Karnataka High Court
Gopalaiah vs The Chairman And Managing Director, ... on 11 September, 1998
Equivalent citations: [1999(81)FLR976], ILR1998KAR3663, 1998(6)KARLJ359, (1999)ILLJ229KANT
Author: R.P. Sethi
Bench: R.P. Sethi, K.R. Prasada Rao
JUDGMENT R.P. Sethi, C.J.
1. The appellant who belongs to a backward community and hails from a poor family got his name registered in the Employment Exchange stating therein that he had studied upto SSLC, but had not completed the same. He was called for interview for the post of a peon and was selected. He was appointed as peon on 22nd of July, 1983 and put under probation for a period of six months. He was issued with a show cause notice on 24th of December, 1983 alleging that as he had secured appointment by suppressing the fact that he had passed SSLC in the year 1979 itself, he thereby committed the fraud incurring a liability of being removed from service. It has to be noticed that the probationary period of the appellant had been extended for a further period of three months. Before the appellant could submit his explanation, the first respondent without holding any enquiry and without affording him any opportunity of showing the cause, passed an order on 28th of March, 1984 terminating his services with immediate effect. Aggrieved by the order of dismissal, the appellant took up the matter with the Management for his reinstatement, for which conciliation proceedings were also initiated before the Regional Labour Commissioner (Central), Bangalore. Upon failure of the conciliation proceedings, the matter was referred to the Central Government Industrial Tribunal-cum-Labour Court, Bangalore. After entering upon the reference and allowing the parties to lead evidence, vide its award dated 2nd of June, 1988 (Annexure-J), the Labour Court rejected the reference holding that the first respondent-bank was justified in terminating the services of the appellant, as he had allegedly committed the fraud and secured the appointment by misrepresentation of facts. Not satisfied with the award of the Labour Court, the appellant filed a writ petition in this Court, which was also dismissed vide the order impugned in this Appeal.
2. The learned Counsel appearing for the appellant has submitted that both the Labour Court as well as the learned Single Judge committed a mistake in holding that the appellant had misrepresented or committed the fraud, as according to him, another person of the same name was also a student of the school in which the appellant had studied, who had actually passed the SSLC examination in the year 1977 and that the appellant had not passed the said examination as on the date when he was appointed as a peon in the year 1983. It is submitted that even if the appellant had not disclosed of his having passed the SSLC examina-
tion on the relevant date, he could not be held guilty of fraud, as withholding of such an information did not in any way affect the employer. It also did not amount to hold that the appellant was not possessing the requisite qualification required for the post at the relevant time. The possession of higher qualification could not be made a basis for penalising and punishing him. Instead of appreciating that the appellant had passed SSLC examination and was appointed as a peon for which the minimum qualification required was less than the aforesaid examination, the first respondent punished him for his allegedly possessing better merit and higher qualification. The learned Counsel for the appellant has referred to a certificate of the Principal, Government Junior College, Kadaba, Gubbi Taluk, (Annexure-H1), which is to the effect:
"This is to certify that Sree Gopalaiah S/o Bettarangaiah was a student of this school during the year 1973-74 and he has passed IX standard during 1974-75 and joined to X standard during 1975-76 and discontinued his studies, as per Admission No. 83 of 1973-74.
Further another Gopalaiah S/o K.B. Bettarangaiah was also the student of this school during the year 1973-74 and he has passed SSLC in 1977 and joined I PUC in the College, As per available records he joined I PUC vide Admission No. 2 of 1981-82 dated 21-7-1981".
3. We are conscious of the fact that while exercising writ jurisdiction, particularly, in appeal, this Court cannot disturb the findings of fact arrived at by the Labour Court, a Court of fact, unless such finding is shown to be perverse or based upon no evidence. Even though the learned Counsel for the appellant has submitted that non-consideration of Annexure-Hl makes the finding of the Labour Court perverse, yet we propose not to disturb the finding of fact arrived at by the Labour Court and have decided to dispose of this appeal on the admitted or so called proved facts. Assuming that the appellant had passed the SSLC examination and declared before the respondents of having not passed such a qualification, can it be said that he was guilty of committing the fraud in relation to his service thereby incurring the disqualification of remaining in service for his alleged possessing of better qualification.
4. 'Fraud' as defined under Section 17 of the Indian Contract Act means:
" 'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
(1)the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2)the active concealment of a fact by one having knowledge or belief of the fact;
(3)a promise made without any intention of performing it; (4)any other act fitted to deceive;
(5)any such act or omission as the law specially declares to be fraudulent".
Fraud has been defined as an act of trickery or deceit. In Webster's Third New International Dictionary fraud in equity has been defined as an act or omission to act or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black's Legal Dictionary, fraud is defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. From the Dictionary meaning it crystallises that fraud would arise out of deliberate active role of representator about a fact which he knows to be untrue, by the misrepresentation of which he intends to seek a gain. One of the main ingredients of fraud within the meaning of Section 17 of the Contract Act is that the alleged false representation should have been made with intent either to deceive or induce the other party to pass orders favourably to the person making representation. It follows, therefore, that to vitiate the action, the alleged fraud should be of positive character with intentional contrivance to keep the opposite party in ignorance of the case or real facts of the case. It must be extrinsic or collateral to the purpose sought to be achieved. Failure to disclose or suppression of fact, which has no bearing on the eventual action, cannot be held to be either deception or fraud. The meaning of the word 'fraud' has to be understood in the context and the circumstances under which it is alleged to have been committed. The first respondent has not placed anything on record to show that no person possessing qualification of SSLC passed or even higher qualification could be appointed as a peon or possessing of a higher degree in educational qualification was a disqualification to remain in service of the first respondent-bank. Even in the order of appointment the appellant was not intimated that in case it was proved that he had passed SSLC examination, his services would be terminated. What was mentioned in the offer of appointment-Annexure-A was:
"The Bank may at any time during the probationary period, terminate your service without assigning any reason whatsoever with due notice of 30 days or salary in lieu thereof.
5. It is also to be noticed that before terminating the services of the appellant, the provisions of Section 25F of the Industrial Disputes Act had not been complied with and during the enquiry held by the Labour Court, the first respondent-management adopted a hyper-technical approach having no rational basis intended to be achieved by removal of the appellant from the post of the peon. He was found to be possessing of requisite minimum qualification and sponsored by the Employment Exchange for the post of peon. Both the Labour Court as well as the learned Single Judge appear to have ignored this aspect of the matter while deciding the 'claim of the appellant. The learned Single Judge, however, relying upon the decision of the Supreme Court in Desk Raj Gupta v Industrial Tribunal IV, Uttar Pradesh, Lucknow and Another , directed payment of back wages to the appellant with effect from 28th of March, 1984 till the date of award, that is, 2nd of June, 1988.
6. Under the circumstances, the appeal is allowed by setting aside the award of the Labour Court and the order of the learned Single Judge. However, keeping in view the peculiar circumstances of the case, we direct that consequent upon his reinstatement to the post of peon, the appellant would be entitled to continuity of service and other benefits, but the arrears of back wages only for a period of last four years from the date of this order. Parties to bear their own costs.