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PETITIONER: J. D. JAIN

       Vs.

RESPONDENT: THE MANAGEMENT OF STATE BANK OF INDIA & ANR.

DATE OF JUDGMENT17/12/1981

BENCH: ISLAM, BAHARUL (J) BENCH: ISLAM, BAHARUL (J) TULZAPURKAR, V.D. VARADARAJAN, A. (J)

CITATION:  1982 AIR  673            1982 SCR  (2) 227  1982 SCC  (1) 143        1981 SCALE  (3)1884

ACT:      Constitution of India 1950 Art. 226-Award of Industrial Tribunal-Jurisdiction   of    High   Court-interference-When arises.      Industrial  Disputes   Act  1947   S.  11  A-Complaint- Depositor against  bank employee-Debit  authority alteration of-Withdrawal of  excess  money-Confession  by  employee  to officer of  alteration and  withdrawal-Holding  of  domestic enquiry-Non examination  of depositor-Charge  of  fraud  and misappropriation proved-Employee  discharged  from  service- Dispute raised-Issue  referred to  Tribunal-Tribunal holding depositor  (complainant)   not   examined-Evidence   against employee  ’hearsay’-Directing  reinstatement-High  Court  in writ petition  setting aside  of tribunal-High Court Whether correct in  interfering with award-Award whether vitiated by misconception of law.      Labour  Law-Domestic   enquiry-Guilt  whether   to   be established  beyond  reasonable  doubt-Proof  of  misconduct alone-Whether sufficient,      Words & Phrases ’hearsay’-Meaning of

HEADNOTE:      The Appellant  was working  as a  Cashier in  a Bank. A depositor who  had a Savings Bank Account with the Bank came to the Bank to receive his Pass Book. On receipt of his Pass Book from  the Counter  Clerk he  complained to  the  ledger keeper that, on a certain date he had withdrawn only Rs. 500 but a  debit entry  of Rs,  1,500 had been shown in the Pass Book. The Ledger keeper took the depositor to the Supervisor and The  Agent and  his complaint  was  recorded.  When  the documents pertaining  to the withdrawal were examined it was found that  the depositor had given a letter of authority to the appellant  authorising withdrawal  from his account. The letter of authority showed that it was for withdrawal of Rs. 1500  though   there  appeared   to  be  some  interpolation suggesting that  the figure  of Rs.  500 had been altered lo the figure of Rs. 1500.      A memorandum  of charge  was served on the appellant by the Management  respondent No.  I and a disciplinary enquiry was held.  The Enquiry  Officer submitted his report and his findings were  that the  appellant had  fraudulently altered

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the  amount   in  the  letter  of  authority  given  by  the depositor, withdrew  Rs. 1500  from the  depositor’s account and paid Rs. 500 only to the depositor and 228 misappropriated Rs.  1500. In  pursuance of  the enquiry the appellant was discharged from service.      The appellant  having raised  an industrial dispute the matter was  referred to  the Industrial Tribunal. Before the Tribunal the  appellant denied  the charges and pleaded that as the  depositor  was  not  examined  in  the  disciplinary enquiry there  was no  legal  evidence  before  the  Enquiry officer for  finding that he was guilty. Before the Tribunal the Management  examined no witnesses but produced documents and relied  on them.  The Tribunal held that on the evidence before it  the appellant  could not be held guilty as in the absence of  the evidence  of  the  depositor,  the  evidence recorded was  ’hearsay’ and  directed reinstatement  to  the appellant with full back wages.      The respondent  moved the  High Court under Article 226 and 227 which held that the charge against the appellant had been established and quashed the award of the Tribunal.      In the  appeal to this Court it was contended on behalf of the appellant: (1) that the Tribunal exercised its powers under Section  11 A  of the  Industrial Disputes Act and the High Court  exercising powers  under Article  226/227 had no jurisdiction to  interfere with  the award; (2) the Tribunal rightly refused  to rely  on the evidence which was hearsay; the depositor  not having  been examined,  and (3)  the High Court committed  an error  in not  considering  the  receipt executed by the depositor showing payment of Rs. 1000 to the depositor.      Dismissing the appeal, ^      HELD:  The   award  of  the  Tribunal  is  vitiated  by misconception of  the law involved. It erred in holding that as  Kansal   (depositor)  was   not  examined,   fraud   and misappropriation on  the part of appellant cannot be held to be proved  and in  failing to appreciate the confession made by the  appellant to  the higher officer that he had altered the amount in figures and words in his own hand. [236 G]      1. In  an application  for a  writ of  certiorari under Article 226 for quashing the award of an Industrial Tribunal the jurisdiction  of the High Court is limited. It can quash the award  when the  Tribunal has  committed an error of law apparent on  the face  of the  record or when the finding of facts of the Tribunal is perverse. [233 B]      In the instant case, three kinds of proceedings against the delinquent  were possible:  (i) departmental proceedings and  action,  (ii)  Criminal  prosecution  for  the  alleged misappropriation of  the amount, and (iii) civil proceedings for recovery  of the  amount alleged  to be misappropriated. The respondent  adopted the  first course and instituted the domestic enquiry.  In such  an enquiry  guilt  need  not  be established beyond reasonable doubt; proof of misconduct may be sufficient. [234 G-235 A]      State of  Haryana &  Anr. v.  Rattan Singh  A.I.R. 1977 S.C. 1512, referred to 229      2. The  word  ’hearsay’  is  used  in  various  senses. Sometimes it means whatever a person declares on information given by someone else. [235 E]      In the  instant case,  the Tribunal after having made a detailed reference  to the  evidence of  the witnesses found that a  complaint was  made by Kansal and that the appellant confessed that  he had altered the debit authority, but held

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That as  Kansal  was  not  examined,  this  was  not  direct evidence but  was of  the nature of ’hearsay’ evidence, with regard to  the fact  whether the  appellant manipulated  the documents, withdrew  the excess  amount and  misappropriated it, there  is no  direct evidence  of any  of the  witnesses except the  appellant’s confession.  The evidence  on  which reliance has  been taken by the respondent is the confession and circumstantial  evidence. The  evidence of  Kansal would have been  primary and  material. if  the fact in issue were whether  Kansal   authorised  the   appellant  to  make  the alterations in  the authority letter. But Kansal’s complaint was to the contrary. No rule of law enjoins that a complaint has to  be in  writing as  insisted by the Tribunal. For the purpose of  a departmental  enquiry, complaint substantiated by circumstantial  evidence is  enough. What  the respondent sought to  establish in the domestic enquiry was that Kansal had made a verbal complaint with regard to the withdrawal of excess money by the appellant. On the factum of complaint of Kansal the  evidence of  these four  witnessess is direct as the complaint  is said  to have been made by Kansal in their presence and  hearing. It  is not  therefore ’hearsay’.  The respondent has  succeeded in  proving that  a complaint  was made by Kansal on the evidence of these four witnesses. [236 A-E]      Subramaniam v  Public Prosecutor  [1956]1  W.L.R.  965, referred to      3. The  receipt executed  by Kansal  showing payment by the appellant  of Rs.  1000 to  the former is destructive of the appellant’s  defence and  on  the  contrary  proves  the respondent’s case. [236 H-237A]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 495 of 1979.      Appeal by  special leave  from the  judgment and  order dated the  18th October,  1978 of  the Delhi  High Court  in Civil Writ Petition No. 1292 of 1975.      R.R.  Garg,   U.R.  Lalit  and  Randhir  Jain  for  the Appellant.       M.C.  Bhandare, S.A.  Shroff, S.S. Shroff and Miss C.K Sachurita for Respondent No. 1.      The Judgment of the Court was delivered by      BAHARUL ISLAM J. This appeal by special leave is by the appellant, J.D.  Jain. who  was a workman and whose services have been  terminated by the management of the State Bank of India (hereinafter called the respondent). 230      2. The material facts are these.      The appellant  was working  as a  cashier in the Meerut City Branch  of the  State Bank  of India. On June 21, 1971, one Dishan  Prakash Kansal  (’Kansal’ for  short) who  had a Savings Bank  account with the said branch of the State Bank came to  the Bank  to receive 3 his Pass Book. On receipt of the Pass  Book from  the counter clerk, Kansal complained to Wadhera who was the Ledger-keeper, that on February 8, 1971, he had withdrawn only Rs. 500 but a debit entry of Rs. 1,500 had been  shown in  the Pass  Book. Wadhera  thereupon  took Kansal to the the Supervisor, R.P. Gupta, before whom Kansal repeated his  complaint. Necessary  documents pertaining  to the said withdrawal were then examined and it was found that Kansal had  given a  ’letter of authority’ (which expression means, we  are told, the withdrawal application form) to the appellant on  February 8,  1971 authorising  him to withdraw

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the amount  from his account. The letter of authority showed that it  was  for  withdrawal  of  Rs.  1,500  though  there appeared to be some interpolation suggesting that the figure of Rs.  500 had been altered to the figure of Rs. 1,500. The matter was  then brought  to the  notice of  M. Ramzan,  the Agent of  the State Bank, before whom also Kansal is said to have repeated his complaint.      3. Eventually  on September  18, 1972,  a memorandum of charges was  served  on  the  appellant  by  the  respondent stating, inter  alia that  in the  letter of  authority, the appellant altered  in his own handwriting with different ink the amount  of Rs.  500 to  Rs. 1,500  and thus received Rs. 1,000 in  excess, passing  only Rs.  500  to  the  pass-book holder,  and   that  he  subsequently,  on  June  24,  1971, deposited Rs  250 in  the account  of Kansal  to liquidate a part or  the amount  misappropriated by  him. The  appellant replied to the charges. He denied the allegations. Thereupon the respondent  appointed one  Rajendra Prasad as an Enquiry officer and  a formal  disciplinary enquiry was held against the appellant.  The Enquiry  Officer submitted his report to the respondent  on February  13, 1973.  The findings  of the Enquiry officer  were that  The appellant  had  fraudulently altered the  amount in  the letter of authority given to him by Kansal, withdrew Rs. 1,500 from Kansal’s account and paid Rs. 500  only to  Kansal and  misappropriated Rs.  1000. The disciplinary authority  on receipt  of  the  report  of  the Enquiry officer passed the following order (material portion only):- 231           "2. Although,  the charges  against you  are of  a      serious   nature which would, in normal course, warrant      your dismissal  from  the  service  of  the  Bank,  yet      keeping in view your past record, I am inclined to take      a lenient view in the matter. Upon consideration of the      matter, I  have tentatively  come to  the decision that      your  misconduct   be  condoned   and  you   be  merely      discharged of in terms of paragraphs 521 (5) (e) of the      Sastry Award  read with  para graph  18.28 of the Desai      Award and paragraph 1.1 of the Agreement dated the 31st      March 1967  entered into between the Bank and the State      Bank of India Staff Federation. Before, however, I take      a final decision in the matter I would like to give you      a hearing  as to why the proposed punishment should not      be imposed  upon you. To enable you to do so, I enclose      copies of  the proceedings  of the enquiry and findings      of the Enquiry officer.           3. You  may ask  for a hearing or if you so prefer      show cause in writing within one week of receipt by you      thereof. If  you fail therein, I will conclude that you      have no cause to show in this behalf."      The appellant  then submitted  a representation to Shri V.B. Chadha, the Regional Manager of the State Bank of India on  June   15,  1973.   Shri  Chadha   after  perusing   the representation of  the appellant  and hearing him in person, recommended that  the  proposed  punishment  should  not  be imposed upon  the appellant,  on the grounds that Kansal had not been  examined as  a witness  and that there had been no written complaint  against the  appellant.  The  respondent, however, did  not accept  the recommendation,  and,  by  its memorandum of  December 7,  1973, discharged  the  appellant from service  with effect  from the close of the business on December 22, 1973.      4. The  appellant  then  having  raised  an  industrial dispute, the  Central Government, by its order dated January 17, 1975,  referred  the  following  issue  to  the  Central

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Government Industrial Tribunal at Delhi for adjudication:           "Is  the   management  of   State  Bank  of  India      justified in  discharging from  service Shri J.D. Jain,      Cashier  of   Meerut  Branch,  with  effect  from  22nd      December, 1973? If not to what relief is he entitled ?" 232      5.  Before  the  Tribunal,  the  appellant  denied  the charges, He  inter alia,  pleaded that  as  Kansal  was  not examined in  the enquiry, there was no legal evidence before the inquiry officer for a finding that he was guilty.      The Tribunal framed the following two issues:-      "1.  Whether a  proper and  valid domestic  enquiry was           held by the Bank and its effect ?       2.  Is the management of State Bank of India justified           in  discharging   from  service  Shri  J.D.  Jain,           Cashier of  Meerut Branch  with effect  from  22nd           December, 1973  ? If  not to  what  relief  is  he           entitled ?"      Before  the   Tribunal,  the   Management  examined  no witnesses but produced certain documents and relied on them. The appellant also did not adduce any evidence.      On a  perusal of  the evidence  recorded by the Enquiry officer, the  Tribunal held  that on the evidence before it, the appellant  could not be held guilty as, according to it, in the  absence of  the evidence  of  Kansal,  the  evidence recorded was  hearsay, with  the  result  that  it  directed reinstatement of  the appellant  with full  back wages  from 22nd December,  1973. The  respondent moved  the High  Court under Article  226 and  227 of the Constitution of India for quashing the award of the Tribunal. The High Court held that the charges  against the  appellant had been established and quashed the  award of  the  Tribunal.  It  is  against  this judgment of  the High  Court  that  the  present  appeal  by special leave is directed.      6. Mr.  R.K. Garg,  learned counsel  appearing for  the appellant makes three submissions before us:-      (1)  That  the  Tribunal  exercised  its  powers  under           Section 11   A  of the Industrial Disputes Act and           the High  , Court, exercising powers under Article           2261227 of  the Constitution,  had no jurisdiction           to interfere with the award of the Tribunal;      (2)  The Tribunal  in  the  perspective  of  the  broad           contours of  the case  rightly refused  to rely on           the evidence  which was hearsay? Kansal not having           been examined; 233      (3)  Assuming the evidence could be relied on, the High           Court  committed  error  in  not  considering  the           receipt executed  by Kansal showing payment of Rs.           1000 to Kansal and its judgment is vitiated.      7.   In an  application for  a Writ of Certiorari under Article 226  of the Constitution for quashing an award of an Industrial Tribunal,  the jurisdiction  of the High Court is limited. It  can quash  the  award,  inter  alia,  when  the Tribunal has  committed an error of law apparent on the face of the  record or  when the finding of facts of the Tribunal is perverse.  In  the  case  before  us,  according  to  the Tribunal, as Kansal was not examined, the evidence before it was hearsay  and as  such on the basis thereof the appellant could not be legally found guilty.      8.   Before  the   Enquiry  officer,   the   respondent examined the following witnesses:           Gupta (Witness  1),  Wadhera,  the  Ledger  Keeper      (Witness 2), Mahesh Chander who was incharge of Savings      Bank account  on 8.2.1971 (Witness 3), M. Ramzan, Agent

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    of the  Bank  (Witness  4),  Sarkar  (Witness  5),  and      Bhardwaj (Witness 6).      Bhardwaj was  a leader  of the  employees’ union of the respondent. He  did not  support the case of the respondent. The other  witnesses supported  the case  of the respondent. Witnesses Nos.  1, 2, 4 and 5 depose that a verbal complaint was made  by Kansal  in their presence to the effect that he had authorised  the appellant  to withdraw Rs. 500 which sum was paid  to him,  but the  entries showed  that Kansal  had withdrawn Rs.  1,500. Witnesses  Vadhera, Ramzan  and Sarkar also deposed  that the  appellant had  confessed before them that he  had made the alterations in the figure and in words of  the   sum.  The  Tribunal  after  having  made  detailed references to  the evidence  of the  above witnesses in fact found, "All  that this  evidence  thus,  proves  is  that  a complaint was  made by  Shri Kansal  and  that  the  workmen confessed that he had altered the debit authority. (emphasis added). Curiously,  however, it  held, "This evidence, by no means prove  that the workman altered the debit authority to defraud or  that he  actually  defrauded  or  that  he  mis. appropriated the  amount of  Rs. 1,000  after paying Rs. 500 only to  Mr. Kansal  from the  amount of Rs. 1,500 withdrawn from the  bank by  him as it was not direct evidence but was in the nature of 234 hearsay evidence since it was learnt through the medium of a third person  and that person was not available." It further held, "There  can be  no  hesitation,  therefore,  that  the enquiry officer  relied on  hearsay evidence  in arriving at his findings  and it vitiated the enquiry." It went on, "All this could  be enough for raising a suspicion only. In order to be  called ’proved’  it needed  evidence  which  was  not there." It  further observed,  "But the question was whether it was  done without the consent or knowledge of Mr. Kansal. There was  no evidence  on the  record to prove it. The only person who  could speak  about it was Mr. Kansal. He did not appear before  the inquiry  officer, therefore, there was no direct evidence  that the change that was admittedly made by the workman  in the debit authority was without Mr. Kansal’s consent or  knowledge or  that it  was designed to defraud " (emphasis added)      The positive findings of the Tribunal are:      (i)  Kansal  made  the  complaint  as  alleged  by  the           management.      (ii) The appellant  confessed  that  he  had  made  the           alterations  charged   with,  as  alleged  by  the           management,     (iii) By implication it has also found that Rs. 1,000 in           excess of  the original  amount  of  Rs.  500  was           received by  the appellant  as  a  result  of  the           alternations. But  it has  held that as Kansal was           not examined,  fraud and  misappropriation on  the           part of the appellant cannot be held to be proved,           as the evidence was ’hearsay’.      9.   The learned  Tribunal, it  appears, was obvious of the fact  that it  was examining  the evidence in a domestic enquiry, and  not the  evidence in  a  criminal  prosecution entailing conviction and sentence.      In a  case like  the one  before  us,  three  kinds  of proceedings against the delinquent are possible .      (i)  departmental proceedings and action,      (ii) original    prosecution     for    forgery     and           misappropriation,     (iii) civil proceedings  for,  recovery  of  the  amount           alleged to be misappropriated.

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235      The respondent herein adopted course (i) and instituted the domestic  enquiry in  which the principle applied by the Tribunal is  not applicable;  in such  an enquiry guilt need not  be   established  beyond  reasonable  doubt,  proof  of misconduct may be sufficient.      The learned  Tribunal has  committed another  error  in holding that  the finding  of the domestic enquiry was based on "hearsay"  evidence. The  law is  well-settled  that  the strict rules  of evidence  are not  applicable in a domestic enquiry.      This Court  in the  case of  State of Haryana & Anr. v. Rattan Singh held:           "It is well-settled that in a domestic enquiry the           strict and  sophisticated rules  of evidence under           the  Indian   Evidence  Act  may  not  apply.  All           materials which  are  logically  probative  for  a           prudent mind  are permissible. There is no allergy           to hearsay  evidence provided  it  has  reasonable           nexus and credibility."      10. The  next question  is,  is  the  evidence  in  the domestic enquiry really hearsay, as held by the Tribunal ?      The word  ’hearsay’ is  used in  various  senses.  Some times it means whatever a person is heard to say; some times it means  whatever a person declares on information given by someone else. (See Stephen on Law of Evidence).      The Privy  Council it  the  case  of  Subramaniam  v/s. Public Prosecutor,  observed: "Evidence  of a statement made to a  witness who  is not himself called as a witness may or may not  be hearsay. It is hearsay and inadmissible when the object of  the evidence is to establish the truth of that is contained in  the  statement.  lt  is  not  hearsay  and  is admissible when it is proposed to establish by the evidence, not the  truth of  the statement  but the  fact that  it was made. The  fact that it was made quite apart from its truth, is frequently  relevant in  considering the mental state and conduct thereafter  of the  witness or some other persons in whose presence these statements are made." 236      11.  In the instant case, the alleged misconduct of the appellant was  that he forged documents, withdrew Rs. 1,500. 1,000 in  excess of  the amount  he was authorised to do and misappropriated the  excess amount of Rs. 1,000. With regard to the fact whether the appellant manipulated the documents, withdrew excess  amount and misappropriated it, there is, of course, no  direct evidence  of any  eye witness  except the appellant’s ’confession’  referred to above. The evidence on which reliance  has been  taken by  the  respondent  is  the confession  and   circumstantial   evidence,   namely,   the authority letter  containing the  admitted interpolations by the appellant  in his  own handwriting in different ink, and the addition  of the  digit "I"  before 500. The evidence of Kansal would  have been primary and material, if the fact in issue were  whether Kansal  authorised the appellant to make the  alterations  in  the  authority  letter.  But  Kansal’s complaint  was  to  the  contrary.  For  the  purpose  of  a departmental enquiry  complaint certainly not frivolous, but substantiated by  circumstantial evidence,  is enough.  What the respondent  sought to  establish in the domestic enquiry was that  Kansal had  made a verbal complaint with regard to 1) the  withdrawal of  excess  money  by  the  appellant  in presence of  the four  witnesses,  namely,  Wadhera,  Gupta, Ramzan and  Sarkar, aforesaid,  against his  advice. On  the complaint of Kansal, the evidence of these four witnesses is direct as  the complaint is said to have been made by Kansal

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in their presence and hearing; it is therefore, not hearsay. As the  respondent has  succeeded in  proving  that  a  come plaint was made by Kansal on the evidence of the above-named four witnesses, the respondent has succeeded. No rule of law enjoins that  complaint has  to be in writing as insisted by the Tribunal.      12.  The learned  Tribunal has  committed  yet  another grevious error,  in failing  to appreciate  the  confessions made by  the appellant  "in the presence of witnesses and to the higher  officer who  appeared as  witness" (as  found by itself)  namely,   Wadhera,  Ramzan,   Gupta   and   Sarkar, aforesaid. The  confessions of the appellant before the said witnesses were  to the effect that he had altered the amount in figure and words in his own hand.      The award of the Tribunal, therefore, has been vitiated by misconception of the law involved in the case.      13.  The last  submission of Mr. Garg that the judgment of the High Court had been vitiated as it had not taken into consideration the receipt executed by Kansal showing payment by the appellant of Rs. 1000 to the former is destructive of the appellant’s defence. In 237 Our opinion,  this  payment  on  the  contrary,  proves  the respondent’s case and destroys the appellant’s defence which was that he had withdrawn Rs. 1,500 as advised by Kansal and paid the full amount to Kansal.      14.  In our  opinion the  High Court  was fully  in its jurisdiction in  quashing the  award of  the Tribunal.  This appeal has no merit and is dismissed. We, however, leave the parties to bear their own costs. N.V.K.                                     Appeal dismissed. 238