WP/1761/1996 : 1 : vss IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1761 OF 1996 Laxman K. Gangwani ... Petitioner V/s. The General Manager Kwality Frozen Foods Pvt. Ltd. & anr. ... Respondents Mr.S.S. Pakale for Petitioner Mr.R.V. Paranjape for Respondent No.1 Respondent No.2 – formal party CORAM: SMT.NISHITA MHATRE, J. DATED: OCTOBER 27, 2010 ORAL JUDGMENT: 1. The petitioner has filed the present petition challenging the awards part I and II passed by the Labour Court in Reference (IDA) No.685 of 1987. By award part I, the Labour Court has held that the enquiry conducted against the petitioner was fair and proper. The Labour Court while deciding award part II has held that the findings recorded by the enquiry officer were not perverse and, therefore, has rejected the reference. 2. The undisputed facts in the present case are as follows: A chargesheet was issued to the petitioner on 27.5.1985 alleging that he had committed the following acts of misconduct: WP/1761/1996 : 2 : 24(a) – Wilful insubordination and disobedience of lawful and reasonable order of superiors. 24(d) – Fraud and dishonesty in connection with the employer's property. 24(l) – Commission of acts subversive of discipline and good behaviour on the premises of the establishment. 24(m) – Gross and habitual negligence. 3. These charges were based on the allegation that the petitioner had not maintained an account of revenue stamps worth Rs.1273.80 during the period from July 1984 to February 1985 and had thereby defrauded the company of that amount. The other charge was that he had not followed the orders of the superiors for the calculation of overtime wages for the workers. An enquiry was conducted against the petitioner. On the basis of the findings of the enquiry officer, the Respondent company dismissed the petitioner from service. An industrial dispute was raised by the petitioner which was referred for adjudication in reference (IDA) No.685 of 1987. 4. The main contention of the petitioner in the statement of claim was that the enquiry conducted against him was in breach of the principles of natural justice. According to the petitioner, certain relevant documents had not been produced by the respondent before the enquiry officer which resulted in a miscarriage of justice. He contended that a statement was filed before the enquiry officer by the respondent showing the numbers of the receipts on which revenue stamps had been affixed. According to the petitioner, this statement had been filed without there being any other documents on record supporting the statement. He also contended that it was not his duty to keep accounts of the revenue stamps used by the company and that WP/1761/1996 : 3 : several persons other than him used the revenue stamps. According to him, none of these persons who had used the revenue stamps were produced as witnesses before the enquiry officer and, therefore, the entire proceedings were conducted in a manner which was contrary to the rules of natural justice. He further pleaded that the punishment was disproportionate, even assuming the misconduct could be said to have been proved against him. The petitioner pleaded that considering the evidence on record it was not possible to conclude that he had committed any misconduct. 5. In the written statement filed by the respondent company it was pleaded that every possible opportunity had been granted to the workman during the course of the enquiry and therefore, the allegation that the enquiry was vitiated because it was not not held in accordance with the rules of natural justice and fair play or because the findings were perverse was not substantiated. It was also pleaded that the charges levelled against the Petitioner had been proved in the domestic enquiry and that he had been dismissed from service on that basis. 6. The evidence of the petitioner was led before the Labour Court. He has deposed that his services had in fact been terminated because he had not accepted the bonus declared by the Company. The respondent-company examined one of the executives of the company who was working in the Supervisory grade in 1983 – 1984 when the alleged acts of misconduct had occurred. 7. By award part I, the Labour Court held that the enquiry instituted against the petitioner could not be characterised as unfair and improper. The enquiry officer had explained the procedure to the workman and had supplied copies of the documents WP/1761/1996 : 4 : relied on by the company. The workman was given an opportunity to cross-examine the witnesses at the enquiry and not only he but his defense representative had cross-examined the witnesses. In these circumstances, the Labour Court by award part I has held that the enquiry conducted against the petitioner was fair and proper, procedurally. 8. The Labour Court then heard arguments with respect to the perversity of the findings of the enquiry officer. It has concluded that there were no lacunae in the appraisal of the evidence and the conclusions drawn by the enquiry officer. The Labour Court was of the view that the charges levelled against the petitioner had been proved adequately by the respondent company and, therefore, there was no need to interfere with the findings of the enquiry officer. Furthermore, it was held that the company had established that there was a shortage of revenue stamps and that no records were maintained with respect to the stamps by the workman for the period from 15.7.1984 to 27.2.1985. The enquiry officer had disbelieved the statement made by the workman that he had been orally asked to discontinue the system of maintaining the records of the revenue stamps. The Labour Court took this finding into consideration and observed that the workman had maintained accounts in his own hand-writing at exhibit 51. On this basis, the Labour Court found that the enquiry officer had drawn a proper inference that the petitioner had not maintained accounts of the purchase and use of revenue stamps except for two months out of eight months from July 1984 to February 1985. Regarding production of the receipt books, the Labour Court has observed that though there was a demand made by the workman for production of these receipt books, the finding of the enquiry officer that the non production of the same had not adversely affected the Petitioner was not WP/1761/1996 : 5 : perverse. 9. This was because there were daily collection slips on which the numbers and the names of the parties to whom the receipts had been issued were mentioned. These collection slips were placed on record. The enquiry officer, according to the Labour Court, had drawn a proper inference that the workman had defrauded the company to the tune of Rs.929.20, taking into consideration the balance of hundred revenue stamps worth Rs.20/- at the end of the relevant period. On the allegation of the petitioner having shirked his responsibilities and disobeyed the orders of his superiors, the Court observed there was evidence of insubordination and disobedience of lawful and reasonable orders of the superiors. The contention of the petitioner that when he was on leave, three other workmen could have used the revenue stamps has not been accepted by the Labour Court. In conclusion, the Labour Court held that since the charges had been conclusively proved and the findings of the enquiry officer were not perverse, there was no need to grant reinstatement with continuity of service and full backwages to the petitioner. The Labour Court therefore rejected the reference. 10. Mr.Pakale, appearing for the petitioner, submits that even assuming the enquiry has been conducted fairly, if only the procedure followed at the enquiry is considered, the findings of the enquiry officer cannot be termed as correct. According to him, the charge of dishonesty and fraud was based on a statement filed before the enquiry officer showing revenue stamps used by the workman, the name of the person in whose favour the receipt was issued, etc. He points out that this statement is not substantiated by any document produced before the enquiry officer. According WP/1761/1996 : 6 : to him, therefore, unless there is a foundation on which the statement is prepared, the statement alone is of no consequence. He urges that from the statement it was obvious that there were several missing receipts as also receipt books. He submits therefore that it is only from the receipt books that one could have ascertained whether there were in fact any missing receipts or receipt books. He therefore submits that the non-production of these receipt books vitiated the enquiry as the substratum of the charge is washed away. Mr.Pakale then submits that the Labour Court had misdirected itself while considering whether the foundation had been laid by the company to prove or establish the charges levelled against the petitioner. He points out that it was not the petitioner who was solely responsible for the accounts of the revenue stamps but there were several other workmen involved. He then submits that even assuming the charge levelled against the petitioner had been proved the punishment was wholly disproportionate. According to him, at best it could be said that the company had suffered a loss of `2,400/- and therefore the punishment of dismissal was not commensurate with the misconduct alleged against him. He further drew my attention to the fact that no procedure was required to be followed for maintaining the accounts of revenue stamps. He submits therefore since it was not one of the duties of the petitioner to maintain such an account, he could not have been terminated from service on the ground that there was a shortfall or because he had not maintained any account of the stamps. The learned advocate has drawn my attention to the fact that the petitioner retired in June 2009 as he had attained the age of superannuation. Therefore according to Mr.Pakale, the petition deserves to be allowed. 11. Mr.Paranjape, appearing for the respondent, submits that the scope of WP/1761/1996 : 7 : judicial review in respect of a domestic enquiry held by an enquiry officer is limited. According to him, the powers of the writ Court do not permit it to reopen the evidence and sit in appeal over the findings of the enquiry officer or the Labour Court. He points out that the Labour Court had concluded that sufficient material on record was produced by the respondent to prove the charges. He then drew my attention to the fact that exhibit 51 was a statement of accounts of the revenue stamps for a particular period had been proved and, therefore, maintainance of these accounts in the petitioner's own hand-writing had also been proved. Thus, according to Mr.Paranjape, Exhibit 51 also established the fact that it was the duty of the petitioner to maintain accounts which he had failed to do for the subsequent period and, therefore, was charged with insubordination and disobedience. The learned advocate then submits that a writ Court should not interfere with the findings of recorded by the Labour Court unless there was an apparent error. He relies on the judgment of the Supreme Court in the case of State of U.P. & anr. vs. Man Mohan Nath Sinha & anr., 2009 III CLR 117. He urges that since the misconduct was proved by cogent evidence, the punishment must be held to be commensurate and proportionate with the alleged misconduct. He relies on the judgment of the Supreme court in the case of Jantha Bazar (South Kanara Central Cooperative Whole Sale Stores Ltd.) etc. vs. The Secretary, Sahakari Noukarara Sangh etc., 2000 LLR 1271 and in the case of Bharat Heavy Electricals Ltd. vs. M.Chandrasekhar Reddy & Ors., 2005 LLR 258. The learned advocate, therefore, submitted that assuming the findings of the enquiry officer are perverse, an opportunity must be given to the employer to prove the allegations against the workman by leading evidence in Court. Reliance is placed on the judgment of the Division Bench of this Court in the case of Zandu Pharmaceuticals Works Ltd. vs. D.S. Mishra & anr., 1992 I CLR 634 and in WP/1761/1996 : 8 : the case of Divyash Pandit vs. Management N.C.C.B.M., AIR 2006 SC 92. 12. In my opinion, the award part I of the Labour Court cannot be faulted. The material on record indicates that every opportunity was given to the workman to defend himself. Copies of documents which were produced before the Enquiry Officer were furnished to the petitioner he was allowed to be defended by a person of his choice at the enquiry. In these circumstances, in my opinion, the challenge to the award part I is unsustainable. 13. The question now is whether the non-production of the receipt books has prejudiced the petitioner. The allegation against the petitioner was that he used to draw money from the company for the purchase of revenue stamps, keep these stamps with him and affix them to documents which were required to be so stamped. The Respondent has also placed on record the fact that the workman had maintained the account for two months and not for the rest of the period which is relevant in the present petition. The first issue is whether the workman was required to maintain such accounts during the course of his duty. The evidence as led by the Respondent does not disclose that such accounts were required to be maintained, as a part of his job profile. However, the Labour Court has observed that because the workman had maintained accounts for two months, in his own hand, it must be held that it was one of his duties. This finding of the Enquiry Officer which is confirmed by the Labour Court is not substantiated by any documents on record or by any oral evidence. Thus, it cannot be said that there was a practice which required the petitioner to maintain accounts of the revenue stamps. WP/1761/1996 : 9 : 14. The statement had been produced before the Enquiry Officer showing the receipts on which the revenue stamps had been used. This statement had not been prepared by any of the witnesses examined at the enquiry. The author of this statement had also not been examined before the Enquiry Officer. Apparently, the statement was based on the receipt books and counter foils of receipts contained in those books. However, there is no evidence on record indicating that the receipt books and the statement can be co-related. The allegations of the petitioner that certain numbers of the receipts have not been mentioned in the statement is not contested by the respondent company. Thus, it is obvious there are some missing receipts. It would have been appropriate for the Enquiry Officer to direct the respondent company to produce the receipt books considering the fact that the workman had in fact called upon the company to produce them. In my opinion, the non-production of the receipt books and receipts vitiates the enquiry as the findings based on a statement which was filed before the Enquiry Officer without any foundation must be held to be perverse. 15. In my opinion, therefore, the finding that no prejudice has been caused to the petitioner by non-production of the receipt books is erroneous and perverse. In these circumstances, in my opinion, the enquiry is vitiated. 16. I am conscious of the fact that under Article 227 of the Constitution of India, this Court must be circumspect while exercising its supervisory jurisdiction. The judgment in the case of State of U.P. & anr. (supra), reflects this view of the Supreme Court. The Supreme Court reiterated the view expressed by it in State of Andhra Pradesh vs. Sree Rama Rao, AIR 1963 SC 1723. In State of Andhra Pradesh WP/1761/1996 : 10 : (supra), the Supreme Court has held that the High Court may undoubtedly interfere where departmental authorities have held proceedings against a delinquent employee in a manner which is inconsistent with the rules of natural justice or in violation of the statutory rules prescribed in the mode of enquiry. Thus it cannot be gainsaid that this Court must exercise its jurisdiction where there is a patent error. There is no doubt that this Court cannot sit in appeal against the merits of the decision. The scope of judicial review is confined to the decision making process. In the present case, the decision making process of the Enquiry Officer as well as the Labour Court is flawed. It has resulted in a miscarriage of justice because there was a failure of the respondent company to produce the receipt books on record. In these circumstances, in my view, the enquiry must be set aside. The other judgements cited at the bar pertain to the punishment which should be imposed. I need not advert to those judgements in the light of the view that I have taken. In Zandu Pharmaceuticals Ltd. (supra), the Division Bench of this Court has held that the word “perverse” indicates that the decision has been taken in the absence of evidence; such findings of the Enquiry Officer could be termed only as perverse. In the present case also, the Enquiry Officer has arrived at the findings that the petitioner is guilty of acts of misconduct of dishonesty and fraud in relation to the employer's property without there being any cogent evidence on record and therefore the findings are perverse. 17. The award part II of the Labour Court is therefore set aside. The respondent company has sought a permission in its written statement to lead evidence in case it was found that the enquiry was vitiated. In these circumstances, the reference is remanded to the Labour Court. The respondent company is permitted to lead WP/1761/1996 : 11 : evidence to establish the charges against the workman. The Labour Court shall decide the reference by 30.6.2011. 18. Rule made absolute accordingly. No order as to costs.