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South Central Railway Employees' Co-operative Credit Society Vs. Labour Court and Ors. (14.04.1982 - APHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberW.P. No. 1973 of 1980
Reported in1988(33)ELT351b(AP); (1983)ILLJ469AP
ActsAndhra Pradesh Shops and Establishment Act
AppellantSouth Central Railway Employees' Co-operative Credit Society
RespondentLabour Court and Ors.
.....industrial - reinstatement - andhra pradesh shops and establishment act - employee terminated by secretary of society pursuant to an inquiry conducted by himself reinstated by court below - such reinstatement challenged - authority of secretary to hold inquiry and subsequently order of termination not proved - evidences on record shows unblemished work of employee for twelve years - act of employee caused no detriment to employer - employee not deemed to be holding any position of confidence which employer could be said to have lost - grounds for termination of employee invalid - reinstatement of invalidly terminated employee justified. - - (3) the impugnmed order directing the reinstatement of the thired-respondent into service against whom the employer lost confidence is illegal..........where, for instnace, the office of the employer was comparatively a small one and the dismissed employee held the position of the secretary, a position of confidence and trust, and the employer had lost confidence in the concerned employee, reinstatement was held to be not fair to either party.' (further held) at page 66 in para 6 : 'the tribunal has to examine, therefore, the circumstance of each case to see whether reinstatemet of the dismissed employee is not inexpedient or improper.' (also held) at page 66 in para 7 : 'in the present case, we are of the view that reinstatement directed by the tribunal was inexpendient. the respondet had served the company in all for a period of twelve months. it was not as if he had been induced to give up any employment he was engaged in for.....

1. The petitioner, South Central Railway Employees' Co-operative Credit Society, represented by its Secretary, seeks a writ of certiorarai quashing the order of the Labour Court, Hyderabad. 1st respondent herein, passed in S.A. No. 2 of 1978.

2. The relevant facts and circumstances giving rise to this writ petition may be stated in brief : The 3rd respondet, A. Ramdas, was at first appointed as an attender in the year 1966 and was promoted as a Record Keeper in 1968, but he was doing despatch work. He was placed under suspension on 7 December, 1972, pending enquiry by the Secretary of the petitioner-society. Charges were framed on 23 December, 1972, to which the thrid respondent submitted his explanation on 9 January, 1973. The petitioner, without holding an enquiry and without assigning any reasons, issued another charge-sheet, dated 14 Septemebr, 1973, with similar charges, to which the third-respondent submitted his explanation on 20 September, 1973, denying the charges. Enquiry was thereafter held and he was found guilty partly of the charges by the enquiry officer and based on that report, the petitioner removed the 3rd respondet from service by order dated 10 February, 1976. The said order was challenged before the appellate authority under the Andhra Pradesh Shops and Establishment Act, 2nd respondent herein, by way of an appeal. The appeals was allowed and a direction was given to reinstate the third respondent into service with full back wages and attendant benefits. The petitoner-society preferred a second appeal before the Labour Court, 1st respondent herein, and the same was dismissed by order dated 4 April, 1980. Hence this writ petition.

3. The contentions of the learned cousnel for the petitioner are : (1) The Courts below have relied on the circumstances, viz., the secretary of the Society, who nominated and constituted the enquiry officer, had no authority, conferrd or delelgated, as the enquiry officer will have to be appointed by the Managing Committee alone, and, therefore, held that the enquiry is vitiated and void. Since there was evidence of delegation of power by the Managing Committee to the Secretary and the Courts below, wihtout giving any opportunity to the petitoner for establishing the same, allowed the case of the third respondent solely based on the said ground and, therefore, the impugned order has to be set aside. (2) The Courts below ought ot have directed for conducting enquiry afresh in case the enquiry was found to be defecftive. (3) The impugnmed order directing the reinstatement of the thired-respondent into service against whom the employer lost confidence is illegal and contrary to the case-law, as the third-respondent would at best be entitled to compensation for loss of service.

4. The counter contentions on behalf of the third respondent are that the reinstatment was quite justified and the two fact-finding Courts below have, after detailed consideration and discussion of the material on record, concluded that the charges framed have not been held established and, therefore, the question of remanding the matter to the enquiry officer does not arise. It is also contended, relying on a Division Bench judgment of this Court in W.P. No. 1036 of 1978, that the order of reinstatement was not unjustified, as there are no unusual or exceptional circumstances to the general rule of reinstatement, which has to be granteed when the charges were held not proved.

5. The first contention is that, no doubt, the Managing Committee is the punishing authority and, therefoer, it is competent for it to constitute an enquiry officer, and, since the secretary was authorised by the Manangaing Committee to constitute an enquiry officer and inasmuch as there was material on record to show the same, the lower Courts erred in holding that the enquiry was vitiated. The first appellate authority held on this :

'There is no dispute about the fact that the punishing authority is the Managing Committee of the respondent-society and not the secretary. It is, however, contended by the counsel for respondent that the action taken against the appellant cannot be questioned on the ground of incompetnece as the society itself authorised and took such action. It is seen from the charge-sheet and the order appointing enquiry officer that they are issued by the secretary of the respondent-society. There is nothing on record to show that they were issued as per the direction of the Managing Committee of the society and no material is also placed in the record. The language used therein also does not indicate that they were issued at the instance of the Managing Committee of the Society. No material was also placed before me to show that the secretary of the respondet-society was delegated with such powers or he was specially authorised in this regard.'

The second appellate authority, likewise, held :

'Admittedly, the punishing authority is the, Managing Committee of the respondent-society but not the secretary of the said society. But in the instant case, it is the secretary of the society that has issued the charge-sheet and it is secretary of the said society that appointed the enquiry officer. There are no delelgation of powers by the employeer to its secretary to do such acts. So, the said enquiry is vitiated ont that ground. In the instant case, no evidence is placed to show that the employer-society has delegated such power to its secretary.'

There are absolutely no grounds whatsoever to take a view at variance with the Courts below on this aspect of the case. In spite of ample oppotunity, no record has been placed before either the first appellate authority or the second appellate authority and, therefore, the faint and feeble attempt at this stage to canvass this aspect of the case, has no substance and, therefore, the same is rejected. It is equally untenable to contned that the Courts below have solely based their decisons on this ground alone. In fact, various points on merits also have been pressed into service and each one of them has been carefully considered and a finding also has been appended thereto. Therefore, this technical ground apart, on merits also there has been adjudication by both the Courts below. Hence the unmerited contention is rejected.

6. Coming to the second contention, which is almost a corollary to the first one, viz., in case the enquiry is defective, the same ought to have been remanded by the Courts below, is devoid of merit and substance. The enquiry, technical defect apart, has been conducted, evidence has been let in and the Courts below have discussed pros and cons and held that in the light of the testimony, the charges levelled have not been substantiated and, therefore, it is too late in the day to ask for remand of the case for providing an opportunity to fill up the lacuanae. The decisions in Firestone tyre and Rubber Co. v. Their Workmen, [1981-II L.L.J. 218] and W.P. No. 3020 of 1976 dated 30 January, 1979, of this Court relied on by the learned counsel for the petitioner, are of no assistance. Hence, this argument should not detain us any longer and, therefore, I have no hesitation to turn down the arguments advanced on this aspect of the matter.

7. The third contention, which is rather vital may now be adverted to. The submision in the main is that where there is a loss of confidence in the employee the continuance of the said person in service should not normally be directed; the damages in lieu of continuance in service is the adequate remedy. Before adjudicating upon this, the case law may be noticed. In Chembur Co-operative Industrial Estate v. M. K. Chhatre, [1975-II L.L.J. 357] at page 359 in para 3, the Supreme Court held :

'However, the facts relating to the removal by the 2nd respondent of a letter from the architects show that he had clearly forfeited the confidence of his employers. We do not thehrefore think that we would be justified in ordering reinstatement of the 2nd respondent. It was also urged on behalf of the appellant-society that it is not now dishcarging any function. But this question had not been raised in time not did the 2nd respondent have an opportunity to meet that point. We are, therefore, deciding this appeal without any reference to this representatio. We must, however, refer to the fact that the 2nd respondent was prepared to accept payment at the rate of Rs. 380 a month from the date of his suspension till the date of the award by the Tribunal. This would come to Rs. 22,800. Mr. Datta appearing for the appeallant-society had first wanted to get the instructions of his clients to this proposal. But after the arguments were over he stated that he was accepting the offer. In the circumstnaces we think it would be enough if we order that compensation be paid to the 2nd respondent as indicated above after deducting the amount of Rs. 7,432.98 already withdrawn by him.

In Monghyr Factory of I. T. C. Ltd. v. Labour Court, [1978-II L.L.J. 354], the Supreme Court held :

'......... it should be remembered, as observed in the Punjab National Bank's case [1959-II L.L.J. 666], that every case has to be judged on its special facts. In the present case, the service card of the employee shows that he had committed several faults in the past and, was sometimes warned, sometimes suspended and sometimes reprimanded for all those omissions and commissions. In the incident in question, he was clearly guilty of neglect of duty in putting wrong sides, although they were wrongly supplied to him, while packing the cigarettes on the packing machine. Even shortly before the incident in question, as pointed out to the High Court on behalf of respondet No. 3 himself he was once warned for absence from proper place of work without permission and was suspended for three days for an act subversive of discipline before he was dismissed in June, 1966. We were also informed by the management that respondent No. 3 had been superannuated according to them in December, 1972. The fact that he was superannuated was not disputed by Mr. Santokh Singh. What was, however, asserted on his behalf was that he had been superannuated not in December, 1972, but about two years later. At the time of the hearing of the appeal, the management offered to pay a very reasonable amount of compensation and all sums of money due to the workman on account of gratuity and provident fund. We think on the facts and in the circumstances of this case, it is not a fit case where the High Court ought to have sustained the order of the reinsntatement as passed by the Labour Court ........'

The Supreme Court in Francis Klein & Co. (P) Ltd. v. Their Workmen, [1971-II L.L.J. 615] held at page 619, para 8 :

'In our view when an employer loses confidence in his employee particularly in respect of a person who is discharging an office of trust and confidence there can be no justification for directing his reinstatement. The post of a durwan in an industrial concern where valuable property, both manufactured goods and assets, require to be guarded is such a post and when one of his colleagues calls on him to assist him in apprehending a thief the refusla to do so is certainly an act which justified the employer in losing confidence in him.'

Likewise, in Workmen of Sudder Officer v. Management, [1971-II L.L.J. 620] it was held at page 629 in para 29 :

'There is no controversy that the workman, Bhola Nath Thakur, was the head clerk at the relevant time in the company's Engineering Godown and he was responsible for the maintenance of stores of the value of Rs. 6 lakhs. This has been accepted by the union itself and if that is so the workman was holding a very responsible post where integrity and honesty are quite essential. The management could have taken disciplinary action against the workman according to law. But it has not done so in this case. On the other hand, when the cricumstances showed that the company can no longer place its trust and confidencne in the workman the management terminated his services by making available to him all amounts he would be entitled to in case of termination simpliciter under clause 9 of the Standing Orders.'

In Ruby General Insurance Co. v. Chopra [1970-I L.L.J. 63] it was held at page 65 in para 6 :

'The normal rule is that in cases of invalid orders of dismissal industrial adjudication would direct reinstatement of a dismissed employee. Nevertheless, there would be cases when it would not be expendient to adopt such a course where, for instnace, the office of the employer was comparatively a small one and the dismissed employee held the position of the secretary, a position of confidence and trust, and the employer had lost confidence in the concerned employee, reinstatement was held to be not fair to either party.'

(Further held) at page 66 in para 6 :

'The Tribunal has to examine, therefore, the circumstance of each case to see whether reinstatemet of the dismissed employee is not inexpedient or improper.'

(Also held) at page 66 in para 7 :

'In the present case, we are of the view that reinstatement directed by the tribunal was inexpendient. The respondet had served the company in all for a period of twelve months. It was not as if he had been induced to give up any employment he was engaged in for joining the service of the appellant-company. The company's establishment in Delhi was comparatively a small establishment. There can be doubt that the position of a stenographer in such an establishment would be one of confidence and trust as he would be taking down dictation and typing out all kinds of matters including sometimes confidential and even secret matters ............ If the regional manager were to entertain a the regional manager were to entertain a feeling that, if reinstated, the respondent would in future also retain with him copies documents of a confidential nature whenever the responded felt that such retention would be of use or advantage to him, such a feeling on the part of the regional manager that he can no longer trust the respondent with any confidential matter, cannot be regarded as altogether unjustified. The regional manager might well feel that if the respondent was capable of collecting evidence against the company, he might in future collect perhaps evidence of a more dangerous and harmful nature ..........'.

Yet another decision relied on by the learned counsel for the petitioner is the one reported in Binny Ltd. v. Workmen, (1973) 43 FJR 437, where it was held : at page 440 :

'It was sought to be contended before us on behalf of the management that the Labour Court erred in holding that management had no right to cancel leave which has been granted to Ramachandran. The provisions of Standing Order 8(ii) were fully applicable and since Ramachandran had absented himself for 8 consecutive working days without leave, it should have been held that he had left the company's service without notice, thereby terminating the contract of service. It has further been pointed out that the 'Labour Court after having found that Ramchandran had obtained leave on a false pretext, fell into a serious error in saying that no question of management losing confidence in him arose. It was quite clear that on his own admission he had acted in a manner by which the management could possibly have no confidence in him for the future. His reinstatement, as well as the payment of Rs. 5,000 as back wages therefore, could not have been ordered according to the well-settled law and principles on the point .....'

On a conspectus of the case law cited above, their following principles could be said to emerge : (1) In order to arrive at a conclusion whether the employer has lost confidence in the employee, there cannot be any strait-jacket principles as each case has to be assessed on its peculiar facts and circumstances; (2) The derelict observance of any act by the employee giving rise tot he complaint of losing confidence in him must be a deliberate one. An innocuous and inadvertent act which causes detriment will not be a circumstance for losing confidence in the employee; (3) The normal rule is that in cases of invalid orders of dismissed employee and the exception is expendience, where, say, the employee held a position of confidence and trust and the employer lost confidence, reinstatement will not be fair.

8. In the light of the above, we will now examine the case on hand. The charges framed against the respondent-employee are that on one occasion he has failed to deliver the cheques tot he persons intended and on another he is said to have delivered the cheques to wrong persons. The respondent-employee's case is that he brought back the cheques on those dates and returned the same in the office, as he could not find the persons (on whom they were) intended to be delivered. The finding in respect of one count was not guilty and regarding the second it was held that he did not properly deliver the cheques. Even regarding this, it is held that no unimpeachable evidence has been let in to sustain the finding. There is also evidence on record to show that the employee's 12 years of service was unblemished.

9. In view of the above material, it is not at all expedient to hold that the employee was holding any position of confidence and trust and thereby the employer could be said to have lost confidence in him. The act attributed to the employee cannot be said to be one amounting to divulgence of any secrecy which could be said to have caused any detriment to the employer. The past long record of service, which is unblemished, lends further credence tot he case for reinstatement. In my judgment, therefore, there is no compelling circumstance to make a departure from the normal rule, which is, reinstatement in cases where an employee has been dismissed on invalid grounds, and award compensation in lieu thereof. The case thus does not call for the issue of the writ sought for, as the impugned order is neither illegal nor void.

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