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CASE NO.: Appeal (civil)  2534 of 2007

PETITIONER: Management, Pandiyan Roadways Corp. Ltd.

RESPONDENT: N. Balakrishnan

DATE OF JUDGMENT: 15/05/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO. 2534  OF 2007  [Arising out of S.L.P. (Civil) No. 12280 of 2006]

S.B. SINHA, J :   

1.      Leave granted.

2.      Respondent herein was employed as a helper at Kumuli Depot of   Appellant.  A criminal complaint was lodged against him for alleged  commission of theft of Rs.37,086.05 on 03.11.1985. A disciplinary  proceeding was also initiated against him.  He pleaded not guilty to the said  charge both before the disciplinary authority as also the criminal court.  In  the disciplinary proceeding,  he was, however, found to be guilty of the said  charge.   He was dismissed from services only  after a show cause notice  was served on him. 3.      Appellant filed an application for approval of the said order of  removal purported to be in terms of Section 33(2)(b) of the Industrial  Disputes Act, 1947 (for short, ’the Act’).  Approval sought for was not  granted on the premise that in passing the said order of termination, Clause  17(5) of the Certified Standing Orders of the Corporation,  which required  the management to take into account the past record before passing the order  of dismissal, was not complied with.

4.      During pendency of the said proceedings before the Tribunal,  admittedly the Criminal Court held the respondent not guilty of commission  of the charge of removal of the said amount of Rs. 37,086.05.  He was,  therefore, acquitted.

5.      A Writ Petition was filed by the appellant questioning the said Order  of the Labour Court which was marked as Writ Petition No. 1485/1990.   A  learned Single Judge of the said Court allowed the Writ Petition.   Aggrieved  by and dissatisfied therewith, Respondent preferred an appeal before a  Division Bench of the High Court.   By reason of the impugned judgment,  the said appeal has been allowed holding :

"14.    Unfortunately, the learned Judge while  accepting the case of Management, committed two  errors.   The first one is that he proceeded that the  charge leveled against the workman relates to  misappropriation.   It is not in dispute that based on  the complaint of the Management, prosecution was  launched against the workmen for the offence of theft,  which also ended in acquittal in C.C. No. 75 of 1986  on the file of Judicial Magistrate, Uthamapalyam

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dated 14.10.1987. Secondly, the learned Judge  committed an error in holding that when an employee  is involved in the case of misappropriation of funds,  no lesser punishment than the dismissal from service  can be imposed.   However, according to the learned  Judge when a major punishment is to be imposed  depending upon the nature or gravity of the offence,  then the factors mentioned in clause 17(5) of the  Standing Orders have some relevance."

6.      Appellant is, thus, before us.

7.      Mr. T. Harish Kumar, learned counsel appearing on behalf of the  appellant, would submit that Clause 17(5) of the Certified Standing Orders  of the Corporation cannot be held to be imperative in character.   According  to the learned counsel, in a case of misconduct involving criminal breach of  trust, the employer would be justified in imposing a punishment of  termination of services and in that view of the matter, question of looking  into the past conduct of the employee would not arise.   

8.      It was contended that past conduct of an employee would be taken  into consideration, only in the event the misconduct proved is not a grave  one.   In a matter involving commission of grave misconduct on the part of  the workman, it was contended,  there is no place for generosity or sympathy  and the case has to be dealt with firmly. Reliance, in this behalf, has been  placed on Janatha Bazar (South Kanara Central Cooperative Wholesale  Stores Ltd.) and Others v. Secretary, Sahakari Naukarara Sangha and Others  (2000) 7 SCC 517]  and Divisional Controller,  KSRTC (NWKRTC)  v.  A.T. Mane [(2005) 3 SCC 254].

9.      The learned counsel argued that it was not a case where the High  Court could have taken into consideration the question as to whether the  punishment imposed was shockingly disproportionate to the misconduct  proved. It was urged that the jurisdiction of the Labour Court in considering  the petition under Section 33(2)(b) Act being limited;  it could not reappraise  the evidence adduced in the disciplinary proceeding.  Even acquittal in a  criminal proceeding Mr. Harish Kumar submitted,  could not have any effect  in a domestic enquiry, in view of the fact that the standard of proof in  criminal proceeding and domestic enquiry is entirely different.   Strong  reliance, in this behalf, has been placed on South Bengal State Transport  Corporation v. Sapan Kumar Mitra and Others [(2006) 2 SCC 584]  and N.  Selvaraj v. Kumbakonam City Union Bank Ltd. and Another [(2006) 9 SCC  172].          10.     Mr. S. Guru Krishna Kumar, learned counsel appearing on behalf of  the respondent, on the other hand, would submit that it is not a case where  this Court should exercise its discretionary jurisdiction under Article 136 of  the Constitution of India.  It  was contended that clause 17(5) of the Certified  Standing Orders was clearly applicable and the conditions laid down therein  must be considered before imposition of punishment keeping in view its  cumulative effect. The learned counsel would contend that clause 17(5) of  the Certified Standing Orders is mandatory in character.        It was also  contended that admittedly past conduct of the respondent has not been  considered while imposing the punishment.   It was urged that  the conduct  of the respondent was otherwise  blemishless  otherwise.  Our attention, in  this behalf, has been drawn to the fact that in terms of the order of the  Labour Court refusing to grant approval, the respondent was taken back in  service in the year 1989 and since then he has been working in the bank  without any blemish whatsoever.  The learned counsel would submit that the  order of acquittal passed by the Criminal Court having been taken into  consideration by the Division Bench, the same should be considered to be an  additional factor apart from the factors contained in Clause 17(5) of the  Certified Standing Orders.

11.     Clause 17(5)  of the Standing Orders of the Corporation reads as

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under :

"In awarding the punishment under this standing order  the employer shall take into account the gravity of the  misconduct, the previous record of the workman and  any other extenuation or aggravating circumstances that  may exist."

12.     On a plain reading of the said provision and particularly in view of the  fact that the word "shall" has been used,  prima facie it would be construed  to be imperative in character.  It may, however, be held to be directory in  certain situation.  While construing a statute of this nature, the context plays  an important role.  Interpretation of a statute would also depend upon the  fact situation obtaining in the case.   There are, however, certain exceptions  to the said rule.   The question came up for consideration before this Court in  U.P. State Electricity Board v. Shiv Mohan Singh and Another [(2004) 8  SCC 402] wherein it was,  inter-alia,  noticed : "96. Ordinarily, although the word shall is considered to  be imperative in nature but it has to be interpreted as  directory if the context or the intention otherwise  demands. (See Sainik Motors v. State of Rajasthan, AIR  para ) 97. It is important to note that in Crawford on Statutory  Construction at p. 539, it is stated: 271. Miscellaneous implied exceptions from the  requirements of mandatory statutes, in  general.Even where a statute is clearly mandatory  or prohibitory, yet, in many instances, the courts  will regard certain conduct beyond the prohibition  of the statute through the use of various devices or  principles. Most, if not all of these devices find  their justification in considerations of justice. It is  a well-known fact that often to enforce the law to  its letter produces manifest injustice, for frequently  equitable and humane considerations, and other  considerations of a closely related nature, would  seem to be of a sufficient calibre to excuse or  justify a technical violation of the law.         \005                    \005            \005 105. Only because the expression shall has been  employed in sub-section (4) of Section 4, the same may  not be held to be imperative in character having regard to  the fact that not only, as noticed hereinbefore, a contract  of apprenticeship commences but also in view of the fact  that an application for registration of apprenticeship  contract is required to be made within a period of three  months in terms of Rule 4-B of the Apprenticeship Rules,  1992. The Act nowhere provides for the consequences of  non-registration.                 \005                    \005            \005 109. It is now a well-settled principle of law that if the  language used in a statute is capable of bearing more than  one construction, the true meaning thereof should be  selected having regard to the consequences resulting  from adopting the alternative constructions. A  construction resulting in hardship, non-fulfilment of the  purpose for which the statute has been brought in force  should be rejected and should be given that construction  which avoids such results."   13.     Yet again in P.T. Rajan v. T.P.M. Sahir and Others [(2003) 8 SCC  498], this Court observed :  "45. A statute as is well known must be read in the text  and context thereof. Whether a statute is directory or  mandatory would not be dependent on the user of the

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words shall or may. Such a question must be posed and  answered having regard to the purpose and object it seeks  to achieve. 46. What is mandatory is the requirement of sub-section  (3) of Section 23 of the 1950 Act and not the ministerial  action of actual publication of Form 16. 47. The construction of a statute will depend on the  purport and object for which the same had been used. In  the instant case the 1960 Rules do not fix any time for  publication of the electoral rolls. On the other hand  Section 23(3) of the 1950 Act categorically mandates that  direction can be issued for revision in the electoral roll by  way of amendment in inclusion and deletion from the  electoral roll till the date specified for filing nomination.  The electoral roll as revised by reason of such directions  can therefore be amended only thereafter. On the basis of  direction issued by the competent authority in relation to  an application filed for inclusion of a voters name, a  nomination can be filed. The person concerned,  therefore, would not be inconvenienced or in any way be  prejudiced only because the revised electoral roll in Form  16 is published a few hours later. The result of filing of  such nomination would become known to the parties  concerned also after 3.00 p.m. 48. Furthermore, even if the statute specifies a time for  publication of the electoral roll, the same by itself could  not have been held to be mandatory. Such a provision  would be directory in nature. It is a well-settled principle  of law that where a statutory functionary is asked to  perform a statutory duty within the time prescribed  therefor, the same would be directory and not mandatory.  (See Shiveshwar Prasad Sinha v. District Magistrate of  Monghyr, Nomita Chowdhury v. State of W.B. and  Garbari Union Coop. Agricultural Credit Society Ltd. v.  Swapan Kumar Jana) 49. Furthermore, a provision in a statute which is  procedural in nature although employs the word shall  may not be held to be mandatory if thereby no prejudice  is caused. (See Raza Buland Sugar Co. Ltd. v. Municipal  Board, Rampur, State Bank of Patiala v. S.K. Sharma,  Venkataswamappa v. Special Dy. Commr. (Revenue) and  Rai Vimal Krishna v. State of Bihar.)"

14.     In Ashok Lanka and Another v. Rishi Dixit and Others [(2005) 5 SCC  598], it was held : "53. The question as to whether a statute is mandatory or  directory would depend upon the statutory scheme. It is  now well known that use of the expression shall or may  by itself is not decisive. The court while construing a  statute must consider all relevant factors including the  purpose and object the statute seeks to achieve. (See P.T.  Rajan v. T.P.M. Sahir and U.P. SEB v. Shiv Mohan  Singh.)"

15.     There cannot also be any doubt that ordinarily consequences flowing  from contravention of an imperative character of a statute has to be given  effect to.   A statutory provision may be substantive or procedural.    If it is  substantive, the requirements laid down in the statute should ordinarily be  complied with. However, when the provisions contain a procedural matter,  substantial compliance thereof would serve the purpose.

16.     Application of a statute or principle of law, however, may vary from  case to case.   

17.     Only because the statute is imperative, it may not necessarily lead to a

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declaration that the order impugned is a nullity.     

18.      In State Bank of Patiala and Others v. S.K. Sharma [(1996) 3 SCC  364], this Court has, inter alia,  laid down the law in the following terms : "33. We may summarise the principles emerging from  the above discussion. (These are by no means intended to  be exhaustive and are evolved keeping in view the  context of disciplinary enquiries and orders of  punishment imposed by an employer upon the  employee):                 \005                    \005            \005  (4)(a) In the case of a procedural provision which  is not of a mandatory character, the complaint of  violation has to be examined from the standpoint  of substantial compliance. Be that as it may, the  order passed in violation of such a provision can  be set aside only where such violation has  occasioned prejudice to the delinquent employee. (b) In the case of violation of a procedural  provision, which is of a mandatory character, it has  to be ascertained whether the provision is  conceived in the interest of the person proceeded  against or in public interest. If it is found to be the  former, then it must be seen whether the  delinquent officer has waived the said requirement,  either expressly or by his conduct. If he is found to  have waived it, then the order of punishment  cannot be set aside on the ground of the said  violation. If, on the other hand, it is found that the  delinquent officer/employee has not waived it or  that the provision could not be waived by him,  then the Court or Tribunal should make  appropriate directions (include the setting aside of  the order of punishment), keeping in mind the  approach adopted by the Constitution Bench in B.  Karunakar18. The ultimate test is always the  same, viz., test of prejudice or the test of fair  hearing, as it may be called."

19.     Ordinarily,  although sub-clause (5) of Clause (17) of the Certified  Standing Orders is required to be complied with, the same, in our opinion,  would not mean that in a given situation, there cannot be any deviation  therefrom.   In a case where dismissal or removal of service is to be  ordinarily followed, e.g. in a case of grave misconduct like  misappropriation, strict enforcement of the rule may not be insisted upon.    When, we say so, we are not oblivious of the law that an executive agency is  ordinarily bound by the standard by which it professes its actions to be  judged.  [See Harjit Singh & Another v. The State of Punjab & Another  [2007) (3) SCALE 553]. But where a procedural provision merely embodied  the principles of natural justice, in view of the decision of this Court in State  Bank of Patiala (supra), the question  as to whether the principle has been  followed or not, will depend upon the fact situation obtaining in each case.   [See Ashok Kumar Sonkar v. Union of India & Others \026 [2007 (3) SCALE  517].  

20.     It will be useful to note that in State of Punjab and Others v.  Sukhwinder Singh [(1999) SCC (L&S) 1234], this Court has held that the  words "gravest act of misconduct" occurring in Rule 16.2(1) of the Punjab  Police Rules need not be used in the order of punishment,  as it can be found  out from the factual matrix obtaining in each case.

21.     However, there is another aspect of the matter which cannot be lost  sight of.  Respondent, in the meanwhile, has been acquitted.  The factum of  his acquittal has been taken into consideration by the Division Bench, which  was  considered to be an additional factor.  Ordinarily,  the question as to

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whether acquittal in a criminal case will be conclusive in regard to the order  of punishment imposed upon the delinquent officer in a departmental  proceeding is a matter which will again depend upon the fact situation  involved in a given case.   

22.     There are evidently two lines of decisions of this Court operating in  the field. One being the cases which would come within the purview of    Capt. Paul Anthony v. Bharat Gold Mines Ltd. and Another [(1999) 3 SCC  679] and G.M. Tank v. State of Gujarat and Others  [(2006) 5 SCC 446].   However, the second line of decisions show that an honourable acquittal in  the criminal case itself may not be held to be determinative in respect of  order of punishment meted out to the delinquent officer, inter alia,  when :  (i) the order of acquittal has not been passed on the same set of fact or same  set of evidence; (ii) the effect of difference in the standard of proof in a  criminal trial and disciplinary proceeding has not been considered. [See  Commissioner of Police, New Delhi  v. Narender Singh  (2006) 4 SCC 265],  or;  where the delinquent officer was charged with something more than the  subject-matter of the criminal case and/or covered by a decision of the Civil  Court.  [See G.M. Tank (supra), Jasbir Singh v. Punjab & Sind Bank and  Others  - 2006 (11) SCALE 204, and Noida Enterprises Assn. v. Noida &  Others  - 2007 (2) SCALE 131 \026 Para 18]  

23.     In Narinder Mohan Arya v. United India Insurance Co. Ltd. and  Others [(2006) 4 SCC 713], this Court held :

"39.  Under certain circumstances, a decision of a civil  court is also binding upon the criminal court although,  converse is not true.   (See Karam Chand Ganga Prasad  v. Union of India).   However, it is also true that the  standard of proof in a criminal case and civil case is  different.

40.   We may notice that in Capt. M. Paul Anthony v.  Bharat Gold Mines Ltd., this Court observed: (SCC p.  695, para 35)

       "35.   Since the facts and the evidence in  both the proceedings, namely, the departmental  proceedings and the criminal case wee the same  without there being any iota of difference, the  distinction, which is usually drawn as between the  departmental proceedings and the criminal case on  the basis of approach and burden of proof, would  not be applicable to the instance case."

41.     We may not be understood to have laid down a law  that in all such circumstances the decision of the civil  court or the criminal court would be binding on the  disciplinary authorities as this Court in large number of  decisions points out that the same would depend upon  other factors as well. See e.g. Krishnakali Tea Estate v.  Akhil Bharatiya Chah Mazdoor Sangh and Manager,  Reserve bank of India v. S. Mani.   Each case is,  therefore, required to be considered on its own facts.

24.     In Delhi Cloth and General Mills Co. v. Ganesh Dutt and Others  [(1972)  4 SCC 834], this Court stated :

"31.  Mr. Sharma referred us to Paragraph 40 of the  Certified Standing Orders of the appellant Company Ex.  M-4 to the effect that in the order deciding to dismiss the  workman, the appellant Company has not taken into  account, as it is bound to, the previous record, if any, of  the workmen.   This contention cannot be accepted

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because in the order dated May 9, 1966, communicated  to each of the workmen, in the penultimate paragraph it  has been stated that while arriving at the decision to  dismiss the employees from the service for misconduct,  all relevant circumstances including the past record of  service, have been fully taken into consideration.   So far  as we could see, no challenge has been made by the  workmen that the appellant has not taken into account his  past record."

25.     We are, however,  of the opinion that it is not a fit case where this  Court should exercise its extra extra-ordinary jurisdiction under Article 136  of the Constitution of India.  Respondent has been taken back in service in  the year 1989.  The occurrence took  place  in the year 1985.    The  application under Section 33(2)(b) of the Act was filed on 16.06.1986.   It  was rejected by an order dated 19.4.1989.  Respondent, thereafter, was taken  back  in service. Despite the fact that the Writ Petition filed by the appellant  was allowed on 08.10.1999, by reason of an interim order of stay granted by  the Division Bench, he continued in his service.  By reason of the impugned  judgment, the Division Bench, as noticed hereinbefore, set aside the  judgment of the learned Single Judge.  Respondent is merely a class IV  employee, it does not hold any office of confidence.   He was not charged  with an offence of criminal breach of trust.

26.     Thus, it is now well-settled principle of law that this Court shall not  exercise its jurisdiction under Article 136 of the Constitution of India, only  because it may be lawful to do so. [See Transmission Corporation of A.P.  Ltd. v. Lanco Kondapalli Power (P) Ltd. (2006) 5 SCC 540] and Chandra  Singh and Others v. State of Rajasthan and Another [(2003) 6 SCC 545].    

27.     For the reasons aforementioned, the appeal is dismissed.  However, in  the facts and circumstances of the case, there shall be no order as to costs.