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CASE NO.: Appeal (civil)  7993 of 2004

PETITIONER: Divisional Controller, N.E.K.R.T.C.

RESPONDENT: H. Amaresh

DATE OF JUDGMENT: 17/07/2006

BENCH: Dr. AR. Lakshmanan & Lokeshwar Singh Panta

JUDGMENT: J U D G M E N T

Dr. AR. Lakshmanan, J.

This appeal is directed against the final judgment and order  dated 22.07.2003 passed by the High Court of Karnataka at  Bangalore in Writ Appeal No. 6439 of 2000.  By the impugned  judgment, the Division Bench, while disposing off the appeal,  confirmed the findings of the Labour Court and of the learned  Single Judge with regard to reinstatement and set aside the  findings on back-wages.  Though the respondent has been served  and the affidavit and proof of service stating therein that the  show cause notice was received by the sole respondent on  04.11.2004, there was no response or representation on behalf of  the respondent.  The respondent was also called absent.  We,  therefore, decided to hear the appeal on merits and also carefully  perused the pleadings, the order of the Labour Court, judgment  of the Single Judge and of the Division Bench of the High Court  and other relevant records. We also heard the learned argument of Ms. Anitha Shenoy,  learned counsel for the appellant-Corporation.   BACKGROUND FACTS: The respondent joined the Corporation as a conductor.   While he was on duty, the appellant-Corporation noticed that he  was under the influence of alcohol and did not issue tickets to  the passengers.  The appellant-Corporation issued Articles of  Charge to the respondent-conductor and he replied to the same.   The charges, which are grave in nature, are enumerated as  below: 1.      That it is reported that you are in a habit of consuming alcohol  while on duty and created bad scene of the Corporation among  the public by spoiling the image of the Corporation apart from  financial loss to the Corporation.                            (not proved)  2.      That on 27.12.90 you were booked on Devadurga Hosur N/o  Schedule No.16/B. 16 along with Sri. Allapa driver No. 2022  but you were not able to discharge duties due to intoxication  and after having consumed alcohol and you are not able to  perform the schedule duty. In place another conductor had to  be arranged inspite of acute shortage of conductor.  (not proved)  3.      Further the passenger of schedule No. 47 B/Hospet, 16B, Hosur  N/o. were unnecessarily detained at bus stand from 21-15  hours to 22-30 hours, and you went away without getting  dispatched from the controller.                        (not proved) 4.      That on 28.12.90 after completion of the above said duties at  about 14 hours, the KSRTC cash held by you was checked and  found Rs. 360-95 as short and you were found in drunken  condition.                                                              (proved)

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Not satisfied with the reply, the appellant-Corporation  conducted the enquiry in accordance with the principles of  natural justice and ’Conduct & Discipline’ Regulations.  The  Inquiry Officer found the charges levelled against the respondent  proved.  A true copy of the Inquiry Report dated 11.12.1991 has  been filed and marked as Annexure-P1.  It is useful to reproduce  the Inquiry Officer’s report in paras 4 and 5.    "4. That act of mis-appropriation noticed after checking the  way bill and many irregularities, namely failed to show the  sale of tickets and over writing. Several places not shown  the number of passengers and trip wise collection not  mentioned target of revenue was Rs. 1250/- but the  delinquent deposit sum of Rs. 638/75 paise. Lastly cash  was remitted very late; hence these are the imputations of  statement. The M.W.1 has given the detail as to the  manner how he notices the irregularities as violations and  misconduct having found in drunken state on duty.

In support he has got marked Ex. M.1 to 4, the  documents which have not been refuted nor tested the  veracity of witness. I have carefully examined the evidence  of M.W.1 and the documents marked fully reveals that the  delinquent has committed not only misconduct but  misappropriated the cash by short remittance. I see no  reason why the testimony of M.W.1 should be discarded  when delinquent has failed to test the statement by cross  examination.

5.      In reply by way of written in defense the delinquent has  simply denied the charges saying as baseless.

On case full consideration of all the aspects of case  unhesitantly I can say that the delinquent has not created  a doubt of evidence led by management and I hold that  management has fully brought home the charges.  There is  no reason to discard the testimony of M.W.1, accordingly I  hold that all the charges have been proved by the  management.  Hence this report."  

The Disciplinary Authority, after perusing the details of the  inquiry proceedings, replied to the respondent to the Articles of  Charge and other available material, agreed with the findings of  the Inquiry Officer and dismissed the respondent from service.   Aggrieved by the order of dismissal, the respondent raised an  industrial dispute under Section 10(4) of the Industrial Disputes  Act, 1947 before the Labour Court, Gulbarga to which the  Corporation replied. The Presiding Officer, Labour Court, by his order dated  30.08.1996, while deciding the preliminary issue regarding the  validity of inquiry proceedings held the same to be illegal and  invalid in view of the denial of reasonable opportunity to the  respondent.  The Labour Court, by its Award dated 17.12.1996, held that  out of 4 charges levelled against the respondent, the 4th charge  regarding pilferage against the respondent stood proved.  As  regards punishment, dismissal from service was substituted with  reinstatement and 75% backwages.  Aggrieved by the award  dated 17.12.1996, the appellant-Corporation filed the writ  petition before the High Court of Karnataka at Bangalore.  The  learned Single Judge, by his order dated 11.09.2000, upheld the  findings of the Labour Court but modified the back-wages and  reduced it to 25%.   Aggrieved by the order of the learned Single Judge, the  Corporation filed an appeal before the Division Bench of the  Karnataka High Court.  The Division Bench, by the impugned

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judgment and order, affirmed the findings of the Labour Court  and of the learned Single Judge with regard to reinstatement and  set aside the findings on back wages.  Hence the special leave  petition was filed by the Corporation and notice was ordered on  17.11.2003.  On 03.12.2004, none appeared on behalf of the  respondent and leave was granted.   We heard Ms. Anitha Shenoy, learned counsel appearing for  the appellant-Corporation.  We have been taken through the  pleadings, two orders passed by the Labour Court, order of  learned Single Judge and of the learned Judges of the Division  Bench.  We have carefully perused those orders. A careful  perusal of the order dated 17.12.1996 of the Labour Court would  only reveal the total non-application of the mind by the Presiding  Officer of the Labour Court, Gulbarga and the inconsistent  findings rendered by the said Court.  There are lot of  discrepancies and mistakes in the award of the Labour Court on  factual as well as legal aspects of the matter.  The Labour Court  at one place has observed as follows:-  "Ex.M.1 goes to show that the claimant was negligent in  remitting the amount. But no inference can be drawn  against him that he was under the influence of  intoxication, and there was shortage of fund with the  claimant. The shortage of fund could be due to so many  reasons. Therefore the claimant has committed some  misconduct which is not a simple in nature."

In another place, the Labour Court in para 22 has observed  as under:- "I have already stated above that the Respondent has  not proved charges 1 to 3. But he has proved charge  No.4.  I have also stated above that the charge No.4 is   grave in nature and as such some reasonable  punishment is necessary."  

 There is absolutely no precision in regard to the factual  aspects and findings rendered by the Labour Court.  In the said  award, the Labour Court directed reinstatement of the  respondent despite holding him guilty of the charge of pilferage  levelled against him and directed reinstatement with back wages.   In our view and as rightly pointed out by learned counsel for the  appellant any dereliction of duty in this regard is highly  detrimental to its financial well being and against public interest.   We shall now consider the judgment of the High Court.   The High Court, in our view, has erred in affirming the award of  the Labour Court insofar as the award of reinstatement is  concerned.  As rightly urged by Ms. Anitha Shenoy that the  charges of pilferage was established against the respondent- workman such misconduct is grave and has the effect of  disrupting the services of a public transport system.   This Court in the judgment reported in (2002) 10 SCC 330  - Regional Manager, RSRTC vs. Ghanshyam Sharma (3  Judges) held that the proved acts of misconduct   either to a case  of dishonesty or of gross negligence and bus conductors who by  their actions and inactions cause financial loss to the  Corporation ought not to be retained in service.   The judgment in Karnataka SRTC vs. B.S. Hullikatti  reported in (2001) 2 SCC 574 (2 Judges) was also referred to and  relied on by the 3 Judges Bench in the above judgment.  This Court in (2001) 2 SCC 574 (2 Judges) has held in para  6 as follows:- "It is misplaced sympathy by the Labour Courts in such  cases when on checking it is found that the Bus  Conductors have either not issued tickets to a large  number of passengers, though they should have, or  have issued tickets of a lower denomination knowing

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fully well the correct fare to be charged. It is the  responsibility of the Bus Conductors to collect the  correct fare from the passengers and deposit the same  with the company. They act in a fiduciary capacity and  it would be a case of gross misconduct if knowingly they  do not collect any fare or the correct amount of fare."

The High Court and the Labour Court failed to consider all  the cogent evidence and documents produced by the Corporation  before them.  The Labour Court has miserably erred by not  considering that the respondent was in a drunken condition  when there was no denial on the part of the workmen to that  effect.  By not considering this, the High Court has also erred.  The order of reinstatement passed by the Labour Court and  its affirmation by the High Court is contrary to the law declared  by this Court in (2001) 2 SCC 574 wherein it was held that it is  misplaced sympathy by courts in awarding lesser punishments  where on checking it is found that the bus conductors have  either not issued tickets to a large number of passengers and  deposit the same with the Corporation.  They act in a fiduciary  capacity and it would be a case of gross misconduct if knowingly  they do not collect any fare or the correct amount of fare.  It was  finally held that the order of dismissal should not have been set  aside.  As already noticed, this view was reiterated by a 3 Judges  Bench of this Court in the Regional Manager, RSRTC case  (supra).  In the instant case, the mis-appropriation of the funds by  the delinquent employee was only Rs. 360.95.  This Court has  considered the punishment that may be awarded to the  delinquent employees who mis-appropriated funds of the  Corporation and the factors to be considered.  This Court in a  catena of judgments held that the loss of confidence as the  primary factor and not the amount of money mis-appropriated  and that the sympathy or generosity cannot be a factor which is  impermissible in law.  When an employee is found guilty of  pilferage or of mis-appropriating a Corporation’s funds, there is  nothing wrong in the Corporation losing confidence or faith in  such an employee and awarding punishment of dismissal.  In  such cases, there is no place for generosity or misplaced  sympathy on the part of the judicial forums and interfering  therefore with the quantum of punishment.  The judgment in  Karnataka State Road Transport Corpn. Vs. B.S. Hullikatti,   (2001) 2 SCC 574 was also relied on in this judgment among  others.  Examination of passengers of vehicle from whom the  said sum was collected was also not essential.  In our view,  possession of the said excess sum of money on the part of the  respondent, a fact proved, is itself a mis-conduct and hence the  Labour Court and the learned Judges of the High Court  misdirected themselves in insisting on the evidence of the  passengers which is wholly not essential.  This apart, the  respondent did not have any explanation for having carried the  said excess amount.  This omission was sufficient to hold him  guilty.  This act was so grossly negligent that the respondent was  not fit to be retained as a conductor because such action or  inaction of his was bound to result in financial loss to the  appellant irrespective of the quantum.  In this context, it is useful to refer to the findings of the  domestic tribunal which has already been extracted above in  paragraph (supra).  Before the Inquiry Officer Exh. M1-M4 were  marked, which have not been refuted nor was the veracity of  witness decided.  The Inquiry Officer has stated that he has  carefully examined the evidence of MW.1 and the documents  marked which fully reveals that the delinquent has committed  not only misconduct but misappropriated the cash.  MW 1 was  not cross examined by the delinquent employee.  In reply, the

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delinquent has simply denied the charges stating it baseless.   The Inquiry Officer, on a careful consideration of all aspects of  the case, unhesitantly held that the delinquent was guilty of the  charges and that all the charges have been proved. Once a domestic Tribunal based on evidence comes to a  particular conclusion normally it is not open to the tribunal and  courts to substitute their subjective opinion in place of the one  arrived at by the domestic tribunal.  Coming to the question of quantum of punishment, this  Court in Divisional Controller, KSRTC (NWKRTC) vs. A.T.  Mane, (2005) 3 SCC 254 has held as under:-   "Coming to the question of quantum of punishment,  One should bear in mind the fact that it is not the  amount of money misappropriated that becomes a  primary factor for awarding punishment; on the  contrary, it is the loss of confidence which is the  primary factor to be taken into consideration. In our  opinion, when a person is found guilty of  misappropriating the Corporation’s funds, there is  nothing wrong in the Corporation losing confidence or  faith in such a person and awarding a punishment of  dismissal."

We may also beneficially refer to a judgment rendered by a  3 Judges Bench of this Court reported in (2005) 3 SCC 401 \026  M.P. Electricity Board vs. Jagdish Chandra Sharma.  This  Court held that the tribunals would not sit in appeal over the  decision of the employer unless there exists a statutory provision  in this behalf.  Moreover, Labour Courts must act within the four  corners of the statute concerned, in terms of the provisions  thereof.  When the Labour Court having held that charge No.4  stood proved, no interference by the learned Single Judge or by  the Division Bench was called for.  In the instant case, the  jurisdiction vested with the Labour Court has been exercised  capriciously and arbitrarily in spite of the finding that Charge  No.4, with regard to the pilferage, has been proved beyond any  doubt.  In our opinion, the conclusion arrived at by the High  Court in ordering reinstatement was shockingly disproportionate  in the nature of charge No.4 found proved.  When charge No.4 is  proved, which is grave in nature, interference with the  punishment of dismissal cannot be justified.  Similarly, the High  Court gets jurisdiction to interfere with the punishment in the  exercise of its jurisdiction under Article 226 of the Constitution  only when it finds that the punishment imposed is shockingly  disproportionate to the charges proved. Ms. Anitha Shenoy also cited a recent decision of this Court  reported in (2005) 7 SCC 447 \026 Rajasthan State Road  Transport Corpn. And Others vs. Zakir Hussain (Ruma Pal  and Dr. AR. Lakshmanan, JJ).  The respondent therein was also  a conductor of the appellant-Corporation.  He challenged the  termination of his service as being in violation of the provisions of  the Standing Order.  However, without availing the remedy  available to him under the Industrial Disputes Act, 1947 he  approached the Civil Courts and obtained decrees in his favour.   It was challenged by the management before the High Court.  The  High Court declined to interfere with the orders passed by the  lower Court since there is concurrent finding on fact by both the  Courts below and that no substantial question of law arises, the  appellant-Corporation preferred the special leave petition before  this Court questioning the correctness of the orders passed by  the courts below and of the High Court particularly on the  question of jurisdiction of civil courts to entertain and try the suit  instead of an industrial dispute.  This Court held that the civil  court has no jurisdiction and that the jurisdiction cannot be  conferred by any order of the court and that where an act creates

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an obligation and enforces the performance in a specified manner  the performance cannot be enforced in any other manner.  It was  held that the employees of the State Road Transport Corporation  are not civil servants and, therefore, they are not entitled to  protection under Article 311 of the Constitution and that their  terms of appointment are governed by the letter of appointment  and, therefore, the management was well within its right to  terminate the services of the respondent during the period of  probation if their services were not found to be satisfactory  during the said period and in such an event the appellant- Corporation was not obliged to hold an enquiry before  terminating the services.  In the concluding part of the judgment,  this Court has observed that since the respondent-workman has  not acted bona fide in instituting the suit, the respondent was  not entitled to any back wages and having regard to the facts and  circumstances of the said case, it would not be appropriate to  order refund of the back wages paid to him and that he shall not  be allowed to continue in service any further and shall be  discharged forthwith.   In the instant case, even though charge No.4 has been  proved beyond any doubt, the Labour Court taking a lenient and  sympathetic view, passed certain directions which were modified  by the learned Single Judge and of the Division Bench.  While  entertaining this special leave petition, this Court has only  ordered notice to the respondent.  The order of the High Court  and of the Division Bench has not been stayed even though the  Division Bench observed that having regard to the gravity of the  charges proved against the respondent, it would be in the  interest of justice to modify the order passed by the learned  Single Judge to the extent he has directed the appellant- Corporation to pay 25% back wages.  The Division Bench deleted  the direction in regard to the payment of back wages but retained  the order in regard to the reinstatement.  The said order is ex- facie illegal and contrary to the principles laid down by the  various decisions of this Court which have been referred to in  paragraphs supra and also on the proved facts and  circumstances of the case.  Having accepted all the facts that the  charges of short remittance was proved and yet the learned  single Judge and the learned Judges of the Division Bench  proceeded to pass an order ordering reinstatement which clearly  goes against the mandate of the various judgments of this Court.  In our view, even short remittance amounts to mis-conduct  and, therefore, applying the rulings of this Court, the impugned  order ought not to have been passed by the Division Bench  ordering reinstatement.  We, therefore, have no hesitation to set  aside the order passed by the learned Judges of the Division  Bench and restore the order of dismissal of the respondent from  service.  It is stated that pursuant to the order of the Labour  Court the respondent was reinstated in service.  Since there was  no stay granted by this Court the respondent had continued in  service of the Corporation.  In view of the law laid down by this  Court and of the facts and circumstances of this case, the  respondent, in our opinion, has no legal right to continue in  service any further.  We, therefore, direct the appellant- Corporation to immediately discharge the respondent from  service.  However, we make it clear that the salary paid to the  respondent and other emoluments during this period shall not be  recovered from the respondent.  We also make it further clear  that in view of the order of dismissal the respondent shall not be  entitled to any further emoluments.  For the foregoing reasons, we allow the appeal filed by the  appellant-Corporation and set aside the orders passed by the  Labour Court, learned Single Judge and also of the Division  Bench as perverse and are against the proved facts and  circumstances of the case.  No costs.

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We place on record our appreciation for the able assistance  rendered by Ms. Anitha Shenoy, learned counsel for the  appellant at the time of hearing.