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Madras Port Trust by Its Chairman Vs. Jal. E. Khambatta - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1970)IILLJ567Mad
AppellantMadras Port Trust by Its Chairman
RespondentJal. E. Khambatta
Cases ReferredIn Public Passenger Service Ltd. v. M.A. Khader
Excerpt:
.....be taken independently as giving a right to the madras port trust for withholding payment of provident fund amount in case of removal of a subscriber. , after referring to the provisions contained in section 96(b) of the government of india act of 1915 and section 240(1) of the government of india act of 1935 and articles 310 and 311 of the constitution of india, with reference to the different punishments enumerated in the service rules observed that both at the date of the commencement of the 1935 act and of the constitution of india, the words 'dismissed',removed' and 'reduced in rank',as used in the service rules, were well understood as signifying or denoting the three major punishments which could be inflicted on government servants and how protection was given to the..........provident fund. but so far the special contribution is concerned, regulation 11 of the madras port trust regulations relating to provident fund and gratuity hereinafter referred to as the regulations, provides that it shall not ordinarily be credited to the provident fund account of an employee who has been discharged from misconduct. hence the chairman of the port trust by his order exhibit b-8 held that no special contribution to the provident fund would be due to the plaintiff and this finding was accepted by the trial court and there is no appeal by the respondent-plaintiff against it.2. there is no dispute that the respondent plaintiff is entitled to his own contributions to the provident fund together with interest thereon. the chairman of the port trust had suggested in his order.....
Judgment:

R. Sadasivam, J.

1. The respondent-plaintiff Khambatta was employed as a dredging master and engineer in respect of the dredgers owned by the appellant, the Madras Port Trust. In 1961, some charges of misappropriation were framed against him for not properly accounting for certain materials entrusted to him during the period 1956 to 1959 and he was removed from service. The respondent-plaintiff was a subscriber to the provident fund and on his removal from service the question came up for consideration whether he was entitled to be paid the entire provident fund amount standing to his credit, made up of his own contributions together with interest thereon amounting Rs. 8,143-75, the Board's contribution together with interest thereon amounting to Rs. 9,015-60 and the special contribution made by the Board to the provident fund. But so far the special contribution is concerned, Regulation 11 of the Madras Port Trust Regulations relating to provident fund and gratuity hereinafter referred to as the Regulations, provides that it shall not ordinarily be credited to the provident fund account of an employee who has been discharged from misconduct. Hence the Chairman of the Port Trust by his order Exhibit B-8 held that no special contribution to the provident fund would be due to the plaintiff and this finding was accepted by the trial court and there is no appeal by the respondent-plaintiff against it.

2. There is no dispute that the respondent plaintiff is entitled to his own contributions to the provident fund together with interest thereon. The Chairman of the Port Trust had suggested in his order Exhibit B-8 that the question as to what should be done with the Board's contribution of Rs. 9,015-60 in view of the estimited loss of Rs. 35,000 caused by the respondent plaintiff might be considered by the Committee which consisted of the Chairman of the Port Trust and two other members. It is cleat from the minutes of the proceedings of the Committee of the Board held on 5th October 1961 (Exhibit B-9) that the chairman represented that this was a very bad case and that the committee decided to withhold the Board's contribution to the provident fund account of the respondent plaintiff. Aggrieved with this order, the respondent plaintiff filed the suit O.S. No. 1521 of 1962 on the file of the City Civil Court, Madras and the learned Fourth Asst. Judge, who tried the suit, upheld his contention that Regulation 20(a) of the Regulation on which the Madras Port Trust relied, did not empower the Port Trust to withhold the Board's contribution to the provident fund account of the subscriber in the event of removal of a subscriber from service, unlike in the case of a dismissal from service. Aggrieved with this decision, the Madras Port Trust has preferred this appeal.

3. The short point for consideration in this appeal is whether in the circumstances of the case stated earlier, the Madras Port Trust is entitled to withhold its own contribution to the provident fund account of the respondent-plaintiff. It is the common case of both parties that the provisions of the Provident Funds Act of 1925 apply to the employees of the Madras Port Trust. In fact, the Madras Port Trust has made Regulations relating to the provident fund, and gratuity as contemplated in the Provident Funds Act. Regulation 20(a) of the Regulations is the only relevant provision to be considered and it is as follows:

When a subscriber's account is closed, either (i) on the dismissal of a subscriber for dishonesty, disobedience, insubordination, neglect of duty, desertion, or any other form of misconduct or on his being found guilty of any criminal offence, or (ii) on his resignation from service within five years from the date of his joining the fund, the Board may withhold all or any part of the amount standing to his credit in the contribution account and pay him only the balance, if any, together with the amount deposited by him as subscription and interest thereon.

4. In the trial Court the Madras Port Trust relied on the clause 'any other form of misconduct' in the above regulation as justifying its conduct in withholding the provident fund contribution. But the trial Court has rightly pointed out that the clause 'any other form of misconduct', like several other clauses in the first part of that regulation refers only to the ground on which the subscriber is dismissed from service and it cannot, therefore, be taken independently as giving a right to the Madras Port Trust for withholding payment of provident fund amount in case of removal of a subscriber. In fact, the learned Advocate for the appellant did not try to support the said contention urged by him in the trial Court.

5. Sri V.V. Raghavan, the learned Advocate for the appellant, however, urged that though the word 'dismissal' alone finds a place in Regulation 20(a) of the regulations, the word should be treated as including the case of removal from service also. He referred to several decisions under Article 311 of the Constitution of India which gives protection to persons employed in civil capacities under the Union or a State in cases of wrongful dismissal, removal or reduction in rank. In Satish Chandra v. The Union of India : [1953]4SCR655 , it is pointed out that the services in India have long been afforded certain statutory guarantees and safeguards against arbitrary dismissal or reduction in rank, that under Section 240 of the Government of India Act, 1935, the safeguards were limited to those two cases and that under the present Constitution, a third was added, namely removal from service. It is observed in that decision that in order to understand the difference between 'dismissal' and 'removal' from service, it will be necessary to turn to the rules which governed, and with modifications still govern the 'services' in India. Rule 49 in Part 12 of the Civil Services (Classification, Control and Appeal) Rules relating to conduct and discipline sets out the various penalties to which a member of the services can be subjected for indiscipline and misconduct and they are seven in number and they are censure, withholding of increment or promotion, reduction in rank, recovery from pay, suspension, removal from service and dismissal from service. The Government of India Act, 1935 selected only two of these possible penalties as serious enough to merit statutory safeguards, namely reduction in rank and dismissal from service but the Constitution has added a third to the list, namely removal from service. In Shyam Lal v. State of Uttar Pradesh : (1954)IILLJ139SC , Rule 49 of the Civil Services (Classification, Control and Appeal) Rules has been extracted in order to explain the history and development of the rule embodied in the Article 311 of the Constitution, It is pointed out in the decision that the only difference between 'dismissal' and 'removal' is that while dismissal ordinarily disqualifies the officer from future employment, removal does not. It is clear from the decision that under the Constitution removal and dismissal stand on the same footing except as to future employment and in this sense, removal is but a species of dismissal. Reference is made in this decision to the earlier decision in Satish Chandra v. The Union of India (supra) wherein it is stated that these terms have been used in the same sense in Article 311 of the Constitution of India. In Parshotam Lal Dhingra v. The Union of India (1958) S.C.J. 217, Das J., after referring to the provisions contained in Section 96(b) of the Government of India Act of 1915 and Section 240(1) of the Government of India Act of 1935 and Articles 310 and 311 of the Constitution of India, with reference to the different punishments enumerated in the service rules observed that both at the date of the commencement of the 1935 Act and of the Constitution of India, the words 'dismissed', 'removed' and 'reduced in rank', as used in the service rules, were well understood as signifying or denoting the three major punishments which could be inflicted on Government servants and how protection was given to the Government servants under Section 240 of the Government of India Act. 1935 and Article 311 of the Constitution of India.

6. The Supreme Court has in Moti Ram v. N.E. Frontier Railway : (1964)IILLJ467SC , discussed the scope of the relevant words 'dismissed' and 'removed' in Article 311 of the Constitution of India in the following terms:

The general rule of interpretation which is common to statutory provisions as well as to constitutional provisions is to find out the expressed intention of the makers of the said provisions from the words of the provisions themselves. It ii also equally well settled that, without doing violence to the language used, a constitutional provision shall receive a fair, liberal and progressive construction, so that its true object might be promoted. Article 311 uses two well-known expressions 'dismissed' and 'removed'. The Article does not, expressly or by necessary implication, indicate that the dismissal or removal of a Government servant must be of a particular category. As the said article gives protection and safeguard to a Government servant, who will otherwise be at the mercy of the Government, the said words shall ordinarily be given a liberal or at any rate their natural meaning unless the said Article or other Articles of the Constitution, expressly or by necessary implication, restrict their meaning, I do not see any indication anywhere in the Constitution which compels the Court to reduce the scope of the protection. The dictionary meaning of the word 'dismiss' is 'to let go; to relieve from duty'. The word 'remove' means 'to discharge, to get rid of to dismiss.' In their ordinary parlance, therefore, the said words mean nothing more or less than the termination of a person's office. The effect of dismissal or removal of one from his office is to discharge him from that office. In that sense, the said words comprehend every termination of the services of a Government servant. Article 311(2) in effect lays down that before the services of a Government servant are so terminated, he must be given a reasonable opportunity of showing cause against such a termination.

In Seervai's Constitutional Law of India it is pointed out at pages 1042 and 1043 that, though according to the ordinary dictionary meaning, there is do difference between the words 'dismissal' and 'removal', the distinction between these words as used in Article 311 of the Constitution became apparent when reference was made to the relevant service rules. In Basu's Commentary on the Constitution of India, Volume V, fourth edition, at page 31 it is pointed out that according to the departmental rules there is some difference between 'dismissal' and 'removal' as to their consequences, but from the constitutional stand-point, they stand on the same footing.

7. Thus, though the words 'dismissal' and 'removal' are synonymous according to the dictionary meaning and they stand on the same footing as regards the constitutional protection afforded to an employee of the Government under Article 311(2) of the Constitution of India, the Departmental rules clearly recognise the distinction between the words 'dismissal' and 'removal'. The Madras Port Trust could not be accused of being Unaware of the distinction between the words 'dismissal' and 'removal', well recognised in service rules, when it framed Regulation 20(a) by virtue of its powers under Section 28(6) of the Madras Port Trust Act. It is not possible to treat the term 'dismissal' in Regulation 20(a) as including 'removal' merely because the two terms could sometimes be used synonymously in accordance with the dictionary meaning, or because the terms are used in the same sense in Article 311 of the Constitution of India and no distinction is made between those terms for the purpose of affording constitutional safeguard. It is significant to note that under Regulation 20(a) the Board is empowered to withhold payment of its contribution to a subscriber not only in the case of dismissal of a subscriber for any misconduct mentioned therein, but also in the case of resignation from service by a subscriber within five years from the date of his joining the fund. If the framers of the Regulation contemplated that the said power should be exercised even when a subscriber is removed from service for misconduct, they would have expressed the same in clear and unambiguous terms.

8. Even the order Exhibit B-8 passed by the Chairman of the Port Trust gives a clear indication that Regulation 20(a) did not contemplate the withholding of the Board's contribution to the provident fund of a subscriber when he is removed from service. The order shows that the Chairman of the Madras Port Trust had no difficulty in finding that the plaintiff was not entitled to the special contribution to the provident fund in view of Regulation 11 of the Regulations. But, in dealing with the Board's contribution in the prior paragraph, reference is made to Regulation 20(a) and the doubt is raised that 'the officer has not been dismissed from service but only removed from service'. It is on account of this doubt that the Chairman of the Madras Port Trust has suggested in the last paragraph of his order Exhibit B-8 that the Committee may discuss the matter.

9. Regulation 24(a) of the Regulations provides as follows:

When the amount standing to the credit of a subscriber in the Fund or the balance thereof after any deduction under Regulations 20 and 22 becomes payable, it shall be the duty of the Chairman of the Board, after satisfying himself that when no such deduction has been directed under those regulations no deduction is to be made, to make payment as provided in Section 4 of the Provident Funds Act, 1925.

Thus, if the Chairman of the Port Trust wants to forfeit the Board's contribution to the Provident Fund Account of the respondent plaintiff by invoking Regulation 20(a) the provisions of that regulation must be strictly complied with. In Public Passenger Service Ltd. v. M.A. Khader : AIR1962Mad276 , a Bench of this Court had to deal with the jurisdiction of the Company Court to set aside an invalid forfeiture in an application for rectification of the share register of the company. It has been held in that decision that the power to forfeit property is a trust, the execution of which will be scanned by the Court and where a power of forfeiture exists it is to be treated as strictissimi juris and that even a minor or a little inaccuracy in complying with the conditions precedent for exercising the right of forfeiture will be fatal to the exercise of the right. On the same principle, the claim of the appellant to forfeit the Board's contribution to the provident fund account of the respondent plaintiff by virtue of Regulation 20(a) should be strictly construed. By virtue of the order Ex. A-1 dated 29.6.1961 the respondent plaintiff has been removed from service. It is not open to the respondent plaintiff to canvass the correctness of the order removing him from service in these proceedings. But it is not also reasonable to attach too much importance to the observation made in Exhibit A-1 that the proper punishment will be dismissal and that taking a more lenient view regarding punishment, the plaintiff was merely removed from service. It is enough to state that respondent plaintiff has been given only the lesser punishment of removal from service and that punishment cannot attract Regulation 20(a). The subsequent order withholding the Board's contribution to the Provident Fund Account of the respondent plaintiff is really another punishment which is not warranted by Regulation 20(a).

10. The decree and judgment of the trial Court that the Madras Fort Trust cannot withhold its ordinary contribution to the Provident Fund Account of the respondent plaintiff are correct and they are confirmed and this appeal is dismissed with costs.


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