THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.1356 OF 2004 DATED DECEMBER, 2009 BETWEEN T.V.Shivudu … Petitioner and Shri Vijaya Vardhani Co-operative Oil Seeds Growers’ Union Ltd., P.B.No.3, Beechpally, Gadwal – 509 125, Mahaboobnagar District, Represented by its Managing Director. And Another … Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.1356 OF 2004 ORDER: This writ petition is filed challenging the NIL Award dated 12.09.2003 passed by the Labour Court-III, Hyderabad, in I.D. No.32 of 2000. The petitioner, the unsuccessful claimant in the said I.D., seeks a consequential direction to allow the same as prayed for. The petitioner, an Oil Mill Operator in Sri Vijaya Vardhani Co- operative Oil Seeds Growers’ Union Limited, Gadwal, Mahaboobnagar District, the first respondent herein, was terminated from service by order dated 07.01.1999. He challenged the same in I.D.No.32 of 2000. In his claim petition filed in the said I.D., the petitioner stated that he had joined in the service of the first respondent as an Oil Mill Operator on 21.03.1998 and that he was entrusted with the sale of oil by the first respondent for administrative convenience, though the same was not part of his regular duty. As per the practice in vogue, the oil was sold on credit basis to the purchasers. He admitted to the fact that he had drawn oil to the tune of Rs.8,12,213.90 ps. and after selling the same, he had credited an amount of Rs.5,89,370/- to the first respondent. An outstanding credit of Rs.2,22,843.90 ps. was due on 04.05.1998. It was his case that the said amount was with a number of customers to whom the oil was supplied on credit basis and that the same had to be collected and remitted to the first respondent. However, he was placed on suspension by proceedings dated 12.06.1998 pending enquiry and therefore he could not take steps to collect the amount. His complaint before the Labour Court was that an Enquiry Officer was appointed to look into the matter and a report was submitted without examination of witnesses and without giving him an opportunity. To compound the same, the first respondent issued charge sheet dated 15.12.1998 without furnishing a copy of the said enquiry report and called upon the petitioner to submit his explanation. The petitioner submitted his explanation on 05.01.1999 denying the charges and stating that the amount was with the creditors and would be remitted to the first respondent as and when collected. Ignoring the explanation, the proceedings dated 07.01.1999 were passed by the first respondent terminating his services. He assailed this order before the Labour Court on the ground that the enquiry was conducted without examination of witnesses and without affording him an opportunity, thereby violating the principles of natural justice. Further, a copy of the enquiry report was also not furnished to him. The petitioner asserted that in fact, there was no enquiry at all and that the report was prepared and submitted behind his back, which formed the basis for the major penalty of his termination from service. He accordingly prayed for a direction to the first respondent to reinstate him in service with continuity of service, back wages and other consequential benefits. The first respondent contested the case before the Labour Court and filed its counter stating to the following effect: The petitioner was entrusted with oil sales so as to make effective use of the idle plant staff and that he had voluntarily come forward for undertaking such sales. It was stated that certain terms and conditions had also been stipulated in this regard. The assertion of the petitioner that a sum of Rs.2,22,843.90 ps. was outstanding on 04.05.1998 as the same was due from a number of customers, was denied and it was stated that only a sum of Rs.48,000/- was to be collected from various parties and the remaining sum of Rs.1,74,843.90 ps. was due from the petitioner’s own father – Tirupaalaiah. The first respondent stated that the enquiry under Section 51 of the Andhra Pradesh Co-operative Societies Act, 1964 (for brevity, ‘the Act of 1964’) was conducted, duly giving an opportunity to the petitioner and in the course of the same, the petitioner deposed on 18.08.1998 that a major portion of the outstanding amount was due from his father. This statement was marked as Ex.M.2 before the Labour Court. The first respondent stated that as the petitioner had himself admitted his liability in Ex.M.2 there was no necessity of examining other witnesses. Further, as the petitioner was allowed only 15 days credit as per the terms and conditions stipulated by the first respondent, it was his responsibility to account for the same and he could not escape liability in this regard. The petitioner filed his rejoinder before the Labour Court denying that he had voluntarily come forward to undertake oil sales and asserted that he was neither idle nor had he given a voluntarily option to take up such oil sales. The petitioner examined himself as W.W.1 before the Labour Court and adduced Exs.W.1 to W.7 as documentary evidence. The first respondent examined one witness and marked seven documents in support of its defence. Basing on the enquiry said to have been conducted under Section 51 of the Act of 1964, it appears that the charge sheet dated 15.12.1998 was issued to the petitioner. Reference was made therein to the enquiry which was conducted and the report submitted by the Enquiry Officer and consequently, four charges were framed against the petitioner. The first charge pertained to the alleged irregularity on the part of the petitioner in remitting oil sales proceeds as per time schedule. The second charge alleged that he had failed to produce the list of debtors at Atmakur and that in the absence of such a list, it would be construed that the amount shown as being due from his father was misappropriated. The third charge was with regard to the alleged undertaking said to have been given by the petitioner on 06.05.1998 that he would remit an amount of Rs.1 lakh by 31.05.1998, which he failed to abide by. The fourth and final charge was with regard to the alleged misappropriation of the sum of Rs.2,22,843.90 ps. for which the petitioner had failed to produce confirmation letters from the debtors. The petitioner was called upon to submit his explanation to the charge sheet failing which appropriate action was proposed to be initiated as per the service regulations. The petitioner submitted his explanation to the above charge sheet on 05.01.1999, marked as Ex.W.3. Therein, he denied his liability in respect of all the charges and requested that he be reinstated in service by revoking the suspension, so that he could collect the amount from the creditors. It appears that thereafter no disciplinary enquiry was conducted in the matter and on the other hand, the order dated 07.01.1999 was passed terminating his services. It is relevant to note that on the basis of the proceedings initiated under Section 51 of the Act of 1964, a surcharge order was passed against the petitioner under Section 60 of the Act. However, the same was set aside by the Andhra Pradesh Co-operative Tribunal at Hyderabad in C.T.A. No.83 of 2000 by Judgment dated 25.02.2003. The same was marked as Ex.W.7 and reflects that the Tribunal found fault with the manner in which the surcharge order was passed without holding a proper enquiry and relying only upon the Section 51 enquiry, which was itself not in accordance with the procedure. The Labour Court however, upon consideration of the material on record, came to the conclusion that the petitioner was guilty of the lapses alleged against him and that he had committed misappropriation of the Union’s funds, which was held to be a serious misconduct. Accordingly, the I.D. was dismissed, giving rise to the present writ petition. In spite of service of notice, the first respondent did not choose to put in its appearance before this Court through an authorized counsel. Therefore, this Court has no option but to adjudicate the matter on the basis of the material on record. It is to be noted that the Award under challenge is fraught with factual inconsistencies. On the one hand, the Labour Court recorded the fact that the petitioner had submitted his explanation dated 05.01.1999 to the Show Cause Notice dated 15.12.1998 and that the same was marked as Ex.W.3. Contradicting the same in the course of its discussion, the Labour Court observed that the petitioner did not submit any explanation even though time was granted. A reading of the Award also reflects variance as to the number of enquiries conducted by the first respondent against the petitioner. The termination order dated 07.01.1999 refers to the Enquiry Officer’s report dated 08.07.1998, which was consequent upon the appointment of one M.Prem Kumar Reddy, General Manager, as Enquiry Officer on 16.06.1998. However, the Award under challenge speaks of the statement made by the petitioner before the said Enquiry Officer on 18.08.1998, which was marked as Ex.M.2, wherein he is said to have admitted his liability. It is not clear as to whether the Enquiry Officer submitted his report even prior to the deposition of the petitioner as contained in Ex.M.2. Be that as it may, it is clear from the charge sheet dated 15.12.1998 that it was on basis of this so-called enquiry and enquiry report, that four separate charges were framed against the petitioner. There is no evidence of any further enquiry being conducted in respect of these four charges, giving due opportunity to the petitioner to defend himself by examining/cross-examining witnesses and adducing evidence. Further, except for the so-called prior enquiry, it appears that the first respondent did not have any other material foundation to proceed against the petitioner in respect of these four charges. As noted supra, the Co-operative Tribunal while dealing with this enquiry in the context of the surcharge proceedings issued against the petitioner, found fault with the procedure followed in the conduct of the enquiry and set aside the surcharge proceedings remitting the matter for fresh enquiry. Sri T.P.Acharya, learned counsel for the petitioner, stated on instructions that no further orders were passed consequent upon such remand. In any event, the so-called admission of guilt by the petitioner in his deposition before the Enquiry Officer in the enquiry conducted under Section 51 of the Act of 1964 could not be the basis for holding proved all the four charges levelled against him under the Show Cause Notice dated 15.12.1998. The principles of natural justice required that the first respondent-Society follow the due procedure by establishing the guilt of the petitioner in respect of these four charges independently before an impartial Enquiry Officer, duly affording an opportunity to the petitioner to defend himself. In the absence of such a procedure, the action of the first respondent in terminating the petitioner’s services is violative of the rule of law and accordingly has to be set aside. Sri T.P.Acharya stated that the first respondent is in the process of liquidation and that it is dispensing with its employees by duly settling their claims. Considering the fact that the petitioner has been out of the service of the first respondent since January, 1999 and there is no averment to the effect that he was not gainfully employed elsewhere during the period that he remained out of service, he would not be entitled for award of back wages. Accordingly, the petitioner’s termination from service by order dated 07.01.1999 is set aside and the first respondent is directed to notionally reinstate him in service with continuity of service and to compute the benefits payable to him by giving due credit to this period of service and pay his service benefits in accordance with the relevant norms within a period of two months from the date of receipt of a copy of this order. The Writ Petition is accordingly allowed in part to the extent indicated above. In the circumstances of the case, there shall be no order as to costs. ____________________ SANJAY KUMAR, J. __________ December, 2009 VGSR