Case: Central Bank Of India Ltd., New Delhi Vs. Shri Prakash Chand Jain

A charge-sheet, containing two charges, was served on the respondent on 21st July, 1961 in order to initiate formally an enquiry for the purpose of taking disciplinary action against him. The two charges framed were asOn 14-1-1960, a sum of Rs. 30,400 was paid to Mr. P. C. Jain by the Assistant Cashier Mr. Nand Kishore out of the cheque No. 43004 dated 14-1-1960 drawn by Messrs. Mool Chand Hari Kishan for Rs. 63,000. Taking this money Mr. P. C. Jain on the same day i. e., 14-1-1960 left for Muzaffarnagar in company of some persons to retire the following bills drawn by M/s. Gupta Iron Industries:-Naya Bazar LBC 3 drawn on Puran Chand Rs. 5,100. Naya Bazar LBC 5 drawn on Hiralal Shyam Rs. 4,950. Thus it was within the knowledge of Shri P. C. Jain that the bills of Messrs. Gupta Iron Industries were drawn on bogus firms and that those were retired by the drawers representative who accompanied Mr. P. C. Jain to Muzaffarnagar. Instead of reporting sueh serious matters to higher authorities, Mr. P. C. Jain claims that he had never visited Muzaffarnagar.2. Mr. P. C. Jain encashed on 25-2-60 cheque No. 400506 for Rs. 46,000/- from the United Bank of India Ltd., Chandni Chowk and brought cash to Naya Bazar after 11.30 A. M. i.e., after the time for presenting of the clearing cheques at the State Bank of India. To cover the misdeeds of Mr. Shiv Kumar Sharma the then Sub-Agent of Naya Bazar Office, Mr. P. C. Jain Treasurers representative stated in his explanation dated 16-2-1961 that cash was received at the office at about 11 A. M. i. e. before the clearing time.The above acts of Mr. Jain were prejudicial to the interests of the Bank as defined in paragraph 521-4(J) of the Sastry Award and amount to gross misconduct. The inquiry will be held on 12-8-1961 at Chandni Chowk Branch at 10-30 A. M. by Mr. P. B. Tipnis, Chief Agent, Agra."Subsequently, an enquiry was held by Mr. Tipnis, one of the senior Officers of the Bank. The Enquiry Officer, after recording evidence tendered on behalf of the Bank as well as the evidence given by the respondent, recorded his findings holding that both the charges were proved against the respondent and, on that basis, came to the view that the actions of the respondent were prejudicial to the interests of the Bank and amounted to gross misconduct, so that he proposed to award the punishment of dismissal from the Banks service. The respondent was given a weeks time to show cause against this proposed punishment and, thereafter, an order was made dismissing the respondent with effect from 18th July, 1962 and a months wages were paid to him in accordance with the provision contained inSection33 (2) (b) of the Act. Since an industrial dispute was pending before the Industrial Tribunal, Delhi, an application underSection33 (2) (b) of the Act was made requesting the Tribunal to accord approval to this order of dismissal. The Tribunal, when dealing with this application, held that the enquiry, which had been held by the Enquiry Officer, was fair and was not vitiated by any irregularity or unfairness, but refused to accord approval on the ground that the findings recorded by the Enquiry Officer were perverse an were not based on evidence inasmuch as most of the findings were the result of mere conjecture on behalf of the Enquiry Officer. It is this order of the Tribunal that has been challenged in this appeal.

Court's reasoning:
We have found that, on two of these points, there was material before the Enquiry Officer which could be held to be legal evidence and, consequently, we have to hold that, on those two points, the Tribunal was incorrect in recording its view that the findings of the Enquiry Officer were defective and could be disregarded by the Tribunal. These two are elements Nos. (ii) and (vii). The finding that the respondent left for Muzaffarnagar on 14-1-1960 was based on the inferences drawn by the Enquiry Officer from the records of the Branch of the Bank in which the respondent was working on that day. The facts found by the Enquiry Officer were that, in the cash receipt book of that date, there were only four entries in the handwriting of the respondent that he made no payments on that day; that, though he was in charge of the entire cash department, he had no knowledge that cash of Rs. 1 lac was brought from the Chandni Chowk Office of the Bank three times during that day; that the Godown Keeper had also verified several vernacular signatures when it was the respondents duty only to verify them; and that the cash account of that day was closed by the Godown Keeper instead of the respondent who should have done so if he was in the Bank until the closure of the work on that day. These circumstances were brought to the notice of the Enquiry Officer from the records of the Bank by Managements witness, J. J. Daver. In our opinion, the Tribunal was incorrect in holding that the Enquiry Officer was acting on mere conjecture when, on the basis of these circumstances, he drew the inference that the respondent had left his work in the Naya Bazar Branch of the Bank on 14-1-l960 after working there for a short time only. Further, the Enquiry Officer in his report mentioned that three witnesses, S.C.L. Chawla, Officer Incharge of the Muzaffarnagar Office of the Bank, Inder Sain Jain, Cashier in the Muzaffarnagar Office, and Nihalchand Jain, who was a Clerk in the Muzaffarnagar Office had stated that they had seen the respondent at Muzaffarnagar office on 14-1-1960, and relied on their evidence to hold that the respondent did go to Muzaffaranagar on that day leaving his work in the Naya Bazar Office of the Bank at Delhi. The Tribunal criticised the evidence of these three witnesses and came to the view that the Enquiry Officer was not justified in believing these witnesses and in holding on the basis of their evidence that the respondent was in Muzaffarnagar on that day. It is clear that, in adopting this course, the Tribunal exceeded its powers.It was not for the Tribunal to sit in judgment over the view taken by the Enquiry Officer about the value to be attached to the evidence of these witnesses, even though the Tribunal thought that these witnesses were unreliable because of circumstances found by the Tribunal in their evidence. What the Tribunal at this stage did was to interfere with the finding of fact recorded by the Enquiry Officer by making a fresh assessment of the value to be attached to the evidence of these witnesses which was not the function of the Tribunal when dealing with an application underSection38 (2) (b) of the Act. In these two respects, we find that the Tribunal fell into an error.8. However, we find that, on the other ingredients of the first charge, the Tribunal was justified in arriving at the conclusion that the findings recorded by the Enquiry Officer were perverse. The Tribunal gave the reason that these findings were based on hearsay evidence. This view taken by the Tribunal appears to be fully justified. The first and the third elements of the charge relating to payment of the sum of Rs. 30,400 to the respondent by Nand Kishore and of the respondent leaving for Muzaffarnagar in the company of some persons in order to retire the bills drawn by M/s. Gupta Iron Industries, were sought to be proved before the Enquiry Officer by the evidence of the Internal Auditor, N. N. Vazifdar, but the latter could not give any direct evidence, as he was not present at the time when money was paid to the respondent or when the respondent left for Muzaffarnagar. He purported to prove these elements of the change by deposing that a statement was made to him by Nand Kishore to the effect that Nand Kishore had paid Rs. 30,400 to the respondent and that, thereafter, the respondent left for Muzaffarnagar in the company of two persons. The Enquiry Officer accepted this evidence of Vazifdar, but ignored the fact that Vazifdars evidence was not direct evidence in respect of the elements of the charge sought to be proved, and that Vazifdar was only trying to prove a previous statement of Nand Kishore which, as rightly held by the Tribunal, would amount to hearsay evidence. Nand Kishore himself was also examined as a witness, but, in his evidence, which was admissible as substantive evidence, he made no statement that this sum of Rs. 30,400 was paid by him to the respondent or that the respondent left for Muzaffarnagar in the company of some persons to retire the bills drawn by M/s. Gupta Iron Industries. In fact, Nand Kishore even went further and denied that he had made any statement to Vazifdar as stated by Vazifdar. The Enquiry Officer was, of course, entitled to form his own opinion and to believe Vazifdar in preference to Nand Kishore; but on this basis, the only finding that the domestic tribunal could record was that Nand Kishores statement given before him was incorrect and that Nand Kishore had made statements to Vazifdar as deposed by Vazifdar. Those statements made by Nand Kishore to Vazifdar could not, however, become substantive evidence to prove the correctness of these elements forming part of the charge.It is in this connection that importance attaches to the views expressed by this Court in the cases cited above where it was pointed out that a finding of a domestic tribunal may be perverse if it is not supported by any legal evidence. It is true that, in numerous cases, it has been held that domestic tribunals, like an Enquiry Officer, are not bound by the technical rules about evidence contained in the Indian Evidence Act; but it has nowhere been laid down that even substantive rules, which would form part of principles of natural justice, also can be ignored by the domestic tribunals. The principle that a fact sought to be proved must be supported by statements made in the presence of the person against whom the enquiry is held and that statements made behind the back of the person charged are not to be treated as substantive evidence, is one of the basic principles which cannot be ignored on the mere ground that domestic tribunals are not bound by the technical rules of procedure contained in the Evidence Act.In fact, learned counsel for the appellant Bank was unable to point out any case at all where it may have been held by this Court or by any other Court that a domestic tribunal will be justified in recording its findings on the basis of hearsay evidence without having any direct or circumstantial evidence in support of thoseviews expressed by this Court, in our opinion, bring out what was meant when this Court held that findings recorded by an Enquiry, Officer must be supported by legal evidence. The evidence, as indicated in these cases, should consist of statements made in the presence of the workman charged. An exception was envisaged where the previous statement could be used after giving copies of that statement well in advance to the workman charged, but with the further qualification that that previous statement must be affirmed as truthful in a general way when the witness is actually examined in the presence of the workman.12. Applying this principle to the present case, it is clear that the previous statement made by Nand Kishore to Vazifdar could not be taken as substantive evidence against the respondent, because Nand Kishore did not affirm the truth of that statement when he appeared as a witness and, on the other hand, denied having made that statement altogether. Even though his denial may be false, that fact would not convert his previous statement into substantive evidence to prove the charge against the respondent when that statement was given to Vazifdar in the absence of the respondent and its truth is not affirmed by him at the time of his examination by the Enquiry Officer. This statement of Nand Kishore made to Vazifdar being ignored, it is clear that no other material was available to the Enquiry Officer on the basis of which he could have held that the sum of Rs. 30,400 was paid to the respondent by Nand Kishore and that Nand Kishore, (respondent?) thereafter left for Muzaffarnagar in the company of some persons with that money.13. The fourth element of the charge was that the bills of M/s. Gupta Iron industries were drawn on bogus firms. We think that the Tribunal is quite correct in its comment that the Enquiry Officer, in holding that the bills were drawn on bogus firms, proceeded to do so without any evidence altogether. In fact, the Enquiry Officer has not referred to any material which was available to him before accepting the allegation against the respondent that the bills had been drawn on bogus firms. Even in the course of his submissions before us, learned counsel for the Bank was unable to point out any evidence which would support this part of the charge. The only evidence to which learned counsel could refer was the statement of Nihal Chand Jain who said that intimations of the bills were sent to the parties mentioned in the bills by post, but were received back unserved. Those intimations were not produced before the Enquiry Officer and there is no mention of the reason why the postal authorities returned those intimations. The mere return of the intimations could not possibly lead to the inference that the parties to whom they were addressed, were bogus. It is quite likely that their addresses were incomplete, so that the postal authorities were unable to trace them. Clearly, in these circumstances, the finding on this point recorded by the Enquiry Officer was without any evidence or material.So far as the sixth element of the charge is concerned, that becomes totally immaterial when it is found that the Enqiry Officers findings that the bills were drawn on bogus firms and that they were retired by the drawers representative accompanying the respondent are held to have been given without any legal evidence. If the bills are not proved to have been drawn on bogus firms and to have been retired by the drawers representative with the aid of the respondent, there was nothing that the respondent was required to convey to higher authorities.16. So far as the second charge is concerned, we find that, similarly, the principal findings given by the Enquiry Officer are not supported by any legal evidence. The substance of the charge was that the respondent enacted the Cheque for Rs. 46,000 from the United Bank of India Ltd and brought the cash after 11.30 a. m., but wrongly stated that he had brought the cash to the Naya Bazar Office of the Central Bank before 11 a. m. The significance of the time was emphasised by the Enquiry Officer because, according to him, 11 a. m. was the clearing time of another cheque of Rs. 15,000 which had been marked as "good for payment" by the then Sub-Agent, Shiv Kumar Sharma and the respondent had to show that cash in respect of the other cheque of Rs. 46,000 had been brought to the Bank at Naya Bazar for deposit in the account of the Drawer of that cheque of Rs. 15,000 so as to justify the endorsement made by the Sub-Agent that it was good for payment. We examined the whole record and we are unable to find any evidence at all in support of the fact accepted by the Enquiry officer that the clearing time was 11 a. m. On the contrary, the only evidence on this point, which was that of Managements witness J. J. Daver, was to the effect that the clearing time was 11.30 a. m. Ignoring this evidence altogether, the Enquiry Officer proceeded to record his findings against the respondent on the basis that the clearing time was 11 a. m. without at all referring to any evidence in support of this fact. The second significant point was as to the time by which the respondent brought the cash in respect of the cheque of Rs. 46,000 from the United Bank of India Ltd., Chandni Chowk, to his own Central Bank Branch in Naya Bazar. No one gave any direct evidence as to the time when the respondent brought the money. The Enquiry Officer has proceeded to hold that the money could not have been brought before 11 a. m., because there is an endorsement on that cheque of Rs. 46,000 which, according to the Enquiry Officer, shows that that cheque was presented for encashment at the United Bank of India Ltd., Chandni Chowk, at 11-15 a. m. This endorsement was also examined by us as it appeared on the photostat copy of the cheque. The endorsement consists of a number 37 beneath which is noted the time 11-15 a. m. with a line drawn between them. From this endorsement alone, the Enquiry Officer proceeded to infer that this cheque was presented for encashment at 11-15 a. m. even though no evidence at all was given by anyone working in the United Bank of India Ltd., Chandni Chowk, to prove that this endorsement of time of 11.15 a. m. represented the time of presentation of the cheque at that Bank. In fact, the Enquiry Officer has not made reference to any evidence at all when holding that this cheque was presented for payment at 11 a. m. at the counter of the. United Bank of India. Learned counsel for the Bank however, referred us to the evidence of J. J. Daver on this point, Daver in this case was discharging a dual function as a witness and as the prosecutor of the case against the respondent for the Bank. In his evidence, Daver stated that this endorsement represented the time when the token was issued to the person encashing the cheque. Later, while prosecuting the case against the respondent on behalf of the Bank, Daver urged before the Enquiry Officer that this endorsement of 11.15 a. m. represented the time of presentation of the cheque and this was noted by the Enquiry Officer in his proceedings. Obviously, the time of presentation of the cheque and the time of issue of the token in respect of it would not be identical. In fact, there can be a lapse of an appreciable interval between the two. In spite of this fact, the Enquiry Officer seems to have proceeded on the basis of what was urged before him by J. J. Daver while acting as prosecutor, and what was stated in that capacity was not evidence at all. The evidence given by Daver was different and that was not relied upon by the Enquiry Officer. On the face of it, the proper evidence, by which it could have been proved that the cheque was either presented at 11.15 a. m. or that the token in respect of it was issued at 11,15 a. m. could have been obtained if the Bank had cared to examine the person in charge of encashing the cheque at the United Bank of India, Chandni Chowk. Daver was not present when the cheque was presented and he has not explained on what basis he stated in his evidence that this endorsement represented the time when the token was issued. It is clear that, on this charge also on the two crucial points of the time viz., the clearing time of the cheque of Rs. 15,000/- as well as the time when the second cheque of Rs. 46,000/- was presented for encashment at the United Bank of India Ltd., Chandni Chowk, the Enquiry Officer has recorded findings without those findings being supported by any legal evidence.17. In these circumstances, it is clear that the Tribunal was fully justified in holding that the findings recorded by the Enquiry Officer on both the charges were perverse in the sense of not being supported by any legal evidence, of course, with the exception of the finding recorded to the effect that on 14-l-1960 the respondent, after doing some work in the Naya Bazar Branch of the Bank, left for Muzaffarnagar and was seen in Muzaffarnagar on that day. It was to this limited extent that the first charge only could have been held to have been proved before the Enquiry Officer against the respondent. On this limited proof and on holding that the Enquiry Officers findings were correct in respect of this part of the charge only, the Tribunal would be fully justified in withholding its approval to the order of dismissal which was passed by the Bank on the basis that all the elements of both the charges had been proved. The order of the Tribunal refusing to grant approval was, therefore, not vitiated by any error and must be upheld.