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Monday, December 12, 2016

The Labour Court, on the available materials on record, found that the termination was unjustified on the basis of a perverse finding entered by the inquiry officer. There was no attempt on the part of the management before the Labour Court to establish otherwise. It appears that the High Court itself has granted compensation since the Court felt that the termination was unjustified and since reinstatement was not possible on account of superannuation. In case, the High Court was of the view that termination was justified, it could not have ordered for payment of any compensation. In order to deny gratuity to an employee, it is not enough that the alleged misconduct of the employee constitutes an offence involving moral turpitude as per the report of the domestic inquiry. There must be termination on account of the alleged misconduct, which constitutes an offence involving moral turpitude.- the appellant shall be entitled to gratuity in respect of his continuous service from his original appointment till the date of his superannuation.



                        IN THE SUPREME COURT OF INDIA



                        CIVIL APPELLATE JURISDICTION



                       CIVIL APPEAL NO.  11807 OF 2016
                (Arising out of S.L.P.(C) No. 26366 of 2016)


JORSINGH GOVIND VANJARI                         ...  APPELLANT (S)


                                   VERSUS

DIVISIONAL CONTROLLER MAHARASHTRA,
STATE ROAD TRANSPORT CORPORATION,
JALGAON DIVISION, JALGAON                         ... RESPONDENT (S)


                           J  U  D  G  M  E  N  T

KURIAN, J.:



Leave granted.

The  appellant,  aggrieved  by  the  termination  from  service,  raised  an
industrial dispute leading to the award in Reference  IDA  No.  42  of  2007
dated 20.06.2013 of the  Labour  Court,  Jalgaon,  Maharashtra.  The  Labour
Court set aside the dismissal  order  dated  26.08.2002.  However,  noticing
that the appellant had already crossed the  date  of  superannuation,  viz.,
31.05.2005, it was ordered that from the date of termination to the date  of
superannuation, the appellant would be  entitled  to  all  service  benefits
except back wages which were limited to 50 per cent.
The respondent challenged the award before the High Court of Bombay. As  per
the impugned judgment dated 08.07.2015 in Writ Petition No.  3268  of  2014,
the award was modified by  granting  only  a  one-time  compensation  of  an
amount equivalent to 50 per cent of the back wages as awarded by the  Labour
Court. Thus aggrieved, the appellant is before this Court.
The charge against the appellant was that he had  collected  fare  from  six
passengers while he was working as a conductor on 06.09.2001 in bus No.  MH-
20/J-4714 on  its  trip  from  Chalisgaon  to  Patanagaon,  without  issuing
tickets. The inspecting team also found that there was a  shortage  of  cash
in his cash bag. A domestic inquiry followed and the inquiry  officer  found
the appellant guilty, and on that basis, he was terminated from service.
Before the Labour Court, four issues were framed:

“1.   Does the  second  party  prove  that  the  departmental  enquiry  held
against him is unjust,  unfair,  improper  and  against  the  principles  of
natural justice, and the findings of Enquiry Officer are perverse?
2.    Does the second party prove that, the termination of  his  service  is
illegal, violating the provisions of law?
3.    Whether the second party is entitled for the relief as sought for?
4.    What order?”


The Labour Court found that:
“… As the alleged passengers have  not  been  examined,  an  opportunity  of
cross examining them is not availed to the second party.  The  one  and  the
same authority has issued charge sheet, conducted enquiry and suggested  the
punishment. Accordingly, serious prejudice is caused to  the  second  party.
One and the same authority is not expected  to  play  the  role  of  Enquiry
Officer and disciplinary authority, which is inconsistent to the  provisions
of law. Accordingly, with biased mind enquiry has  been  conducted.  Despite
of  not  examining  the  witnesses  the  enquiry  officer  considered  their
statements recorded on the spot and concluded that,  charges  of  misconduct
have been proved against the second party. Besides this,  the  reporter  has
not stated before the Enquiry Officer in terms of his  report.  Accordingly,
the enquiry officer has recorded his findings on the basis  of  no  evidence
and therefore, the findings recorded by the Enquiry Officer  appears  to  be
perverse one. …”


 On issue no.2, it was noted that:
“… in the light of findings on issue no.1 that,  the  enquiry  held  against
the Complainant was fair, proper and  legal  and  the  findings  of  enquiry
officer are perverse, then it is  for  first  party  to  prove  the  alleged
charges of misconduct before this court. It is pertinent to  note  that,  in
their written statement the first party has not made  prayer  that,  if  the
court  arrived  at  the  conclusion  that  the  enquiry  held  against   the
Complainant was not fair, proper and  legal  and  the  findings  of  enquiry
officer are perverse, then they may be permitted to prove the misconduct  of
second party before this court by leading evidence. But, they failed  to  do
so.  No  witness  is  examined  by  the  first  party.  Hence,  the  alleged
misconduct of second party has not been proved before this court.”

Still further, the Labour Court proceeded further and found that:
“14.  In a case before me, testified evidence of second party at Exh. U-8  &
U-13 reflect that, he was working with first party as a bus conducted  since
05.04.1971 at Chopda Depot. Thereafter he was transferred to  Amalner  Depot
and Chalisgaon Depot. However, without  considering  his  meritorious  clean
and unblemished service record, first party has dismissed him  from  service
vide order dated 26.08.2002.  On  06.09.2001  when  he  was  performing  his
duties as a conductor on bus  no.  MH-20/J-4714  which  is  proceeding  from
Chalisgaon to Patanagaon, at that time his bus  was  checked  by  Inspecting
squad at Balziri Phata and it is alleged against him that 6 passengers  were
found travelling in the said bus without tickets,  though  fare  amount  was
paid by them to the second party-conductor. Those 6 persons were  illiterate
persons and inspecting squad as per their whims recorded  their  statements,
as well as S.T. cash was found less by Rs.56. Had the second party  actually
recovered the amount from the very six passengers,  then  Rs.36/-  ought  to
have been found excess in his cash bag. However, contrary  to  this,  amount
was found less with the second party and hence Respondent  by  making  false
allegations issued false charge  sheet,  conducted  enquiry.  Principles  of
natural justice have not been observed  by  the  first  party.  The  alleged
passengers have not been examined and an opportunity of cross  examining  to
them is not availed to the second party. The one and the same authority  has
issued charge  sheet,  conducted  enquiry  and  suggested   the  punishment.
Accordingly, serious prejudice is caused to the second  party.  Accordingly,
with bias  mind  enquiry  has  been  conducted.  Instead  of  examining  the
witnesses the enquiry officer considered their statements  recorded  on  the
spot and concluded that, charges of misconduct have been proved against  the
second party. Besides this, the  reporter  has  not  stated  before  Enquiry
Officer in terms of his report. Report is  not  exhibited  and  duly  proved
before the Enquiry Officer, even though enquiry officer  relied  on  it  and
concluded that, alleged misconducts have  been  proved  against  the  second
party. Thus, by violating the principles of  natural  justice,  enquiry  has
been conducted and the findings drawn by the enquiry officer  are  perverse.
On the basis of said report punishment of dismissal has been  imposed  which
is extremely harsh and disproportionate. This oral testimony of  the  second
party has not been shattered during cross examination.

15.    After  cross-examining  the  second  party,  the  Respondent  has  an
opportunity to lead evidence in support of  the  chargers  levelled  against
the Complainant. Once, findings of the enquiry officer are held perverse  by
this court, then burden lies  on  Respondent  to  prove  the  misconduct  by
leading evidence before this court. But,  instead  of  leading  evidence  in
support of alleged misconduct of the second party, first party did not  lead
any oral evidence before  this  court,  on  the  contrary  filed  pursis  of
closing their evidence at Exh. C-20. Therefore, it is  crystal  clear  that,
the misconduct of the second party is not proved before this  Court  by  the
first party.  Therefore,  it  can  safely  be  inferred  that,  the  charges
levelled against the second party are false and the said  charge  sheet  was
issued with an intention to victimize him. As the charges  levelled  against
the second party are not  proved  either  in  the  departmental  enquiry  or
before this court, hence, the dismissal order issued by the first  party  is
nothing  but  in  colourable  exercise  of  employer’s  right,  by   falsely
implicating the Complainant in  a  criminal  case  on  false  evidence,  for
patently false reasons, in utter disregard  of  the  principles  of  natural
justice in the conduct of domestic enquiry and with undue  haste,  amounting
to unfair labour practice. Hence, I hold that the dismissal of second  party
is illegal, violating the provisions of law.”
                                                         (Emphasis supplied)
On issue no.3, it was held as follows:
“17.  As to issue no.3:- So far as relief sought  by  the  second  party  is
concerned, the Ld. Counsel for second party has submitted that,  the  second
party has attained the age of retirement  on  31.05.2005  hence  he  may  be
given all the retiral benefits from the date of his  illegal  dismissal.  It
is pertinent to note that, in his statement of claim the  second  party  has
stated that, he will be going to  retire  from  service  on  31.05.2005.  It
means, already the second party has attained the age of  retirement  in  the
year 2005. Once  his  termination  is  held  as  illegal,  second  party  is
entitled for reinstatement  with  continuity  of  service  and  back  wages.
However, the second party has attained the age  of  superannuation  i.e.  58
years on 31.05.2005. Accordingly, had he been in service then he would  have
been retired on 31.05.2005. The charges levelled in  the  charge  sheet  are
not proved in enquiry or before  this  Court,  therefore,  second  party  is
entitled for all the benefits, as if he  was  in  employment  of  the  first
party-corporation. Therefore, the Ld. Counsel for second party argued  that,
despite directing reinstatement of the second  party,  the  first  party  be
directed to avail him all the monetary benefits till his superannuation  and
dues admissible as per rules. Considering all  these  aspects  of  attaining
the age of superannuation by the second party, it will be  proper  to  mould
the relief as sought by him to the extent of availing him all  the  monetary
benefit till his superannuation, which are admissible as per law.  Once,  it
is held that, the findings of enquiry officer are perverse and  first  party
has illegally dismissed him from service, therefore,  certainly  the  second
party is entitled for the relief. …”.

Thus, the Reference was answered in favour of the  appellant  setting  aside
the dismissal order. However, taking note of the  fact  that  the  appellant
had crossed the age of superannuation,  instead  of  reinstatement,  50  per
cent of the back wages from  the  date  of  termination  till  the  date  of
superannuation with all other service benefits were granted.
The High Court, in the impugned order, took the view that the  Labour  Court
went wrong in deciding the preliminary issue concerning the fairness of  the
inquiry and deciding  all  further  issues  in  one  stroke.  To  quote  the
relevant  consideration  which  appears  at  paragraph-12  of  the  impugned
judgment:
“12.  It is apparent that  the  Labour  Court  has  erred  in  deciding  the
preliminary issues concerning the fairness of the enquiry and  the  findings
of the enquiry officer along  with  all  the  issues  while  delivering  the
impugned  judgment.  The  procedure  laid  down  in  law,  which  has   been
considered by this Court and followed  in  the  case  of  Maharashtra  State
Roadways Transport Corporation, Beed Vs. Syed Saheblal Syed Nijam [2014  III
CLR 547], has not been followed by the  Labour  Court.  It  could  not  have
decided the preliminary issues along with all the rest of the issues in  one
stroke while delivering the impugned  award.  For  this  reason  alone,  the
impugned award is rendered unsustainable.”

In that view of the matter, it was held that  the  appellant  would  not  be
entitled  to  the  gratuity  but  a  one-time  compensation  of  an   amount
equivalent to 50 per cent of the back wages, would be just  and  proper.  To
quote the relief portion:
“17.  This Writ Petition is, therefore, partly allowed. The  impugned  award
is modified by setting aside clause 1 and 2 of the  order  and  by  granting
the 50% of the backwages as awarded by  the  Labour  Court  from  26.08.2002
till  31.05.2005  as  quantified  compensation.  The  Respondent  shall   be
deprived of gratuity amount since the  charge  proved  against  him  in  the
enquiry involves moral turpitude.”

Heard Learned Counsel appearing on both sides.
On facts, it clear that the High Court has gone wrong in  holding  that  the
Labour Court did not follow the procedure. It is seen from  the  award  that
the management had not sought for an opportunity for leading  evidence.  And
despite granting an opportunity, no evidence was adduced  after  the  Labour
Court  held  that  the  findings  of  the  inquiry  officer  were  perverse.
Therefore, the Labour Court cannot be faulted for  answering  the  Reference
in favour of the appellant.
The Labour Court, on the available  materials  on  record,  found  that  the
termination was unjustified on the basis of a perverse  finding  entered  by
the inquiry officer. There was no attempt on  the  part  of  the  management
before the Labour Court to establish otherwise.
It appears that the High Court itself has  granted  compensation  since  the
Court felt that the termination was unjustified and since reinstatement  was
not possible on account of superannuation. In case, the High  Court  was  of
the view that termination was justified,  it  could  not  have  ordered  for
payment of any compensation.
In order to deny gratuity to an employee, it is not enough that the  alleged
misconduct of the employee constitutes an offence involving moral  turpitude
as per the report of the domestic inquiry.  There  must  be  termination  on
account of the alleged misconduct, which constitutes  an  offence  involving
moral turpitude.
Thus, viewed from any angle, the  judgment  of  the  High  Court  cannot  be
sustained. It is hence set aside. The appeal is  allowed.  The  award  dated
20.06.2013 of the Labour Court, Jalgaon, Maharashtra in  Reference  IDA  No.
42 of 2007 is restored. Consequently, the appellant  shall  be  entitled  to
gratuity in respect of his continuous service from his original  appointment
till the date of his superannuation.
There shall be no orders as to costs.


                                  ........................................J.
       (KURIAN JOSEPH)




                                                        ......………………………………J.
(ROHINTON FALI NARIMAN)

New Delhi;
December 6, 2016.

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                                                                  REPORTABLE





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