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CASE NO.: Appeal (civil)  5344 of 2005

PETITIONER: United Bank of India

RESPONDENT: Tamil Nadu Banks Deposit Collectors Union and Anr

DATE OF JUDGMENT: 05/12/2007

BENCH: Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT:

J U D G M E N T

CIVIL APPEAL NO. 5344 OF 2005

Dr. ARIJIT PASAYAT, J.  

1.      Challenge in this appeal is to the order Passed by a  Division Bench of the Madras High Court         allowing the writ  appeal filed by the respondents.

2.      Background facts in a nutshell are as follows:

Two persons named Koshi Kottikeran and Liakath Ali  were engaged as Commission agents with the appellant Bank  in its Coimbatore Branch. On 11.10.1984 and 12.12.1984  engagements of Koshi Kottikeran and Liakath Ali came to be  terminated by the appellant-Bank.  Respondent No.1-The  Union raised two disputes purported to be an industrial  dispute with regard to alleged termination of the aforesaid two  persons. The matter was referred to the Industrial Tribunal,  Tamil Nadu (in short the ’Tribunal’) I.D. Case Nos.26 and 44 of  1987.  Appellant Bank took the stand that these two persons  were not workmen and in any event the dis-engagement was  legal, justified and permissible.  The Tribunal passed a  common award answering the reference against the claimant  and in favour of the management.  

Aggrieved by the award the respondent No. 1-Union  preferred Civil Writ Petition No. 15538 of 1997 before the  Madras High Court.   

Learned Single judge by order dated 15.10.1997  dismissed the writ petition.  The Union carried the matter  further in writ appeal.   By the impugned order the Division  Bench of the High Court allowed the writ appeal.  The High  Court came to hold that a Tiny Deposit Collector was a  workman. Therefore, it is a valid dispute, and the dispute  referred to can be adjudicated by the Tribunal.  It referred to  the letters of disengagement and came to hold that the  termination orders disclosed that they were simple orders of  termination. That being so no specific reason for termination  of services was disclosed. They did not refer to any misconduct  and therefore there was no justification for the Tribunal to  permit the appellant-bank to rely upon documents and  materials to justify the orders.  It was also held that there was  absolutely no acceptable evidence placed before the Tribunal

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to justify the orders of termination.  Accordingly writ appeal  was allowed.

3.      Learned counsel for the appellants submitted that it was  permissible for the Tribunal to allow the employer to lead  evidence.  The learned Single judge categorically observed that  the evidence led before the Tribunal was to substantiate the  stand of the employer about the misconduct of the two  workmen.  

4.      There is no appearance on behalf of respondent No.1- Union in spite of service of notice.

5.      Circumstances, when permission can be granted to an  employer to lead evidence to justify its order of termination,  have been highlighted by this Court in several cases.

6.      The reference to the Tribunal was as follows:

"ID 26/87 :Whether the action of the  management of the United Bank of India,  Madras, in terminating the services of Shri  Koshy Kottikaran, Tiny Deposit Collector,  United Bank of India, Oppanakkara Street,  Coimbatore from 20.12.1984 is legal?  If not to  what relief is workman concerned entitled?"

ID 44/87 : Whether the action of the  Management of the United Bank of India,  Madras, in terminating the services of Shri  Liakath Ali, Tiny Deposit Collector, United  Bank of India, Oppanakkara Street,  Coimbatore from 11.10.1984 is legal? If not to  what relief is the workman concerned  entitled?"

7.      The reasons which weighed with the Tribunal for  deciding in favour of the appellant bank read as follows:

"The Dy. General Manager asked the Regional  Manager to give the particulars regarding the  non-engagement of Commission Agent for TSS  is disclosed by Ex. M 10. The commission  Agents decided to demonstrate at 5.00 p.m.  from 28.8.1984 in front of the Bank for one  week and 28t" onwards is revealed by Ex. M.  11. This scheme was abolished due to  complaints and problems. The object of the  introduction of the Tiny Deposit Scheme is to  create a Saving habit of the weaker section of  the society is proved by Ex. M. 13. The  Manager wrote to the Regional Manager,  Southern Region, regarding the Tiny Deposit  Scheme, one depositor   A.  Ali paid Rs. 1,,000/- to the petitioner in  I.D. No. 44/87 and he has not passed any  receipt is disclosed by Ex. M 15. He obtained a  loan from the bank, is established by Ex. M.  16.    Rs. 1,000/- was remitted on 15.11.84 is  proved .  The Manager sent a letter to the  appellant in I.D. No. 44/87 to submit his  explanation as to why action should not be  taken against him within 24 hours from the  date of receipt of the notice.  He submitted his

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explanation.  The appellant in I.D. no. 44/87  did not immediately report the missing of the  bag to the bank is made out by Ex. M 21. The  petitioner in I.D. No. 44/87 did not  immediately report the missing of the bag to  the bank is made out by Ex M 21 the  petitioners in I .D. No. 44/87 did not  immediately report the missing of the bag to  the bank, is made out by Ex. M. 21. The  petitioner in I.D. No. 44/87 remitted the  collection of Rs. 455 /- to the bank is  established by Ex. M. 22. The Manager sent a  confidential letter to the Regional Manger,  Southern Region, is supported by Ex.M. 23.  The Bank issued Show Cause Notice to the  Petitioner in I.D. No. 44/87 is proved by Ex.  M. 24. He submitted his explanation is proved  by Ex. M. 25. The bank published the notice in  Tamil News Paper is proved by Ex M 20 The  Petitioners in both the I.D.s demanded coupon  for Rs. 500/- and 1 000/- and signatures of  the Manger in the coupon. The Bank refused  to concede to the demand of the Commission  Agents. Ravi kumar was also  a Commission  Agent and he committed several malpractice  and action was taken against him. The  Commission Agents and two staff of the b  demonstrated in front of the bank and  shouting vulgar slogans against the Dy.  General Manager is proved by the Evidence of  M.Ws 1 and 2. Admittedly there is no enmity  between the Commission Agents and M.Ws 1  and 2. The Petitioner in the two I.Ds and Ravi  Kumar, used vulgar words is proved by the  legal evidence of M.Ws 1 and 2, the petitioner  in both the ID were given warning and put on  notice about their misconduct.  The petitioners  in both the I.Ds were given  opportunities and  warnings to rectify their mistakes.  The  termination of the petitioner in both the I.Ds is  legal.  Even no enquiry enquiry as conducted, it  will not vitiate the order of dismissal is held in  1973 I LLJ 78 S.C. Workmen of Firestone Tyre  Rubber Co. Vs. Management. Even no enquiry  was conducted and the enquiry conducted is  defective, an opportunity must be given to the  employee to prove the charges and opportunity  must be given to the employee to evidence  control is held in the above cited case.  In  these two I.Ds. opportunity was given to the  appellant and respondent to adduce evidence,  to prove the charge in this Tribunal.  The  charge is proved by the evidence of M.Ws.  1and 2.  There is no evidence contrary."

8.      In Workmen of Motipur Sugar Factory (Private) Limited v.  Motipur Sugar Factory [(1965) 3 SCR 588] it was observed as  follows:

"It is now well-settled by a number of decisions  of this Court that where an employer has failed  to make an enquiry before dismissing or  discharging a workman it is open to him to  justify the action before the tribunal by leading  all relevant evidence before it. In such a case

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the employer would not have the benefit which  he had in cases where domestic inquiries have  been held. The entire matter would be open  before the tribunal which will have jurisdiction  not only to go into the limited questions open  to a tribunal where domestic inquiry has been  properly held (see Indian Iron & Steel Co. v.  Their workmen [[1958] S.C.R. 667] but also to  satisfy itself on the facts adduced before it by  the employer whether the dismissal or  discharge was justified. We may in this  connection refer to M/s Sasa Musa Sugar  Works (P) Limited v. Shobrati Khan [[1959]  Supp. S.C.R. 836], Phulbari Tea Estate v. Its  Workmen and Punjab National Bank Limited v.  Its Workmen. There three cases were further  considered by this court in Bharat Sugar Mills  Limited. v. Shri Jai Singh, and reference was  also made to the decision of the Labour  Appellate Tribunal in Shri Ram Swarath Sinha  v. Belaund Sugar Co. [[1954] L.A.C. 697]. It  was pointed out that "the import effect of  commission to hold an enquiry was merely this  : that the tribunal would not have to consider  only whether there was a prima facie case but  would decide for itself on the evidence adduced  whether the charges have really been made  out". It is true that three of these cases, except  Phulbari Tea Estate’s case were on  applications under Section 33 of the Industrial  Disputes Act, 1947. But in principle we see no  difference whether the matter comes before the  tribunal for approval under Section 33 or on a  reference under Section 10 of the Industrial  Disputes Act, 1947. In either case if the  enquiry is defective or if no enquiry has been  held as required by Standing Orders, the entire  case would be open before the tribunal and the  employer would have to justify on facts as well  that its order of dismissal or discharge was  proper. Phulbari Tea Estate’s was on a  reference under s. 10, and the same principle  was applied there also, the only difference  being that in that case, there was an enquiry  though it was defective. A defective enquiry in  our opinion stands on the same footing as no  enquiry and in either case the tribunal would  have jurisdiction to go into the facts and the  employer would have to satisfy the tribunal  that on facts the order of dismissal or  discharge was proper. 9.      Again in Delhi Cloth and General Mills Co.Vs. Ludh Budh  Singh [1973(3) SCR 29] this Court held as follows: "When a domestic enquiry has been held  by the management and the management  relies on the same, it is open to the latter to  request the Tribunal to try the validity of the  domestic enquiry as a preliminary issue and  also ask for an opportunity to adduce evidence  before the Tribunal, if the finding on the  preliminary issue is against the management.  However elaborate and cumbersome the  procedure may be, under such circumstances,  it is open to the Tribunal to deal, in the first  instance, as a preliminary issue the validity of

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the domestic enquiry. If its finding on the  preliminary issue is in favour of the  management, then no additional evidence need  be cited by the management. But. if the finding  on the preliminary issue is against the  management, the Tribunal will have to give the  employer an opportunity to cite additional  evidence and also give a similar opportunity to  the employee to lead evidence contra, as the  request to adduce evidence had been made by  the management to the Tribunal during the  course of the proceedings and before the trial  has come to an end. When the preliminary  issue is decided against the management and  the latter leads evidence before the Tribunal,  the position, under such circumstances, will  be, that the management is deprived of the  benefit of having the finding of the domestic  Tribunal being accepted as prima facie proof of  the alleged misconduct. On the other hand,  the management will have to prove, by  adducing proper evidence, that the workman is  guilty of misconduct and that the action taken  by it is proper. It will not be just and fair either  to the management or to the workman that the  Tribunal should refuse to take evidence and  thereby ask the management to make a further  application, after holding a proper enquiry,  and deprive the workman of the benefit of the  Tribunal itself being satisfied, on evidence  adduced before it, that he was or was not  guilty of the alleged misconduct."

10.     In Workmen of Fire Stone Tyre Rubber Company v.  Management [1973(1)LLJ 78] it was inter alia held as follows:

"4. Even if no enquiry has been held by  an employer or if the enquiry held by him is  found to be defective, the Tribunal in order to  satisfy itself about the legality and validity of  the order, had to give an opportunity to the  employer and employee to adduce evidence  before it.  It is open to the employer to adduce  evidence for the first time justifying his action,  and it is open to the employee to adduce  evidence contra.

(5)      The effect of an employer not holding an  enquiry is that the Tribunal would not have to  consider only whether there was a prima facie  case. On the other hand, the issue about the  merits of the impugned order of dismissal or  discharge is at large before the Tribunal and  the latter, on the evidence adduced before it,  has to decide for itself whether the misconduct  alleged is proved. In such cases, the point  about the exercise of managerial functions  does not arise at all. A case of defective  enquiry stands on the same footing as no  enquiry. (6) The Tribunal gets jurisdiction to consider  the evidence placed before it for the first time  in justification of the action taken only, if no  enquiry has been held or after the enquiry  conducted by an employer is found to be

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defective. (7) It has never been recognised that the  Tribunal should straightaway, without  anything more, direct reinstatement of a  dismissed or discharged employee, once it is  found that no domestic enquiry has been held  or the said enquiry is found to be defective.

(8) An employer, who wants to avail himself of  the opportunity of adducing evidence for the  first time before the Tribunal to justify his  action, should ask for it at the appropriate  stage.  If such an opportunity is asked for, the  Tribunal has no power to refuse.  The giving   an opportunity to an employer to adduce  evidence for the first time before the Tribunal  is in the interest of both the management and  the employee and to enable the Tribunal itself  to be satisfied about the alleged misconduct.

(9)     Once the misconduct is proved either in  the enquiry conducted by an employer or by  the evidence placed before a Tribunal for the  first time, punishment imposed cannot be  interfered with by the Tribunal except in cases  where the punishment is so harsh as to  suggest victimization."

11.     In view of the aforesaid position in law, the inevitable  conclusion is that the Division Bench of the High Court was  not justified in allowing the writ appeal.  A wrong permission  granted to lead evidence and absence of acceptable evidence  are conceptually different. The Division Bench appears to have  been confused between the two concepts. There is no finding  recorded that the permission was wrongly granted.  That being  so, the appeal deserves to be allowed, which we direct.  No  costs.