IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 14.12.2010 CORAM THE HON’BLE MR.JUSTICE D.MURUGESAN AND THE HONOURABLE MR.JUSTICE B.RAJENDRAN O.S.A.Nos.333 to 335 of 2010 M.Lakshmanan ... Appellant in all the O.S.As.(1st Defendant) -vs- 1. ICICI Bank Employees Union Rep.by its Secretary A.L.Kalayappan No.47, Saravana Street T.Nagar, Chennai-17 2. ICICI Bank No.758, Anna Salai Respondents 1 & 2 Chennai-2 .. in all the O.S.As./ (Plaintiff and 2nd Defendant) Original Side Appeals filed under Article 36 Rule 9 of the Original Side Rules read with Clause 15 of the Letters Patent against the order and decretal order dated 1.10.2010 made in O.A.Nos.1005 to 1007 of 2010 in C.S.No.807 of 2010. For Appellant :: Mr.V.Prakash Senior Counsel for Mr.K.Sudalaikannu ( in all the OSAs) For Respondents :: Mr.Vijay Narayan Senior Counsel for Mrs.Narmadha Sampath for R1 Mr.A.L.Somayaji Senior Counsel for Mr.V.Perumal for R2 (in all the OSAs) https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT D.MURUGESAN, J. All the three original side appeals arise out of the common order made in O.A.Nos.1005 to 1007 of 2010 in C.S.No.807 of 2010 dated 1.10.2010. The Original Applications raise an interesting question as to whether the conviction and sentence imposed on an employee of the bank under Section 138 of the Negotaible Instruments Act could be considered to be the conviction and sentence for an offence involving moral turpitude, thereby disentitling him to continue to be a member of the employees union and to hold the post of General Secretary of the union? 2. The original side appeals arise under the following circumstances. According to the plaint averments made by the first respondent union, the appellant was elected as the General Secretary of the first respondent ICICI Bank Employees Union, Chennai in the general body for the period from 14.10.2007 to 31.12.2009. The appellant became a partner in the real estate business run by Mr.Gopinath Ramadass & Mr.Gopinath Ramesh and he borrowed a sum of Rs.10 lakhs from each of them and a further similar sum from one Mr.Raja during the year 2002 assuring them of getting an immovable property at Selaiyur. Out of the said amount, the appellant purchased the property at Selaiyur, but failed to convey the same to the above three individuals. He also did not repay the said amount of Rs.30 lakhs collected from them. On demand, he issued three cheques dated 24.10.2008 in favour of the above three individuals and when those cheques were presented for payment, they were dishonoured with an endorsement “no funds”. 3. As the cheques were dishonoured, the three individuals filed a complaint before the learned Judicial Magistrate, Alandur under Section 138 of the Negotiable Instruments Act, which was taken on file in C.C.No.10 of 2009. By order dated 18.3.2010, the learned Judicial Magistrate, Alandur found that the appellant herein being an employee of the bank and knowing the provisions of law, particularly, the Negotiable Instruments Act, had issued the cheques without maintaining sufficient balance and thereby he committed the offence punishable under the said Act. The learned Judicial Magistrate also found that the appellant involved himself in financial and real estate business while continuing in service of the bank. With those findings, the learned Judicial Magistrate convicted the appellant under Section 138 of Negotiable Instruments Act and sentenced him to undergo simple imprisonment for a period of six months and to pay a fine of Rs.5,000/-, in default to undergo simple imprisonment for another six weeks. The learned Judicial Magistrate also directed the sentence imposed on the appellant in C.C.Nos.10, 11 & 12 of 2009 to run concurrently. https://hcservices.ecourts.gov.in/hcservices/ 4. The Secretary of ICICI Bank Employees Union, therefore, filed the civil suit before this Court for a judgment and decree of permanent injunction restraining the appellant herein from functioning, claiming or acting as General Secretary of the union or interfering with the working or activities of the said union. A further relief for a judgment and decree was also prayed for permanent injunction restraining the bank from recognizing/permitting the appellant herein to represent the employees of the bank as General Secretary of the union or in any other manner. In respect of the above plea, the Secretary of the union, who is the first respondent herein, has also relied upon Section 21-A of the Trade Unions Act, 1926 relating to the disqualification of the office bearer of the trade union. The said provision contemplates that in the event any person has been convicted by a Court in India for any offence involving moral turpitude and sentenced to imprisonment, he shall be disqualified for being chosen as and for being a member of executive or other office bearers of a registered trade union unless a period of five years has elapsed since his release. By that provision, the appellant is disqualified. The union had further alleged that the appellant had withdrawn abnormal cash from the savings bank account maintained by the union from July, 2010 to the tune of Rs.1,92,177/-. It was also averred that the appellant herein had closed the fixed deposits pertaining to the union worth about Rs.23 lakhs on 30.8.2010 and the end use of the fund is not known to any member of the union. Hence, it was averred that the appellant was not eligible either to become or to continue as a member of the union and consequently, he cannot be allowed to continue as General Secretary of the union. It was also alleged that in any case, the services of the appellant was terminated by the bank with effect from 3.9.2010 and once the employee of the bank has been removed from service, he cannot be a member of the union recognized by that bank. While the said suit was pending, the union also filed three original applications, viz., O.A.Nos.1005 to 1007 of 2010. In the first application, the union prayed for interim injunction restraining the appellant herein from functioning, claiming or acting as the General Secretary of the union or interfering with the working or activities of the union pending disposal of the suit. In the second application, the union prayed to grant interim injunction restraining the appellant from contesting in any of the election of the union and in the third application the union prayed to grant interim injunction restraining the bank from recognizing/permitting the appellant to represent the employees of the bank as the General Secretary of the union or in any other manner. These three original applications were taken up together and by the impugned order dated 1.10.2010, they were allowed as prayed for. The above common order is questioned in these original side appeals. 5. Mr.V.Prakash, learned senior counsel for the appellant has submitted that though the appellant was convicted for the offence under https://hcservices.ecourts.gov.in/hcservices/ Section 138 of the Negotiable Instruments Act and sentenced to undergo imprisonment and payment of fine, the said conviction and sentence cannot be construed to be for an offence involving moral turpitude. In that event, the provisions of Section 21-A of the Trade Unions Act disqualifying the office bearer of the trade union in the event such office bearer has been convicted by a Court in India of any offence involving moral turpitude and sentenced to imprisonment would not be applicable. He would also submit that in any case, the judgment of the criminal Court has been challenged by filing appeal and pending appeal, the sentence imposed on the appellant has been suspended. In such circumstance, there is no question of applying the judgment for grant of interim injunction. He would further submit that the grant of interim injunction would in fact amount to deciding the suit itself without there being a trial. Hence, he would submit that the impugned order is liable to be set aside. 6. Mr.Vijay Narayan, learned senior counsel for the first respondent union, however, would submit that the appellant has been convicted and sentenced under Section 138 of the Negotiable Instruments Act for an offence which could be considered to be an offence involving moral turpitude. He would further submit that the conduct of the appellant in issuing the cheques fully knowing that there are no funds in his account would have a bearing while considering the question as to whether the said conviction and sentence is for an offence involving moral turpitude. In this context, he would submit that while the appellant was in service, he entered into a partnership to run the finance and real estate business and had collected a huge sum of Rs.30 lakhs from three persons and assured them that he will purchase the property at Selaiyur. Though he purchased the property, he did not convey the same to them and rather had chosen to issue the three cheques which were later dishonoured. This conduct of a bank employee who knows the legal implications of issuance of cheques without there being any funds in the account and allowing those cheques to be dishonoured is a relevant factor while deciding the question in issue. For that reason only, he was made to face criminal trial, which resulted in the conviction and sentence. If the above factors are also taken into consideration, the conviction and sentence under Section 138 of the Negotiable Instruments Act would certainly fall under the expression "moral turpitude". In this context, he would also rely on Section 21-A of the Trade Unions Act relating to disqualification of any person either to become a member or an office bearer of a union in the event he is convicted and sentenced for an offence involving moral turpitude. With these submissions, the learned senior counsel prayed that the appeals deserve to be dismissed. 7. Mr.A.L.Somayaji, learned senior counsel for the second respondent bank, in addition to the submissions of Mr.Vijay Narayan, would submit that in terms of Section 10(1)(i) of the Banking Regulation Act, 1949, no banking company shall employ or continue the https://hcservices.ecourts.gov.in/hcservices/ employment of a person who is or has been convicted by a criminal Court for an offence involving moral turpitude and for that reason, the appellant had been removed from service on 3.9.2010. Inasmuch as the appellant had been removed from service, he cannot be considered as an employee of the bank and on the date when the interim orders were passed, he was not eligible to be a member of the union or for that matter, to be the General Secretary of the union. Hence, the learned senior counsel would pray for the dismissal of the appeals. 8. We have carefully considered the above submissions. In order to find out as to whether the conviction and sentence imposed on the appellant under Section 138 of the Negotiable Instruments Act would amount to a conviction and sentence involving moral turpitude, the expression “moral turpitude” must be first considered. Though the expression “moral turpitude” is used in Section 21-A of the Trade Unions Act, while dealing with the disqualification of office bearers of trade unions, that Act does not define the said expression “moral turpitude”. Equally, though Section 10(1)(b)(i) of the Banking Regulation Act refers to the offence involving moral turpitude empowering the banking company not to employ or continue to employ any person who is or has been convicted for an offence involving moral turpitude, the said Act also does not define the expression “moral turpitude”. Further, the expression “moral turpitude” has not been defined in any other penal statutes. The Courts, while considering the expression “moral turpitude”, had mainly relied upon the possible impact of an act for which such conviction and sentence was awarded. 9. "Moral turpitude" is a phrase which can hardly be accurately defined. It can have various shades of meaning in the various sets of circumstances. The concept of moral turpitude escapes from precise definition, but has been described as “an act of baseness, vileness or depravity in private and social duties which a man owes to fellow men and to the society in general.” In criminal law, the expression “moral turpitude” is used to describe the conduct that is considered contrary to community standards of justice, honesty and good morals. The expression “moral turpitude” can also be described as the criminal behaviour that is inherently bad, which is known as "malum in se" in contrast to the behaviour that is bad merely because it is forbidden in law, known as "malum prohibitum." 10. In Edition I-1976 “Words and Phrases” (Permanent Edition) it is defined as any thing contrary to justice, honesty, modesty or good morals. “Moral turpitude” as regards contribution between tort-feasors, refers largely to moral character state of mind. It has reference largely to moral character and state of mind, and known or intentional violation of statute may or may not show moral turpitude. It is a vague term, and its meaning depends to some extent on the state of public morals; it is anything that is done contrary to justice, honesty, principle, or good morals; an act of baseness, vileness and depravity https://hcservices.ecourts.gov.in/hcservices/ in the private and social duties which a man owes to his fellow man, or to society in general, contrary to the accepted and customary rule of right and duty between man and man; it implies something immoral in itself, regardless of fact whether it is punishable by law. 11. In Black’s Law Dictionary, 5th Edition, it is defined as the quality of a crime involving grave infringement of the moral sentiment of the community as distinguished from statutory mala prohibita. In Prem’s Judicial Dictionary, Vol.II, it is stated that the test which should ordinarily be applied and which should in most cases be sufficient for judging whether a certain offence does or does not involve moral turpitude appears to be (1) whether the act leading to a conviction was such as could shock the moral conscience of society in general (2) whether the motive which led to the act was a base one and whether on account of the act having been committed the perpetrator could be considered to be of a depraved character or a person who was to be looked down upon by the society. Every false statement made by a person may not be moral turpitude, but it would be so if it discloses vileness of depravity in the doing of any private and social duty which a person owes to his fellow men or to the society in general. It implies depravity and wickedness of character or disposition of the person charged with the particular conduct. We find a similar definition in K.J.Aiyar’s Judicial Dictionary (9th Edition). If an act is unintentionally committed through an error of judgment it may not involve moral turpitude. 12. While considering the expression “moral turpitude”, the Apex Court in the judgment in Sushil Kumar Singhal v. Regional Manager, Punjab National Bank, (2010) 8 SCC 573, in paragraph-23, has observed as follows: “23. “Moral turpitude” means per Black’s Law Dictionary (8th Edn., 2004): “Conduct that is contrary to justice, honesty, or morality. In the area of legal ethics, offences involving moral turpitude-such as fraud or breach of trust. .. Also termed moral depravity…. ‘Moral turpitude’ means, in general, shameful wickedness-so extreme a departure from ordinary standards of honest, good morals, justice, or ethics as to be shocking to the moral sense of the community. It has also been defined as an act of baseness, vileness, or depravity in the private and social duties which one person owes to another, or to society in general, contrary to the accepted and customary rule of right and duty between people…” Again the expression “moral turpitude” has been quoted with approval by https://hcservices.ecourts.gov.in/hcservices/ the Apex Court in the subsequent judgments in Pawan Kumar v. State of Haryana, (1996) 4 SCC 17 and Allahabad Bank v. Deepak Kumar Bhola, (1997) 4 SCC 1. 13. Considering the above, the expression “moral turpitude” means anything done contrary to honesty, modesty and good morals. As has been observed by the Apex Court in Sushil Kumar Singhal’s case, the said expression in fact means that the conviction of a person in a crime involving moral turpitude impeaches his credibility, as he has been found to have indulged in shameful, wicked and waste activities. The expression “moral turpitude” should be understood in the light of prevailing norms that is expected from a person. The term should be interpreted in a widest possible manner while considering the conduct of a person convicted and sentenced. This law has been laid down by the Apex Court in the judgment in P, an Advocate in Re, AIR 1963 SC 1313. The question is as to whether in all cases of conviction and sentence under Section 138 of the Negotiable Instruments Act, such conviction and sentence could be considered to be an offence of punishment involving moral turpitude? In this context, we may also mention that no absolute standards can be maintained for deciding whether a particular act is to be considered as one involving moral turpitude. Certain general test should be applied, which could be sufficient to enable one to arrive at the correct conclusion on the question. All types of offences for which a conviction is rendered would not per se amount to a conviction involving moral turpitude, since surrounding factors are also relevant for consideration. There may be cases where the conviction and sentence imposed on a person under Section 138 may not be considered to be an offence involving moral turpitude. For example, if a person with all bona fide belief that he had sufficient funds in his bank account and had issued the cheque in favour of a person from whom he borrowed money and later on the said cheque was dishonoured resulting in his conviction and sentence, that conviction and sentence will not necessarily amount to an offence involving moral turpitude. The question of offence of moral turpitude will depend upon the facts of the case. 14. Our attention was drawn by Mr.V.Prakash, learned senior counsel for the appellant to a Division Bench judgment of the Kerala High Court in C.Saseendran Nair v. General Manager (Operations), State Bank of Travancore, Thiruvananthapuram and others, 1996 Crl.L.J. 4289 to contend that the offence of issuing cheque without sufficient funds does not involve the element of moral turpitude. It is true that in that judgment, the Division Bench of the Kerala High Court was considering the expression “moral turpitude” with reference to Section 10(1)(b)(i) of the Banking Regulation Act and the Division Bench was of the opinion that the act of issuance of cheque without sufficient funds is not generally regarded as morally wrong or corrupt. However, the very same Division Bench, in paragraph-12 of the order, while approving https://hcservices.ecourts.gov.in/hcservices/ the above principle, has also held that the question of offence of moral turpitude has to be decided on the facts of each case, as all offences do not necessarily involve moral turpitude. The Division Bench has also held that Section 138 of the Negotiable Instruments Act is no exception to the said principle. Though the Division Bench has held that the mere issuance of cheque without there being sufficient funds in the account resulting in dishonouring of cheque that led to conviction and sentence may not amount to moral turpitude, nevertheless, has categorically observed that the above application of law would depend upon the facts of each case. In fact, when the very same judgment came up for consideration before another Division Bench of the Kerala High Court in Ibrahim Kannu v. State of Kerala, (2005) 4 KLT 1034, after referring to the earlier judgment, it has been observed as follows: “We are of the view, the reasoning of the learned single Judge that a government servant cannot be removed or dismissed from service for the sole reason that he has been found guilty under Section 138 of the Act is an over statement of law. In our view, it would depend upon several factors including conduct of the employee, gravity of the misconduct, the impact of the misconduct on the administration and other extenuating circumstances. Further reasoning of the learned single Judge that a conviction in a case for an offence punishable under Section 138 cannot be treated as moral turpitude or as a blot on the character or conduct of an employee disentitling him to continue in the service of the Government is also not a correct proposition of law. We reiterate that would depend upon facts and circumstances of each case.” 15. The question is, therefore, as to whether the conviction and sentence under Section 138 of the Negotiable Instruments Act would amount to an offence involving moral turpitude or not depends upon the facts of each case. There is no dispute that the appellant had been convicted under Section 138 of the Negotiable Instruments Act and sentenced to undergo imprisonment apart from payment of fine. It is argued that the judgment of the criminal Court has been questioned by the appellant and the sentence has been suspended and thereafter, the said judgment cannot be relied. We are not inclined to accept the said submission. It must be noticed that pending appeal only, the sentence has been suspended and not the conviction. So long as the conviction remains, the judgment can be the basis for grant of injunction. Hence, the claim of the appellant that the judgment of a criminal court cannot be the basis for the grant of injunction has to be rejected. That apart, the learned single Judge had granted the interim injunction not only on the basis of mere conviction under Section 138, but also taking into consideration the other factors. https://hcservices.ecourts.gov.in/hcservices/ 16. The facts pleaded by the respondent union in the pending suit are that while the appellant was in service, he entered into a partnership business with Mr.Gopinath Ramadass & Mr.Gopinath Ramesh and had borrowed a sum of Rs.10 lakhs from each of them and a further sum of Rs.10 lakhs from one Raja during the year 2002. The amounts were borrowed with an assurance that he would get them an immovable property at Selaiyur. Though he purchased the said property, he had failed to convey the property to them. As against the same, he had chosen to issue three cheques each for a sum of Rs.10 lakhs. On the date of issuance of cheques, there were no funds and for that reason, when those cheques were presented before the bank, they were dishonoured with an endorsement ”no funds”. The appellant is a bank employee and apart from that, he is the General Secretary of the union representing majority of the employees of the bank. He is well versed with the banking transactions. Knowing fully well of the above, not only he had failed in his assurance to buy the property for three persons, but also he formed a partnership firm while in service, and also had issued cheques knowing that those cheques would not be honoured. The above conduct would be a relevant factor while considering the conviction and sentence under Section 138 of the Negotiable Instruments Act. If both the above conduct and the subsequent conviction are taken together, one must understand that the conviction and sentence under Section 138 would necessarily amount to an offence involving moral turpitude. On the given facts and circumstances of the case and once the above principle is accepted, the provisions of Section 21-A of the Trade Unions Act are also relevant. By clause (ii) of sub-section (1) of Section 21-A, if an employee of the bank has been convicted by a Court in India for an offence involving moral turpitude and sentenced to imprisonment and unless a period of five years has lapsed since his release before that date, such employee shall be disqualified for being chosen as and for being a member of the executive or any other office bearer of a registered trade union. 17. As far as the claim for disqualification of the appellant for being a member of the union and consequently to be the General Secretary of that union, the respondent union has made out a prima facie case and for