IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated 04..11..2006 Coram The Hon'ble Mr. Justice K.CHANDRU W.P. Nos.15525 and 23474 of 2004 W.P.No.15525 of 2004: G.Anburaja .. Petitioner vs. 1. The Presiding Officer Central Government Industrial Tribunal -cum-Labour Court SasthriBhavan, Chennai 2. Assistant General Manager Region IV State Bank of India No.43 Moore Street Chennai .. Respondents W.P.No.23474 of 2004: Assistant General Manager Region IV State Bank of India Chennai .. Petitioner vs. 1. The Presiding Officer Central Government Industrial Tribunal -cum-Labour Court Block No.1 SasthriBhavan Haddows Road, Chennai 2. G.Anbu Raja .. Respondents Petitions filed under Article 226 of the Constitution of India seeking for issue of writ of Certiorarified Mandamus and for writ of Certiorari respectively for the reasons stated therein. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mr.R.Kamatchi Sundaresan in W.P.No.15525 of 2004 & for Mr.Balan Haridas R2 in W.P.No.23474 of 2004 For Respondent 2 : Mr.K.S.Sundar in W.P.No.15525 of 2004 & Petitioner in W.P.No.23474 of 2004 . . . . . C O M M O N O R D E R W.P.No.15525 of 2004 is filed by the employee of the State Bank of India and W.P.No.23474 of 2004 is filed by the State Bank of India challenging the Award dated 11.11.2003 passed by the Central Government Industrial Tribunal – cum – Labour Court, Chennai, in I.D.No.338 of 2001. In the operative portion of the Award impugned in these writ petitions, the Tribunal gave the following directions: "In view of the above, I find that this preliminary issue is to be answered in favour of the petitioner. Therefore, I find the order of dismissal passed by the Respondent / Management State Bank of India against the petitioner Sri.G.Anburaja is to be set aside. Ordered accordingly. At the same time, liberty is given to the Respondent / Management State Bank of India to proceed with the case against the petitioner Sri.G.Anburaja in accordance with law." While the Bank is aggrieved about the finding regarding setting aside of the dismissal order made in favour of the employee, the employee was aggrieved against the liberty given to the Bank to proceed with the case against the employee in accordance with law. Therefore, both the writ petitions were heard together. 2. It is seen from the records that the petitioner in W.P.No.15525 of 2004 (hereinafter referred to as 'the petitioner employee') was placed under suspension by order dated 12.10.1992 passed by the petitioner in W.P.No.23474 of 2003 (hereinafter referred to as 'the Bank Management') and was given a memo to show cause and an enquiry was conducted in respect of five charges based upon several transactions. The sum and substance of the allegation against the employee was that he has falsified the records and made spurious credit https://hcservices.ecourts.gov.in/hcservices/ entries in various SB Accounts and withdrew the amounts in his favour and by committing such acts of misappropriation, forgery and making spurious entries in the Bank's records resulting in a financial loss, he has been prejudicial to the interests of the Bank amounting to gross misconduct in terms of paragraphs 521 – 4 (j) of the Sastry Award. 3. An enquiry was conducted in respect of the charge sheet dated 26.10.1992 by the Enquiry Officer. Before the Enquiry Officer, the petitioner employee admitted all the charges. Only in respect of Charge No.3, he has stated that he did not forge the initials of any of the officials but only authenticated the entries. While the Bank Management produced the documentary evidence in respect of the transaction, since the employee himself admitted the charges, it was held by the Enquiry Officer that the charges need not be proved by any oral evidence. Before the Enquiry Officer, the petitioner employee had stated the circumstances under which he was forced to commit the acts for which he was charge sheeted. In the light of the same, the Enquiry Officer found the petitioner employee guilty of charges 1, 2, 4 and 5. Only in respect of charge No.3, he has held that the charge of forgery has not been proved and the Bank Management has not taken steps to prove the charge of forgery. But he has not initialed the entries in respect of charge No.3 and, therefore, he is partially guilty of the same for falsification of records but not for forgery. 4. The employee also wrote a letter dated 23.9.1992 marked as Ex.P.16 wherein he has disowned having paid the amounts to the Bank Management by way of repayment of the loss caused by him. In further letter dated 07.01.1993 marked as Ex.P.18, he had stated that he has already accepted his guilt of withdrawing a sum of Rs.1,10,600/- and since he has already made good the loss, he should be allowed to continue in service. He has also stated that his father died in a road accident during 1981 and he had three brothers and four sisters and since he had to take care of them and his mother, who was affected by heart problems, he stopped his education in the middle and joined the Bank on 21.9.1983 to shoulder the burden of maintaining the family and for the purpose of conducting his sister's marriage, he required some additional amount. He has further stated that considering his strenuous service, he may be let off without imposing any penalty. He had also signed a Power of Attorney dated 30.9.1992, which is marked as P.Ex.34, giving the power to the Bank to sell his house property. He has sent a further letter dated 29.9.1992, which is marked as P.Ex.35, creating equitable mortgage in favour of the Bank Management. On the basis of the findings given by the Enquiry Officer holding the petitioner employee guilty of four charges and the other charge https://hcservices.ecourts.gov.in/hcservices/ partially proved, he was supplied with the minutes of the enquiry proceedings by the Bank Management vide letter dated 24.5.1993 asking him to give his explanation. The employee, on receipt of the said findings, submitted an explanation dated 09.6.1993. For the first time, the petitioner employee took the stand that his voluntary action of making good the amount cannot be held against him and that his acceptance cannot amount to proof of misconduct. 5. The Disciplinary Authority issued a show cause notice dated 18.6.1993 to the petitioner employee stating that he disagreed with the Enquiry Officer with reference to Charge No. 3 and he was of the opinion that all the five charges were proved against him and with a view to inflict the punishment of 'Dismissal without notice', he issued show cause notice and also gave an opportunity for personal hearing on 16.7.1993. Subsequently, the Disciplinary Authority gave a personal hearing on 16.7.1993 and the petitioner employee participated in the same and gave a written submission dated 16.7.1993. It was thereafter, he was dismissed by an order dated 23.8.1993. As against the said order of dismissal, the petitioner employee preferred an appeal dated 13.10.1993 to the Deputy General Manager, State Bank of India, Zonal Office, Madras. Even the Appellate Authority gave a personal hearing on 31.12.1993 and by an order dated 17.01.1994, he independently considered the evidence and rejected the appeal preferred by the employee. 6. Aggrieved at the same, the employee raised dispute under Section 2A of the Industrial Disputes Act 1947 (hereinafter referred to as 'the I.D. Act') before the Assistant Labour Commissioner, which culminated in an order of reference made to the first respondent Tribunal. The Central Government, Ministry of Labour, vide Notification dated 07.12.2000 referred the dispute to the Tribunal, viz., Central Government Industrial Tribunal – cum – Labour Court, Madras, for adjudication, which is extracted below: "Whether the dismissal of Shri G.Anburaja by the management of State Bank of India is legal and justified? If not, to what relief is the workman entitled?" 7. Before the Tribunal, the petitioner employee filed a claim statement dated 07.3.2001 and the Bank Management filed a counter statement dated 07.8.2002. The Tribunal took the matter in I.D.No.338 of 2001 and after hearing the learned counsel for the parties, framed a preliminary issue, which is extracted below: "Whether an opportunity was to be provided in this case by the Disciplinary Authority, when the Disciplinary Authority disagreed https://hcservices.ecourts.gov.in/hcservices/ with the findings recorded by the Enquiry Officer in respect of charge No.3?" 8. Before the Tribunal, both the sides prayed that the preliminary issue regarding the domestic enquiry conducted by the Bank can be decided. Therefore, the Tribunal heard the parties on the preliminary issue, viz., whether the employee was given opportunity by the Disciplinary Authority since he has disagreed with certain findings of the Enquiry Officer. While the employee relied upon the decision of the Supreme Court reported in 1998 (7) SCC 84 [PUNJAB NATIONAL BANK vs. KUNJ BEHARI MISRA], the Bank Management contended that since no prejudice was caused to employee, it will not vitiate the proceedings initiated by the Bank. On the basis of the arguments made by the parties, the Tribunal held that since the Disciplinary Authority did not grant opportunity to the employee, he disagreed with reference to the finding regarding charge No.3 by the Enquiry Officer and, therefore, held that the order passed by the Bank Management must be set aside. Further, the Tribunal also gave liberty to the Bank Management to proceed with the case against the petitioner employee in accordance with law. Aggrieved at the said Award passed by the Tribunal, both the employee and the Bank have come forward with the present writ petitions. 9. W.P.No.15525 of 2004 was admitted on 08.6.2004 and interim stay was granted in W.P.M.P.No.18426 of 2004. W.P.No.23474 of 2004 was admitted on 17.8.2004 and interim stay was granted in W.P.M.P.No.23428 of 2004 and a petition in W.V.M.P.No.1369 of 2004 was filed by the petitioner employee for vacating the stay granted W.P.M.P.No.23428 of 2004. 10. When the Miscellaneous Petitions came up for hearing, the main writ petitions themselves were taken up for hearing. I have heard the arguments of Mr.Kamatchi Sundaresan, appearing for Mr.Balan Haridas, learned counsel for the employee as well as the arguments of Mr.K.S.Sundar, learned counsel appearing for the Bank and have also perused the records. 11. This is a strange order passed by the Tribunal. What was argued and decided by the Tribunal was only the preliminary issue regarding the nature of domestic enquiry conducted against the petitioner employee. On the contrary, the Tribunal has passed a final Award without deciding the merits of the case. By virtue of Section 10(4) of the I.D. Act, when the appropriate Government was satisfied with the points of dispute for adjudication, the Tribunal should confine its adjudication to those points and the matters incidental thereto. Section 10(4) of the I.D. Act reads as follows: https://hcservices.ecourts.gov.in/hcservices/ "Where in an order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication, the Labour Court, or the Tribunal or the National Tribunal, as the case may be, shall confine its adjudication to those points and matters incidental thereto" By not deciding the issue of dismissal of the petitioner employee and further relegating the conduct of further enquiry to the Bank, the issue has been kept open further thereby indicating that the Tribunal has not kept the jurisdiction vested on it in mind. 12. In this context, it is relevant to refer to the decision of the Supreme Court reported in (1973) 1 SCC 813 [THE WORKMEN OF M/S FIRESTONE TYRE AND RUBBER CO. OF INDIA (PVT.) LTD. vs. THE MANAGEMENT AND OTHERS] wherein while interpreting Section 11-A of the I.D. Act, the Supreme Court laid down certain guidelines to be followed by the adjudicating authorities. While interpreting the proviso to Section 11- A, the Court observed as follows: "48-49. We are not inclined to accept the above contention of Mr Deshmukh. The Proviso specifies matters which the Tribunal shall take into account as also matters which it shall not. The expression “materials on record”, occurring in the Proviso, in our opinion, cannot be confined only to the materials which were available at the domestic enquiry. On the other hand, the “materials on record” in the Proviso must be held to refer to materials on record before the Tribunal. They take in— “(1) the evidence taken by the management at the enquiry and the proceedings of the enquiry, or (2) the above evidence and in addition, any further evidence led before the Tribunal, or (3) evidence placed before the Tribunal for the first time in support of the action taken by an employer as well as the evidence adduced by the workmen contra.” https://hcservices.ecourts.gov.in/hcservices/ The above items by and large should be considered to be the “materials on record” as specified in the Proviso. We are not inclined to limit that expression as meaning only that material that has been placed in a domestic enquiry. The Proviso only confines the Tribunal to the materials on record before it as specified above, when considering the justification or otherwise of the order of discharge or dismissal. It is only on the basis of these materials that the Tribunal is obliged to consider whether the misconduct is proved and the further question whether the proved misconduct justifies the punishment of dismissal or discharge. It also prohibits the Tribunal from taking any fresh evidence either for satisfying itself regarding the misconduct or for altering the punishment. From the Proviso it is not certainly possible to come to the conclusion that when once it is held that an enquiry has not been held or is found to be defective, an order reinstating the workman will have to be made by the Tribunal. Nor does it follow that the Proviso deprives an employer of his right to adduce evidence for the first time before the Tribunal." 13. While dealing with the contention that in case of no enquiry or defective enquiry, the Tribunal cannot order directly reinstatement without completely answering the reference. The relevant portion in paragraph 32 from the above said judgment is extracted below: "32. From those decisions, the following principles broadly emerge: ........... .......... ....... ... ............... ........... .......... ....... ... ............... (4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is https://hcservices.ecourts.gov.in/hcservices/ open to the employee to adduce evidence contra. (5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry. (6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective. (7) It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective. This aspect has not been kept in mind by the Tribunal while passing the Award. 14.1. On the contrary, Mr.Kamatchi Sundaresan, learned counsel appearing for the employee, contended that since the Bank Management had not sought for permission to lead evidence at the earliest stage, they may not be allowed to let in evidence afresh and hence, the Tribunal was forced to pass the Award impugned in these writ petitions. 14.2. For this purpose, the learned counsel relied upon the judgment of the Supreme Court reported in (1979) 3 SCC 371 [SHANKAR CHAKRAVARTI vs. BRITANNIA BISCUIT CO. LTD.] to contend that the employer Bank had not made any request in his written statement or by way of application during the pendency of the proceedings to lead evidence in case the enquiry is found to be defective. This judgment has been subsequently considered by the Supreme Court in its decision reported in (2001) 5 SCC 433 [KARNATAKA STATE ROAD TRANSPORT CORPORATION vs. LAKSHMIDEVAMMA (SMT) AND ANOTHER] where the entire case laws have been summed up. In that https://hcservices.ecourts.gov.in/hcservices/ judgment, the Supreme Court has approved the reasoning found in the decision reported in (1983) 4 SCC 491 [SHAMBHU NATH GOYAL vs. BANK OF BARODA]. As per this judgment, the Bank Management had to exercise its right of leading fresh evidence at the first available opportunity and not any time during the proceedings before the Tribunal. 14.3.Once an enquiry is set aside in its entirety and if no fresh evidence is let in, then the question whether the Management is entitled to rely upon the records relating to the domestic enquiry came up for consideration by the Supreme Court in its decision reported in (1999) 1 SCC 517 [NEETA KAPLISH vs. PRESIDING OFFICER, LABOUR COURT AND ANOTHER] and the Supreme Court in paragraphs 26 and 27 of the judgment observed as follows: "26. Learned counsel for the appellant (sic respondent) contended that in spite of the direction by the Labour Court to the respondent-Management to lead evidence, it was open to the Management to rely upon the domestic enquiry proceedings already held by the Enquiry Officer, including the evidence recorded by him, and it was under no obligation to lead further evidence, particularly as the Management was of the view that the charges, on the basis of the evidence already led before the Enquiry Officer, stood proved. It was also contended that under Section 11-A, the Labour Court had to rely on the “materials on record” and since the enquiry proceedings constituted “material on record”, the same could not be ignored. The argument is fallacious. 27. The record pertaining to the domestic enquiry would not constitute “fresh evidence” as those proceedings have already been found by the Labour Court to be defective. Such record would also not constitute “material on record”, as contended by the counsel for the respondent, within the meaning of Section 11-A as the enquiry proceedings on being found to be bad, have to be ignored altogether. The proceedings of the domestic enquiry could be, and were in fact, relied upon by the Management for the limited purpose of showing at the preliminary stage that the action taken against the appellant was just and proper and that a full opportunity of hearing was given to her in consonance with https://hcservices.ecourts.gov.in/hcservices/ the principles of natural justice. This contention has not been accepted by the Labour Court and the enquiry has been held to be bad. In view of the nature of objections raised by the appellant, the record of enquiry held by the Management ceased to be “material on record” within the meaning of Section 11-A of the Act and the only course open to the Management was to justify its action by leading fresh evidence as required by the Labour Court. If such evidence has not been led, the Management has to suffer the consequences." 14.4. Therefore, the learned counsel for the employee submits that under these circumstances, the direction of the Tribunal allowing the Bank to conduct fresh enquiry may not be proper and that portion of the Award should be set aside. 15.1. Per contra, Mr.K.S.Sundar, learned counsel appearing for the Bank Management stated that the finding of the Tribunal that the enquiry was vitiated was contrary to the materials on record and the decisions relied on by the Tribunal in this regard, viz., the judgment of the Supreme Court reported in (1998) 7 SCC 84 (cited supra) followed by the Supreme Court in its decision reported in (2003) 2 SCC 449 [STATE BANK OF INDIA AND OTHERS vs. K.P.NARAYANAN KUTTY] have no application to the facts and circumstances of the present case. The learned counsel stated that the judgment in Punjab National Bank case (cited supra) holding that if the Disciplinary Authority disagreed with the findings of the Enquiry Officer then an opportunity should be given cannot be mechanically applied. 15.2. In Punjab National Bank case, while interpreting the Regulation 6 of the Punjab National Bank Officer Employees' (Discipline and Appeal) Regulations, 1977, the Supreme Court, in paragraphs 18 and 19 of the judgment, observed as follows: "18. Under Regulation 6, the enquiry proceedings can be conducted either by an enquiry officer or by the disciplinary authority itself. When the enquiry is conducted by the enquiry officer, his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stand concluded with the decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the enquiry officer. Where the disciplinary authority itself holds an enquiry, an opportunity of hearing has to https://hcservices.ecourts.gov.in/hcservices/ be granted by him. When the disciplinary authority differs with the view of the enquiry officer and proposes 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 charged officers succeed before the enquiry officer, they are deprived of representing to the disciplinary authority before that authority differs 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 enquiry as explained in Karunakar case4. 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 on 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." https://hcservices.ecourts.gov.in/hcservices/ 15.3. According to the learned counsel, this was followed in the subsequent judgment of the Supreme Court reported in the State Bank of India’s case (cited supra) and also referred to by the Tribunal in the impugned Award more particularly, in paragraph 6, it was observed as follows: "It was also contended on behalf of the appellants that the High Court committed an error in setting aside the order of dismissal when it was not shown that any prejudice was caused to the respondent by not giving an opportunity to him by the disciplinary authority. In this regard the learned counsel cited a decision of this Court in Union Bank of Inida v. Vishwa Mohan (1998 (3) L.L.N. 90). As already noticed above, before the High Court both the parties concentrated only on