[2016] II S.C.R.219

JORSINGH GOVIND VANJARI

DIVISIONAL CONTROLLER MAHARASHTRA, STATE ROAD

TRANSPORT CORPORATION, JALGAON DIVISION,

JALGAON

(Civil Appeal No. 11807of2016)

DECEMBER 06, 2016

(KURIAN JOSEPH AND R. }'. NARIMAN, JJ.)

Service Lmv:

Termination - On charges of misconduct - Chal/e11ge to - Back wages - Gratuity - Allegation that while working as a bus conductor. appellant had collected fare from six passengers, without issuii1g tickets - Inquiry officer found him guilty - He was terminated from service - Labour court set aside the order of dismissal - However, as appellant had already crossed the age of siperannuation, instead of reinstatemellt, 50% of the back wages from date of termination till the date of superannuation with all other service benefits were gramed by the Labour court - High Court modified the m1, ard by graming one time compensation of an amount equivalent to 50% of the back wages as awarded by Labour court but did not grant gratuity - On appeal, held: Labour court, on available materials on record, found that the termination was unjustified on basis of perverse finding entered by the inquiry officer - Despite grant of opportunity, 110 evidence was adduced by the 111anageme111 to establish othen1•ise - Therefore, Labour court cannot be faulted for answering the reference in favour of the appellant - High Court itself gramed compensation as it felt that the termination was unjustified and reinstatement was not possible - Appellant entitled to gratuity in respect of his co111inuous service from his original appoi11tme11t till the date of his superannuation - Judgment of High Court not sustainable and award of Labour court restored

Allowing the appeal, the Court

HELD: 1. On facts, it is clear that the High Court has gone wrong in holding that the Labour Court did not follow the procedure. It is seen from the award that the management had 219

not sought for an opportunity for leading evidence. And despite granting an opportunity, 110 evidence was adduced after the Labour Court held that the findings of the inquiry officer were perverse.

Therefore, the Labour Court cannot be faulted for answering the Reference in favour of the a1ipellant. [Para 14] (226-A-B)

2. The Labour Court, on the available materials on record, found that the termination was unjustified on the basis of a perverse finding entered by the inquiry officer. There was no attem11t on the part of the management before the Labour Court to establish othenvise. [Para 15] [226-B-C]

3 .. It appears that the High Court itself has granted compensation since the Court felt that the termination was unjustified and since reinstatement was not possible on account of superannuation. In case, the High Court was of the view that termination was justified, it could not have ordered for payment of any compensation. [Para 16] [226-C-DJ

4. In order to deny gratuity to an employee, it is not enough that the alleged misconduct of the employee constitutes an offence involving moral turpitude as per the report of the domestic inquiry.

There must be termination on account of the alleged misconduct, which constitutes an offence involving moral turpitude.

E Consequently, tlae appellant shall be entitled to gratuity in rc'!pect

of his continuous service from his original appointment till the date of his superannuation. (Paras 17, 18] (226-D-F)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11807 of2016.

From the Judgment and Order dated 08.07.2015 of the High Court 9f Judicature at Bombay, Bench at Aurangabad in Writ Petition No.

3268of2014.

Uday B. Dube, Adv. for the Appellants.

G R. S. Hegde, Ms. Farhat Jahan Rehmani, Chandra Prakash, Rajeev

1-1

Singh, Advs. for the Respondent.

KURIAN, J. I. Leave granted.

2. The appellant, aggrieved by the termination from service, iaised an industrial dispute leading to the award in Refererice'IDA No. 42 of

2007 dated 20.06.2013 of the Labour Court, Jalgaon, Maharashtra. The Labour Court set aside the dismissal order dated 26.08.2002. However, noticing that the appellant had already crossed the date of superannuation, viz., 31.05.2005, it was ordered that from the date of termination to the date of superannuation, the appellant would be entitled to all service benerits except back wages which were limited to 50 per cent.

3. The respondent challenged the award before the High Court of Bombay. As per the impugned judgment dated 08.07.2015 in Wri'< Petition No. 3268of2014. the award was modified by granting only a one-time compensation of an amount equivalent to 50 per cent of the back wages as awarded by the Labour Court. Thus aggrieved, the appellant is before this Court.

4. The charg<: against t:1,· appellant was that he had collected fare from six passengers while he was \\ 0rking as a conductor on 06.09.2001

in bus No. MH-20/J-4714 011 its trip from Chalisgaon to Patanagaon, without issuing tickets. The inspecting team also found that there was a shortage of cash in his cash bag. A domestic inquiry followed and the inquiry officer found the appellant guilty, and on that basis, he was tenninated from service.

5. Before the Labour Court, four issues were framed:

"l. Does the second party prove that the departmenta! enquiry E held against him is unjust, unfair, improper and against the principles of natural justice, and the findings of Enquiry Officer are perverse?

Does the second party prove that, the termination of his service is illegal, violating the provisions oflaw?

Whether the second party is entitled for the relief iis sought . for?

What order?"

6. The Labour Coui1 found that:

" ... As the alleged passengers have not been examined, an opportunity of cross examining them is not availed to the second party. The one and the same authority has issued charge sheet, conducted enquiry and suggested the punishment. Accordingly, serious prejudice is caused to the second party. One and the

F that:

same authority is not expected to play the role of Enquiry Officer and disciplinary authority, which is inconsistent to the provisions of law. Accordingly, with biased mind enquiry has been conducted. Despite of not examining the witnesses the enquiry officer considered their statements recorded on the spot and concluded that, charges of misconduct have been proved against the second party. Besides th is, the reporter has not stated before the Enquiry Officer in tem1s of his report. Accordingly, the enquiry officer has recorded his findings on the basis ofno evidence and therefore, the findings recorded by the Enquiry Officer appears to be perverse one . .- .. "

7. On issue no.2, it was noted that:

" ... in the light of findings on issue no. I that, the enquiry held against the Complainant was fair, proper and legal and the findings of enquiry officer are perverse, then it is for first party to prove the alleged charges of misconduct before this court. It is pertinent to note that, in their written statement the first party has not made prayer that, if the court arrived at the conclusion that the enquiry held against the Complainant was not fair, proper and legal and the findings of enquiry officer are perverse, then they may be permitted to prove the misconduct of second party before this court by leading evidence. But, they failed to do so. No witness is examined by the first party. Hence, the alleged misconduct of second party has not been proved before this court."

8. Still further, the Labour Court proceeded further and found

"14. In a case before me, testified evidence of second party at Exh. U-8 & U-13 reflect that, he was working with first party as a bus conducted since 05.04.1971 at Chopda Depot. Thereafter he was transferred to Amalner Depot and Chalisgaon Depot.

G However, without considering his meritorious clean and unblemished service record, first patiy has dismissed him from service vide order dated 26.08.2002. On 06.09.200 I when he was performing his duties as a conductor on bus no. MH-20/J- 4714 which is proceeding from Chalisgaon to Patanagaon, at that time his bus was checked by Inspecting squad at Balziri H Phata and it is alleged against him that 6 passengers were found

--<.,.. +

travelling in the said bus without tickets, though fare amount was paid by them to the second party-conductor. Those 6 persons were illiterate persons and inspecting squad as per their whims recorded their statements, as well as S.T. cash was found less by Rs.56. Had the second party actually recovered the amount from the very six passengers, then Rs.36/- ought to have been found excess in his cash bag. However, contrary to this, amount was found less with the second party and hence Respondent by making false allegations issued false charge sheet, conducted enquiry. Principles of natural justice have not been observed by the first party. The alleged passengers have not been examined and an opportunity of cross examining to them is not availed to the second party. The one and the same authority has issued charge sheet, conducted enquiry and suggested the punishment.

Accordingly, serious prejudice is caused to the second paiiy.

Accordingly, with bias mind enquiry has been conducteC:. Instead of examining the witnesses the enquiry officer considered their statements recorded on the spot and concluded that, charges of misconduct have been proved against the second party. Besides this, the reporter has not stated before Enquiry Officer in terms of his report. Report is not exhibited and duly proved before the Enquiry Officer, even though enquiry officer relied on it and concluded that, alleged misconducts have been proved against the second party. Thus, by violating the principles of natural justice, enquiry has been conducted and the findings drawn by the enquiry officer are perverse. On the basis of said report punishment of dismissal has been imposed which is extremely harsh and disproportionate. This oral testimony of the second party has not been shattered during cross examination.

15. After cross-examining the second party, the Respondent has an opportunity to lead evidence in support of the chargers levelled against the Complainant. Once. findings of the enquiry officer are held perverse by this court, then burden lies on Respondent to prove the misconduct by leading evidence before this court. But, instead ofleading evidence in support of alleged misconduct of the second party, first party did not lead any oral evidence before this court, on the contrary filed pursis of closing their evidence at Exh. C-20. Therefore, it is crystal clear that, the misconduct of the second party is not proved before this

Court by the first party. Therefore, it can safe_!, y be inferred that, the charges levelled against the second party are false and the said charge sheet was issued with an intention to victimize l1im, As the charges levelled against the second party are not proved either in the departmental enquiry or before this court, hence, the dismissal order issued by the first party is nothing but in colourable exercise of employer's right, by falsely implicating the Complainant in a criminal case on false evidence, for patently false reasons, in utter disregard of the principles of natural justice in the conduct of domestic enquiry and with undue haste, amounting to unfair labour practice. Hence, I hold that the dismissal of second party is illegal, violating the provisicns of law."

(Emphasis supplied)

9. On issue no.3, it was held as follows:

"17. As to issue no.3:- So far as relief sought by the scond party is concerned, the Ld. Counsel for second party has submitted that, the second party has attained the age ofretircment on 31.05.2005 hence he may be given all the retiral benefits from the date of his illegal dismissal. It is pertinent to note that, in his statement of claim the second party has stated that, he will be going to retire from service on 31.05.2005. It means, already the second party has attained the age of retirement in the year

2005. Once his termination is held as illegal, second paity is entitled for reinstatement with continuity of service and. back wages. However, the second party has attained the age of superannuation i.e. 58 years on 31.05.2005. Accordingly, had he been in service then he would have been retired on 31.05.2005.

The charges levelled in the charge sheet are not proved in enquiry or before this Cou11, therefore, second party is entitled for all the benefits, as ifhe was in employment of the first pmty-corporation.

Therefore, the Ld. Counsel for second patty argued that, despite directing reinstatement of the second party, the first party be directed to avail him all the monetary benefits till his superannuation and dues admissible as per rules. Considering all these aspects of attaining the age of superannuation by the second

paity, it wi 11 be proper to mould the relief as sought by him to the extent of availing him all the monetary benefit till his

superannuation, which are admissible as per law. Once, it is held that, the findings of enquiry officer are perverse and first party has illegally dismissed him from service, therefore, certainly the second party is entitled for the relief. ... ".

I 0. Thus, the Reference was answered in favour of the &ppellant setting aside the dismissal order. However, taking note of the fact that the appellant had cro~, cd the age of superannuation. instead of reinstatement, 50 per cent of the back wages from the date of termination till the date of superannuation with all other service benefits were granted.

11. The High Court, in the impugned order, took the view that the Labour Court went wrong in deciding the preliminary issue concerning the fairness of the inquiry and deciding all further issues in one stroke.

To quote the relevant consideration which appears at paragraph-12 of the impugned judgment: ·

"12. It is apparent that the Labour Court has erred in deciding the preliminary issues concerning the fairness of the enquiry and the findings of the enquiry officer along with all the issues while delivering the impugned judgment. The procedure laid down in law, which has been considered by this Court and followed in the case of Maharashtra State Roadways Transport Corporation, Beed Vs. Syed Saheblal Syed Nijam [2014 Ill CLR 547], has not been followed by the Labour Court. It could not have decided the preliminary issues along with all the rest of the issues in one stroke while delivering the impugned award. For this reason alone, the impugned award is rendered unsustainable."

12. In that view of the matter, it was held that the appellant would not be entitled to the gratuity but a one-time compensation ofar. amount equivalent to 50 per cent of the back wages, would be just and proper.

To quote the relief portion:

"17. This Writ Petition is, therefore, partly allowed. The impugned award is modified by setting aside clause I and 2 of the order and by granting the 50% of the backwages as awardiod by the Labour Court from 26.08.2002 till 31.05.2005 as quantified compensation. The Respondent shall be deprived of gratuity amount since the charge proved against him in the enquiry involves moral turpitude."

13. Heard Learned Counsel appearing on both sides.

14. On facts, it clearthatthe High Court has gone wrong in holding that the Labour Court did not follow the procedure. It is seen fro; n the award that the management had not sought for an opportunity for leading evidence. And despite granting an opportunity, no evidence was adduced after the Labour Court held that the findings of the inquiry officer were perverse. Therefore, the Labour Court cannot be faulted for answering the Reference in favour of the appellant.

15. The Labour Court, on the available materials on record, found that the termination was unjustified on the basis of a perverse finding entered by the inquiry officer. There was no attempt on the part of the management before the Labour Com1 to establish otherwise.

16. It appears that the High Court itself has granted compensation since the Court felt that the termination was unjustified and since reinstatement was not possible on account of superannuation. In case, the High Court was of the view that termination was justified, it could not have ordered for payment of any compensation.

17. In order to deny gratuity to an employee, it is not enoug:1 that the alleged misconduct of the employee constitutes an offence involving moral turpitude as per the report of the domestic inquiry. There must be termination on account of the alleged misconduct, which constitutes an offence involving moral turpitude.

18. Thus, viewed from any angle, the judgment of the High Court cannot be sustained. It is hence set aside. The appeal is allowed. The award dated 20.06.2013 of the Labour Court, Jalgaon, Maharashtra in Reference IDA No. 42 of2007 is restored. Consequently, the appellant shall be entitled to gratuity in respect of his continuous service from his original appointment till the date of his superannuation.

19. There shall be no orders as to costs.

Ankit Gyan Appeal allowed.