CWP No. 16091 of 1999 and another connected matter 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 29.03.2010 CWP No. 16091 of 1999 Rishi Ram son of Ram Richhpal, ...... PETITIONER VERSUS The State of Haryana through its Commissioner and Secretary and others .......RESPONDENTS CWP No. 6555 of 2000 The Anayat Cooperative Credit and Service Society Ltd., Anayat ...... PETITIONER VERSUS The Presiding Officer, Industrial Tribunal-cum-Labour Court, Panipat and another ....... RESPONDENTS CORAM: HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present: Mr. S.K.Monga, Advocate, for the petitioner ( In CWP No. 16091 of 1999) None for respondent No. 1 ( In CWP No. 16091 of 1999) Mr. Bhoop Singh, Advocate, for the petitioner ( In CWP No. 6555 of 2000) for respondent No. 3 (In CWP No. 16091 of 1999). Mr. R.K.Malik, Sr. Advocate, with Ms. Renu, Advocate, for respondent No. 4 ( IN CWP No. 16091 of 1999) for respondent No. 2 (In CWP No. 6555 of 1999) *** AUGUSTINE GEORGE MASIH, J. (ORAL) The Award dated 05.05.1999 (Annexure P-1) passed by the Industrial Tribunal-cum-Labour Court, Panipat is under challenge. CWP No. 16091 of 1999 titled as Rishi Ram vs. State of Haryana and others has been preferred by a person, who was not a party to the proceedings CWP No. 16091 of 1999 and another connected matter 2 before the Labour Court but has been held responsible to make good the amount of full back wages, which have been ordered by the Labour Court while deciding the reference in favour of Ishwar Singh-workman- respondent No. 4 on the ground that the principles of natural justice have not been complied with as no notice was given to the workman before passing such an order by the Labour Court. CWP No. 6555 of 2000 has been preferred by the Anayat Cooperative Credit and Service Society Ltd., Anayat, of which Ishwar Singh-workman was an employee and the Award has gone in favour of the workman holding him entitled to reinstatement with continuity of service and full back wages. Counsel for the parties state that both these writ petitions can be heard and decided by a common order. Accordingly, the cases are being taken up for hearing and disposal together. The basic facts are being taken from CWP No. 16091 of 1999 titled as Rishi Ram vs. State of Haryana and others. Ishwar Singh-respondent No. 4-workman was appointed as a Salesman on 13.10.1980 by the Anayat Cooperative Credit and Service Society Ltd., Anayat-respondent No. 3. He continued to serve the Management. Vide a resolution dated 17.09.1992, the workman was put under suspension. A charge-sheet was served on him, to which he filed a reply and on consideration of the said reply, the services of the workman- respondent No. 4 were terminated on 17.05.1993. The workman-Ishwar Singh preferred a demand notice dated 14.07.1993, wherein he alleged that the termination of his services was in violation of the principles of natural justice and the charge-sheet and the termination order were not issued by the competent authority as per Rules governing the service. CWP No. 16091 of 1999 and another connected matter 3 When the conciliation proceedings failed, the matter was referred to the Industrial Tribunal-cum-Labour Court, Panipat for decision. On the basis of the pleadings and the evidence led by the parties, the Labour Court came to the conclusion that no charge-sheet was given by the Managing Committee and three charge-sheets have been signed by the persons/officials, who had no authority to take any action against the workman. It was further concluded that there was no evidence that any enquiry was held against the workman into the alleged violation of the order of stoppage of sale of urea after a particular date as was ordered by the Managing Committee of the Society. The Labour Court further proceeded to hold that the service of the workman was, as a matter of fact, terminated to accommodate one Balbir Singh, who was brother of the petitioner-Rishi Ram and thus, the termination of the services of the workman was not in accordance with law. In view of the said findings recorded by the Labour Court, the workman was ordered to be reinstated with continuity of service and full back wages. It was also observed by the Labour Court that in the first instance, the entire amount shall be paid out of the funds of the Society and then it shall be recovered from the petitioner-Rishi Ram, who had colluded to illegally remove the workman from service with an intention to employ his brother in his place. It is this Award, which is under challenge by Sh. Rishi Ram as also the Society. Counsel for the petitioner contends that the petitioner is only aggrieved with regard to the foisting of the responsibility on the petitioner and the observation made by the Labour Court with regard to the mala-fide intention on the part of the petitioner in getting the termination order of the workman to accommodate his brother in his place. He contends that the Labour Court ought to have first given notice to the petitioner and an CWP No. 16091 of 1999 and another connected matter 4 opportunity to explain his conduct before making such observation in its Award. Without giving the petitioner an opportunity of being heard, the Labour Court had proceeded to make observation with regard to the mala- fide intention on his part despite there being no allegations either in the demand notice by the workman or in the claim statement or there being any evidence in this regard before the Labour Court. What was expected of the Labour Court was to intimate the petitioner with regard to the allegations against him, if it so desired to observe and after hearing the petitioner, the Labour Court could have passed such an order. He, on this basis, contends that these observations made by the Labour Court deserve to be expunged and the responsibility fixed on the petitioner with regard to the payment of the full back wages, which was ordered to be recovered from the petitioner, deserves to be set aside. He further contends that during the pendency of the writ petition, Rishi Ram-petitioner had expired on 24.04.2009 and now the legal representatives of the petitioner are on record. Counsel for the Society, Mr. Bhoop Singh, submits that the findings, as recorded by the Labour Court, are not based on the evidence on record. He contends that the Labour Court has misread the Rules and has overlooked the Rules, which govern the service as have been approved by the Registrar, Co-operative Societies. He refers to the Resolution of the Society, vide which the Secretary of the Society Sh. Hoshiar Singh was empowered to issue suspension order and to issue charge-sheet to the workman-Ishwar Singh. The said Resolution is dated 17.09.1992, which was produced before the Labour Court. He, on this basis, contends that the suspension order and the charge-sheet was duly issued by a competent authority, which has been authorized by the CWP No. 16091 of 1999 and another connected matter 5 Managing Committee of the Society. As regards the termination order, counsel for the Society very fairly states that the same has not been placed on record of the Labour Court. He submits that the relevant Rules, which deal with the penalties to be imposed on the employees of the Society, are the Primary Co-operative Credit & Services Societies, Staff Services Rules, 1992 (hereinafter referred to as 'the Rules, 1992'). The said Rules have been adopted by the Society w.e.f. 16.11.1992. He contends that Rule 18 of the Rules, 1992 deals with the penalties and as per the requirement of the said Rule, after issuing the charge-sheet and considering the reply submitted by the workman, the Society has proceeded to pass an order of termination, which is in accordance with the Rules. He, on this basis, contends that the Award passed by the Labour Court cannot be sustained and, therefore, deserves to be set aside. On the other hand, counsel for the respondent-workman- Ishwar Singh contends that the finding, which has been returned by the Labour Court, is in accordance with law and based on the pleadings and the evidence recorded by the Labour Court. He contends that even if the contention with regard to the issuance of the suspension order and the charge-sheet to the workman is ignored, then also the order of termination has not been passed by the Society nor has that been placed on record before the Labour Court. His further contention is that even if the Rule, which has been relied upon by the counsel for the Society-respondent No. 3 for justifying the order of termination, is read, the same also envisaged the imposition of a penalty for good and sufficient reasons by the Committee for the mis-conduct, which is established on his part. He contends that since no enquiry was held after the issuance of the charge- sheet and the receipt of the reply by the workman, wherein all charges CWP No. 16091 of 1999 and another connected matter 6 were denied by the workman, the requirement of law, as per Rule 18 itself, was establishment of the mis-conduct, which could only be done by holding an enquiry. It is an admitted position on behalf of the Society that no enquiry was held against the workman. He, on this basis, contends that the Award passed by the Labour Court is fully justified and does not call for any interference by this Court. I have heard the counsel for the parties and have gone through the records of the case. The basic facts with regard to the appointment and termination of the services of the workman, are not in dispute. The Rule, which has been relied upon by the counsel for the Society, is Rule 18 of the Rules, 1992, which reads as follows:- “18. PENALTIES:- The following penalties may, for good and sufficient reasons, be imposed on an employee by the Committee for the misconduct established on his part: i) Censure ii) Reduction in emoluments iii) Removal or dismissal from service. In addition to any one of the aforementioned penalties, the Committee may order recovery from his pay of the whole or part of any pecuniary loss caused by him to the Society by negligence or by any wilful act of omission or commission. 18.2 No order of imposition of any of the penalties specified in Rule 18.1 shall be passed except after a) Informing the employee, in writing, of the charge or CWP No. 16091 of 1999 and another connected matter 7 charges levelled against him & b) Giving the employee full opportunity to represent his case within 15 days from the receipt of notice.” A perusal of the above Rule provides for the punishment, which can be imposed on the workman. However, before imposition of the said punishment, the mandate of the Rule is the establishment of the misconduct against the employee, who is to be punished. Even if the assertion of the counsel for the Society is accepted that the suspension order and the charge-sheet was issued by the competent authority, then also merely on the basis of the reply, which has been filed by the employee, wherein he has denied the charges levelled against him, non- satisfaction of the Management with the reply, cannot be termed as mis- conduct having been established against the employee. Where the employee disputes the charges levelled against him by the Management, only recourse open is to prove the charges against the workman and for coming to such a conclusion, there has to be a fact finding enquiry. The position in the present case is that the charges were denied by the workman but no enquiry was held to prove the guilt of the delinquent employee against whom the charges were framed. Merely because specifically under Rule 18 of the Rules, 1992 it is not provided that an enquiry has to be conducted before holding an employee guilty, would not absolve the Management to not comply with the principle of natural justice, which mandates the employee to prove his innocence before an independent Enquiry Officer. It is not in dispute that in the present case, no enquiry was held and, therefore, the mandate of Rule 18 of the Rules, 1992 has not been complied with, which empowered the Committee to CWP No. 16091 of 1999 and another connected matter 8 impose a penalty for mis-conduct, which is established on the part of the employee. The order of termination of the workman thus, cannot be said to be in accordance with the Rules governing the service. That being so, the findings recorded by the Labour Court with regard to the factum of the termination of the workman being not in consonance with the law and illegal, are fully justified which do not call for any interference by this court. Mr. Bhoop Singh, counsel for the Society, at this stage, put forth the submission that in the light of the fact that the Management has lost faith in the workman and there are serious allegations of mis-conduct with regard to the embezzlement of the amount and non-compliance of the directions issued by the Managing Committee coupled with the fact that the workman is out of service since 1993. He states that the reinstatement of the workman, at this belated stage, would neither be conducive nor in the interest of the Society. He submits that the workman be compensated instead of reinstatement in service with full back wages. His further submission is that after the admission of the present writ petition, the workman has, all through, been paid the last wages drawn as per provisions contained under Section 17-B of the Industrial Disputes Act. This contention of the counsel for the Society appears to be quite justified. The allegations made against the workman do indicate loss of faith on the workman. Under these circumstances, it would not be conducive for the smooth running of the Society that an employee should be foisted back on the Society. The interest of justice would be duly served by directing payment of a lump-sum compensation to the workman. Accordingly, keeping in view the length of service the workman had rendered with the Society as also the period which he had lost in pursuing the litigation and keeping in view the fact that the workman has CWP No. 16091 of 1999 and another connected matter 9 been paid the last wages drawn by him during the pendency of the writ petition in this Court, lump-sum compensation of Rs. 1 lac would serve the interest of justice. Accordingly, the workman is held entitled to a lump-sum compensation of Rs. 1 lac (one lac) in lieu of ordering his reinstatement in service and all other consequential benefits, which have been granted to him by the Labour Court. Now adverting to the case of the deceased Rishi Ram, against whom the Labour Court had made observation in its Award, which has been impugned by him. The basic principle of law is whenever the conduct of a person is to be commented upon adversely or where some responsibility has to be pinned to him and where civil consequences would follow, the principle of audi alteram partem has to be complied with, which the Labour Court has totally overlooked. The petitioner was neither a party to the proceedings before the Labour Court nor he was given any opportunity to defend himself. Even no notice was issued with regard to the mala-fides, which findings have been returned by the Labour Court which lead to the termination of the service of the workman. Not to speak of this, no allegations were made either in the demand notice, claim statement or the evidence, which had come on record. The observations made by the Industrial Tribunal-cum-Labour Court, Panipat vide its Award dated 05.05.1999, which are as follows:- “xxx xxx xxx In the first instance the entire amount shall be paid out of the funds of the Society and then it shall recover the same from MW-2 Rishi Ram who did everything illegal for removing the petitioner from service simply to give employment to his brother. xxx xxx xxx” can not be sustained. Accordingly, these observations, which have been CWP No. 16091 of 1999 and another connected matter 10 referred to above, are ordered to be expunged from the Award. In view of the above, CWP No. 16091 of 1999 titled as Rishi Ram vs. State of Haryana and others is hereby allowed. The observations made against the petitioner in para-18 of the Award, as has been referred to above, are ordered to be expunged. The writ petition preferred by the Society i.e. CWP No. 6555 of 2000 titled as Anayat Cooperative Credit and Service Society Ltd., Anayat vs. The Presiding Officer, Industrial Tribunal-cum-Labour Court, Panipat and another is allowed to the extent that the Award dated 05.05.1999 (Annexure P-1) passed by the Industrial Tribunal-cum-Labour Court, Panipat, is modified to the extent that the workman shall be entitled to a lump-sum compensation of Rs. 1 lac (one lac) in lieu of reinstatement with continuity of service and full back wages. A direction is issued to the petitioner-Anayat Cooperative Credit and Service Society Ltd., Anayat to release the amount of compensation, as assessed by this Court, within a period of three months' from the date of receipt of a certified copy of this order. ( AUGUSTINE GEORGE MASIH ) JUDGE March 29, 2010 pj CWP No. 16091 of 1999 and another connected matter 11