Jalna District Central Co-Operative Bank Ltd. v. Umesh
2014-05-02
A.M.BADAR, R.M.BORDE
body2014
DigiLaw.ai
JUDGMENT R.M. Borde, J. 1. Heard. Rule. Rule made returnable forthwith. With the consent of the parties, petition is taken up for final disposal at admission stage. 2. Petitioner-Jalna District Central Co-operative Bank Ltd., has presented instant petition seeking quashment of the award dated 8-11-2009 passed by the Lok Nyayalaya thereby settling dispute between the bank and respondent and directing disposal of complaint ULP No. 13/2009 presented by respondent-employee, in terms of compromise decree. 3. Respondent was initially appointed as clerk with the petitioner-bank in the year 1978 and later on he was promoted as Banking Officer Grade-II and thereafter as Banking Officer Grade-I. At the relevant time in the year 2008, respondent was posted as Branch Manager at Market Yard branch, Jalna. On receipt of complaint, it was noticed by the petitioner-bank that respondent in collusion with some other employees of the bank has illegally withdrawn amount from the accounts of few customers. The amount was stated to have been deposited in the account of the customers under the scheme floated by the Government for providing aid to weaker section. Respondent was placed under suspension and an enquiry was conducted at the instance of the independent enquiry officer. Respondent was served with charge-sheet on 24-1-2009 and after holding due enquiry, Enquiry Officer submitted his report to the General Manager on 4-3-2009. On receipt of enquiry report, the bank took decision of dismissing respondent from services. Order of dismissal issued by the bank was challenged by respondent by tendering complaint bearing ULP No. 13/2009 to the Labour Court, Jalna. In the meanwhile, since the bank was facing economic hardship and it was revealed that the affairs of the bank were not carried out in proper manner, the Commission of Co-operation passed an order directing appointment of Board of Administrators. Composition of Board was later on changed and one Shri S.S. Kshirsagar was entrusted with the charge of administration of petitioner-bank. It is stated that resolution came to be passed in the general body meeting convened by the Board on 11-8-2009 for holding re-enquiry in respect of allegations levelled against respondent through the Government Officer. Accordingly, the President of the Administrative Board appointed Assistant Registrar, Co-operative Societies, Bhokardan as Enquiry Officer and directed to submit the report. Assistant Registrar, Co-operative Societies, Bhokardan, submitted his report on 14-10-2009 recommending imposition of lesser punishment.
Accordingly, the President of the Administrative Board appointed Assistant Registrar, Co-operative Societies, Bhokardan as Enquiry Officer and directed to submit the report. Assistant Registrar, Co-operative Societies, Bhokardan, submitted his report on 14-10-2009 recommending imposition of lesser punishment. The District Deputy Registrar, Jalna, issued a letter to the President of the Administrative Board of which he himself was the President thereby recommending reinstatement of respondent and directing imposition of punishment of stoppage of one increment. Resolution came to be passed in the meeting of Administrative Board resolving to reinstate respondent and imposition of lesser punishment i.e. stoppage of one increment and disentitling the respondent to claim backwages. Complaint ULP No. 13/2009 presented by respondent was placed before Lok Nyayalaya on 8-11-2009 and in view of resolution adopted by the Administrative Board on 13-10-2009, order in terms of settlement came to be passed by the Lok Nyayalaya thereby disposing of complaint ULP No. 13/2009. 4. According to petitioner, reinstatement of respondent in service in pursuance to settlement before Lok Nyayalaya is a fraudulent act by respondent in collusion with Administrative Board. It is the contention of petitioner that as a result of various complaints received from the members relating to maladministration by Three Member Administrative Board, direction was issued for conducting special audit and accordingly, one Shri R.T. Shelke, Special Auditor Group-I, Co-operative Societies, was appointed as Enquiry Officer. Enquiry Officer has commented upon the decision of the Administrative Board of settling the matter with respondent and directing his reinstatement. It is observed in the report that the fact of initiation of criminal prosecution against respondent for committing misappropriation of funds was not brought to the notice of the general body and a decision was taken for taking lenient view against respondent. The District Deputy Registrar, on receipt of report directed that the matter be placed before the general body of the society for taking appropriate decision in the matter in the light of the report by the Special Auditor. General Body Meeting of the society was held on 13-8-2011 wherein it was resolved to authorise Chairman of the Managing Board of the bank to take appropriate decision in respect of course to be adopted against respondent in the light of the report of the Special Auditor. The Managing Committee of the bank thereupon resolved on 28-9-2011 to dismiss respondent and other employees from service.
The Managing Committee of the bank thereupon resolved on 28-9-2011 to dismiss respondent and other employees from service. Order of dismissal in pursuance to the decision by the Managing Committee was served on respondent on 30-9-2011. Respondent challenged the order of dismissal issued by petitioner-bank in complaint ULP No. 14/2011 presented to the Labour Court. Penalty of dismissal from services imposed against respondent was without holding any enquiry and, according to the employee, it amounts to double jeopardy. Complaint presented by respondent was contested by the bank contending that compromise arrived at Lok Nyayalaya was fraudulent. It is alleged that respondent-employee in collusion with Board of Administrator has colluded in settling the dispute before Lok Nyayalaya. Labour Court, however, after observing the procedure prescribed in that behalf, by judgment dated 29-6-2012 allowed the complaint and directed re-instatement of respondent-employee with continuity and backwages with effect from 30-9-2011. Order passed by the Labour Court was subjected to challenge in Revision ULP No. 42/2012 presented by petitioner-bank. Revision application was partly allowed. The order passed by the Labour Court directing reinstatement of respondent with continuity in service is maintained, however, it is declared that respondent-employee shall be entitled to 50% of the backwages from 30-9-2011 till the date of his reinstatement. Order passed by the Revisional Court was subject-matter of challenge before the learned Single Judge of this Court at the instance of employer-bank as well as the employee. Learned Single Judge directed dismissal of the petition presented by employer however, petition presented by employee came to be allowed and the order refusing to grant 50% backwages came to be set aside thereby holding the employee entitled to receive full backwages. Order passed by the learned Single Judge is subject-matter of challenge in Letters Patent Appeal presented by employer-bank separately. In the instant petition, however, challenge is raised by the employer to the award passed in the Lok Nyayalaya on 8-11-2009 thereby settling the dispute raised in complaint ULP No. 13/2009 and the resolution No. 18 passed in the meeting dated 30-10-2009. 5. It is the contention of petitioner-bank that respondent is charged with misappropriation of funds which is a serious issue and further that he is being prosecuted for committing misappropriation of funds of the bank in criminal case lodged against him.
5. It is the contention of petitioner-bank that respondent is charged with misappropriation of funds which is a serious issue and further that he is being prosecuted for committing misappropriation of funds of the bank in criminal case lodged against him. It is contended that respondent in collusion with Administrative Committee headed by Shri Kshirsagar was instrumental in recording decision in the form of resolution No. 18 to reinstate respondent. It is contended that it was the duty of the Administrative Committee to point out to the general body that the allegations levelled against respondent are of serious nature and that he is being prosecuted in criminal case. Withholding of material information from general body, according to petitioner, is fraudulent act by the members of the Administrative Committee in collusion with respondent. In pursuance to the decision of the general body the Chairman of the Administrative Committee directed appointment of Assistant Registrar, Co-operative societies, to conduct re-enquiry and submit the report. It is contended that when there was earlier enquiry which was concluded there was no reason for the Administrator to direct fresh enquiry. On receipt of the report of the Enquiry Officer the Chairman of the Administrative Committee in his capacity of District Deputy Registrar, recommended reinstatement of respondent. Resolution came to be passed on 30-10-2009 in the meeting of Administrative Committee headed by District Deputy Registrar to enter into settlement with respondent. It was resolved to reduce the punishment of dismissal from service and direct stoppage of one yearly increment. It was resolved that the employee shall not be paid backwages during suspension period till reinstatement. It was resolved to reinstate the employee with continuity in service subject to condition that the employee shall withdraw the complaint lodged against bank. In pursuance to the resolution adopted in the meeting of the general body, the matter was placed before Lok Nyayalaya and settlement was arrived at. Respondent-employee has been reinstated in service in pursuance to the order issued in Lok Nyayalaya thereby disposing of complaint in terms of the settlement. Respondent agreed for penalty of stoppage of one increment and also agreed not to claim backwages during the period of suspension till the date of re-instatement. 6. Although petitioner contends that the matter was again scrutinized by the Special Auditor who has recommended appropriate action in the year 2011, nothing has transpired till the year 2014.
Respondent agreed for penalty of stoppage of one increment and also agreed not to claim backwages during the period of suspension till the date of re-instatement. 6. Although petitioner contends that the matter was again scrutinized by the Special Auditor who has recommended appropriate action in the year 2011, nothing has transpired till the year 2014. Respondent has been reinstated in employment on 9-11-2009. The Managing Committee of the bank in view of authorisation issued by the general body proceeded to direct dismissal of respondent and other employees without holding any enquiry. As stated above, the decision taken by the bank in respect of dismissal of employee was subject matter of challenge in complaint ULP No. 14/2011 which has been dismissed and challenge to the said order has been turned down by the Revisional Court as well as this Court. While opposing complaint ULP No. 14/2011 it was canvassed by the bank that the decision before Lok Nyayalaya of settling the matter and reinstating respondent-employee is fraudulent and is a result of collusion between respondent and the Administrator. However, bank though raised contention in respect of fraud and collusion, failed to adduce any evidence in that regard before the Labour Court. It is observed by the Labour Court while deciding the matter that since the dispute pending before the Labour Court in the shape of complaint ULP No. 13/2009 was settled before Lok Nyayalaya and the order of dismissal came to be set aside by the act of the parties, earlier enquiry report which was the basis of order of termination also shall be deemed to be set aside. It was not open for the Board of Directors to consider earlier report of enquiry and direct termination of services of employee. The order directing reinstatement of employees and setting aside order passed by the bank on 30-9-2011 has attained finality since the petition presented by bank has been dismissed by learned Single Judge. It is to be taken note of that once the employee has undergone punishment for the alleged misconduct, he cannot be again punished for the same cause. In the instant matter, as per the decision of the Lok Nyayalaya, lighter punishment of stoppage of one increment was imposed, respondent-employee was held disentitled to claim backwages from the date of issuance of order of suspension till the date of his reinstatement.
In the instant matter, as per the decision of the Lok Nyayalaya, lighter punishment of stoppage of one increment was imposed, respondent-employee was held disentitled to claim backwages from the date of issuance of order of suspension till the date of his reinstatement. The employee accepted the punishment and has undergone the same. He has been reinstated in the year 2009, however, it was not open for the bank to punish the employee for the same cause again. Imposition of punishment at latter point by petitioner amounted to double jeopardy which cannot be permitted. 7. So far as allegations of fraud made by petitioner in the petition are concerned, it is a matter of detailed investigation. Petitioner-bank failed to substantiate the allegations of fraud although such contentions were raised before the Labour Court. In the instant matter also, merely on the basis of pleadings, it cannot be inferred that respondent is guilty of committing fraud in collusion with the Board of Administrators. Reference can be made to the Judgment of the Apex Court in the matter of Bhaurao Dagdu Paralkar vs. State of Maharashtra and others, reported in (2005) 7 SCC 605 . The Apex Court in paragraph Nos. 9 to 16 of the judgment has observed thus: 9. By "fraud" is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from ill-will towards the other is immaterial. The expression "fraud" involves two elements, deceit and injury to the person deceived. Injury is something other than economic loss, that is, deprivation of property, whether movable or immovable or of money and it will include any harm whatever caused to any person in body, mind, reputation or such others. In short, it is a non-economic or non-pecuniary loss. A benefit or advantage to the deceiver, will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied. [See Vimla (Dr.) vs. Delhi Admn. and Indian Bank vs. Satyam Fibres (India) (P) Ltd.) 10. A "fraud" is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. (See 5.
[See Vimla (Dr.) vs. Delhi Admn. and Indian Bank vs. Satyam Fibres (India) (P) Ltd.) 10. A "fraud" is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. (See 5. P. Chengalvaraya Naidu vs. Jagannath.) 11. "Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either by letters or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letters. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by willfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. An act of fraud on Court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. (See Ram Chandra Singh vs. Savitri Devi.) 12. In Shrisht Dhawan vs. Shaw Bros., it was observed as follows: (SCC p. 553, para 20)] "Fraud" and collusion vitiate even the most solemn proceedings in any civilised system of jurisprudence. It is a concept descriptive of human conduct. Michael Lelvi likens a fraudster to Milton's sorcerer, Camus, who exulted in his ability to, "wing me into the easy hearted man and trap him into snares". It has been defined as an act of trickery or deceit.
It is a concept descriptive of human conduct. Michael Lelvi likens a fraudster to Milton's sorcerer, Camus, who exulted in his ability to, "wing me into the easy hearted man and trap him into snares". It has been defined as an act of trickery or deceit. In Webster's Third New International Dictionary "fraud" in equity has been defined as an act or omission to act or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black's Law Dictionary, "fraud" is defined as an intentional perversion of truth for the purpose of inducting another in reliance upon it to part false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. Section 17 of the Contract Act, 1872 defines "fraud" as an act committed by a party to a contract with intent to deceive another. From the dictionary meaning or even otherwise fraud arises out of the deliberate active role of the representator about a fact, which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of fact with knowledge that it was false. In a leading English case i.e. Derry vs. Peek what constitutes "fraud" was described thus: (All ER p. 22 BC) "Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in it's truth, or (iii) recklessly, careless whether it be true or false." But "fraud" in public law is not the same as "fraud" in private law. Nor can the ingredients, which establish "fraud" in commercial transaction, be of assistance in determining fraud in administrative law. It has been aptly observed by Lord Bridge in Khawaja vs. Secy. of State for Home Deptt.
Nor can the ingredients, which establish "fraud" in commercial transaction, be of assistance in determining fraud in administrative law. It has been aptly observed by Lord Bridge in Khawaja vs. Secy. of State for Home Deptt. that it is dangerous to introduce maxims of common law as to the effect of fraud while determining fraud in relation of statutory law. "Fraud" in relation to the statute must be a colourable transaction to evade the provisions of a statute. "If a statute has been passed for someone particular purpose, a Court of law will not countenance any attempt which may be made to extend the operation of the Act to something else which is quite foreign to its object and beyond its scope.' Present day concept of fraud on statute has veered round abuse of power or mala fide exercise of power. It may arise due to overstepping the limits of power or defeating the provision of statute by adopting subterfuge or the power may be exercised for extraneous or irrelevant considerations. The colour of fraud in public law or administrative law, as it is developing, is assuming different shades. It arises from a deception committed by disclosure of incorrect fact knowingly and deliberately to invoke exercise of power and procure an order from an authority or tribunal. It must result in exercise of jurisdiction which otherwise would not have been exercised. That is misrepresentation must be in relation to the conditions provided in a section on existence or nonexistence of which power can be exercised. But non-disclosure of a fact not required by a statute to be disclosed may not amount to fraud. Even in commercial transactions non-disclosure of every fact does not vitiate the agreement. 'In a contract every person must look for himself and ensure that he acquires the information necessary to avoid bad bargain.' In public law the duty is not to deceive." (See Shrisht Dhawan vs. Shaw Bros. SCC p. 554, para 20.) 13. This aspect of the matter has been considered recently by this Court in Roshan Deen vs. Preeti Lal, Ram Preeti Yadav vs. U.P. Board of High School and Intermediate Education, Ram Chandra Singh case and Ashok Leyland Ltd. vs. State of T.N. 14. Suppression of a material document would also amount to a fraud on the Court. (See Gowrishankar vs. Joshi Amba Shankar Family Trust and S.P. Chengalvaraya Naiu case.) 15.
Suppression of a material document would also amount to a fraud on the Court. (See Gowrishankar vs. Joshi Amba Shankar Family Trust and S.P. Chengalvaraya Naiu case.) 15. "Fraud" is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. Although negligence is not fraud but it can be evidence on fraud; as observed in Ram Preeti Yadav case. 16. In Lazarus Estates Ltd. vs. Beasley Lord Denning observed at QB pp. 712 and 713; (All ER p. 345 C) "No judgment of a Court, no order of a minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything." In the same judgment Lord Parker, L.J. observed that fraud vitiates all transactions known to the law of however high a degree of solemnity. (p. 722) These aspects were recently highlighted in State of A.P. vs. T. Suryachandra Rao." 8. Placing reliance on the judgment in the matter of T. Vijendradas and another vs. M. Subramanian and others reported in 2008(1) All M.R. 446, petitioner contends that judgment, decree or order obtained by playing fraud on the Court is a nullity, non est in the eye of law. Such a judgment, decree or order by the first Court or by the final Court has to be treated as nullity by every Court, superior or inferior. It can be challenged in any Court, at any time, in appeal, revision, writ or even in collateral proceedings. In the instant matter, it cannot be said that petitioner has established fraud at the instance of somebody on the Court. However what is alleged is that there is collusion between respondent and the Board of Administrators and they together persuaded the Court to settle the matter. Placing reliance on the judgment in the matter of A.V. Papayya Sastry and others vs. Government of A.P. and others, reported in AIR 2007 SC 1546 it is contended that judgment, decree or order obtained by fraud is to be treated as nullity, whether by the Court of first instance or by the final Court. And it has to be treated as non est by every Court, superior or inferior.
And it has to be treated as non est by every Court, superior or inferior. It is contended by respondent by placing reliance on the judgment of the Supreme Court in the matter of P.T. Thomas vs. Thomas Job, reported in AIR 2005 SC 3575 that judicial review of the decision arrived at Lok Nyayalaya is not permissible on the ground as raised in the writ petition. The Supreme Court, referring to the decision in the matter of Board of Trustees of the Port of Visakhapatnam vs. Presiding Officer, Permanent, Lok Adalat-cum-Secretary, District Legal Services Authority, Visakhapatnam and another, reported in 2000(5) ALT 577 , as observed that "The award is enforceable as a decree and it is final. In all fours, the endeavour is only to see that the disputes are narrowed down and make the final settlement so that the parties are not again driven to further litigation or any dispute. Though the award of Lok Adalat is not a result of a contest on merits just as a regular suit by a Court on a regular trial, however, it is as equal and on par with a decree on compromise and will have the same binding effect and conclusive just as the decree passed on the compromises cannot be challenged in a regular appeal, the award of the Lok Adalat being akin to the same, cannot be challenged by any regular remedies available under law including invoking Article 226 of the Constitution of India challenging the correctness of the award on any ground. Judicial review cannot be invoked in such awards especially on the grounds as raised in this writ petition." In order to contend that the order of dismissal issued on second occasion by the petitioner-bank amounts to double jeopardy, reliance is placed on judgment of the Division Bench of this Court in the matter of Shrinivasan Ranganathan vs. Air India Ltd. Bombay and another, reported in 2010(4) Mh.L.J. 325 . It is contended that on issuance of order of dismissal on the first occasion, respondent-employee approached Labour Court by presenting complaint and the complaint presented by respondent was settled in view of resolution No. 18 adopted by the Board. Punishment of dismissal from service has been reduced to stoppage of one increment and respondents were held disentitled to claim backwages during the period of suspension.
Punishment of dismissal from service has been reduced to stoppage of one increment and respondents were held disentitled to claim backwages during the period of suspension. Once lesser punishment is imposed and respondent is reinstated in employment, it is not open for the petitioner-bank to impose harsher punishment once again for the same cause or on the same allegations and it would amount to double jeopardy. 9. It is to be taken note of that respondent herein is reinstated in employment in the year 2009 whereas instant petition challenging the decision in respect of disposal of complaint in view of settlement before Lok Nyayalaya on 18-11-2009 is subjected to challenge in the petition presented in the year 2013. In the meanwhile, respondent-employee has retired on attaining age of superannuation. At this belated stage and for the reasons recorded above, petition does not deserve consideration. Petition is devoid of substance hence stands rejected. Rule discharged. Pending civil application, if any, does not survive and stands disposed of. Petition allowed.