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Salem-shevapet Sri Venkateswara Bank, Ltd. Vs. Krishnan (K.K.) and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1959)IILLJ797Mad; (1960)IIMLJ165
AppellantSalem-shevapet Sri Venkateswara Bank, Ltd.
RespondentKrishnan (K.K.) and anr.
Excerpt:
.....of section 41(1) would not be..........guilty of various acts of misconduct. on 7 september 1955 the clerk filed two appeals, one to the additional commissioner for workmen's compensation, madras, under section 41(2) of the madras shops and establishments act, 1947 (act xxxvi of 1947), and another to the board of directors of the bank. on 29 september 1955 the employee was directed to appear before the board and he did so. on that day he was asked by the board to elect between the two appeals, the one to themselves and the other to the additional commissioner for workmen's compensation. the employee refused to elect and stated that he would have the benefit of both the appeals. subsequently on on 10 october 1955, by a communication addresed by the secretary, the employee was informed that his appeal would be heard on 14.....
Judgment:
ORDER

Rajagopala Ayyangar, J.

1. One Krishnan who is the first respondent in this petition was a clerk in the Salem-Shevapet Sri Venkateswara Bank, Ltd., who are the petitioners in this petition for the issue of a writ of certiorari. The facts which have given rise to petition are briefly these: While Krishnan was working as clerk in the petitioner bank he sent a letter on 8 August 1955 to the secretary of the bank requesting that he may be granted leave for that day and the next. Leave was not granted and on 11 August 1955 the secretary of the bank directed the clerk to offer an explanation as to why he had absented himself from duty on 8 August 1955, without previously obtaining leave. Besides this there were several charges made against him and this was sent in a formal communication dated 22 August 1955. In the meantime the clerk was kept under suspension. An explanation was furnished by the employee which the secretary held to be unsatisfactory, and it is common ground that without any further inquiry the secretary passed an order on 1 September 1965 dismissing the employee from service,

2. The order of dismissal recited that the employee was guilty of various acts of misconduct. On 7 September 1955 the clerk filed two appeals, one to the Additional Commissioner for Workmen's Compensation, Madras, under Section 41(2) of the Madras Shops and Establishments Act, 1947 (Act XXXVI of 1947), and another to the board of directors of the bank. On 29 September 1955 the employee was directed to appear before the board and he did so. On that day he was asked by the board to elect between the two appeals, the one to themselves and the other to the Additional Commissioner for Workmen's Compensation. The employee refused to elect and stated that he would have the benefit of both the appeals. Subsequently on on 10 October 1955, by a communication addresed by the secretary, the employee was informed that his appeal would be heard on 14 October 1955 and he was required to appear at that time with his witnesses. On 13 October 1955 the petitioner sent a reply. In this he drew the attention of the board to the counter filed by the bank to his appeal before the Additional Commissioner for Workmen's Compensation and enquired whether evidence would be recorded on the charges framed against him with an opportunity to him to cross-examine those witnesses and also wanted copies of records regarding the enquiry. He also added:

From the written statement filed by you before the Commissioner of Labour I have no belief that I will get justice at the hands of the board of directors.

This was not replied to by the bank but on 14 October 1955 the order of dismissal was confirmed, the minutes of the meeting of the board recording that the clerk did not attend the meeting and give evidence and that from the deposition of the secretary the charges framed against the clerk were held to have been proved. Thereafter the appeal before the Additional Commissioner for Workmen's Compensation was heard and that officer passed an order on 8 January 1957, allowing the appeal and setting aside the order of the board dismissing the clerk from service. It is the legality of this order of the Additional Commissioner for Workmen's Compensation dated 8 January 1957 that is challenged in these proceedings.

3. Three points were urged by Mr. Nambiar, learned Counsel who appeared for the employer-petitioner. First, that the appeal by the employee to the Additional Commissioner for the Workmen's Compensation was Incompetent because the order of the secretary effecting the dismissal was not final but was subject to confirmation by the board of directors and that till such confirmation was obtained there was no definitive order of dismissal which could be the subject-matter of an appeal, under Section 41(2) of the Shops and Establishments Act. For this purpose learned Counsel relied on Articles 67 and 86 of the articles of association of the bank which ran in these terms :-

Article 67; ' In anticipation of the sanction of the executive committee, the secretary has the power to appoint, to grant leave, to punish and to dismiss the employees. The appeal time is one month from the date of the order of the secretary.'

Article 86: ' The secretary has the power to grant leave to the bank employee as well as to deduct their pay for the days of absence without permission, to fine the employees not exceeding Re. 1 for every mistake of disobedience and to suspend subject to the confirmation of the executive committee and to appoint another in that place. But to dismiss an employee, the sanction of the executive committee is necessary.

The same point was urged before the appellate authority but was rejected for the reason that the order of dismissal passed by the secretary and which was the subject-matter of the appeal before him nowhere indicated that it was not final nor did it recite that it was in anticipation of sanction by the board of directors. The Additional Commissioner also pointed out that the wages of the employee were paid only upto the end of 31 August 1955, which went to show that the bank treated the employee as in service only upto the date of the dismissal order issued by the secretary which also showed that it did not proceed on the basis of its being effective only when confirmed by the board. Besides there had been a previous resolution of the board on 28 August 1955, which had authorized the secretary ' to take such action as he deemed fit' and against the clerk that it was in pursuance of this authorization that the secretary had taken action against the respondent and that it was possibly for this reason that the order of dismissal passed by the secretary was treated as a definitive order entitling the employee to wages only upto that date. The reasons given by the Additional Commissioner are sound and this point has, therefore, no substance.

4. The second matter that was urged was that since the employee had filed an appeal to the board of directors under the articles of the bank, the order of the secretary even if it was once final, became reopened with the result that it could be the subject- matter of an appeal entertainable by the Additional Commissioner under Section 41(2) of the Madras Shops and Establishments Act, 1947. This point has also in my opinion no substance and deserves to be rejected. The theory that by reason of filing an appeal a definitive order of an inferior or original authority becomes reopened is not in my opinion applicable to such proceedings as are now in question in this petition. This apart, the board of directors on 28 September 1958 proceeded on the basis that it was open to the employee to opt for either remedy-to prosecute his appeal before the board of directors or to proceed with his appeal before the Additional Commissioner. This certainly could be only on the footing that the appeal before the Additional Commissioner was one properly filed and properly entertained and was a competent appeal pending on that date. When required to elect between the two remedies, the employee had stated that he would prefer to avail himself of both the remedies, which certainly meant that he did not intend to drop or withdraw his appeal before the Additional Commissioner. If the appeal before the Additional Commissioner had been validly filed and entertained, and was pending on 28 September 1955, I am unable to see any principle by which the Additional Commissioner would become functus officio by reason of the employee refusing to drop his appeal to the board. No doubt, if the employee obtained at the hands of the board such relief as he thought he was entitled to, he might have withdrawn his appeal before the Additional Commissioner, but such withdrawal would be of an appeal which was in force on that date, the withdrawal being because of the fact that he had already obtained such relief as he would have got by the successful prosecution of that appeal. Mr. Nambiar, however, urged that by offering the employee the option to choose either of the remedies, it could not be taken that the bank had agreed to waive their objections to the jurisdiction of the Additional Commissioner for the reason he had simultaneously filed an appeal to the board which was also pending at the same time as the appeal before the Additional Commissioner. If Mr. Nambiar is right in this contention, and I am satisfied that he is not, by parity of reasoning the appeal before the board must be held to be incompetent because of the pendency of the appeal before the Additional Commissioner and this would show how untenable the argument of the learned Counsel is. In my judgment, the Additional Commissioner very properly overruled this objection to his jurisdiction to decide the appeal.

5. The last point that was urged in support of the petition was that the Additional Commissioner erred in not enquiring into the merits of the misconduct charged against the employee and in allowing the appeal and setting aside the order of dismissal for the sole reason that no enquiry had been held by the management prior to the dismissal. In this connexion the learned Counsel referred me to the analogy of cases under the Industrial Disputes Act, wherein it has been held that if permission is not obtained to the dismissal of an employee during the pendency of an industrial dispute and the propriety of the order of the employer comes up before the industrial tribunal, the latter is bound to enquire into the merits of the complaint against the workman before setting aside the order of the employer. I am unable to see any analogy between the two cases. Section 41(1) of the Madras Shops and Establishments Act, enacts:

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, provided, however, that such notice shall not be necessary where the services of such person are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an enquiry held for the purpose.

This section enacts a rule of law which is a variation from the common law contractual right of a master to dispense with the services of his servant. In the case of persons who are under the coverage of the statute it affords the protection of a security of tenure dismiss or discharge the employee. The provision, it would be seen, has two limbs. Under the first, the master or the employer is entitled to dispense with the services of a servant for reasonable cause but after giving such person at least one month's notice.

6. Though at common law the right of an employee to discharge a servant on giving him notice or wages in lieu is unfettered, the statute effects a change in this right and requires in addition to notice for the contractual period, that there should be reasonable cause for the discharge. What would constitute reasonable cause. Whether the employee should have notice of that reasonable cause with an opportunity to canvass it are matters that do not arise in this petition and which would preferably be considered when they become material.

7. What is really relevant is the second limb of the section-where no notice or wages In lieu of notice is given, and the discharge or dismissal is effected for misconduct on the part of the servant. In such cases the statute enacts a greater degree of protection to the employee, and insists on the charge of misconduct being held to be proved by satisfactory evidence recorded at an inquiry held for the purpose.

8. Here again it would help the appreciation of the legal position, if the variation from the common law right of the master were noticed. Misconduct, inconsistent with the due and faithful discharge by the servant of the duties for which he was engaged, is good cause for dismissal at common law. The common law, however, does not insist on an enquiry before dismissal and the master is entitled to justify the dismissal by proving the misconduct, when the servant questions the legality of the dismissal, say, by an action for wages for periods subsequent to the dismissal. The protections afforded to the servant by the statute are thus:

(1) an insistence on the employer holding an enquiry into the misconduct, and

(2) have satisfactory evidence recorded at that enquiry held in his presence before he can be dismissed from service for misconduct.

It would, therefore, appear as if the enquiry of the sort set out in the statute is as essential a prerequisite to a valid order of dismissal, as the presence of misconduct which is required by the common law as well, on the part of the employee.

9. It is in the light and context of these elements of protection granted to the servant that the terms of Section 41(2) have to be understood. Under Section 41(2) the grounds of appeal are two:

(1) that there was no reasonable cause for dispensing with the services, and

(2) that the employee (appellant) had not been guilty of misconduct as held by the employer.

It would be seen that these two terms are related to the two limbs of Sub-section (1) of Section 41 to which I have already referred. I will refrain from dealing with the first of the grounds of appeal, namely, that there was no reasonable cause for dispensing with the services which applies to cases where notice of at least one month or wages in lieu of notice is given as that is not relevant to the present case and confine myself only to the other ground, namely, ' the appellant had not been guilty of misconduct' as held by the employer. The appellate authority under Section 41(2) must be held to have jurisdiction to enquire whether the statutory conditions subject to which alone a servant could be dismissed have been complied with. When it finds that this is lacking, I consider that it would be the duty of that authority to allow the appeal. It must be remembered that Section 41(2) of the Act enacts that it is the misconduct which has been held by the employer to have been established that is made the subject-matter of enquiry by the appellate authority. That 'holding' can only arise on the terms of Section 41(1) after an enquiry at which satisfactory evidence has been recorded. When those conditions are wanting, the terms of Section 41(1) would not be satisfied.

10. Besides, under Section 41(1) it is the employer that is vested with jurisdiction to terminate the services of a person employed, subject to the fulfilment of the statutory conditions and to hold that the appellate authority can conduct as it were an original enquiry into the charge of misconduct would not be in accordance with the scheme of Section 41 and would nullify the protection afforded by the statute and place the servant in the same position as if the conditions laid down by the second limb of Section 41(1) were not there. It is only when at an original enquiry held by the employer that the charges are held by him to have been proved that the appellate authority is directed to enquire as to whether the charge of misconduct could be taken to have been properly established. In my opinion, Section 41(2) was not intended to convert the appellate authority Into a forum where an original enquiry into the misconduct of the employee justifying his dismissal could be conducted so as practically to deprive the servant of any right beyond what he was entitled to at common law. I have, therefore, no hesitation in rejecting this point urged by the learned Counsel for the petitioner.

11. The result is that this petition fails and is dismissed. The rule nisi will be discharged.


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