C.W.P No.5097 of 1995 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P No.5097 of 1995 Date of Decision: 20.07.2009 Manmohan Sood .....Petitioner Versus The Presiding Officer, Labour Court, U.T. and another ...Respondents Present: Mr. Rahul Sharma, Advocate for the petitioner. Mr. Ramesh Chopra, Advocate for respondent No.2. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporters or not ?Yes 3. Whether the judgment should be reported in the Digest?Yes -.- K. KANNAN J. 1. The point of reference before the Labour Court was whether the workman, who was working as a Salesman in the Central Cooperative Consumers Store Ltd., Chandigarh had been responsible for a shortage that worked out to a loss of Rs.1,08,888.61 and whether he was validly terminated from service. The Labour Court answered the reference against the workman and upheld the contention of the management. Aggrieved workman is the party before this Court that challenges the award of the Labour Court by the writ petitioner. 2. The charge-sheet imputing allegations of misappropriation germinated from the fact that the workman had confirmed his liability in the liability register on 28.02.1987. There had been a balance as on C.W.P No.5097 of 1995 -2- 06.03.1987 of Rs.1,08,888.61 against the workman which he was called upon to reconcile. The workman had availed several opportunities but did not reconcile the same. To the charge-sheet, the reply was that he had not admitted his liability and his signature had been taken in some paper on a representation that if he did not do so, the management would give a complaint to the police. It was the statement in defence that he had also paid Rs.40,000/- to cashier in cash, which had not been brought to the books of account. At the enquiry, the management examined Sh. Shugan Chand, who produced photocopies of the register, which was Mark 'A1' to Mark 'A4' but significantly they had not been exhibited as documents in evidence. The workman pointed out to the fact that no documents had been produced that could be said to admit his liability and his contention was also that the witness brought on behalf of the management did not himself know whether cash had been paid by the workman to the cashier or not. He was also unaware about the correctness of entries in the liability register and therefore, the contention was that management had not established before the Enquiry Officer that there had been any case of defalcation. The enquiry had been concluded and report of guilt was returned. The order of termination was subsequently passed and when the workman demurred and refused to accept the finding, the adjudication was sought through reference to the Labour Court. 3. Before the Labour Court, it was shown that the fundamental flaw in the enquiry proceedings was that subsistence allowance had not been paid and that the workman did not have the necessary C.W.P No.5097 of 1995 -3- wherewithal to put up a proper defence. The management conceded to the inherent defect although it did not concede that the finding itself was vitiated. It sought for a finding as a preliminary issue whether the proceedings before the Enquiry Officer were to be held to be not fair, the manager was prepared to prove the guilt before the Labour Court. The Labour Court by its order dated 17.08.1993 found that the enquiry had been vitiated and the management was given an opportunity to prove the alleged misconduct in Court. The management examined the accountant, Sh. Shugan Chand and another witness, Sh. Gurmit Singh, a Law Officer of the department and also produced the enquiry report. The workman examined himself. 4. Adverting to the objections of the workman that the liability register itself had not been proved and there was nothing on record to show that he had admitted his liability, the Labour Court ruled that documents Mark A-1 to Mark A-4 which were photocopies had been admitted before the Enquiry Officer and therefore, it was not possible to deny the genuineness of the documents. The Labour Court also commented on the fact that the workman could not be said to be speaking the truth when he was contending that Rs.40,000/- had been paid to the cashier and according to the Labour Court, it was inconceivable that such a large amount could have been paid. It also observed that the very fact that Rs.40,000/- was said to have been deposited showed admission of guilt for, if no amount had been misappropriated, there was no need for deposit of Rs.40,000/-. 5. At the outset, the power of the Labour Court to take evidence and prove the guilt in cases where it was found that the C.W.P No.5097 of 1995 -4- enquiry before the Enquiry Officer was vitiated, was pointed out by learned counsel appearing for the respondent as perfectly justified by referring to a decision of the Hon'ble Supreme Court in Cooper Engineering Limited Vs. P.P. Mundhe 1975 II LLJ 379 that held that where a case of dismissal or discharge of employee is referred for adjudication, the Labour Court must first decide as a preliminary issue whether the domestic enquiry was following the principles of natural justice and if it found that the enquiry was vitiated for any reason, it was competent for the Labour Court to allow the proof to be adduced before it for rendering an adjudication. Although the manner of conduct of enquiry regarding examination of witnesses or the adequacy of the evidence was itself not in challenge, the management had conceded that the enquiry was vitiated by the fact that subsistence allowance had not been paid to the workman and it took upon itself the burden of establishing the alleged guilt of the delinquent before the Labour Court. In view of the stand taken by the management, the case of proof of guilt was required to be examined only in the manner of how evidence had been adduced and how the charge was sought to be proved before the Labour Court. The finding of the Enquiry Officer itself loses value and so too nature of evidence produced before the Enquiry Officer. 6. Learned counsel appearing for the workman, Sh. Rahul Sharma contended that there was no document at all which had been accepted as a document supporting the contention that there had been any admission of liability. According to him, the finding of the Labour Court that documents Mark A-1 to Mark A-4 had been C.W.P No.5097 of 1995 -5- established was wrong since the documents had not been exhibited as evidence. Mere filing of documents, he contended would not amount to proof of the same. In the absence of proof through any documents, it could not be stated that even the so-called liability register had been established. He pointed out to the evidence of Mr. Gurmit Singh, who referred to document Mark-A, which was photocopy of indent No.4355 that purported to show that material amounting to Rs.84,000/- was taken under his signature by the workman. This document was denied in evidence by the workman by contending that he had not signed in the document and he had not received the document amounting to Rs.84,000/-. Documents Mark-B to E were purported to be letters written to the workman to reconcile liability and the receipt of letters themselves were not denied and therefore, even without reference to a document it might be noticed that the management was at various time calling upon the workman to reconcile liability. In the cross-examination, it was admitted by Sh. Gurmit Singh that he had himself not prepared the indent nor was it prepared in his presence. He also admitted that letters seeking for reconciliation of accounts had not been issued by him and it was not part of his duties to write letters which were Mark-B to Mark-E. He also denied knowledge if the workman had deposited Rs.40,000/-. Therefore, it could be seen that the evidence of Gurmit Singh itself proved neither the indent register nor alleged admission of liability by the workman. 7. The statement of Shugan Chand was placed before Labour Court where he gave evidence to the effect that on 28.02.1987, the C.W.P No.5097 of 1995 -6- workman had confirmed his liability in the register. It has to be again noticed that the liability register Mark A-1 to Mark A-4 from December, 1986 to March, 1987 had not been accepted as evidence and merely the photocopies had been referred to in the evidence. In the cross-examination, he admitted that the liability register was being maintained by a clerk and the liabili ty register was compared with the indent as per records. Even the WW-1 had not been produced in original and merely a photocopy had been filed. With reference to document Ex.W-1 also, the management witness, Sh. Shugan Chand admitted that he had not brought the original. A discrepancy was confronted to the witness that indent No.4154 had been shown to have been issued on 04.12.1986 whereas the particular indent whereby the workman was alleged to have received materials amounting to Rs.84,000/- was shown bearing No.4155 which was dated the previous date. This discrepancy was also pressed with vehemence by the learned counsel for the workman to point out that the alleged indent which purported to prove the receipt of materials to the tune of Rs.84,000/- had not been established at all, in spite of his denial that he had received the materials and that he had signed the indent. Again with reference to the payment of the workman to the extent of Rs.40,000/- to the cashier, Shugan Chand, the accountant had denied any knowledge about the same. He admitted that if there was any payment, it could have been entered in the cash book but he had not brought the cash book before the Court. 8. In order that the charge might stick, three things at least were required to be established (i) that the workman had signed the C.W.P No.5097 of 1995 -7- indent and had received the materials. For this, the original indent was not there and both the management witnesses gave no evidence of the absence of the original or produced proof that the workman had actually signed in the indent; (ii) The signature in the liability register would have pinned down the liability of the workman. The liability registers purporting to contain the signature of the workman were again not produced before the Court nor was the clerk who had admitted to have made the entries examined before the Labour Court; (iii) the remittance of Rs.40,000/- in cash to the cashier was not even specifically denied by the the accountant, Sh. Shugan Chand, who merely said that he did not know whether Rs.40,000/- had been paid to the cashier. 7. In spite of these deficiencies, the Labour Court went on to observe that the management had proved the guilt by a sweeping observation that all the documents, which were photocopies had been admitted by the workman. While strict rules of evidence may not be applied in an enquiry before the Enquiry Officer and leeway could be made for certain deviation so long as there were cogent reasons and proof in support of the contention of the management, the Labour Court that passed an order rejecting the Enquiry Officer's report and undertaken a responsibility to direct the parties to give evidence before it, could not have also thrown the rules of evidence to the winds. In the absence of any evidence or production of documents relating to the liability register, mere reference to documents Mark A- 1 to Mark A-4 could not have been relied on by the Labour Court to establish admission of liability by the workman. It is not clear from C.W.P No.5097 of 1995 -8- the records as to what the workman had admitted before the Enquiry Officer. Even admission to the existence of documents would not amount to admission of the recitals in the documents nor would it dispense with the necessity to prove the documents in the manner required by law. The burden of proof of establishing the guilt and misappropriation could never shift, it would lie anchored in the management at all times. The onus of proof could shift to the workman in case there was any evidence let in that was acceptable to show that there was either proof of receipt of materials worth Rs.84,000/- or there had been a shortfall of stocks to the tune of Rs.1,08,888.61. The failure of the workman to turn up in spite of notices for reconciling the account itself cannot amount to proof of the charge-sheet. The charge was not after all the failure to reconcile account but the charge was of misappropriation. Even independently of his liability to turn up at the office and reconcile the accounts, there was always the burden on the management to show that there had been misappropriation to the tune imputed by them on the workman. Such an evidence was just not available. 9. The Labour Court has rendered the finding of guilt against the workman on evidence that did not exist; on admission that the workman did not made; and on proof that the management did not render. The finding of the Labour Court is vitiated by a complete lack of evidence and I have no alternative except to reject the award passed by the Labour Court as not conforming to law and evidence. 10. Under the circumstances, the award of the Labour Court is set aside and the workman is entitled to reinstatement, back wages and C.W.P No.5097 of 1995 -9- continuity of service. The writ petition is allowed with costs assessed at Rs.5000/-. (K. KANNAN) JUDGE July 20, 2009 Pankaj*