IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MRS. JUSTICE K.HEMA MONDAY, THE 21ST JANUARY 2008 / 1ST MAGHA 1929 WA.No. 2824 of 2007() --------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.16622/2005 Dated 28/03/2007 .................... APPELLANTS: (PETITIONERS): ------------------------- 1. THE PRESIDENT, MITHIRMALA SERVICE CO-OPERATIVE BANK LTD.NO.2452, MITHIRMALA P.O. 2. THE SECRETARY, MITHIRMALA SERVICE CO-OPERATIVE BANK LTD.NO.2452, MITHIRMALA P.O. BY ADV. SRI.G.S.REGHUNATH RESPONDENTS: (RESPONDENTS): --------------------------- 1. STATE OF KERALA, REP. BY ITS PRINCIPAL SECRETARY, LABOUR DEPARTMENT, TRIVANDRUM. 2. SRI.N.RAMAKRISHNA PILLAI, LALITHA MANDIRAM, PARAPPIL, MUTHUVILA P.O. BY GOVT.PLEADER SRI.K.MEERA (SR) FOR R1 ADV.SRI.PIRAPPANCODE V.S.SUDHIR FOR R2 THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 21/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B.KOSHY & K.HEMA, JJ. ------------------------------- W.A.NO.2824 OF 2007 () ----------------------------------- Dated this the 21st day of January, 2008 J U D G M E N T KOSHY,J. Second respondent was dismissed from service by Ext.P13 order dated 28.2.1988. While he was working as Secretary of the appellant's Co-operative Society, he was informed that there was shortage and non accounting of Rs.1,76,884.12 and he should remit the amount. He replied that if there is shortage, he will remit the amount found short during the period he was the Secretary. He paid part of the amount also. He was placed under suspension on 20.8.1986 by Ext.P6 order. On 31st October, 1986 an arbitration claim was filed against the 2nd respondent by appellant's Society under Section 69 of the Kerala Co-operative Societies Act by Ext.P7. It was stated in the above claim that an amount of Rs.1,31,962.97 is due to the Society from the 2nd respondent as the amount was found short as per audit certificate for the WA.2824/2007 2 years 1979-80, 1980-81 and 1981-82. Out of the above amount, Rs.57,500/- was remitted by the 2nd respondent and balance due is Rs.74,462.97. It should be remitted with 18% interest. During the pendency of the arbitration proceedings, it was decided to conduct an enquiry regarding the allegations of misconduct and an Advocate was appointed as the Enquiry Officer. But no charge sheet was issued to him. He was informed by the Enquiry Officer by letter dated 5.11.1987 that he was appointed as the Enquiry Officer and enquiry is posted on 11.11.1987 at 4 p.m. He was then also not informed of the charges against him on the basis of which allegations of misconduct are raised. He was informed by Ext.P11 dated 20.2.1988 that, he was placed under suspension with effect from 20.8.1986 and Enquiry Officer found him guilty of irregularities conducted by him as Secretary during the period 1979-80 to 1981-1982 and he can appear before the Disciplinary Committee to give explanation. Even then he was not given copy of the charge against him or copy of the enquiry report. Ext.P11 reads as follows: “You have been placed under suspension pending enquiry with effect from 20.8.1986 in WA.2824/2007 3 connection with the irregularities committed in the accounts and in the functioning of the Society during the years 1979-80, 1980-81 and 1981-82 while you were functioning as the Secretary of the Mithirmala Service Co- operative Society. The enquiry officer duly appointed to investigate into the irregularities committed by you has completed the investigation and submitted its report in the Society. It is decided to hold the Director Board Meeting on Sunday, the 28th February, 1988, so as to take a decision on the investigation report. You are therefore informed that if you have anything to submit personally before the committee before taking a decision you can appear before the committee meeting to be held at the Society office on the said day (28.2.1988) at 4 p.m. in the after noon. In the event of your failure to appear, the committee will take up appropriate decision on the presumption that you have nothing to submit more.” He denied the allegations by Ext.P12. In Ext.P12, he not only denied the charge but also stated that accounts have to be verified to find out the truth of the allegations. He also stated that shortage in the account as pointed out in the audit report for 1979-80 has been paid off. He also stated that the advance alleged to be given without proper procedure (in the audit report) during the period 1979-80 and 1981-82 resulting in WA.2824/2007 4 shortage, arbitration case is already pending. According to him, advances were made according to proper procedure. By Ext.P14, dated 4.7.1988, he was dismissed from service with effect from 20.2.1986. 2. Issue regarding the dismissal from service was referred for adjudication to the Labour Court, Kollam. Labour court by Ext.P16 preliminary order found that enquiry was not conducted properly and the Enquiry officer was informed by the appellant that there were six allegations against the employee based on the audit report. Despite notice issued by the Enquiry officer, the employee did not attend the enquiry, as according to him, no charge sheet was received and he was not aware of the charges levelled against him. Even the letter addressed to the Enquiry Officer by the appellant Society mentioning the allegations was not served on him showing the nature of the charges and the specific allegations. No formal enquiry was conducted by the Enquiry Officer. But he went to the Office of the Co-operative Society, perused the audit report and gave report finding him guilty. No witnesses were examined. No documents were marked. Allegations were not proved even WA.2824/2007 5 ex parte. Ext.P17 is the enquiry report. Enquiry report shows that documents produced are the copy of the notice of enquiry and postal records to show that notice was posted and no other relevant documents were produced. Based on the report, he was dismissed from service. The Labour Court found that no formal enquiry was conducted and no specific charges were framed, and therefore, the alleged enquiry was not proper. In paragraph 6 of the preliminary order, Labour Court found as follows: “6. On the question of validity of the enquiry proceedings the main challenge of the workman is that there was no formal enquiry conducted, no specific charges framed, and charge memo issued to the workman, and that no notice of enquiry was issued to the workman. He alleges that he was not heard and no opportunity was given to him to put forth his defence. The enquiry file is produced in the case, which does not contain the enquiry report. The photo copy of the report was produced as M1. A casual perusal of M1 shows that no formal enquiry was conducted by the enquiry officer. The report states that ten questions were referred to him, which are narrated therein on which he went to the society office after issuing a notice to the delinquent and verified few records from the society and thus the report is filed. The enquiry report does not even say that formal charges were framed and such charge memo were issued to the delinquent officer. It does not also say that opportunity was given to the WA.2824/2007 6 delinquest officer to file a written statement of defence, nor was he called upon to adduce evidence in support of his defence. On behalf of the management also no witness is examined; and it appears that the enquiry officer on his own accord perused two registers of the society and on that basis filed M1 report. The enquiry file produced also does not disclose any memo of charge and does not also disclose that such charge memo was issued to the delinquent. On the allegation of the worker that he was not issued notice of enquiry also, the management did not produce any supporting evidence to prove that such notice was duly served on the delinquent.” The management was allowed an opportunity to adduce evidence before the Labour Court. The auditor was not examined to prove the allegations. Even before the labour court, specific charges were not given to the employee but appellant relied on the letter that he has admitted the liability to pay. It is true that in some of the letters, the employee had stated that he has not misappropriated the amounts and with regard to some advances to be recovered, suit has to be filed and further it is stated that if any amount is found short, being the Secretary, he is prepared to pay the amount. Liability to pay and clearing the alleged shortages by an employee in charge of accounts is different from misappropriation. He never stated or admitted that he misappropriated the amount WA.2824/2007 7 or committed any misconduct. No specific allegations of misconduct or charges were made against him. He, being the custodian of the accounts, he may have civil liability, which is different from misconduct or misappropriation. In the above circumstances, misconduct was not proved. None of the persons in the bank at that time when he was employed were also examined. Only the then Secretary of the Co-operative Society, who was not in charge at the relevant time was examined. Labour court analysed the evidence adduced before it and found that misconduct was not proved. However, the Labour court noted that he was dismissed in 1988. Award was passed in 2005. He reached the superannuation age by the time award was passed. He was not given the relief of reinstatement or benefit of full back wages till the date of superannuation. Therefore, instead of granting the above relief, Labour court only awarded an amount of Rs.75,000/- which is not even ¼th of the back wages payable from the date of dismissal till the date of retirement even though misconducts were not proved and he had an unblemished long service records. WA.2824/2007 8 3. One of the contentions raised was that he was not a workman as provided under the Industrial Disputes Act. Labour Court has considered the same in detail. Labour court found as follows: “Now in the present case the workman has given evidence as WW1 and stated that he was only implementing the directions of the President and the executive committee and that the nature of his work is only in the category of worker. Nothing has brought out to discredit his testimony in this regard. The present Secretary, though examined as MW2 in the case, has also not deposed anything to make out that the worker WW1 was in a supervisory capacity or in an administrative post. So in the light of the evidence on record, it has to be found that the person Sri.Ramakrishna Pillai is a worker within the meaning of Section 2(s) of the Industrial Disputes Act.” To decide the question whether the employee is a workman or not and whether he was exercising managerial functions, mere nomenclature of the designation is not enough. In the absence of any evidence to show that he was having any administrative or supervisory power, it was found that he was a workman employed by the Society. He has no power to take disciplinary WA.2824/2007 9 action or grant leave to employees in the society. He has no supervisory functions. The learned Single Judge found that no grounds are made out to interfere with the award. Labour Court was right in holding that no proper enquiry was conducted. Even though Management was given an opportunity to adduce evidence to prove misconducts before the Labour Court, it failed to adduce sufficient evidence to prove any misconduct. By exercising jurisdiction under 11 A of the Industrial Disputes Act, relief was granted. Findings of the Labour court are not perverse. There is no jurisdictional error or illegality. No grounds for judicial review was made out by the appellant. It was also noticed that arbitration proceedings are pending for recovery of the alleged dues and learned Single Judge allowed the Society to continue with the arbitration proceedings for recovery of the amount if any found short for which appellant is responsible. That question of civil liability has to be decided in the arbitration proceedings and we are not making any observations regarding the merits of the above. Arbitration award should be passed untrammeled by the observations in the award of the Labour Court or judgments confirming the same. We see no ground to interfere in the WA.2824/2007 10 impugned award or judgment of the learned Single Judge, and hence, this appeal is dismissed. J.B.KOSHY, JUDGE K.HEMA, JUDGE prp J.B.KOSHY & K.HEMA, JJ. -------------------------------------------------------- M.F.A.NO. OF 2006 () --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 1st January, 2008