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The Indian Overseas Bank Vs. G. Nagiah and anr. - Court Judgment

LegalCrystal Citation
SubjectService
CourtChennai High Court
Decided On
Case NumberWrit Appeal No. 345 of 1969
Judge
Reported inAIR1973Mad409; (1973)1MLJ341
ActsMadras Shops and Establishments Act, 1947 - Sections 41(2); Shops Act - Sections 41(1); ;Constitution of India - Article 226
AppellantThe Indian Overseas Bank
RespondentG. Nagiah and anr.
Excerpt:
.....from the second circular and it is contended that this by itself, and more especially when it is read with the rest of the passage in the circulars, would amount to making a false statement for the bank's position was not in any way as described therein, and that in any case a statement like that should necessarily be prejudicial to the interests of the bank. but that apart, the question still is whether there was anything for the additional commissioner for workmen's compensation to be satisfied that the statement contained in the extract from the second circular was false or distorted. it is here we think that the appellant bank has seriously failed at the domestic enquiry to do its duty if it thought fit and careful......of the bank, that is to say, what may be harmful to or adversely affect the interests of the bank. by interests of the bank, one would understand not merely the banking business in its comprehensive sense but also the administration, the staff the discipline and the morale of the staff, rule 28, among other things in the present context includes indifference or knowingly doing anything detrimental to the interests of the bank. in this case, if rule 21 has no application to the facts, it may not in out view be possible to hold that rule 28 has been infringed either. the whole question is whether the two circulars amounted to subversive activity prejudicial to the interests of the bank. 4. a careful reading of each of the circulars leaves us with the impression that that is not the.....
Judgment:

K. Veeraswami, C.J.

1. Alagiriswami, J. has refused to issue a rule nisi against an order of the Additional Commissioner for Workmen's Compensation by which he had set aside the termination by the appellant bank of the first respondent's services. The termination order which followed a domestic enquiry was dated 26-2-1968. The charge against the first respondent framed as early as 18-10-1965, was that he had, on 29-4-1965 and 20-9-1965 issued two circulars Nos. 2 of 1965 and 3 of 1965 respectively, in the name of the appellant bank employees union subscribing his name thereto as its secretary, and caused them to be distributed freely among the members of the staff of the appellant bank at its central office and its branches that in the two circulars he had made baseless and scurrilous allegations against the management with a view to create prejudice in the minds of the staff in order to bring about disharmony between the management and the staff, and also by these allegations to bring discredit and disrepute to the management, which would cause great harm to the appellant institution itself. This according to the charge constituted violation of Rules 21 and 28 of the Rules governing the service of the officers in the appellant bank. Pending an enquiry into the charge the first respondent was placed under suspension with immediate effect. At the enquiry, the charge was found proved and the first respondent in consequence was dismissed from service. The first respondent's appeal to the Additional Commissioner for Workmen's Compensation under Section 41(2) of the Madras Shops and Establishments Act. 1947, however, succeeded. This officer found that the first respondent had, as held by the enquiry officer in the domestic enquiry, issued the circulars in his personal capacity and not as secretary of the employees' Union and that therefore, he was amenable to the disciplinary proceedings of the management. He also thought that the language used by the first respondent in the two circulars was indeed strong and highly critical of the management, and particularly of one Mr. Rao, who was then the Assistant General Manager in charge of the staff. But, all the same he was of opinion that it had not been categorically proved by the management in the domestic enquiry as to how the first respondent had committed a breach of the two rules. He held, therefore, that the charge had not been proved beyond doubt. He recorded a further finding that the action of the management in this case was to some extent as he put it, an act of victimization for the first respondent's union activities. Alagiriswami, J. while dismissing the appellant's petition under Art. 226 of the Constitution, expressed the view that the circulars read as a whole were only calculated to ventilate the grievance of the first respondent against Mr. Rao, and they were not in any way prejudicial to the interests of the appellant bank.

2. For the appellant the case has been presented to us with a certain amount of vehement enthusiasm which was perhaps justified in the circumstances, but we are of the view that although the conduct of the first respondent in having issued the circulars and at the domestic enquiry is reprehensible, we cannot say that the Additional Commissioner's order suffers from any error of law. The circulars which form the subject-matter of the charge against the first respondent are somewhat lengthy. Their purport was to severely criticize Mr. Rao in respect of his supposed acts of omission and commission the shortsighted policies suggested by him to the Board of Directors and the Chairman, the wrong and distorted picture of the state of affairs of the staff position as given to them, and the disparity and discrimination patent in his dealings in regard to promotions, transfers, recruitment, confirmations etc. With this atmosphere he asked in the circular, how on earth could the staff have contentment and how could they expect the bank to improve deposits? The circular charged Mr. Rao of being a personality in creating staff problems and living on them, and described the all-India union leaders as regular stooges in his hands to the entire detriment of the employees concerned. In the circumstances, according to the first respondent in this circular it was high time the management bestowed thought and considered the removal of Mr. Rao, who according to him had become an utter failure in his position. The basic grievance of the first respondent, as we see from the circular, seems to have emanated from the question of bonus for the year 1962-63. The second circular at the outset voiced his grievance that his transfer to Devakottai by Mr. Rao was motivated. He repeated his allegation that Mr. Rao misguided and misrepresented things to the Board of Directors to punish him without any mistake on his part. Then came the following in the second circular:

In this connection, we have to bring to the notice of all that under the present regime of the staff portfolio the feeling of dissatisfaction is prevalent among all the members of the staff as a result of which the progress of the Bank is much affected and the total deposits are dwindling when compared to other banks who were small and are being passed in leaps and bounds within short periods. If only the Board of Directors probe into the matter and bestow calm thought over this malady, much can be done. We feel the change in the staff department which must view every aspect with a human approach to avoid staff trouble etc., will go a long way to help the institution to build up the deposits and business.'

before we deal with the two circulars to find whether there was any error in the order of the Additional Commissioner for Workmen's Compensation, the two rules mentioned in the charge should be noticed and they are:--

Rule 21: No officer shall enter into or assist any subversive activity which is in any way prejudicial to the interests of the bank.

Rule 28: An officer who commits a breach of the rules of the bank, or he displays negligence, inefficiency or indifference or who knowingly does anything detrimental to the interests of the bank shall be liable to the following punishments: (a).............. (b)................ (c)............... (d) dismissal.'

Under Section 41(1) of the Shops Act, no employer shall dispense with the services of a person employed continuously for a period of not less than six months except for a reasonable cause and without giving such person at least one month's notice or wages in lieu of such notice; but such notice shall not be necessary where the services of such a person are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at the enquiry held for the purpose; that is to say, which reasonable cause would include misconduct, misconduct as an exception for the purpose of notice or a month's wages, which are dispensed with in view of the misconduct found. The next sub-section provides for an appeal. The appellate authority may interfere with the order made in the domestic enquiry on the ground that there was no reasonable cause for dispensing with the services, or on the ground that there was no room for finding misconduct. The Commissioner who is the appellate authority had a wide scope of enquiry. He could review the evidence to see whether a reasonable cause for dispensing with the first respondent's services had been made out. He could also go into the question of misconduct and see whether the finding was well-founded. If the finding of the appellate authority in the appeal suffers from any error of law, that of course is subject to removal by this court in certiorari. It should be remembered that its powers are no wider and cannot approach the matter in the same way as the Additional Commissioner for Workmen's Compensation could do within the purview of an appeal under Section 41(2) of the Act.

3. Is there any error of law in the order of the Additional Commissioner for Workmen's Compensation? We are not satisfied that there is. Rule 21 covers a subversive activity prejudicial in any way to the interests of the bank. 'Subvert' means overturn, upset, effect destruction. It may relate to anything but in the context of Rule 21, it has reference to what is prejudicial to the interests of the bank, that is to say, what may be harmful to or adversely affect the interests of the bank. By interests of the bank, one would understand not merely the banking business in its comprehensive sense but also the administration, the staff the discipline and the morale of the staff, Rule 28, among other things in the present context includes indifference or knowingly doing anything detrimental to the interests of the bank. In this case, if Rule 21 has no application to the facts, it may not in out view be possible to hold that Rule 28 has been infringed either. The whole question is whether the two circulars amounted to subversive activity prejudicial to the interests of the bank.

4. A careful reading of each of the circulars leaves us with the impression that that is not the effect. The first respondent's objective in the circulars was to attack Mr. Rao as an official incharge of the staff and to show that if the management had not been misled or misguided by him, the bank would not suffer as it did in the matter of its progress and total deposits. But strong reliance has been placed on the passage we have extracted from the second circular and it is contended that this by itself, and more especially when it is read with the rest of the passage in the circulars, would amount to making a false statement for the bank's position was not in any way as described therein, and that in any case a statement like that should necessarily be prejudicial to the interests of the bank. At the enquiry, a question was put to the first respondent whether he could support this statement. His answer was 'Ask the Union'. To say the least, this attitude of the first respondent was thoroughly unjustified, more especially when the Commissioner has found that he did not issue the circulars as a union official but only in his own personal capacity. He should not forget that he was an employee of the bank and that he could not behave in the manner he did, even if he was acting as an official of the union. But that apart, the question still is whether there was anything for the Additional Commissioner for Workmen's Compensation to be satisfied that the statement contained in the extract from the second circular was false or distorted. It is here we think that the appellant bank has seriously failed at the domestic enquiry to do its duty if it thought fit and careful. The appellant had or should have had all the materials necessary to show that the bank's position was not as described by the first respondent in the second circular and that there was no reaction on the bank's working or its business reflected through the staff discontentment if any. But then the representative of the bank was content by merely putting the question we mentioned above to the first respondent and even at the appellant stage, placed nothing before the Commissioner to enable him to assess the record to see whether Rule 21 was in any way violated by the first respondent. On the materials on record it is not possible to say that the Commissioner came to an erroneous conclusion in law when the he held that he was of opinion that it had not been categorically proved by the management at the domestic enquiry as to how the first respondent had committed a breach of the rules. That it enough to dispose of the appeal.

But Mr. Ramakrishna, for the appellant, very strenuously urged that on the view we take we should give the management a second opportunity to rectify the omission by supplying at least at this stage the appellant's balance sheet and other relevant materials. We are unable to accept this contention, because of the limited scope of the enquiry in this appeal, as we have already indicated, that is to say, to see whether the order of the Commissioner suffers from any error of law on the materials as they stand at the moment.

5. There is also the other finding that the action of the management in dismissing the first respondent was to some extent an act of victimization for his union activities. It is urged for the appellant that this finding is not correct. But we are inclined to think that this is a supplemental finding which the Commissioner would render as flowing from a finding that the first respondent had not been shown to have violated Rules 21 and 28. If on that matter he had come to a contrary conclusion, it is not possible to predicate that he would come to the same conclusion as he did on the question of victimization. On that view, it is not necessary for us to deal with it in any further detail.

6. The appeal is dismissed. No costs.

7. Appeal dismissed.


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