IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.BALAKRISHNAN NAIR & THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN MONDAY, THE 15TH MARCH 2010 / 24TH PHALGUNA 1931 WA.No. 2425 of 2007() --------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.15759/2006 .................... APPELLANT(S): 1ST RESPONDENT/UNION ---------------------------------- 1.GENERAL SECRETRY, SYNDICATE BANK STAFF UNION, SHANTHI THEATRE ANNEXE, 44-MOUNT ROAD, MADRAS-2. ADDITIONAL APPELLANTS IMPLEADED : 2. MARY J. PRABHAKAR, AGED 59 YEARS, W/O.LATE JOHN P.PRABHAKAR, PRASANTH MANDIR, AMBATTUKAVU, ALUVA. 3. PRASANTH J.PRABHAKAR, AGED 29 YEARS, S/O.LATE JOHN P.PRABHAKAR, PRASANTH MANDIR, AMBATTUKAVU, ALUVA. 4. PRAVEENA J.PRABHAKAR, AGED 31 YEARS, D/O.LATE JOHN P.PRABHAKAR, C/O.ASHA DONAT, ASHA SADAN, KANGANADY, SIMON LANE, MANGALORE. (ADDITIONAL APPELLANTS ARE IMPLEADED AS PER ORDER IN I.A.NO.1068/2009 DATED 22.10.2009) BY ADV. SRI.P.RAVINDRAN, SENIOR ADVOCATE SRI.JOSE PALLATTUKARAN RESPONDENT(S): PETITIONER AND 2ND RESPONDENT -------------------------------------------- 1. THE DEPUTY GENERAL MANAGER, SYNDICATE BANK, REGIONAL OFFICE, THIRUVANANTHAPURAM. 2. THE LABOUR COURT, ERNAKULAM. BY ADV. SRI.M.P.ASHOK KUMAR GOVT.PLEADER SRI.BENNY GERVASIS THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 15/03/2010, ALONG WITH WA NO. 2608 OF 2007 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.R. K.BALAKRISHNAN NAIR & P.N.RAVINDRAN, JJ. ---------------------------------------------- W.A. Nos.2425 & 2608 of 2007 ---------------------------------------------- Dated 15th March, 2010. J U D G M E N T Balakrishnan Nair, J. These Writ Appeals are directed against the judgment of the learned Single Judge in W.P.(C) No.15759 of 2006. The said Writ Petition was filed by the Deputy General Manager of the Syndicate Bank, Regional Office, Thiruvananthapuram, challenging Ext.P2 award of the Central Government Labour Court, Ernakulam, in I.D.No.8/1995. The learned Single Judge interfered with the said award. Feeling aggrieved by the interference made by the learned Judge, the Employees' Union has preferred W.A.No.2425 of 2007. Dissatisfied with the extent of interference, the Management has preferred W.A.No.2608 of 2007. Since these Writ Appeals are directed against the very same judgment, they are heard and disposed of by this common judgment. 2. W.A.No.2608 of 2007 is treated as the main case, for the purpose of referring to the parties and exhibits. The brief WA Nos.2608 & 2425/07 2 facts of the case are the following : Mr.John P.Prabhakar was a Special Assistant in the Syndicate Bank, Shanmugham Road Branch, Ernakulam. The commissions and omissions from his part, between 1988 and 1991, were the subject-matter of the disciplinary proceedings, which led to Ext.P2 award of the Labour Court. The allegations against him were that (1) He allowed unsecured debit balances in the accounts on various dates in routine manner without proper authority to do so; (2) Authorized payment of stale/post dated cheques; (3) Passed certain cheques for payment without actually debiting them to the respective accounts; (4) Paid certain cheques without actually debiting them to the respective accounts; (5) Allowed withdrawals in some of the accounts against uncleared clearing credits. 3. The management served a charge-sheet, containing the above allegations, on the workman, on 30.11.1991. The workman did not file any reply to the charge- sheet. According to him, he requested for copies of various documents to file his reply and since they were not furnished, he could not file the reply. The Enquiry Officer submitted his report WA Nos.2608 & 2425/07 3 dated 28.7.1993, finding the workman guilty of the charges. Based on the enquiry report, he was dismissed from service on 28.3.1994. The Appellate Authority confirmed the punishment. The workman, through his Union, raised an Industrial Dispute. The Government referred the said dispute to the Labour Court, as per Government Order dated 18.4.1995. The dispute referred was “Whether the action of the Management of Syndicate Bank, Trivandrum in dismissing Sri.J.P.Prabhakar, Special Assistant from service with effect from 28.3.1994 is legal and justified? If not, what relief is the said workman entitled to?” 4. Before the Labour Court, both sides filed their pleadings. In the claim statement filed by the workman, it was pleaded as follows : “4. The workman concerned is only a Special Assistant. He had no managerial functions. There are Assistant Managers, Sub-Managers and a Manager above him who are verifying each of the transactions at the bank every day and also send reports to higher authorities. If the payments made between the period mentioned in the charge sheet were unauthorised most of such payments could have been stopped by the Manager or higher officers. WA Nos.2608 & 2425/07 4 5. During the enquiry, it was specifically pointed out by the employee that all the cheques were passed as per the instructions of the Manager or as per the instructions of an authorized officer. Unless Authorized by a competent officer no payments will be made. This aspect was not considered by the enquiry officer and the E.O. went on the assumption that the person who had signed on the cheque is the only person who is responsible. The E.O. did not advert to the procedure followed in the Bank in respect of day-to-day transactions. 6. The pattern of the working of the bank involves the involvement of more than one person in dealing with the transaction. Unless and until cheques are passed by persons who have authority to do so, no cash payment is made or adjustment is recorded in the books of accounts of a bank. There is no allegation of any conspiracy or receipt of illegal gratification other than a bald allegation of showing undue official favours to the parties concerned. If there was any unauthorised exercise of power by the workmen that could have been pointed out immediately as there is involvement of more than one person in the process. The manual of instructions, which governs the working of the day to day business, provides for safeguards against anybody exercising powers beyond what is delegated to them. When an allegation is made that a workman was continuously exercising powers beyond authorisation, it was necessary for the management to establish how this could have happened without the knowledge of the superior officers. No attempt was made by management to show that unauthorized actions were done by the workman behind the back of the superior officers and without their knowledge and approval. There is also no allegation that the workman acted with WA Nos.2608 & 2425/07 5 malafide intentions and violated any of the provisions of the manual and circulars issued by the bank.” He also pleaded that the enquiry was held in violation of the principles of natural justice and therefore, vitiated. The Labour Court, by its preliminary order dated 10.6.1998, found that the enquiry was vitiated and therefore, set aside the enquiry and the findings of the Enquiry Officer. The management was given a chance to adduce evidence to prove the allegations in the charge-sheet. Witnesses were examined and documents were produced from both sides. On conclusion of the trial, the Labour Court, by award dated 28.11.2001, set aside the order of punishment imposed on the workman. The management filed O.P.No.5491 of 2002, challenging the award. The learned Single Judge dismissed the Original Petition. But, on appeal, a Division Bench of this Court, by Ext.P1 judgment, reversed the judgment of the learned Single Judge and found that the appellant was guilty of the charges levelled against him and directed the Labour Court to decide on the quantum of punishment to be imposed, taking into account the fact that a lesser punishment was imposed on the Manager of the Bank, Mr.Richard Martis, who also WA Nos.2608 & 2425/07 6 faced more or less identical allegations. The Division Bench also directed to examine the question whether any loss has been suffered by the Bank, by the misconduct of the workman. The Manager of the Bank was let off with a punishment of withholding of promotion for a period of five years. That is why this Court directed to take into account the punishment imposed on the Manager, while considering the penalty to be imposed on the workman. The relevant portion of Ext.P1 judgment reads as follows :- “Applying to the above mentioned principle, we have no hesitation to hold that the charges levelled against the workman stand proved. We find no reason to direct the Labour Court to conduct a fresh adjudication in the facts and circumstances of the case. The workman had admitted that he had acted beyond his authority but on the basis of an oral direction by the superior officers. We have held, even if it is so, it would not absolve the workman from the charges. We therefore set aside the award passed by the Labour Court and the judgment of the learned Single Judge. The only question is regarding the quantum of punishment to be imposed taking into consideration that a lesser punishment has been imposed on Richard Martis. The Labour Court is directed to examine the quantum of punishment. Labour Court would also examine the question whether because of the conduct of the workman Bank had suffered any financial loss. We have already indicated that WA Nos.2608 & 2425/07 7 the workman has completed the year of superannuation. Labour Court will therefore pass appropriate orders at the earliest, at any rate, within a period of three months from the date of receipt of a copy of this judgment.” 5. In obedience to the said direction, the matter was re-heard by the Labour Court and it passed Ext.P2 award, setting aside the punishment of dismissal of the workman from service and imposing a penalty of withholding of two increments. On the question of loss caused by the misconduct of the workman, the Labour Court found that the workman was not accountable for any loss suffered by the Bank. Challenging Ext.P2 award, the Writ Petition was filed. 6. The workman filed a detailed counter affidavit, resisting the prayers in the Writ Petition. The learned Single Judge, after hearing both sides, allowed the Writ Petition in part. The punishment imposed on the workman was sustained, but, the back wages was restricted to 50%. Thereafter, the learned Single Judge went on to consider the question of loss suffered by the Bank and found that it suffered a loss of Rs.4,81,400.90. It was declared that the management will be entitled to recover the said WA Nos.2608 & 2425/07 8 amount from the benefits to be paid to the workman. Feeling aggrieved by the said judgment, this Writ Appeal is preferred by the management. As mentioned earlier, the workman has also challenged the said judgment, to the extent it interfered with the findings of the Labour Court. 7. We heard Sri.M.P.Ashok Kumar, learned counsel for the appellant Bank and Sri.P.Ravindran, learned senior counsel for the first respondent Union. According to the Bank, the workman had a previous history of punishment. Though that was brought to the notice of the Labour Court with materials, the same was not considered. According to the Bank, the writing off the loan liability of a customer or closing of the loan account under some settlement scheme will not absolve the liability of the workman, who caused loss to the Bank. So, even if the loan accounts were closed or the loan liabilities were written off, still the workman was liable to answer for the liability incurred by the Bank because of his misconduct. The Labour Court failed to advert to this aspect. Secondly, it is submitted that even if no loss is suffered, since the workman was found to have acted WA Nos.2608 & 2425/07 9 against the rules in monetary transactions, he cannot be retained in service, and therefore, the punishment of dismissal should have been sustained. The learned Single Judge, therefore, failed to exercise the discretion vested in him, it is further submitted. 8. The workman, on the other hand, pointed out that the learned Single Judge has acted, as if this Court was exercising the appellate power, over the decision of the Labour Court. This Court has no such power under Article 226 of the Constitution of India. Secondly, it is pointed out that this Court has no power or authority to fix the liability of the workman and allow the Bank to recover it from him. It is beyond the scope of the reference and cannot be sustained, it is submitted. 9. We considered the rival submissions made at the Bar and also perused the materials on record. In this case, both sides are bound by the remand order made by the Division Bench of this Court, as per Ext.P1. That means, the finding of guilt against the workman has become final. Though the workman would point out that going by the banking practices, the workman, who was a senior clerk, designated as Special WA Nos.2608 & 2425/07 10 Assistant, had no independent authority to pass cheques beyond the arrangements in the accounts, in view of the finding of the Division Bench, we cannot go into such contentions at this stage. The Division Bench decided to remand the matter because the Manager, who was also accused of more or less similar misconduct was let off with a punishment of barring of promotion for a period of five years. Therefore, the Division Bench, thought that the question of imposing a lesser penalty should be considered by the Labour Court. That is why the matter was remitted to the Labour Court to consider on the question of punishment, with reference to the punishment imposed on the Manager. The Division Bench also said, the loss if any, caused as a result of the misconduct of the workman, shall also be looked into by the Labour Court. We think, that direction was issued, as the same was a relevant matter, while considering on the choice of appropriate penalty. The same was not intended as a separate proceeding for the assessment of the liability of the workman and its recovery from him. In view of the scope of the remand order, the contentions of the appellant Bank that the Labour Court WA Nos.2608 & 2425/07 11 should have sustained the punishment of dismissal of the workman from service, cannot be accepted. The Division Bench remanded the matter with certain observations. The same definitely enabled the Labour Court to choose a lesser penalty and that was what was done by it. The choice of penalty always involves a subjective element, which two persons can, on the same set of facts come to diametrically opposite conclusions, without forfeiting their title to be regarded as reasonable [Lord Hailsham of St.Marylebone L.C. In re W. (An infant) (1971) A.C.682]. The same is accepted as a well settled principle of Administrative Law. The learned authors H.W.R.Wade and C.F.Forsyth in their Administrative Law 10th Edition, stated as follows : “There is ample room, within the legal boundaries, for radical differences of opinion in which neither side is unreasonable. A number of statements to this effect were made in the Court of Appeal and the House of Lords in the case of the Tameside schools, discussed below. Lord Denning MR pointed out the error of confusing differences of opinion, however strong, with unreasonableness on the part of one side or the other. One party may call the other 'quite unreasonable' when he is well within the legal limits of reasonableness. This was the distinction which the Secretary of State failed to make, as the House of Lords WA Nos.2608 & 2425/07 12 emphatically confirmed. Lord Diplock said : The very concept of administrative discretion involves a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred. In the same vein Lord Hailsham LC has said that 'not every reasonable exercise of judgment is right, and not every mistaken exercise of judgment is unreasonable.” Going by the above principles, we find it difficult to hold the view taken by the Labour Court, as an unreasonable view in the Administrative Law sense, warranting interference by this Court. Having regard to the limited scope of the order of remand, the Labour Court adverted to the punishment imposed on the Manager and thereafter, took the view that a penalty of barring two increments will meet the ends of justice. The said decision cannot be said to be arbitrary or perverse or one, which no man in his senses would take. If this Court was exercising the power of the Labour Court, this Court may have taken a different view. As pointed out earlier, the same is not a ground for this Court to interfere or substitute its decision. Therefore, the learned Single Judge could not have interfered with the punishment, unless appellate power was being exercised by this Court. The learned WA Nos.2608 & 2425/07 13 Judge supported the view of the Labour Court, regarding the discrimination meted out to the workman, but, decided to interfere with the payment of back wages. We think, regarding payment of back wages also, a plausible view has been taken by the Labour Court. The said view cannot be said to be irrational or perverse. If the disciplinary authority at the first instance imposed a lesser penalty, he could have continued in service and earned wages. So, the direction of the Labour Court to pay back wages is fully justified. 10. Regarding the liability incurred by the Bank, owing to the misconduct of the workman, we think, the Labour Court itself has slightly misdirected in law. The Division Bench considered that issue as one relevant, while considering the choice of penalty. But, the Labour Court had independently considered that point and held that the worker was not liable. It is relevant, in this context, to note certain findings made by the Labour Court, while it dealt with the issue. The photocopies of various pages from the books of accounts were produced by the management. In the photocopies, certain portions remained WA Nos.2608 & 2425/07 14 blank, which showed that some paper was put/pasted in the document to hide something, before taking the photocopy. The workman pointed out that the portions thus blacked out related to the endorsement regarding the closing of the accounts. When originals were called for, there also, those endorsements were covered by pasting white paper. When the covered portion was held against light, the endorsement regarding closing of the account was noticed by the Labour Court. So, the Labour Court took the view that all those accounts, based on which the liability was tried to be fastened on the workman were, actually closed. It is a finding of fact, with which this Court cannot interfere. But, according to the management, even if those accounts were closed or the liabilities of the customer were written off, the workman was still liable. But, that contention has been met by the Labour Court, relying on Guideline No.11 in Chapter 6 of the Comprehensive Recovery Policy for Non-Performing Assets. The said norms were produced as M27(a) by the management. The relevant clause reads as follows :- “11. Irregularities/lapses in the conduct of the account shall be examined and certificate/report on staff WA Nos.2608 & 2425/07 15 accountability shall be submitted [Annexure - III(a)]. In other words, the proposal for write off shall be submitted only after examination and closure of the staff accountability aspect.” Relying on the above clause, the Labour Court found that these accounts were written off or closed, only after closure of staff accountability. Therefore, the Labour Court took the view that the workman can no longer be made liable for any amount. We are told by both sides that the workman has filed an application under Section 340 of the Criminal Procedure Code to prosecute the officer responsible for producing the aforementioned documents, which did not co-relate to the original documents and the Labour Court has ordered prosecution of the officer concerned, for perjury. According to the workman, that criminal case is still pending, though the learned counsel for the management disputed that. Whatever be that, the Labour Court found that the management, relying on manipulated documents, tried to fasten the liability on the workman, as mentioned earlier. The finding of the Labour Court that the workman was not accountable for the loss is a finding of fact arrived at, based on cogent reasoning, with which we cannot interfere. But, in this case, the learned Single Judge overruled the said finding and WA Nos.2608 & 2425/07 16 found the workman liable for an amount of Rs.4,81,400.90. The Bank was also permitted to recover the same from the terminal benefits payable to the workman. This was not a matter referred for adjudication to the Labour Court. This was not a matter directed to be decided, by the Division Bench. The direction of the Division Bench has to be read, in the light of the reference order and also in the light of the observations in the judgment, as a whole. As mentioned earlier, the Division Bench only directed to consider the point of loss caused to the Bank, as a relevant matter, while considering the choice of penalty. But, the learned Single Judge has granted a money decree, in favour of the Bank. Since this Court has no power or authority to pass such an order, the learned Single Judge clearly went beyond the powers of this Court, in making such an order. We also notice that in the Writ Petition, there is no such prayer also. So, we set aside the fixation of liability and the direction to recover it from the workman. 11. We notice that the workman has already reached WA Nos.2608 & 2425/07 17 the age of superannuation, before the disposal of the earlier Writ Appeal and during the pendency of this Writ Appeal, he died and his legal heirs have been impleaded. 12. Having regard to the facts of the case and the findings entered by us herein-above, we reverse the judgment of the learned Single Judge and dismiss the Writ Petition. In the result, we dismiss W.A.No.2608 of 2007 with costs and allow W.A.2425 of 2007 with costs. K.BALAKRISHNAN NAIR, JUDGE. P.N.RAVINDRAN, JUDGE. tgs K.BALAKRISHNAN NAIR & P.N.RAVINDRAN, JJ. ---------------------------------------------- W.A. Nos.2425 & 2608 of 2007 ---------------------------------------------- J U D G M E N T Dated 15th March, 2010.