V.P. Gopalan Nambiyar, J.
1. I, therefore, proceed to judgment.
2. Respondent 1 in this original petition was a salesman employed under the petitioner-firm. For having sold an umbrella on 9 May 1961, without a bill and appropriated the same price to himself, the petitioner framed a charge against him and proposed to hold an enquiry into the same on 26 May 1961 at 3-30 p.m. Notice of the charge and of the proposed enquiry was given to respondent 1 on 19 May 1961. Respondent 1 by letter dated 23 May 1961 (copy filed as Ex. P. 1) informed the petitioner that he did not propose to participate in the enquiry as he did not expect justice at the petitioner's hands. The enquiry proceeded on 25 May 1961 in the absence of respondent 1. One Sundar Singh, a salesman of the petitioner's shop, and one Sulaiman, the cashier, were examined. On their evidence, the petitioner held the charge proved and passed orders dismissing respondent 1 from service.
3. Respondent 1 preferred an appeal under Section 41 of the Travancore-Cochin Shops and Establishments Act, 1125; but after the coming into force of the Kerala Shops and Commercial Establishments Act, 34 of 1960, the appeal was disposed of by respondent 2, the appellate authority constituted under its provisions. There is no controversy before me that the appeal was liable to be dealt with under the provisions of the said Kerala Act. Respondent 2 found against the case of respondent 1 that there was no enquiry at all on 25 May 1961, and held that an enquiry did materialize on that day at which respondent 1 failed to be present. He further held that the evidence at the enquiry did not support the charge or the finding of the petitioner. He commented on the fact that the cash bill relating to the transaction had not been produced and the purchaser of the umbrella sold without the bill had not been examined. Respondent 2 recorded:
In the circumstances, I am convinced that the evidence in the domestic enquiry does not have any substantial weight so as to come to the conclusion of the respondent. The appellant cannot be. said to be guilty of the charge levelled against him from the evidence adduced in the domestic enquiry.
4. It would appear that before respondent 2, the two witnesses, Sundar Singh and Sulaiman, were again examined. Besides, the petitioner and respondent 1 were also examined in the appeal. Having recorded the finding noticed above, respondent 2 proceeded to state that the petitioner had an opportunity to adduce farther evidence before him and that even at the enquiry in the appeal, the petitioner had failed to establish the Charge, even the primary witness Sundar Singh, having denied his participation in the enquiry before the petitioner. In the result, respondent 1 set aside the order of dismissal and directed reinstatement of respondent 1 with arrears of wages, at the rate of Rs, 80 per mensem amounting to Rs. 3,280. On default of reinstatement, respondent 1 was held entitled to claim a lump-sum compensation of Rb. 4,500 from the petitioner. A certified copy of the order of respondent 2 has been filed as Ex. P. 2. The original petition Is to quash Ex. P. 2.
5. Section 18 of the Kerala Shops and Commercial Establishments Act, 34 of 1960, under which the appeal of respondent 2 was disposed of, in so far as the same is material, reads as follows:
18. Notice of dismissal,-(1) No employer shall dispense with the services of an employee employed continuously for a period of not less than six months, except for a reasonable cause and without giving Such employee at least one month's notice or wages in lieu of such, notice: provided however that such notice shall not be necessary where the services of such employee are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.
(2) Any employee whose services are dispensed with may appeal to such authority and within such time as may be prescribed either on the ground that there was no reasonable cause for dispensing with his services or on the ground that he had not been guilty of misconduct as held by the employer.* * *
6. Rule 3 (2) of the Kerala Shops and Commercial Establishments Rules, 1961, reads:
Appeals under Section 18 (1) ...
(2) The procedure to be followed by the District Labour Officer when hearing appeals preferred to him under Sub-sectiontion (2) of Section 18, shall be summary. He shall record briefly the evidence adduced before him and then pass orders giving his reasons therefor. The result of the appeal shall be communicated to the parties as soon as possible. Copies of the orders shall also be furnished to the parties if required by them. The copies snail be on a stamp paper to be furnished by the parties.
7. The only question agitated before me in this original petition is that respondent 2 in dealing with the appeal preferred before him by the petitioner had no jurisdiction to conduct a de novo enquiry into the charge and to arrogate to himself the functions of the employer who had dismissed the workman, again which the appeal was preferred to respondent 2. One simple answer to this contention is that the order of respondent 2, properly read and understood, does not lend itself to that construction. As noticed above, in the paragraph extracted from Ex. P. 2, respondent 2 clearly found that respondent 1 could not be said to be guilty of the charge adduced against him at the enquiry. The said finding of respondent 2 is sufficient to sustain its order of reinstatement, and the fact that respondent 2 offered a further opportunity to the parties to place evidence before it and found the said evidence also unacceptable to prove the charge, does not warrant interference in the Interests of justice with respondent 2's order in these proceedings. On this short ground, the original petition must fail.
8. As, however, the question was elaborately debated before me as to whether respondent 2 had the power to take evidence and conduct a de novo inquiry, I may express myself on the question. The language of Section 18 of the Act leaves no doubt in my mind that the power conferred on respondent 2 is an appellate power. Section 18 (1) sanctions the dispensing with the service of an employee
on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.
Section 18 (2) provides for an appeal against the order dispensing with the service. On the terms of Sections 18 (1) and 18 (2), it appears to me that the question whether the evidence at the inquiry was ' satisfactory ' or not is open to review in the appeal preferred under Section 18 (2). For that purpose a re-appraisal and re-assessment of the evidence by the appellate authority is called for and is justified. Rule 3 (2) gives power to the appellate authority to take evidence. There was no case before me that the rule was ultra vires or illegal. On the terms of the section and of the rule, it would appear that the appellate authority has the power to review evidence adduced at the inquiry and to take additional evidence. The mode and manner of exercise of the power can alone be called In question in a proper case.
9. However, it was argued on the strength of certain decisions to be referred to presently, that such is not the content and scope of the power of the appellate authority. Reliance was placed on the decision in Tata Oil Mills Co. Ltd. v. Dominic Gomes and Ors. 1966--1 L.L.J. 628 that an industrial tribunal does not act as a Court of appeal and substitute its own judgment for that of the management. The decision was however concerned with the power of an industrial tribunal on a reference made to it of an industrial dispute between the management and workmen. It is plain that in such a case the tribunal does not exercise an appellate power of the type conferred by Section 18 (2) In the present case. That even in such a case the tribunal may not altogether be powerless to re-appraise the evidence taken at the domestic enquiry, is seen from the recent decisions of the Supreme Court in Powari Tea Estate v. Barkataki (M. K.) and Ors. 1965--11 LL.J. 102.
10. Counsel for the petitioner relied upon the observations of Rajagopala Ayyangar, J., in Salem-Shevapet Sri Venkateswara Bank, Ltd. v. Krishnan (K. K.) and Anr. 1959--11 L.L.J. 797. It was observed therein that Section 41 (2) of the Madras Shops and Establishments Act (which is similar to Section 18 of the Kerala Act) at p. 801:
was not intended to convert the appellate authority into a forum where an original inquiry into the misconduct of the employee justifying his dismissal could be conducted, so as practically to derive the servant of any right beyond what he was entitled to at common law.
When the facts of the decision are related to the observation made, it will be found that the decision lends no support to the contention advanced by the counsel for the petitioner. In that case, a workman had been dismissed without any inquiry by the employer after receiving his explanation. The order of dismissal was set aside on appeal. The argument advanced on behalf of the management in writ proceedings that the appellate authority ought to have taken evidence and conducted a fresh enquiry before allowing the appeal, was rejected by the learned Judge with the above observations. It would appear from the decision in Srirangam Janopakara Bank, Ltd. v. Rangarajan (S.) and Anr. 1964--1 L.L.J. 221 that Rajagopala Ayyangar, J., himself had, in Writ Petitions Nos. 702 and 703 of 1959, recognized that it was with in the jurisdiction of the tribunal to inquire into the misconduct on the merits and sustain the order of dismissal passed by the employer.
11. The correct position of the power of the appellate authority under the Madras Shops and Establishments Act would appear to have been stated in 1960--1 L.L.J. 485. Rajagopalan, J., observed at p. 488:
Neither Section 41 (2) nor Rule 9 (2) confines the appellate authority to the evidence already recorded In the inquiry, for which Section 41 (2) provided. It is an appellate jurisdiction and the rule has made it expressly clear that the appellate authority has jurisdiction to take such evidence as it considered necessary. Of course, in exercise of the appellate jurisdiction, the appellate authority had also to consider the records of the enquiry conducted by the management, to verify if the evidence placed on record at that stage was sufficient to support the finding reached by the management. It is, however, open to the appellate authority to review that evidence afresh, and also to review that in the light of the further evidence taken in the enquiry before him and come to his own conclusion independent of and even at variance with finding recorded by the management. Of course, as the appellate authority it should take into consideration the fact that the management had jurisdiction to hold an enquiry and to reach its conclusions; and those conclusions of the management with its right to terminate the services of an employee for misconduct proved to its satisfaction, should be treated with respect by the appellate authority, and should not be lightly brushed aside. But that is not equivalent to saying that the appellate authority had no Jurisdiction to review the evidence afresh.
The above observations, with which I am in respectful agreement, apply with equal force to Section 18 (2) and Rule 3 (2) of the Kerala Act and rules.
12. The decision in Srirangam Janopakara Bank, Ltd. v. Rangarajan (S.) and Anr. 1964--1 L.L.J. 221 (vide supra) was rendered on appeal from the decision of Veeraswami, J., in Rangarajan v. Srirangam Janopakara Bank; Ltd. 1962--11 L.L.J, 482. Veeraswami, J., took the view that it is not possible to understand the two Sub-sectiontions of Section 41 of the Madras Act as permitting the appellate authority to take additional evidence and dispose of the appeal on that basis. The learned Judge found it difficult to see how Rule 9 (2) could be regarded as authorized by Section 49 of the Madras Act. On appeal, in reversing the decision of Veeraswami, J., it was pointed out that Section 41 (2) of the Madras Act conferred an appellate power which would entitle the appellate authority to go into the merits of the case and consider the evidence in support thereof. It was further ruled that Rule 9 (2) did not go beyond rule-making power under Section 49 of the Act. It was pointed out that the power and the scope for interference by the labour court and the industrial tribunal with an order of dismissal made by the employer after holding a domestic enquiry are different from the appellate power conferred under Section 41(2) of the Madras Shops and Establishments Act. Reference was made to the decision of Rajagopalan, J., in 1960--1 L.L.J. 485. (vide supra) and it was noted that the decision was confirmed on appeal by Rajamannar, C.J., and Venkatadri, J.
13. I am in respectful agreement with the principle laid down in 1960--1 L.L.J. 485 (vide supra) and 1964--1 L.L.J. 221 (vide supra). I do not understand that any different note was struck by Rajagopala Ayyangar, J., in 1959--11 L.L.J. 797 (vide supra). The decision of Veeraswami, J., in 1962--11 L.L.J. 482 (vide supra) was not sustained on appeal. On the authorities placed before me I am unable to endorse the submission of the counsel for the petitioner that the appellate authority in the Instant case had exceeded Its powers in taking evidence itself and entering a decision also on the strength of the evidence so taken. The evidence at the domestic enquiry was found unsatisfactory and unacceptable. It was also taken in the absence of respondent 1, who failed to be present at the enquiry. The course followed by the appellate authority was fair and proper and no prejudice was shown to have resulted to the petitioner thereby.
14. The original petition is dismissed. I make no order as to costs.