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2010 DIGILAW 925 (MAD)

Management, Sri Vaikundam Co-operative Bank Limited, Srivaikundam, Chidambaranar District by the Special Officer A. Mathar Sulaiman v. Labour Court, Tirunelveli, Tirunelveli District & Another

2010-03-02

A.ARUMUGHASWAMY, R.BANUMATHI

body2010
Judgment : Per Ms. R. Banumathi, J. This writ appeal arises out of order dated 12. 1999 in W.P.No. 17529 of 1993 dismissing the writ petition and thereby declining to quash the award of Labour Court in I.D. No. 273 of 1389. 2. Management-Sri Vykundam Cooperative bank Limited is the Appellant, 2nd respondent, -Krishnan was appointed as Attender in Sri Vykundam Cooperative Bank Limited on 11. 1963. Subsequently, he was promoted as Clerk and thereafter on 7. 1986, he was promoted as Assistant Secretary of the Bank. On 7. 1986, he assumed charge as the Assistant Secretary. He was given special allowance as per his written request. While the 2nd respondent was functioning as Assistant Secretary of the Bank, he committed misappropriation of the bank funds amounting to about Rs. 1 lakh. Therefore on 19. 1987, the 2nd respondent was suspended from service and on 10. 1987, a charge memo was issued containing fifteen charges. The charges related to the 2nd respondent’s falsification of accounts of his wife, father, mother and brother by falsely crediting the amounts in their accounts and withdrawing them and correcting entries in the accounts of their family members and one Vadivelu. The 2nd respondent is alleged to have misappropriated a total sum of Rs. 96,5550. On two occasions i.e., on 9. 1987 and 19. 1987, 2nd respondent has remitted a sum of Rs. 96,557.50ps, which is the entire amount said to have been misappropriated. The 2nd respondent has submitted his explanation admitting the endorsement of Rs. 96,557.50ps and request of them to drop the proceedings since he has remitted the entire amount of Rs. 96,557.50ps. 3. After receipt of is explanation dated 110. 1987 an enquiry officer was appointed for conducting an enquiry as regards the charges leveled against the 2nd respondent. On 210. 1987, the Enquiry Officer conducted enquiry and the Secretary of Bank Lakshmana Perumal was examined as a witness for the Bank. Exhibit M-1 to M-12 and other documents were marked on the side of the Management. The 2nd respondent stated that he admits charges and the Enquiry Officer need not proceed with the enquiry proceedings further and the 2nd respondent requested to close the enquiry. To that effect, the 2nd respondent has also given a letter containing the above facts and the said letter dated 210. 1987 was marked as Exhibit D-1. The 2nd respondent stated that he admits charges and the Enquiry Officer need not proceed with the enquiry proceedings further and the 2nd respondent requested to close the enquiry. To that effect, the 2nd respondent has also given a letter containing the above facts and the said letter dated 210. 1987 was marked as Exhibit D-1. Upon consideration of the evidence, the Enquiry Officer held that the charges against the 2nd respondent are proved and he submitted a detailed report on 212. 1987. The Enquiry Officer found that charges 10 to 15 are based on charges 1 to 9 and charges 1 to 9 have been proved beyond reasonable doubt and held that charge Nos. 1 to 15 are proved. 4. Basedon the report submitted by the Enquiry Officer, Board of Directors of the Bank considered the report on 21. 1988 and passed a resolution to remove the 2nd respondent from service. Pursuant to the resolution passed by the Board of Directors, on 21. 1988, Vice President passed the order of removal from service. The order was communicated to the 2nd respondent. Thereafter the 2nd respondent was removed from service with effect from 19. 1987. 5. As against order dated 21. 1988, appeal was preferred to the Registrar as per Spl. Bye Law 13 (iv) of the Appellant Bank. Even when matter was “pending before the appellate authority, the 2nd respondent filed a petition before the Conciliation Officer, Tuticorin. The 2nd respondent set up a case of madness on his part. In the petition before the Conciliation Officer, the 2nd respondent stated that he mentally became ill and without knowing the consequence he accepted charges and admitted the offences and remitted the amount. The 2nd respondent filed petition under Section 2(a) (ii) of Industrial Disputes Act before the Labour Court, Tirunelveli and the petitioner produced all the relevant materials before the Labour Court. 6. Finding that Criminal case is pending against the 2nd respondent and that any punishment imposed in the Criminal case would be a sufficient punishment for the 2nd respondent and that no further departmental enquiry is necessitated to go into the charges, Labour Court set aside the order of punishment and ordered reinstatement with back wages. The order of Labour Court in I.D.No.273 of 1989 was challenged in W.P.No. 17529 of 1993. The order of Labour Court in I.D.No.273 of 1989 was challenged in W.P.No. 17529 of 1993. Holding that when criminal case is pending, the disciplinary proceeding may not be necessary and that if the 2nd respondent gets convicted for any offence, appellant Bank is at liberty to invoke the relevant disciplinary proceedings so as to deal with the situation, learned single Judge dismissed the writ petition preferred by the Management, which is challenged in this appeal. 7. Learned counsel for appellant submitted that when the 2nd respondent has admitted the charges before the Enquiry Officer, he was rightly found guilty and while so, the Labour Court was not justified in saying that the delinquent could not have individually committed misappropriation. It was further submitted that the Labour Court erred in ignoring the overwhelming documentary evidence to show the misappropriation. Learned counsel would further submit that when the 2nd respondent has forfeited the trust and confidence and when the management has dismissed the 2nd respondent from service, Labour Court erred in ordering reinstatement and the learned single Judge was not right in confirming the award of the Labour Court. .8. Drawing our attention to the bye-laws, the learned counsel for the 2nd respondent submitted that as per the bye-laws, only president of the Co-operative Bank has general control over the Bank and while so, the order of dismissal passed by the Vice president was not by the competent authority, which would vitiate the order of dismissal. Reiterating the contention that the 2nd respondent was a workman and that his incidental supervisory work cannot convert the workman as Supervisory character, the learned counsel for the 2nd respondent contended that the order passed by the Labour Court and the order of the learned single Judge were based on materials and the same cannot be interfered with. 9. Learned counsel for appellant contended that the 2nd respondent is not a workman within the meaning of Section 2(s) of the Industrial Disputes Act, it was further submitted that 2nd respondent was Assistant Secretary, which is an Executive Post drawing more than Rs. 1,600/- per month and therefore, 2nd respondent was not a workman under Section 2(s)(xiv) of the Industrial Disputes Act. 10. 1,600/- per month and therefore, 2nd respondent was not a workman under Section 2(s)(xiv) of the Industrial Disputes Act. 10. Per contra, the learned counsel for 2nd respondent submitted that 2nd respondent was working only as a clerk of the Bank and that he is a workman within the meaning of Section 2(s)(iv) and entitled to raise a dispute under the Industrial Disputes Act. .11. Section 2(s) of the Industrial Disputes Act reads as under: .“Workman” means any person (including an apprentice) employed in the industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied, and for the purposes of any proceedings under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequences of, that dispute or whose dismissal, discharge or retrenchment has led to that dispute.” 12. The 2nd respondent joined as Clerk in 1963 and only from 7. 1986, he was assigned the duties and responsibilities of Assistant Secretary. The proposal (312. 1986) to relax the educational qualification to hold the post of Assistant Secretary was rejected by the Register of Co-operative Societies by his order dated 14. 1987, as the 2nd respondent was not a graduate and that there was no room for relaxation of educational qualification. Even though the 2nd respondent was working as Assistant Secretary, there was no fixed salary for him and that he was doing clerical work Referring to Special Officer, Salem Central Co-operative Bank Ltd. v. Deputy Commissioner of Labour 1999 Lab IC 1368 and Pallamedu Co-operative Land Development Bank Ltd. v. A. Shanmugkam (1980) TLNJ 237, learned single Judge held that incidental work cannot convert the employee as a supervisor in character and found that the 2nd respondent would come under the purview of workman to raise an Industrial Dispute. As such, we do not find any reason to take a different view. Moreso, at this distant point of time, to hold that the Industrial Dispute raised by the 2nd respondent was not maintainable, may not be appropriate. As such, we are not inclined to interfere with the finding of Labour Court on this core as to the maintainability of Industrial Dispute. 13. Moreso, at this distant point of time, to hold that the Industrial Dispute raised by the 2nd respondent was not maintainable, may not be appropriate. As such, we are not inclined to interfere with the finding of Labour Court on this core as to the maintainability of Industrial Dispute. 13. At the outset, we may deal with a feeble attempt made by the 2nd respondent in assailing the order of dismissal from service on the ground that the impugned order was not passed by a competent authority. The learned counsel for the 2nd respondent contended that the special bye-law 13(1)(a) relating to Employees Service Conditions and General Bye-law 23(1)(a) empowers only the President of the Bank as the competent authority to pass ah order of dismissal. It was further submitted that as per general bye-law 23(1)(a), the President shall have a general control over the affairs of the Bank. It was contended that when the President has general control over all the affairs of the Bank, the enquiry was conducted and the Enquiry Officer was appointed by the order of the Vice President, who is not the competent authority to initiate and order such enquiry. It is the further contention of the 2nd respondent that the impugned order of removal dated 21. 1988 was also passed by the Vice President who is not a competent authority and the same is vitiated. The contention that the order of dismissal was passed by Vice President, who is not a competent authority, is untenable. By reading of order imposing punishment of dismissal, it is seen that it refers to resolution passed by the Board of Directors dated 21. 1988 and only oh being authorized by the Board of Directors, the Vice President has passed the order of dismissal from service,. The contention that the order was not passed by competent authority cannot be sustained. 14. The modus operandi of the misappropriation committed by the 2nd respondent appears to be to create accounts in the names of his wife, mother and brother and tampering the accounts and swindling the money. Before the Enquiry Officer, Secretary of appellant viz., Lakshmana Perumal was examined. In his evidence, M.W.1. has stated that without receipts, the 2nd respondent has credited amount in the account of his wife Jayalakshmi (S.B. Account Nos. 988 and 989) on various dates and withdrawn the amount and misappropriated. Before the Enquiry Officer, Secretary of appellant viz., Lakshmana Perumal was examined. In his evidence, M.W.1. has stated that without receipts, the 2nd respondent has credited amount in the account of his wife Jayalakshmi (S.B. Account Nos. 988 and 989) on various dates and withdrawn the amount and misappropriated. Similarly, the 2nd respondent has credited the amounts in the accounts of his father Srinivasa Iyengar (S.B. Account No. 638) and misappropriated the amount. Equally, on the same lines, the 2nd respondent has also credited amount in the account of his mother Lakshmi Ammal (S.B. Account No. 1992) without receipts and the 2nd respondent has withdrawn the amount. Same was the modus operandi of crediting the amount without receipts and withdrawl in the account-of his brother Padmanabhan (S.B. Account No. 741). In his evidence, M.W.1 has also spoken about correction made by the 2nd respondent In the ledger and misappropriation. 15. M.W.1 Lakshmana Perumal has also spoken about the misconduct of the 2nd respondent as to how the 2nd respondent has made entries in the S.B. Accounts and corrected the ledgers. In his Provident Fund Account, the 2nd respondent borrowed Rs.5,488/-and he made entry reducing Rs.1480/-. As on 12. 1986, in his provident fund account, amount of Rs.9,500/- was the balance. The 2nd respondent has paid only Rs. 5,600/-, but made entries as if he has paid the entire amount of Rs.9,500/- and thereby misappropriated Rs.4,000/-. M.W.1 has also spoken about another misconduct of the 2nd respondent. The 2nd respondent is alleged to have made jewels for his family stating that he will pay the amount in the Bank account of S. Vadivelu. Instead of paying the amount, the 2nd respondent made false entries in the account of said Vadivelu as if the amounts were paid and thereby misappropriated Rs.37,700/-. .16. While assessing the evidence and the Enquiry Officer’s report, the Labour Court observed that the 2nd respondent could not have committed misconduct and misappropriated, the amount without the help of others and further observed that the 2nd respondent alone cannot be held responsible for loss to the Bank. In our considered view, such finding of Labour Court is without any basis. In our considered view, such finding of Labour Court is without any basis. The 2nd respondent was working as the Assistant Secretary and he was in-charges of writing of accounts, maintaining registers and ledgers, circulation register, preparation of weekly statement and other statements and also in-charge of preparing monthly statements of Savings Sank Account. M.W.1 has spoken about various duties and responsibilities assigned to the 2nd respondent, which is clear from the following evidence of M.W.1: .TAMIL 17. 2nd respondent was having multifarious duties and responsibilities and in-charge of ledgers, circulation register, etc. While so, Labour Court has held that the punishment in the criminal cases would be sufficient for misappropriation, if any, and that there was no necessity to proceed with the disciplinary enquiry and impose punishment. It is fairly well settled that notwithstanding the criminal prosecution the disciplinary proceedings could be continued since nature and scope of enquiry in a criminal case is different from disciplinary proceedings. Where the Officer of the Bank has betrayed the confidence reposed in him and committed breach of trust by falsification of accounts, necessarily he has to be proceeded both under criminal law and disciplinary proceedings. The observation of the Labour Court that the punishment, if any, to be imposed in criminal case is perverse, cannot be sustained. The learned single Judge was not right in confirming the view taken by Labour Court. 18. In Criminal cases, 2nd respondent faced serious charges of misappropriation under Sections 408,465 and 477-A of IPC. Before the Enquiry Officer, the 2nd respondent had also admitted the charges. On 110. 1987, the 2nd respondent has sent a letter to the Vice President expressing regret and lamenting for the wrong done by him, pleading for mercy in the said letter to the Vice President, the 2nd respondent has stated as under: “………………But in the past due to reasons beyond my control I had erred and committed much harm to the Bank; by. Embezzling an amount to the tune of Rs. 96,557.50, which had been duly reimbursed. 2. I regard for my shameful act and lament for the wrong done…………….” Likewise, before the Enquiry Officer, on 210. 1937, the 2nd respondent has admitted the charges in writing. Inspite of admission of the charges by the 2nd respondent, both before Vice President and the Enquiry Officer, in our considered view, Labour Court was not right in overlooking the admission,. 19. 1937, the 2nd respondent has admitted the charges in writing. Inspite of admission of the charges by the 2nd respondent, both before Vice President and the Enquiry Officer, in our considered view, Labour Court was not right in overlooking the admission,. 19. Inhis report, the Enquiry Officer has clearly stated that the 2nd respondent has stated that he is admitting the charges and further enquiry is not necessitated. However, with a view to afford opportunity, inspite of admission of the 2nd respondent. Enquiry Officer proceeded with enquiry and examined M.W.1 and marked the documents. Based upon the evidence of M.W.1 and documentary evidence, the Enquiry Officer held that the charges against the 2nd respondent are proved. The Labour Court faulted the Management that even after admission of charges by the 2nd respondent and inspite of reimbursement of misappropriated amount of Rs.96,577.50ps., there was no need to proceed with the enquiry. Not withstanding the admission of charges, In compliance with the principles of natural justice, the Enquiry Officer proceeded with the enquiry and the same cannot be faulted. Even though in Himahal Pradesh Road Transport Corporation and Another v. Hukam Chand (2009) 2 SCC (L$S) 615, the Supreme Court has held that compliance with the principles of natural justice, either by holding an enquiry or by giving the employee an opportunity of hearing or showing cause, is necessary, where an employer proposes to punish an employee on a charge of misconduct which is denied, or when any term or condition of employment is proposed to be altered to the employee’s disadvantage without his consent. 20. As pointed out earlier, the 2nd respondent has paid the amount of Rs.50,557.50ps on 9. 1987 and Rs.46,000/- on 19. 1987 totalling Rs.96,557.50ps, which is the misappropriated amount. Placing reliance upon a decision of this Court in Canara Bank v. P.O., Industrial Tribunal (2008) 2 MLJ 414 , learned counsel appearing for the 2nd respondent submitted that simply because the delinquent/employee has subsequently remitted the shortage amount into the employer Bank that does not mean he had admitted the alleged offence of embezzlement and the subsequent remittance we may not go against the employee. Each case stands on different footing. Each case stands on different footing. In the cited case, it was a case of total denial of charges by the delinquent employee and the Management drew an inference of guilt on the circumstance that the delinquent employee has paid the embezzled amount. The case on hand stands on different footing. As we pointed out earlier, that the 2nd respondent has admitted the charges in clear terms both before the Vice President as well as before the Enquiry Officer. It is not as if the charges were found proved on the only circumstance that the 2nd respondent has paid the embezzled amount. The conclusion of Enquiry Officer is based upon evidence of M.W.1 and documents. 21. The 2nd respondent was faced with serious charges of misappropriation. Ignoring the admission and gravity of charges, in our considered view, Labour Court erred in ordering reinstatement. While exercising jurisdiction under Section 11-A of the Industrial Disputes Act, Labour Court is entitled to consider as to whether punishment awarded is wholly disproportionate to the delinquent employee or not. But, discretion vested in it must be exercised in a judicious manner. Labour Court ordinarily should not interfere with the discretion exercised by the employer unless the same is found to be inconsistent. With the provisions of a statute or otherwise perverse or unjust, (see Balasaheb Desai Sahakari S.K. Ltd. v. Kashinath Ganapathi Kambale (2009) 2 SCC 288). 22. Court can interfere with the punishment and exercise power only on the existence of certain factors like punishment being disproportionate to the gravity of misconduct or the existence of any mitigating circumstances, which require reduction of sentence or past conduct of workman, which required intervention of the Court or the circumstances require reduction of the punishment. Charges of misappropriation leveled against the 2nd respondent are grave in nature. We do not find any mitigating factors warranting interference with the discretion the employer and while so learned single Judge was not right in confirming the award of Labour Court ordering reinstatement. 23. As held by the Supreme Court in S.B.I. v. Ramesh Dinkar Punde (2006) 7 SCC 222: (2007) 7 MLJ 848, a Bank Officer. Is required to exercise higher standards of honesty and integrity as he deals with the money of the depositors and the customers. 23. As held by the Supreme Court in S.B.I. v. Ramesh Dinkar Punde (2006) 7 SCC 222: (2007) 7 MLJ 848, a Bank Officer. Is required to exercise higher standards of honesty and integrity as he deals with the money of the depositors and the customers. Every Officer/employee of the Bank is required to take all possible steps to protect the Interests of the Bank and to discharge his duties with utmost integrity, honesty, devotion and diligence to do nothing which is unbecoming of a bank officer. Good conduct and discipline are inseparable from the functioning of every Officer/employee of the Bank. In Suresh Pathrella v. Oriental Bank of Commerce (2006) AIR SCW 573, the Supreme Court held thus: “…… every officer of the bank at all times take all possible steps to protect the interest of the bank and discharge his; duties with utmost integrity, devotion and indulgence and nothing which will be unbecoming of a bank officer. It is a case of loss of confidence in the officer by the bank. In such, a situation, it would be a futile exercise of judicial review to embark upon the decision of the disciplinary authority removing the officer from service, preceded by an enquiry, and to direct the bank to take back the officer in whom the bank has lost confidence, unless the decision to remove the officer is tainted with malafide, or in violation of principles of natural justice and prejudice to the officer is made out.” .24. In U.P.SRTC v. Hoti Lal AIR 2003 SC 1462 : (2003) 3 SCC 605 : 2003-II-LLJ-267, the Supreme Court has held as follows: .“10. …….If the charged employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money or is engaged in financial transaction or acts in a fiduciary capacity, the highest degree of integrity and trustworthiness is a most and unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and. Restore the order of the learned single Judge upholding the order of dismissal.” 25. The appellant is a Co-operative Bank having customers from all walks of life. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We set aside the same and. Restore the order of the learned single Judge upholding the order of dismissal.” 25. The appellant is a Co-operative Bank having customers from all walks of life. While working as Assistant Secretary in the Bank, the 2nd respondent was expected to function with honesty good conduct and discipline. Because of loss of trust and confidence and having regard to proved charges, the Management had dismissed the 2nd respondent from service. In our considered view, the Labour Court was not right in interfering with the punishment of dismissal. 26. Insofar as backwages, while referring to the direction of Labour Court that payment of backwages would be subject to the outcome of criminal cases, the learned single Judge observed that the result of the criminal cases will have no bearing on disciplinary proceedings. The learned single Judge further observed that; in case the 2nd respondent gets convicted for any offence, appellant Bank is at liberty to Invoke the relevant provisions of the disciplinary proceedings so as to deal with the situation and pre-condition imposed in the order of Labour Court is undesirable. 27. The learned single Judge was not right in observing that the outcome of criminal cases would have no bearing upon the disciplinary proceedings. As submitted by the learned counsel for the appellant, in all the criminal cases in C.C. Nos. 37 to 42 of 1992, the 2nd respondent was convicted. The finding of guilt and conviction was also confirmed by the Appellate Court. The finding of guilt by the Criminal Court is certainly a relevant factor to be taken note of. .28. The Labour Court ignored the gravity of charges and admission of charges by the 2nd respondent. In our considered view, there was no proper exercise of discretion of the Labour Court and the Labour Court erred In substituting its view for that of the employer. Learned single Judge was not tight in confirming the order of the Labour Court and ordering reinstatement with backwages. The order of Labour Court and the order of learned single Judge cannot be sustained and are liable to be set aside. 29. Learned single Judge was not tight in confirming the order of the Labour Court and ordering reinstatement with backwages. The order of Labour Court and the order of learned single Judge cannot be sustained and are liable to be set aside. 29. In the result, the order of learned single Judge in W.P.No. 17529 of 1993 is set aside and writ appeal is allowed and the award of the Labour Court in I.D. No. 273 of 1989 dated 6. 1993 is quashed. However, there shall be no order as to costs. 30. During pendency of writ petition, 17-B wages were to the respondent. It is made clear that the same shall not be recovered.