1 WP No.8242/2010 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.8242/2010 Nanded District Central Cooperative Bank Ltd., Nanded, Through it’s Authorized Officer. - PETITIONER VERSUS Anil s/o Prabhakarrao Girgaonkar Age: 44 Yrs., occu. Agril. R/o Somnath Nagar, Dhanegaon, Tq. and Dist. Nanded. - RESPONDENT ***** Mr.KJ Suryawanshi, Advocate for Petitioner; Ms.Rashmi Gour, Adv. h/for Mr.NR Jamdade and MR Jamdade, Advocates for Respondent. ----- CORAM : K.U.CHANDIWAL, J. DATE : 20th DECEMBER, 2011. ORAL JUDGMENT: 1) Heard extensively. Rule was issued on 7th December, 2010, status quo was granted on 18th October, 2010. 2) The respondent was a Branch Manager at Wajegaon branch with the petitioner – Cooperative Bank. It is alleged, during the course of his employment, he has committed misconduct/irregularities by using his power and position. In an Audit, carried at the said branch on 15.12.2004, these illegalities/irregularities were revealed by the report of the Auditor. Consequently, 2 WP No.8242/2010 notices were issued to the respondent/branch manager. He was charge-sheeted on 25.11.2005. Five charges were levelled against him. The respondent filed his reply on 3.1.2006 and admitted his misconduct claiming that it was occasioned under the pressing circumstances. 3) On 27.1.2006, an inquiry was conducted. The respondent appeared before the Enquiry Officer, recorded his exhaustive reply. The Enquiry Officer held that the charges levelled against the respondent are proved. 4) A show cause notice was served upon the respondent asking him as to why his services should not be terminated. 5) The respondent, on 23rd March, 2006 replied the show caused notice, accepting and reiterating that he had before the Enquiry Officer on 3.1.2006 confirmed all his mistakes and accepted the charges unconditionally. However, he has urged to the Enquiry Officer to show sympathy towards him and the nature of punishment should be moderate and proportionate, which would not impel the financial implications to the respondent and his family. The respondent also informed in his reply that he was unaware of the banking regulations and procedure and consequently, the mistakes, as alleged, were occasioned, which were not intentional or deliberate. The punishment of dismissal from service was disproportionate to the charges levelled and 3 WP No.8242/2010 since he was already under suspension from 30th May, 2005, he has faced the brunt and humiliation amongst his colleagues, this was sufficient punishment for his misconduct and consequently, he urged to withdraw the show cause notice. He further informed that he has served the Bank for more than 18 years. He has family to maintain including his parents. 6) The Bank did not concede to the reply of the respondent/branch manager; and by its letter dated 1st April, 2006, considering the gravity of the charges levelled against him; and the nature of the transactions of the Bank, in the overall activities of the Bank, continuation of the respondent in service, was not possible, as it would demolish/lower down the discipline and goodwill of the Bank, confirmed the show cause notice and directed dismissal of the respondent. This was questioned by the respondent before the Learned Judge of the Labour Court at Jalgaon in Complaint (ULP) No.7/2006. The learned Judge, Labour Court dismissed it on 3rd December, 2009. Said order was questioned in a revision, being Revision (ULP) No.2/2010, under Section 44 of the M.R.T.U. And P.U.L.P.Act, 1971 (hereinafter to be referred as the said Act). The learned Member of the Industrial Court, by judgment and order dated 29th August, 2010, allowed the revision, directing reinstatement of the respondent without back wages and consequently the same is questioned by the Bank in the writ petition. 4 WP No.8242/2010 8) Learned Counsel for the petitioner principally informed that the proceedings before the learned Judge of the Labour court or before the Industrial Court were not maintainable. In terms of Section 2(s) of the Industrial Disputes Act, 1947, the respondent will not be “workman”. Section 2(s) of the said Act, reads as under: “2(s) "Workman" means any person (including an apprentice) employer in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person - (i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or (ii) who is employed in the police service or as an officer or other employee of a prison, or (iii) who is employed mainly in a managerial or administrative capacity, or (iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by 5 WP No.8242/2010 reason of the powers vested in him, functions mainly of a managerial nature.” 9) Learned Counsel, in order to substantiate his contention, has placed reliance to the judgment of Division Bench of this Court in the matter of Pralhad Vithalrao Pawar Vs. Managing Director and Anr - 1991 (1) Bom.C.R. 840. It was under the provisions of Maharashtra Cooperative Societies Act, 1960; and in particular concerning a cooperative Bank. The writ petitioner in the said proceeding (i.e. Writ Petition No.1805/1998) was working as a Branch Manager with Osmanabad District Central Cooperative Bank Ltd. and he was removed from service. The Division Bench gave reference to a Full Bench Judgment of this Court reported in 1993 (1) Mh.L.J. 1 – Shamrao Vithal Co-operative Bank Ltd. Vs. Kadubirdi Pattabhiram Bhatta). Again the said judgment was referred in another Division Bench Judgment in the matter of Dyandeo Dattatraya Kale Vs. State of Maharashtra – 1995 (2) Mh.L.J.930, in which it was held that, a Cooperative society, registered under the provisions of Maharashtra Cooperative Societies Act, 1960, is not a “State” within the meaning of Article 12 of the Constitution of India. This judgment of the Division Bench has been followed in subsequent judgment in the matter of Osmanabad District Central Cooperative Bank Ltd. Vs. Aasaram s/o Vishwanath Waghmare, reported in 2009 (1) Mh.L.J. 366. 6 WP No.8242/2010 10) Considering the legal position indicated herein above, it is more than clear that the Complaint (ULP) filed by the respondent before the learned Judge, Labour Court and entertaining the same by learned Member of the Industrial Court, itself was not maintainable. The proper remedies available to the respondent were by way of raising a Dispute before a competent Cooperative Court. 11) The learned Member, Industrial Court is guided by provisions of Section 44 of the M.R.T.U. & P.U.L.P. Act, 1971. Learned Member, Industrial Court is not expected to re-assess evidence in distort to record. Once the learned Judge, Labour Court came to the conclusion that the charges of misconduct, held by duly constituted enquiry is proved, the learned Member, Industrial Court could not substitute it by reasons contrary to record. 12) Now, turning to the facts emerging are : The respondent has put in 18-19 years service in the Bank. At the relevant time, he was the Branch Manager, where the misconduct or misappropriation or irregularities have taken place. Whether it is irregularity or mis-deed or mis- conduct, needs to be considered. 13) The contention raised by the learned Counsel for the respondent that he was new and not accustomed to the procedure as Branch Manager and, therefore, he acted upon the advice of the earlier branch manager, in either releasing certain payments or correcting 7 WP No.8242/2010 the record of the Bank, is difficult to digest, basically in the light of the fact that he has put in 18 years service in the Bank. Law contemplate that he is consciously alive and aware to obligations cast on him and he cannot be allowed to perpetrate such crutches. 14) The respondent faced five charges, as under : (i) On 6.3.1999, sum of Rs.15,000/- and Rs. 20,000/- were deposited in Fixed Deposit Receipt (FDR) bearing Receipt Nos.51710 and 51711 for the duration of five years and three months, earning interest @ 16% p.a. in the joint names of the respondent and his wife. Under the pretext of loss of FDRs, duplicate Fixed Deposit receipts were obtained; and the rate of interest since was reduced, with intent to gain higher interest, the respondent has changed/altered the duration of the said FDR from 5 years three months to 15 years and 3 months; (ii) Sugarcane bill of Rs.24,276.80 of Bhagwan Kawle was credited in the branch, however, it was deposited in the account of Shri Nitin Deorao Shinde and an amount of Rs.10,000/- was withdrawn by Respondent from the account of Shri Shinde under voucher prepared by the respondent. When the complainant Bhagwan got furious and threatened to report the matter to the police, without any authority an amount of Rs.10,000/- 8 WP No.8242/2010 was paid to him without any voucher and the entry was altered in the account of Shri Shinde and the amount was credited to the account of Bhagwan Kawle on 30th March, 2003; (iii) One Narayan Sambhaji Puyed expired. During life time of said Narayan, his son Vitthal was authorized to operate the bank account. In spite of knowledge of death of said Narayan, without following due procedure, the respondent/branch manager, initially credited the amount of said Narayan in the name of Vitthal and then it was debited from the account of original account holder. (iv) On 10.7.2004, an amount of Rs.30,000/- was outstanding in the account of Gangadhar (Account No.1841), however, it was not properly accounted for. (v) A cut book entry was matched with difference of Rs.24,276.80, but the respondent did not report about debit balance to the Head office. 15) Learned Counsel for the respondent submits, out of these five charges, though accepted by the respondent, later three charges are of in-consequence and would not involve illegalities at the command of the respondent. So far as first two charges are concerned, learned Counsel submits, it was under a bonafide mistake, he had not misappropriated the 9 WP No.8242/2010 amount. Even if Respondent has retained the amount, the period/duration is very short. He would not put his job to stake by making such entries of withdrawal. There was no mistake on the part of the learned Member, Industrial Court as he found that the respondent was swayed away by the advise of earlier branch manager. The punishment inflicted against the respondent, is disproportionate to the alleged misconduct. 16) Learned Counsel for the respondent has placed reliance to the judgment of Hon’ble Supreme Court, reported in AIR 2003 SC 1377 – Kailas Nath Gupata Vs. Enquiry Officer (R.K.Rai), Allahabad Bank & Ors. In the said judgment, it was not a case of misappropriation, mis-conduct, but it was a case, where the Bank Manager, during long past service, has advanced loans without observing requirement of possessing documents of land holdings of the borrower. Small amounts of loan became sticky. The Supreme Court found that there was error on the part of said Bank employee, however, it was not deliberate. The relevant factors are required to be considered. The Hon’ble Supreme Court also dealt with doctrine of proportionality, to be part of judicial review in administrative law. In paragraph 11 the Hon’ble Lordships have observed as under : “11. In the background or what has been stated above, one thing is clear that the power of interference with the quantum of punishment is extremely limited. But when relevant factors are not taken note of, which have some 10 WP No.8242/2010 bearing on the quantum of punishment, certainly the Court can direct re- reconsideration or in an appropriate case to shorten litigation, indicate the punishment to be awarded. It is stated that there was no occasion in the long past service indicating either irregularity or misconduct of the appellant except the charges which were the subject matter of his removal from service. The stand of the appellant as indicated above is that though small advances may have become irrecoverable, there is nothing to indicate that the appellant had misappropriated any money or had committed any act of fraud. If any loss has been caused to the bank (which he quantifies at about Rs. 46,000/-) that can be recovered from the appellant. As the reading of the various articles of charges go to show, at the most there is some procedural irregularity which cannot be termed to be negligence to warrant the extreme punishment of dismissal from service." 17) The facts in the case of Kailas Gupta will not be fitting to the facts at hand as in the said case, it was irregular disbursement of petty loans, without adhering to regular documentations and following bank norms and accounts getting sticky, irrecoverable. In the instant case, apart from three such instances of illegalities, there are two major charges of manipulation of bank record with calculated mind for personal gains amounting to fraud in terms of the provisions of Contract Act. The fraud was obviously perpetrated for personal gain by the respondent. 11 WP No.8242/2010 18) The learned Counsel for the petitioner has placed reliance to the judgment of Hon’ble Supreme Court in the matter of Sudhir Vishnu Panvalkar Vs. Bank of India - AIR 1997 SC 2249. It was also a case of a Bank officer, he was involved in misappropriation of funds of the cooperative society. The Supreme Court has observed in para 5 - “ There was loss of confidence in the employees and consequently, the termination was proper.” 19) In the case of State Bank of India Vs. S.N.Goyal - 2008 (8) SCC 92 : 2008 DGLS (Soft) 582, the Hon’ble Lordships of the Supreme Court were dealing with identical case under Service Law of Bank employee and observed that, - in the administrative decision, there is a finality to the decision. The Supreme Court discussed as to exercise of the powers. 20) The contention that, the respondent has already suffered a traumatic situation of suspension and dis-reputation amongst his colleagues, was also considered in case of Noharlal Verma Vs. District Cooperative Central Bank Limited, Jagdalpur - 2008 DGLS (Soft.) 1175 and it was observed that the contention, that the appellant has sufficiently suffered and should be reinstated without back wages, cannot be accepted as the charge of misconduct and misappropriation of bank money, was established. 21) The settled legal position is, the Court should not sway for benediction, impelled by sympathetic consideration to disturb the well- 12 WP No.8242/2010 reasoned findings of the authority competent to do so. The Hon’ble Supreme Court in the matter of Domestic Enquiry reported in 2011 (4) Mah.L.J. 510 – State Bank of Bikaner Vs. Nemichand Nalwaya, have indicated scope of judicial interference and observed that, - loss of confidence in the employee, will be important and relevant factor in imposing punishment against a delinquent. It is observed, the Courts should not act as appellate court and re-assess the evidence led in the domestic inquiry and not to interfere on the ground that another view is possible on the material on record. 22) In the matter of State of U.P. and Ors. Vs. J.P.Saraswat - 2011 (4) Mah.L.J. 524. The Hon’ble Supreme Court has again reiterated the position of law and limitations of the judicial interference in the domestic inquiry on facts. 23) Re-visiting the facts of the present case, I find, - (a) The proceeding before the Labour Court was not maintainable; (b) Re-assessment carried, in terms of Section 44 of M.R.T.U. & P.U.L.P. Act, 1971, had its in- build inhibition, which the learned Member of Industrial Court, has unfortunately lost sight of; (c) The manipulation of the bank record (FDRs) by the respondent for his personal gain, does not 13 WP No.8242/2010 come within the ambit of `negligence' or 'mistake' through oversight, it was committed with calculated intention to achieve benefit of financial scheme or better return of interests derived therefrom; (d) Crediting the amount from the account of Bhagwan to the account of Shinde and withdrawal of amount was deliberate. Withdrawal also speaks of malafides and misconduct on the part of the respondent. In his effort to salvage the situation of misconduct, the respondent paid Rs. 10,000/- (Rs.Ten thousand) to Bhagwan without any voucher and deflated faith of account holders in normal Banking System. 24) The observations/findings of learned Member, Industrial Court questioned in the writ petition, therefore, call for interference, same are set aside. The orders of the labour Court, dismissing the Complaint ULP dated 3rd December, 2009 stands confirmed. 25) Rule is made absolute in above terms. sd/- (K.U.CHANDIWAL) JUDGE bdv/