Case: M.L.SINGLA Vs. PUNJAB NATIONAL BANK

In order to appreciate the controversy involved in the appeal, it is necessary to set out the relevant facts in detailThe appellant herein was the employeeof respondent No.1-Punjab National BankThe appellant, at the relevant time, was working as Cashier in the PNB, Branch Office at JindOn 21.03.1984, the appellant while on duty was found consuming liquor in the Branch. On the same day, respondent No.1-Bank also found shortage of Rs.35,000/- in daily cash balance on verification of the dailyRespondent No.1-Bank, therefore,decided to hold a departmental inquiry to probe the aforementioned two charges against the appellant as per the serviceA charge-sheet was accordingly served on the appellant on 11.10.1985. The charges read asThat on 21.03.84 while you were working as Cashier Incharge at BO, Jind City, at about 01.30 p.m. you had asked Shri Hakikat Rai, Peon-cum-Guard to bring a glass of water and one Mathi which were provided to you by him and you took out a bottle of liquor from your drawer and consumed the same. 2. That on 21.03.84 while you were working as Cashier Incharge, you withdrew a sum of Rs.4,28,124.74 on different occasions leaving Rs.1,40,900/- in the cash safe of the Bank afterthe said withdrawals. Besides this during normal business hours, you had also received Rs.16,473.98 as direct receipt from customers and Rs.1,08,690/- from the Asst. Cashier to meet the payment. In all, you made total payment of Rs.3,31,417.68 during the day and at the close of the day, there should have been a cash balance of Rs.2,21,871.04 with you. Besides this at closing of the day, you received Rs.95,448.35 on account of the balance of receipt made by the Assistant Cashier.Thus, including the cash in the cash safe total receipt made by Asstt. Cashier during the day of the closing balance should have been Rs.4,58,219.39 with you whereas the actual balance was only Rs.423,219.39 with you showing a shortage of Rs.35,000/- and thus you acted in a manner which is prejudicial to the interest of the Bank or gross negligence involving the Bank in serious loss. Further, on your request you were advance Rs.35,000/- from the suspense account to meet the shortage of Rs.35,000/- occurred on that day due to your grossRespondent No.1-Bank on 06.12.1985 appointed an Enquiry Officer and the Presenting Officer.The appellant on being served with the charge-sheet submitted his reply on 29.10.1985. Respondent No.1-Bankand the appellant then participated in the enquiry and adduced evidence in support of their respectiveOn 12.02.1987, the Enquiry Officer submitted his Enquiry Report. He held that both the charges are provedagainst the delinquent employee (appellant herein). The eventual conclusion on the two charges reads asThe charge that on21.03.84, while working as Cashier Incharge, BO Jind City at about 01.30 p.m., Shri Singla asked Shri Hakikat Rai, Peon-cum,-Guard to bring a glass of water and one ‘Mathi?, which were provided to him and he took out a bottle of liquor from the drawer consumed the same, stands fully substantiated and hence, proved. CHARGE-IIThe charge that on21.03.84 at BO Jind, a shortage of Rs.35,000/- occurred in the cash handled by Shri M.L. Singla while working as Cashier Incharge due to gross negligence on his part, thus, causing bank a serious loss, also stands fully substantiated, hence,Respondent No.1 then sent a show cause notice along with the Enquiry Report on 25.07.1987 to the appellant proposing therein to inflict the punishment of dismissal from service.The appellant filed his reply. On 29.08.1987, the Competent Authority, on perusal of the Enquiry Report and thereply, concurred with the findings of the Enquiry Officer and accordingly passed a dismissal order datedThe appellant, felt aggrieved by his dismissal order, filed appeal before the Appellate Authority as provided in service rules. The Appellate Authority, by order dated 26.02.1988, dismissed the appeal finding no meriten approached the State Government praying for making an Industrial Reference to the Labour Court to decide the legality and correctness of his dismissal order under the Industrial Dispute Act, 1947 (hereinafter referred to as?the ID Act?. The State Government acceded to the request of the appellant and accordingly made the following Reference on 16.08.1989 to the Labour Court under Section 10 of the IDthe action of the management of PunjabNational Bank in dismissing from service Shri M.L. Singla is justified? If not, to what relief is the workmanThe Labour Court, on receipt of the Reference, issued notices to the parties.The parties filed their statements.The Labour Court then asked both the parties toadduce their evidence. Both the parties accordingly adduced theirBy award dated 30.05.2006, the Labour Court answered the Reference in appellants favour. It was heldthat the finding of the Enquiry Officer on Charge-I and II is perverse and, therefore, it was set aside.It was further held that since no evidence was adduced by respondent No.1-Bank to prove that the appellant (employee) was gainfully employed elsewhere after his dismissal, he was entitled to claim 50% back wages along with the relief of reinstatement. With these findings, the Labour Court set aside the dismissal order dated 29.08.1987 and answered the Reference in appellant?s favour.The Labour Court, however, did not decide the question as to whether the domestic enquiry is legal andRespondent No.1-Bank felt aggrieved and filed writ petition in the High Court. The High Court, by impugnedorder, allowed the writ petition and set aside the award of the Labour Court. As a consequence thereof, the dismissal orderwas held legaland proper and was accordinglyIt is against this order, the employee has felt aggrieved and filed the present appeal by way of special leave in this Court.

Reasoning:
While deciding thisquestion, it was not necessary for the Labour Court to examine as to whether the charges are made out or not. In other words, the enquiry for deciding the question should have been confined to the factors such as-what is the nature of the charge(s), its gravity, whether it is major or minor as per rules, the findings of the Enquiry Officer on the charges, the employees overall service recordand the punishment imposednd error was that the Labour Court called upon the parties to lead evidence on all the issues including the charge of misconduct in the first instanceThe third error committed by the Labour Court was that it proceeded to examine the findings of the Enquiry Officer on the charges like an Appellate Court, appreciated the evidence adduced before the Enquiry Officer and the one adduced before it and then came to a conclusion that the findings of the Enquiry Officer are perverse. This the Labour Court could notAssuming that the Labour Court had the jurisdiction to direct the parties in the first instance itself to adduce evidence on merits in support of the charges yet, in our opinion, it was obligatory upon the Labour Court to first frame the preliminary issue on the question of legality and validity of the domestic enquiry and confined its discussion only for examining the legality and propriety of the enquiryDepending upon the finding on the preliminary issue on the legality of the enquiry proceedings, the Labour Court should have proceeded to decide the next questions. The Labour Court while deciding the preliminary issue could only rely upon the evidence, which was relevant for deciding the issue of legality of enquiry proceedings but not beyondIn other words, the Labour Court failed to see thatit would have assumed the jurisdiction to examinethe charges on the merits only after the domestic enquiry had been held illegal and secondly, theemployer had sought permission to adduce evidence on merits to prove the charges and on permission being granted he had led theThe fourth error was award of 50% back wages to the appellant. While awarding 50% back wages, the Labour Court did not examine the question as to whether the appellant had pleaded and proved with the aid of evidence that he was not gainfully employed after his dismissal fromIn order to claim back wages, it was necessary for the appellant to plead and prove that he was not gainfully employed after his dismissal with the aid of evidence. Respondent No.1-Bank too was entitled to adduce evidence to prove otherwise.The aforementioned four errors, in our opinion, go to the root of the matter and being jurisdictional in nature and against the law laid down by this Court in a number of decisions, as detailedinfra, render the award in questionNow coming to the reasoning of the High Court, we find that the High Court having referred to few decisions of this Court on the subject, which were mostly on the powers of the Court underSection 11A of the ID Act, failed to notice the aforementioned jurisdictional errors committed by the Labour Court. Indeed, in our view, these errors were apparent in the award of theLabour Court and, therefore, should have been noticed for being corrected by clarifying the legal position keeping in view the law laid down by this Court in several decisions and the matter should have been remanded to the Labour Court for deciding itThe High Court instead proceeded to examine the findings of the Labour Court and the Enquiry Officer on two charges on merits in its writ jurisdiction by entering into the factual arena which, inour opinion, was not permissible and on its appreciation came to a conclusion that the reasoning of the Labour Court on Charge-I is perverse whereas the finding of the Enquiry Officer on the said charge isThe High Court accordingly reversed the finding of the Labour Court on Charge-I and restored that of the Enquiry Officer. The High Court then held that since the Charge-I is proved, it is enough to sustain the dismissal order and, therefore, it is not necessary to examine the merits and demerits ofWe cannot concur with the approach and the reasoning of the Labour Court or/and the High Court detailed above which, in our view, does not appear to be in conformity with the law laid down by this Court in a number ofWhile examining the aforementioned question, this Court also took note of several decision of this Court wherein this Court examined the questions in extenso,namely, where dismissal is based on enquiry, or no enquiry or illegal enquiry, how the Court should decide the legality of dismissal. We have mentioned these cases in ParaIn our view, the reasoning, which we have given while dealing with the first three errors committed by the Labour Court in Paras 2o to 33, are based on the law laid down in aforementioned cases, which are approved in Shankar Chakravarti?s caseHaving examined the approach, reasoning and the conclusion arrived at by the Labour Court and the High Court which is not legally sustainable, the next question which arises for consideration is what course should be adopted to decide theWe are, however, not inclined to remand the case to the Labour Court after lapse of a long period of more than a decade. It is more so when we have examined the entire case on meritsAs mentioned above, there was no categorical finding recorded by the Labour Court and the High Court as to whether the domestic enquiry was legal or proper. We, therefore, proceed to examine this issue in the firstHaving perused the enquiry proceedings along with the Enquiry Report, we are of the view that no fault of any nature can be noticed in the domestic enquiry proceedings for more than oneFirst, the appellant was given full opportunity at every stage of the proceedings which he availed; Second, he never raised any objection complaining causing of any prejudice of any nature to him before theEnquiry Officer; Third, he received all the papers/documents filed and relied upon by respondent No.1-Bank in support of the charge- sheet; Fourth, he filed reply, cross examined the employer?s witnesses, examined his witnesses in defense, attended the proceedings and lastly, the EnquiryOfficer appreciated the evidence and submitted his reasoned report running in several pages holding the appellant guilty of both theIn short, in our opinion, no case is made out to holdthat the domestic enquiry suffers from any procedural lapse or was conducted in violation of the principle of natural justice thereby causing any prejudice to the rights of theSo far as Charge-I is concerned, it was proved in the enquiry that the appellant had consumed liquor while on duty. No employer would ever allow or tolerate such behavior of his employee while on duty. The employer had, therefore, every right to initiate domestic enquiry against such employee for such reprehensible conduct andSo far as Charge-II is concerned, that a shortage of Rs.35,000/- cash was found in cash balance on the particular day was also held proved. It is not in dispute that the appellant was working as Cashier. Hewas on duty on that day. He was, therefore, directly responsible for the shortage found in theIn our opinion, both the charges being serious in nature, therefore, the order of dismissal passed against the appellant cannot be faulted with and nor it can be said to be, in any way, disproportionate to the gravity of charges. In other words, punishment of dismissal was proportionate with the gravity of the charges and hence deserves to beIn view of the foregoing discussion, though we agree with the conclusion arrived at by the High Court,which also resulted in upholding of the dismissal order, but this we do so on our reasoning detailed above.