IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE THIRD DAY OF DECEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION Nos.16781 and 25114 of 1999 WRIT PETITION NO:16781 of 1999 Between: The Yemmiganur Weavers Co-op Production & Sales Society Ltd. Administrarive Office, Weavers Colony, Rep by its Secretary. Yemmiganur, Kurnool District. ..... PETITIONER AND 1 The Second Appellant Authority under A.P.Shops & Establishments Act, 1988 & Dy.Commissioner of Labour, Kurnool. 2 The Authority under Sec.48(1) of the A.P.Shops & Establishments Act, 1988 & Asst.Commissioner of Labour, Adoni, Kurnool District. 3 K.M.Jambaiah, S/o Sarabhaiah, W.No.XVIII, 1st Cross, Basaveswara Nagar, Bellary, Karnataka. .....RESPONDENTS Counsel for the Petitioner:MR.O.MANOHAR REDDY Counsel for Respondent Nos.1 & 2: AGP FOR LABOUR Counsel for Respondent No.3: MR.SURENDRA DESAI WRIT PETITION NO:25114 of 1999 Between: K.M.Jambaiah, S/o Sara Baiah, R/o W.No.18, I Cross, Baseveshwara Nagar, Bellary. ..... PETITIONER AND 1 The Yemmiganur Weavers Co-op Production & Sales Society Ltd., Adminstrartive Office, Rep by its Secretary. Weavers Colony, Yemmiganur, Kurnool District. 2 The Second Appellate Authority under Sec.48(1) of A.P.Shops & Establishments Act, 1988 & Dy.Commissioner of Labour, Kurnool. 3 The Authority under A.P.Shops & Establishments Act, 1988 & Asst.Commissioner of Labour, Adoni, Kurnool District. .....RESPONDENTS Counsel for the Petitioner:MR.SURENDRA DESAI Counsel for Respondent Nos.1 & 2:AGP FOR LABOUR Counsel for Respondent No.3: MR. O.MANOHAR REDDY The Court made the following : ORDER: These two writ petitions are filed against common order. For convenience, the parties are referred as they are arrayed in Writ Petition No.25114 of 1999. The petitioner and respondent No.1 filed WP.Nos.25114 and 16781 of 1999 respectively partly aggrieved by the orders passed by respondent Nos.2 and 3, the first and second appellate authorities under the Andhra Pradesh Shops and Establishments Act, 1988 (for short ‘the Act’). The facts in brief are as follows: The petitioner was a salesman in respondent No.1 society. While he was working as Salesman at Gangavathi Sales Depot, the Depot was checked by the Inspector and found alleged shortage of goods worth Rs.11,161.30 ps and excess cash of Rs.576.42 ps. As the petitioner’s explanation there for did not satisfy respondent No.1 society, charge sheet-cum-suspension order was issued by the latter on 31.12.1984. He was charged with misappropriation of funds of respondent No.1 society amounting to Rs.11,161.30 ps. In his explanation, dated 20.02.1995, the petitioner submitted that the shortage of goods worth Rs.11,161.30 ps found during inspection of the Inspector from 13.12.1994 to 15.12.1994 was on account of the credit sales made by him to improve the sales of the Depot. He, however, submitted that he recovered the said money and sent the same through demand drafts, dated 19.12.1994 and 20.12.1994 to the Head Office. He further submitted that despite the Checking Inspector finding that the goods, cash, inventory and packing materials have tallied and the records being in order, charge sheet-cum-suspension order was served on the petitioner. In his enquiry report, the enquiry Officer referred to the following irregularities: 1. There is a cash excess of Rs.576.42 ps. as per cash extract dated 14.12.1994. 2. The delinquent drawn Rs.9,800.00 D.D., by putting bills in the presence of inspection. 3. There is a stock deficit of Rs.11,161.30 and excess of Rs.813.80 as per stock verification dated 14.12.1994. He also referred to explanation, dated 20.02.1995 submitted by the petitioner to the Secretary of the society. In paragraph 5 of his report, the enquiry Officer held that the petitioner admitted the charges that due to mistake, he committed the said irregularities and that he has drawn the demand drafts towards the deficit stock and sent the same to the Head Office. The enquiry Officer concluded that the management proved the charges against the delinquent beyond all reasonable doubt. Purporting to act on the enquiry report, respondent No.1 society issued termination order, dated 20.07.1995. The petitioner questioned the said order before the Authority under Section 48 of the Act and Assistant Commissioner of Labour, Adoni (for short ‘the first appellate authority’), who conducted a fresh enquiry, wherein the petitioner examined himself as A.W.1 and the society examined R.Ws.1 to 3. While Exs.A.1 to A.15 were marked on behalf of the petitioner, Exs.B.1 to B.12 were marked on behalf of the society. The first appellate authority framed two issues, namely, whether the termination of the petitioner was illegal and if so, to what relief, he is entitled. Under issue No.1, the first appellate authority found that the petitioner exceeded his power by extending credit sales to private persons without proper authority and recovering the amount of Rs.9,800/- after the check was made, and created suspicion about his conduct. Thus, while approving the action of respondent No.1 society in initiating disciplinary proceedings, the first appellate authority, however, observed that the enquiry Officer did not perform his duties properly and his report cannot be relied upon. It has also observed that the enquiry Officer failed to apply his mind and respondent No.1 society did not follow the settled principle of law that a final show cause notice shall be issued before terminating the petitioner’s services and that admittedly, no explanation was called for before issuing the order of termination. On the above premises, the first appellate authority held that the charges against the petitioner were proved, but, as the principles of natural justice were not followed, he held the termination as illegal and directed the petitioner’s reinstatement by awarding 1/4th of back wages. Both the parties filed their respective appeals against the said order of the first appellate authority before the second appellate authority, which by its common order, dated 25.05.1999 dismissed both the appeals, confirming the order of the first appellate authority. Against this common order, these two writ petitions are filed. At the hearing, Sri Surendra Desai, learned counsel for the petitioner submitted that the finding of the enquiry Officer, which was accepted by respondent No.1 society, was wholly perverse, as the same was not based on the evidence on record. He further submitted that while the charge framed against the petitioner was only regarding misappropriation of Rs.11,161.30 ps., the enquiry Officer referred to the three charges, which included charges 1 and 2, which did not find a place at all in the charge memo issued by respondent No.1 society to the petitioner. He further submitted that the enquiry report is totally vitiated, because it is based on the purported admission of the petitioner, which was completely misconstrued by him. He also submitted that the termination order issued based on the perverse findings of the enquiry Officer is also liable to be set aside. A similar contention is advanced with regard to the order of the first appellate authority and the learned counsel submitted that even if the petitioner is found to have violated the written instructions regarding credit sales, penalty of removal from service or denial of 3/4th back wages is completely disproportionate to the proven misconduct. Sri O.Manohar Reddy, learned counsel for respondent No.1 society submitted that as the petitioner indulged in serious misconduct, his reinstatement with 1/4th back wages as ordered and confirmed by the first and second appellate authorities respectively, is illegal. I have carefully considered the submissions of the learned counsel for the parties. A perusal of the charge memo shows that the only charge imputed to the petitioner is that he misappropriated the funds to the tune of Rs.11,161.30 ps. As noted above, the enquiry Officer in his enquiry report added two more charges relating to the alleged cash excess of Rs.576.42 ps., and drawing of Rs.9,800/- by the petitioner through demand draft. These two charges not being part of the charge memo ought not to have been made basis by the enquiry Officer to come to the conclusion that the petitioner is guilty of misconduct. Further, the enquiry Officer has not properly considered explanation, dated 20.02.1995 offered by the petitioner and termed the said explanation as an admission on his part. In the said explanation, the petitioner while admitting that he sold the goods on credit basis stated that he did so to improve the sales. However, he immediately stated that he recovered the said money and sent the same through two demand drafts on 19.12.1994 and 20.12.1994 to the Head Office. The fact that he sent the two demand drafts representing the money covered by the charge memo is not disputed by respondent No.1 society. Surprisingly, after receiving the said money, the charge memo was issued at a later point of time. The first and second appellate authorities have not properly considered the fair conduct of the petitioner. At the earliest opportune time, the petitioner himself while admitting that he has conducted sales on credit basis in order to improve the sales, took immediate remedial steps by recovering the money due under the credit sales and sending the demand drafts on 19.12.1994 and 20.12.1994. Though the petitioner technically violated the written instructions of the society not to conduct sales on credit basis, he has ensured that on account of such technical violation, the society did not suffer any loss. Within four days of the inspection, he has recovered the money and sent the same to respondent No.1 society. In my considered view, the misconduct, if any, alleged against the petitioner was offset by his corrective action. This apart, it is admitted by R.W.3 before the first appellate authority that the enquiry report was furnished to the petitioner after termination order was passed. The first appellate authority has, therefore, rightly held that the order of termination is vitiated by violation of principles of natural justice. In view of the grave procedural illegalities with which the termination order suffered, namely, addition of two charges, which did not form part of the charge memo, and failure of respondent No.1 society to furnish a copy of the enquiry report before passing the termination order, the entire disciplinary proceedings ought to have been held vitiated and ordinarily, the matter should have been referred back to respondent No.1 society for fresh action. But keeping in view the fact that the petitioner has already retired, I am of the view that such a course would only prolong the agony of the petitioner. The fact that the petitioner technically violated the written instructions by conducting credit sales is admitted by the petitioner. But the petitioner has immediately rectified his mistake by recovering the money due on credit sales and paid back the same even before the charge memo was issued. Keeping these facts in view, I am of the considered opinion that while the removal of the petitioner from service is completely disproportionate to the misconduct indulged in by him, the interests of justice would be met, if he is denied 50% of the back wages for the said misconduct. The orders of the first and second appellate authorities are accordingly, modified by holding that the petitioner’s reinstatement into service as ordered and confirmed by the first and second appellate authorities respectively does not suffer from any legal infirmity. However, the petitioner is entitled to 50% of the back wages instead of 1/4th of the back wages. The writ petitions are accordingly, disposed of. C.V.NAGARJUNA REDDY, J 3rd DECEMBER, 2008. kvni