but, it was relied upon by the reviewing authority. Therefore, the reviewing authority has committed gross error in imposing the punishment of dismissal and has set aside the dismissal order. The Labour Court has denied the back wages of interim period considering the evidence of the workman. The gainful employment was not proved by the petitioner before the Labour Court. 4.1 The respondent workman raised various contentions against the review proceedings including SCA/9158/2004 6/18 JUDGMENT there is no power to enhance the punishment. The question of enhancement of punishment is decided by the Division Bench of this Court in Reference No.1 of 2007. Therefore, rest of the contentions of the respondent raised before the Court / Tribunal is examined by this Court as matter is old and to avoid the decision on technical ground. There are basic error in review proceedings which is considered by this Court. 5. Hearing of review was taken on 20.10.1997 where explanation was given by conductor with all the details in departmental inquiry which may be taken into account. On the date of incident, his duty was on route from Bhiloda - Una but, conductor of the said route was not available and therefore, the he was all of sudden asked to change the duty and to send at the route from Bhiloa - Una. For that, he was not aware to obtain way bill and therefore, he went on duty while obtaining one way bill in normal course and there was no bad intention on his part. After personal hearing of the workman, no further finding is given and straightway, dismissal order was passed by the reviewing authority on 18.12.1997. Therefore, the Labour Court has considered the matter on merits and set aside the punishment of dismissal on the ground that reviewing authority has no power to enhance the punishment. The Labour Court has examined the merits and ultimately, come to the conclusion that punishment of dismissal is harsh and unjustified and finding given by the competent authority in SCA/9158/2004 7/18 JUDGMENT absence of examination of the reporter is baseless and perverse. Therefore, the contention raised by learned advocate Mr.Dagli cannot be accepted and same are rejected. 6. The law on the subject has been examined in identical situation where the inquiry officer exonerated the delinquent and disciplinary authority is not agree with such finding then, finding of disagreement must have to be communicated to the concerned delinquent. The reasons for disagreement provided for the first time with the order of punishment which has been held to be violative of principles of natural justice and settled canons of law. 7. In this case also, the punishment imposed by competent authority for which reviewing authority is not agree and the reviewing authority wanted to enhance the punishment during the pendency of appeal filed by workman. The decision of review cannot be taken during the pendency of appeal. When the reviewing authority is not agree with punishment imposed by the competent authority and the reviewing authority is deferring with the decision of competent authority then the reviewing authority should have to give reasons that how the competent authority is wrong in imposing the punishment to the workman. No such reasons are given by reviewing authority. Along with the review show cause notice, no finding is given by reviewing authority to the workman. The SCA/9158/2004 8/18 JUDGMENT punishment imposed by the competent authority is found inadequate but on what basis and without disclosing the reason, explanation was called for from the workman. After reply of the review show cause notice and personal hearing of the workman, no further finding was given and straightway, punishment was enhanced by the reviewing authority. Even the reviewing authority has not given reason along with the punishment order. Therefore, the order passed by reviewing authority is basically contrary to the principles of natural justice and also settled law laid down by the Apex Court. The view taken by the Division Bench of the Bombay High Court in case of Food Corporation of India Employees Association, West Zone and Anr. v. Food Corporation of India and Ors. reported in 2007 III LLJ 385. Relevant observations made in Para.9 which are quoted as under : "9. The learned counsel appearing for the petitioners has relied upon the judgments of the Supreme Court in the cases (i) Punjab National Bank and Others v. Kunj Behari Mishra, AIR 1998 SC 2713 : (1998) 7 SCC 84 : 1998-II-LLJ-809 and (ii) Yoginath d. Gagde v. State of Maharashtra and others, AIR 1999 SC 3734 : (1999) 7 SCC 739 in support of his contention that the entire departmental proceedings would stand vitiated on this ground. In the case of Punjab National Bank and Others v. Kunj Behari Mishra (supra), the Court held as under 1998-II-LLJ-809 at pp.817, 818 & 819 : "16. In Karunakar case (1993) 4 SCC 727 : 1994-I-LLJ-162 the question arose whether after the 42nd Amendment of the Constitution, when the enquiry officer was other than a SCA/9158/2004 9/18 JUDGMENT disciplinary authority, was the delinquent employee entitled to a copy of the enquiry report of the enquiry officer before the disciplinary authority takes decision on the question of guilt of the delinquent. It was sought to be contended that in that case that as the right to show cause against the penalty proposed to be levied had been taken away by the 42nd Amendment, therefore, there was no necessity to give to the delinquent a copy of the enquiry report before the disciplinary authority took the final decision as to whether to impose a penalty or not. Explaining the effect of the 42nd Amendment the Constitution Bench observed that : "All that has happened after the Fortysecond Amendment of the Constitution is to advance the point of time at which the representation of the employee against the enquiry officer's report would be considered. Now, the disciplinary authority has to consider the representation of the employee against the report before it arrives as its conclusion with regard to his guilt or innocence of the charges." The Court explained that the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusion on the basis of the evidence, the enquiry officer's report and the delinquent employee's reply to it. The second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. It is the second right which was taken away by the 42nd Amendment but the right of the charged officer to receive the report of the enquiry officer was an essential part of the first stage itself. This was expressed by the Court in the following words : The reason why the right to receive the report of the enquiry officer is considered an essential part of the reasonable opportunity at the first stage and also a principle of SCA/9158/2004 10/18 JUDGMENT natural justice is that the findings recorded by the enquiry officer from an important material before the disciplinary authority which along with the evidence is taken into consideration by it to come to its conclusions. It is difficult to say in advance to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions. The findings further might have been recorded without considering the relevant evidence on record, or by misconstruing it or unsupported by its. If such a finding is to be one of the documents to be considered by the disciplinary authority, the principles of natural justice require that the employee should have fair opportunity to meet, explain and controvert it before he is condemned. It is negation of the tenets of justice and a denial of fair opportunity to the employee to consider the findings recorded by a third party like the enquiry officer without giving the employee an opportunity to reply to it. Although it is true that the disciplinary authority is supposed to arrive at its own findings on the basis of the evidence recorded in the inquiry. It is also equally true that the disciplinary authority takes into consideration the findings recorded by the enquiry officer along with the evidence on record. In the circumstances, the findings of the enquiry officer do constitute an important material before the disciplinary authority which is likely to influence its conclusions. If the enquiry officer were only to record the evidence and forward the same to the disciplinary authority, that would not constitute an additional material before disciplinary authority of which the delinquent employee has no knowledge. However, when the enquiry officer goes further and records his findings, as stated above, which may or may not be based on the evidence on record or are contrary to the same or in ignorance of it, such findings are an additional material SCA/9158/2004 11/18 JUDGMENT unknown to the employee but are taken into consideration by the disciplinary authority while arriving at its conclusions. Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the inquiry officer's findings. The disciplinary authority is then required to consider the evidence, the report of the enquiry officer and the representation of the employee against it." 17. These observations are clearly in tune with the observations in Bimal Kumar Pandit IR 1963 SC 612 : 1963-I-LLJ-295 quoted earlier and would be applicable at the first stage itself. The aforesaid passages clearly bring out the necessity of the authority which is to finally record an adverse finding to give a hearing to the delinquent officer. It if enquiry officer had given an adverse finding, as per Karunakar (supra) case, the first stage require an opportunity to be given to an employee to represent to the disciplinary authority, even when an earlier opportunity had been granted to them by the enquiry officer. It will not stand to reason that when the finding in favour of the delinquent officers is proposed to be over turned by the disciplinary authority then no opportunity should be granted. The first stage of the inquiry is not completed till the disciplinary authority has recorded its finding. The principles of natural justice would demand that the authority which proposes to decide against the delinquent officer must give him a hearing. When the enquiry officer holds the charges to be proved, then that report has to be given to the delinquent officer, who can make a representation before the disciplinary authority takes further action which may be prejudicial to the delinquent officer. When, like in the present case, the enquiry report is in favour of the delinquent officer but if SCA/9158/2004 12/18 JUDGMENT the disciplinary authority proposes to defer with such conclusions, then that authority which is deciding against the delinquent officer must give him an opportunity of being heard for otherwise he would be condemned unheard. In departmental proceedings, what is of ultimate importance is the finding of the disciplinary authority. (emphasis supplied) 18. Under Regulation 6, the enquiry proceedings can be conducted either by an enquiry officer or by the disciplinary authority itself. When the inquiry is conducted by the enquiry officer, his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stands concluded with the decision of the disciplinary authority. It is the disciplinary authority which can impose penalty and not the enquiry officer. Where the disciplinary authority itself holds an inquiry, an opportunity of hearing has to be granted by him. When the disciplinary authority defers from the view of the enquiry officer and proposed to come to a different conclusion, there is no reason as to why an opportunity of hearing should not be granted. It will be most unfair and iniquitous that where the charge officer succeed before the enquiry officer, they are deprived of representing to the disciplinary authority before that authority defers with the enquiry officer's report and, while recording a finding of guilt, imposes punishment on the officer. In our opinion, in any such situation, the charged officer must have an opportunity to represent before the disciplinary authority before final findings on the charges are recorded and punishment imposed. This is required to be done as a part of the first stage of inquiry as explained in Karunakar (supra). SCA/9158/2004 13/18 JUDGMENT 19. The result of the aforesaid discussion would be that the principles of natural justice have to be read into Regulation 7(2). As a result thereof, whenever the disciplinary authority disagrees with the enquiry authority or any article of charge, then before it records its own findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the enquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the enquiry officer. The principles of natural justice, as we have already observed, require the authority which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file a representation before the disciplinary authority records its findings on the charges framed against the officer. 20. The aforesaid conclusion which we have arrived at is also in consonance with the underlying principle enunciated by this Court in the case of Institute of Chartered Accountants (1986) 4 SCC 537. While agreeing with the decision in Ram Kishan case (1995) 6 SCC 157 we are of the opinion that the contrary view expressed in S.S.Koshal 1994 Supp. (2) SCC 468 and M.C. Saxena (State of Rajasthan v. M.C.Saxena, (1998) 3 SCC 385 : 1998-I-LLJ-1244) cases do not lay down the correct law." 8. The effect of non-application of mind and non- reasoned order passed by the administrative authority which has been discussed by the Apex Court in case of Cyril Lasrado (Dead) by Lrs. and others v. Juliana SCA/9158/2004 14/18 JUDGMENT Maria Lasrado and Anr. reported in (2004) 7 SCC 431. Relevant Para.11 and 12 are quoted as under: "11 Reasons introduce clarity in an order. On plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge. The absence of reasons has rendered the High Court's judgment not sustainable. 12. Even in respect of administrative orders Lord Denning, M.R. in Breen v. Amalgamated Engg. Union observed : (All ER p.1154h) "The giving of reasons is one of the fundamentals of good administration." In Alexander Machinery (Dudley) Ltd. v. Cabtree it was observed : "Failure to give seasons amounts to denial of justice. Reasons are live links between the mind of the decision-taker tot he controversy in question and the decision or conclusion arrived at." Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The "inscrutable face of the sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance." 9. In view of the law as discussed above, the SCA/9158/2004 15/18 JUDGMENT Labour Court has rightly examined the matter on merits and is perfectly justified while exercising the power under Section 11A of the I.D.Act,1947 to set aside the dismissal order. The Labour Court has rightly not granted the back wages of interim period. Therefore, the Labour Court has not committed any error while granting the relief in favour of respondent workman. Learned advocate Mr.Dagli is not able to point out any infirmity in the award. This Court is having very limited jurisdiction to interfere with award while exercising the power under Article 227 of the Constitution of India. The view taken by the Delhi High Court in case of Sushila Sharma v. Pawan Sharma reported in 2007 II LLJ 865. Relevant observations are made in Para.11 and 12 which are quoted as under : "11. The settled position of law in respect of interference by the writ courts under Article 226 of the Constitution of India in matters of this nature is that a writ court exercises its powers of judicial review well within certain parameters. A series of judgments have been rendered by the Supreme Court in this context, as mentioned below: (i) Sadhu Ram Vs. Delhi Transport Corporation Learned AGP Mrs.Pathak requests for some time. Therefore, matter is adjourned to 3.12.2007. Ad-interim relief granted earlier to continue till then. 1984 Learned advocate Mr..... has filed leave note / sick note. Therefore, matter is adjourned to 24.7.2007. 1967. (ii) Harbans Lal Vs. Jag Mohan, , (1985) 4 SCC SCA/9158/2004 16/18 JUDGMENT 333. (iii) Calcutta Port Shramik Union Vs. Calcutta River Transport Association and Ors. 1988 (supp.) SCC 768. (iv) Ramniklal N.Butta and another Vs.State of Maharashtra and others, (1997) 1 SCC 134. (v) Indian Overseas Bank Vs. I.O.B.Staff Canteen Workers’ Union