Karnataka High Court
K Krishna Murthy vs The Bharath Earth Movers Limited on 19 April, 2017
Author: B.Veerappa
Bench: B.Veerappa
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`IN THE HIGH COURT OF KARNATAKA
AT BENGALURU
DATED THIS THE 19TH DAY OF APRIL, 2017
BEFORE
THE HON'BLE MR. JUSTICE B.VEERAPPA
WRIT PETITION NO. 37136/2012(L-TER)
BETWEEN:
K Krishna Murthy
S/o Late R Kantharaj Shetty
Age: 62 years,
Formerly working as
Stores Supervisor,
BEML and residing at No.1678,
4th Cross, 5th Stage,
Rajarajeshwari Nagar,
Bangalore-98.
... Petitioner
(By Sri M. Subramanya Bhat, Advocate)
AND:
The Bharath Earth Movers Limited
Bangalore Complex,
New Tippasandra Post,
Bangalore-75,
Represented by the
Chairman and
Managing Director.
... Respondent
(By Sri N. S. Narasimha Swamy, and
Sri Thulsiram Singh B. K., Adv. for
M/s. Swamy and Singh)
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This Writ Petition is filed under Articles 226 and 227
of the Constitution of India praying to issue a writ of
certiorari or any other appropriate writ, order of direction
quashing the order dated 09.02.2011 in ID No.102/2009
marked at Annexure-N and the award dated 31.12.2011 in
ID No.102/2009 marked as Annexure-Q on the file of the II
Additional Labour court, Bangalore as the same suffer from
errors which are apparent on the face of the record and etc.
This petition having been heard and reserved for
orders on 17.03.2017, coming on for pronouncement of
order this day, the Court made the following:
ORDER
The petitioner has filed the present writ petition for a writ of certiorari to quash the order dated 09.02.2011 made in I.D.No.102/2009 on the file of the Presiding Officer, II Additional, Labour Court, Bangalore and also the award dated 31.12.2011 made in I.D.No.102/2009 on the file of Second Additional Labour Court, Bangalore and a writ of mandamus directing the respondents to extend all the consequential benefits upon quashing the award as if 3 the petitioner was not removed and to extend the benefits like full backwages, seniority, increments and all terminal benefits to meet the ends of justice.
2. It is the case of the petitioner that he had joined the services of the respondent - Company as Group-B Mechanic at KGF in the year 1974. He earned several promotions from time to time. Finally, he was promoted as Stores Superintendent in the Stores Department of the Railway Coach Division, Bangalore. Totally, he has completed 34 years of service and maintained absolute integrity, devotion and rendered unblemished service. It is further case that on 10.09.2008 at about 8.05 a.m. when the petitioner was working in the Stores Division, three persons from the Security Department came and searched the table drawer used by the petitioner and recovered a sum of Rs.1,31,580/- which belong to the petitioner. It was also alleged that the petitioner has involved Chit Fund 4 Business inside the company premises and later he was kept under suspension alleging that he was running Chit Fund business in the company premises. The petitioner was also issued with an article of charges on 22.09.2008 alleging that he was involved in Chit Fund business in the premises of the respondent - Company. On 06.10.2008 he submitted his written reply stating that he has not conducting any Chit Fund business or any personal unauthorized business within the Company premises.
3. The Disciplinary Authority not satisfied with the reply submitted by the petitioner, proceeded to hold an enquiry by appointing an Enquiry Officer. The enquiry was commenced from 22.10.2008. On behalf of the respondent - Company, one Sri Gopal, Secretary Intelligence Subedar was examined as MW.1, Sri K.R.Ganesh, Assistant Security Officer was examined as MW.2 and Sri G.V.Chandrashekar was examined as 5 MW.3. It is further alleged that at the domestic enquiry, the petitioner was not allowed to cross-examine MW.3, the enquiry was conducted in utter disregard to the principles of natural justice and the charges levelled against him does not amount to any misconduct. The findings of the enquiry officer are perverse and do not based on the legal evidence. Thereafter, the enquiry officer submitted the report on 05.02.2009 and held that the charges levelled against the petitioner are proved. The respondent after issuing second show cause notice dated 13.09.2009, had removed the petitioner from the services on 16.04.2009 not disqualifying for future employment.
4. Aggrieved by the said order passed by the Disciplinary Authority, the petitioner has raised Industrial Dispute under the provisions of Section 10 (4-A) of the Industrial Dispute Act (for short 'the Act') and the same was resisted by the respondent - 6 Company by filing the objections. The II Additional Labour Court by an order dated 09.02.2011 held that the domestic enquiry conducted against the petitioner is fair and proper and posted the matter for evidence of the petitioner on victimization.
5. The Labour Court considering the entire material on record by the impugned award dated 31.12.2011 has rejected the petition filed by the petitioner under Section 10 (4-A) of the Act. Hence, the present writ petition is filed for the relief sought for.
6. I have heard the learned counsel for the parties to the lis.
7. Sri Subramanya Bhat, learned counsel for the petitioner contended that on 11/12.09.2008, the statement of four employees of the respondent - Company were recorded as a part of the preliminary investigation, who have stated that the petitioner was 7 running Chit Fund business at his residence. On the basis of the preliminary enquiry, article of charges (5) was issued on 22.09.2008 to the petitioner and he has submitted his reply on 06.10.2008. In paragraph No.3 of his reply, he has specifically stated that the enquiry conducted by the security staff is unauthorized and untenable and the cash which was found in his table drawer and in his pant amounting to Rs.1,31,580/- belongs to him and it is his personal money. He further contended that there is nothing in the Certified Standing Orders to prohibit keeping personal money inside the factory premises. The petitioner has denied the allegation that he is running Chit Fund business inside the factory premises amongst the employees and officers that he has been collecting the Chit Fund monthly premium amount through the agent employees inside the factory.
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8. Learned counsel for the petitioner further contended that the enquiry officer has mainly relied upon the statements made by four employees which were recorded in the preliminary enquiry as per the documents marked as MDs.10 to 14, even though they have not been examined before him, which is impermissible under law. He further contended that three witnesses who were examined before the enquiry officer as MWs.1 to 3 who have stated on oath that amount of Rs.1,31,580/- which was found in the table drawer of the petitioner, but have not stated anything with regard to Chit Fund business maintained by the petitioner inside the factory premises. He further contended that at page No.37, paragraph No.2 of the enquiry report, it is recorded that the documents which are taken on record during the course of enquiry proceedings viz., MD.1 establishes the fact of seizure of money to the tune of Rs.1,31,580/- and Management Document - MD.2, the statement of charge sheet 9 submitted by him on the date of the incident i.e., on 10.09.2008 that about 35 members of his Chit Fund business are the employees/officers of the Company that is being further strengthened by the documents marked as MD.10 to MD.14. The said finding is erroneous. He further contended that the petitioner has never admitted that about 35 member of the Chit Fund business are the employees/officers of the Company inside the factory and they are the members of the Company chit fund business in his house. It is his further contention that the employees who have given statements as per documents MD.10 to MD.14 are not examined before the enquiry officer. Therefore, the finding of the enquiry officer with regard to the amount which was in possession of the petitioner i.e., Rs.1,31,580/- on 10.09.2008 inside the company premises slips containing information about Chit Fund business being run by him is proved beyond doubt cannot be accepted. The learned counsel further 10 contended that it is not the case of the Management that the petitioner was running Chit Fund business inside the factory premises and there is no allegation in the charge memo about his irregular work. The disciplinary authority without considering the material on record has proceeded to pass the order of removal of the petitioner from service, which does not disqualify him for future employment only on the basis of the enquiry report which is impermissible. He further contended that the Labour Court relying upon paragraph Nos.13 to 17, 19, 20 and 22 of the enquiry report has arrived at conclusion and rejected the reference without any basis. The Labour Court also held that the domestic enquiry held is fair and proper and same is also erroneous.
9. In support of his contention, learned counsel for the petitioner relied upon the judgments of the Hon'ble Supreme Court as follows:
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a) In the case of Roop Singh Negi vs. Punjab National Bank and Others reported in (2009) 2 SCC 570 and in the said judgment, it is held as under:
"14. Indisputably, a departmental proceeding is a quasi-judicial proceeding. The enquiry officer performs a quasi-judicial function. The charges levelled against the delinquent officer must be found to have been proved. The enquiry officer has a duty to arrive at a finding upon taking into consideration the materials brought on record by the parties. The purported evidence collected during investigation by the investigating officer against all the accused by itself could not be treated to be evidence in the disciplinary proceeding. No witness was examined to prove the said documents. The management witnesses merely tendered the documents and did not prove the contents thereof. Reliance inter aliea, was placed by the enquiry officer on the FIR which could not have been treated as evidence.12
23. Furthermore, the order of the disciplinary authority as also the appellate authority are not supported by any reason. As the orders passed by them have severe civil consequences, appropriate reasons should have been assigned. If the enquiry officer had relied upon the confession made by the appellant, there was no reason as to why the order of discharge passed by the criminal court on the basis of selfsame evidence should not have been taken into consideration. The materials brought on record pointing out the guilt are required to be proved. A decision must be arrived at on some evidence, which is legally admissible. The provisions of the Evidence Act may not be applicable in a departmental proceeding but the principles of natural justice are. As the report of the enquiry officer was based on merely ipse dixit as also surmises and conjectures, the same could not have been sustained. The inferences drawn by the enquiry officer apparently were not supported by any evidence. Suspicion, as is well known, however high may be, can under no 13 circumstances be held to be a substitute for legal proof".
b) In the case of Mohd. Yunus Khan vs. State of Uttar Pradesh and Others reported in (2010) 10 SCC 539 wherein it is held as under:
"16. We have to proceed keeping in mind the trite law that holding disciplinary proceedings against a government employee and imposing a punishment on his being found guilty of misconduct under the statutory rules is in the nature of quasi- judicial proceedings. Though the technical rules of procedure contained in the Code of Civil Procedure, 1908 and the provisions of the Evidence Act, 1872 do not apply in a domestic enquiry, however, the principles of natural justice require to be observed strictly. Therefore, the enquiry is to be conducted fairly and reasonably and the enquiry report must contain reasons for reaching the conclusion that the charge framed against the delinquent stood proved against him. It cannot be an ipse dixit of the enquiry officer.14
Punishment for misconduct can be imposed in consonance with the statutory rules and principles of natural justice. (See Bachhittar Singh vs. State of Punjab, Union of India vs. H.C. Goel, Anil Kumar vs. Presiding Officer, Moni Shankar vs. Union of India and Union of India vs. Prakash Kumar Tandon).
c) In the case of M/s. Glaxo Laboratories (I) Ltd., vs. Presiding Officer, Labour Court, Meerut and Others reported in (1984) 1 SCC 1, wherein it is held as follows:
"16. Reference was also made to Central India Coalfields Ltd,. Culcutta vs. Ram Bilas Shobnath in which scope and ambit of Standing Order 29 (5) came up for consideration before this Court. The Industrial Tribunal had held that the alleged misconduct had taken place outside the working hours as well as outside the pit where the respondent had to discharge his duties and accordingly he could not be punished under Standing Order 37. This 15 Court while allowing the appeal of the employer observed that 'normally this standing order would apply to the behavior on the premises where the workmen discharge their duties and during the hours of their work'. It was further observed that 'it may also be conceded that if a quarrel takes place between workmen outside working hours and away from the coal premises that would be a private matter which may not fall within Standing Order 29 (5)'. This Court then observed that in the special circumstances of this case it is clear that the incident took place in the quarters at a short distance from the coal-bearing area. If the incident occurred in the quarters occupied by the workmen who were working in a nearby coal bearing area, one can safely conclude that the incident occurred in the vicinity of the establishment and that was the governing factor which swayed the decision. And the decision was reached as specifically stated in the special circumstances of the case while leaving no trace of doubt about the normal approach in law to the construction of a standing order 16 that it would apply to the behavior on the premises where the workmen discharge their duties and during working hours of their work. This clearly imports time-place content in the matter of construction. This decision would rather clearly indicate that the misconduct prescribed in a standing order which would attract a penalty has a causal connection with the place of work as well as the time at which it is committed which would ordinarily be within the establishment and during duty hours."
d) In the case of Rasiklal Vaghajibhai Patel vs. Ahmedabad Municipal Corporation reported in (1985) 2 SCC, wherein it is held as follows:
"4. It is thus well-settled that unless either in the Certified Standing Order or in the service regulations an act or omission is prescribed as misconduct, it is not open to the employer to fish out some conduct as misconduct and punish the workman even though the alleged misconduct would not be 17 comprehended in any of the enumerated misconducts.
5. The High Court fell into error when it observe that;
The conduct of the petitioner in suppressing the material facts and
misrepresenting his past on the material aspect cannot be said to be a good conduct. On the contrary it is unbecoming of him that he should have deliberately suppressed the material fact and tried to obtain employment by deceiving the Municipal Corporation. It is clearly a misconduct.
After thus holding that the suppressio veri and suggestio falsi would constitute misconduct, the High Court held even if it does not fall in any of the enumerated misconducts, yet for the purpose of service regulation, it would nonetheless be a misconduct punishable as such. We are unable to accept this view of law and it has to be rejected.18
10. Hence, he contended that keeping personal money with the workman during the course of his employment and also running Chit Fund business in his house do not amounts to misconduct and neither the Regulations nor the Rules or the Standing Orders of BEML prohibit the said act. Therefore, he sought to set aside the impugned order passed by the Labour Court.
11. Per contra, Sri N. S. Narasimha Swamy, learned counsel for the respondent sought to justify the impugned order passed by the Labour Court. He invited the attention of the Court with regard to the Standing Orders and disciplinary Rules for workman of respondent Company at Clause - 8.2 which states that the all personal properties should be so declared in the prescribed form before being taken inside, at the Watch and Ward Officer who will check and certify when they are taken out; Clause - 20.6 states that collection of any money within the Company's premises for purposes not 19 sanctioned by the Management; Clause - 21.13 states that engaging in any private, personal unauthorized trade or business within the Company's premises and Clause - 21.14 states that entering another department or shop otherwise than in the course of his duty.
12. He further contended that in paragraph No.3 of his reply dated 06.10.2008, the petitioner workman admitted that the cash found in his table drawer and in his pant amounting to Rs.1,31,580/- belongs to him and it is his personal money. He also invited the attention of the Court that paragraph Nos.5 to 10 of the enquiry report stating that in the enquiry, it is established that the documents made available by the petitioner during the course of enquiry and analyzed the evidence, cross-examination of Management witnesses and perused the final statement given by the petitioner that he was in possession of Rs.1,31,580/- on 10.09.2008 inside the factory premises and slips 20 containing information about Chit Fund business being run by him. It proves beyond doubt that the petitioner was deserting the work spot and visiting various departments and shops during the working hours for collection and distribution of Chit Fund money to the members, officers and employees, which is nothing but indulging and engaging in private/personal unauthorized trade or business inside the Factory premises during working hours.
13. He further contended that the charge sheet dated 22.09.2008, it is stated that after referring to the charge memo of his above acts, if proved would amount to misconduct under the Certified Standing Orders of the Company at Clause - 21.13, 21.14, 21.6 and 21.3. Therefore, the contention of the learned counsel for the petitioner that there is no Standing Orders for prohibiting keeping the personal money inside the Factory premises cannot be accepted. He further 21 contended that there is no pleading with regard to the perversity of the enquiry and findings by the petitioner. He further contended that in paragraph Nos.15 and 16 of the counter claim, it is specifically stated that the averments made in paragraph Nos.12, 13, 14 and 15 are all false and the petitioner has involved inside the Factory by running Chit Fund business which is prohibited.
14. He further contended that the petitioner who was examined as WW.1 has admitted that he has not informed about amount of Rs.1,31,580/- was seized from him by the respondent -Company to the association. He also admitted that he was running Chit Fund business and therefore he brought the money to the Company for distribution of the same to the members of the Chit Fund business. He also admitted that there are 35 members in his Chit Fund business. He further contended that the impugned order passed 22 by the disciplinary authority removing the petitioner from service does not disqualify his future employment. The enquiry authority and disciplinary authority have held that the charges are proved against the petitioner. The Labour Court on considering the preliminary enquiry has recorded a finding that the domestic enquiry held is fair and proper. Therefore, the impugned order passed by the Labour Court is in accordance with law and the scope of Articles 226 and 227 of the Constitution of India is very limited. Hence, he sought for dismissal of the writ petition.
15. In support of his contentions, the learned counsel for the respondent relied upon the judgment of the Hon'ble Supreme Court in the case of Divisional Controller, Karnataka State Road Transport Corporation vs. M.G.Vital Rao reported in (2012) 1 SCC 442 and also in the case of G.M. (Operations) S.B.I and Anr. Vs. R. Periyasamy reported in 2015 23 AIR SCW 455 to the fact that it is now well settled that the Courts will not act as appellate Court and reassess the evidence led in the domestic enquiry nor interfere with the ground that another view is possible on the material on record. If the enquiry has been fairly and properly held and the findings are based on the evidence, the question of adequacy of the evidence of the reliable nature of the evidence will not be ground to interfer with the findings in departmental enquiries, except where such findings are based on no evidence or whether they are clearly perverse. Therefore, he sought for dismissal of the writ petition.
16. The learned counsel for the respondent also brought to the notice of this Court that the petitioner has removed from service on 16.04.2009 and he has retired after attaining the age of superannuation on 31.01.2011. He has received the entire pensionery benefits from 1974 till the date of his removal. The 24 dispute is only in respect of 18 months salary and he has not worked in view of the removal and 'no work no pay' principle has to be applied his case. The said fact is not disputed by learned counsel for the petitioner.
17. While replying to the argument of learned counsel for the respondent, learned counsel for the petitioner has stated that the charge is not for violation of any Standing Orders specially as per Clause - 8.2 of standing orders, no evidence was adduced by the Management to prove the charge. The perverse findings recorded by the Labour Court based on the irrelevant evidence, the High Court can interfere under Articles 227 of the Constitution of India. He sought to rely on the judgment of this Court reported in 2004 (2) KLJ 479 and AIR 1977 SC 2077.
18. In view of the rival contentions urged by learned counsel for the parties to lis, the only point that arises for consideration in the present writ petition is: 25
"Whether the impugned award passed by the Labour Court dated 09.02.2011 rejecting the reference made under Section 10 (4-A) of the Act confirming the removal order passed by the disciplinary authority dated 16.04.2009 is justified in the facts and circumstances of the present case?
19. I have given my anxious consideration to the arguments advanced by the learned counsel for the parties and perused the entire material on record carefully.
20. It is an admitted fact that the petitioner had appointed as Group-B Mechanic in the respondent - Company in the year 1974. Subsequently, he was promoted as Stores Superintendent in the Stores Department at the Railway Coach Division, Bengaluru and he has worked more than 34 years by maintaining absolute integrity, devotion and rendered blemishless service. It is also not in dispute that on 10.09.2008 26 three officers from the respondent - Company came and searched the table of drawer used by the petitioner and recovered a sum of Rs.1,31,580/- belongs to the petitioner. Thereafter, preliminary enquiry was conducted and alleged that the petitioner has involved in Chit Fund business inside the factory and accordingly, the statements of the petitioner's collogues in the respondent - Company were recorded.
21. It is not in dispute that 1) M.Ramanna, who was working in the Stores Department has stated 11.09.2008 that the petitioner was running Chit Fund business at his residence/house and since 9 months back he has subscribed two chits of Rs.1,05,500/- each at Rs.3,000/- per month for 35 months. Some other employees of the respondent - Company were also members of the said Chit Fund business. Last month he told to the petitioner that he need some money urgently as his sun was studying in final B.E. at East - 27 West College and his fee has to be paid. Mostly the transactions were done outside/during the lunch hours because of company circular and security strictness.
2) Sri. B.N. Ramamurthy, who stated on 11.09.2008 that he was working in Cash Office since 7 months and stated that he know the petitioner for last three years and he is doing Chit Fund business at his residence and he know that some of the respondent - Company are the members the Chit Fund business of the petitioner. He had subscribed of Rs.1,05,000/- at Rs.3,000/- per month for 35 months. 3) Sri Chikkamadaih, who stated on 11.09.2008 that he was working in Progress Department of the respondent - Company since 27 years and he know the petitioner for the past 10 years and he is running Chit Fund business. To save some money for his daughters marriage, he has subscribed for two chits of Rs.1,05,000/- for two chits each at Rs.3,000/- per month for 35 months. He also stated many employees are the members of petitioner' Chit 28 business and he do not know their names. He is residing near the petitioner's house and he was paying dues there only. 4) Sri Y. E. Ramachandrappa, who stated on 12.09.2008 that he was working in Task Planning Department since 1993. He know the petitioner since 15 years and the petitioner was running Chit Fund business at his residence and he subscribed two chits of Rs.1,05,000/- having premium of Rs.3,000/- per month for 35 months. He also stated that some other employees are also the members of the petitioner's Chit Fund business. He further stated that mostly the transactions are done in the house of the petitioner at R.R.Nagar where he was also staying.
22. It is also not in dispute that on the basis of the preliminary enquiry, a charge sheet came to be issued on 22.09.2008 containing five charges which amount to misconduct under the certified Standing 29 Orders of the respondent - Company, which reads as under.
i. Clause 21.13 - Engaging in any private,
personal unauthorized trade or
business within the company's
premises.
ii. Clause 21.14 - Entering another
department or shop otherwise than in
the course of his duty.
iii. Clause 21.16 - Failure to observe safety instructions or unauthorized removal of guards and other safety devices.
iv. Clause 21.19 - Gambling and money lending or doing any other private business within the Factory premises.
23. In pursuance of the said charge memo, the petitioner submitted his explanation on 06.10.2008 and specifically contended that the check conducted by the security staff on 10.09.2008 is unauthorized and untenable. The cash found in his table and in his pant amounting to of Rs.1,31,580/- was belongs to him and that there is nothing in the Certified Standing Orders to 30 prohibit keeping personal money inside the factory premises. He has worked more than 35 years of blemishless service and he is aware of the fact that private business of any kind should not be carried on inside the factory premises and the same has not been done by him. Therefore, the charge under Clause - 21.13 does not stand. He further contended that he was working as Senior Supervisor in the Processing and Delivery Stores Section. His duty involves movement from work place in the stores department to other department in connection with his officially entrusted job and he has not entered any other Department or shop for the purposes of carrying on any trade or business. As such, Clause-21.14 is not attracted to his case. He specifically contended that he has not collected any money within the factory premises on any working day. Therefore, Clause-21.6 of Standing Order does not attract his case.
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24. It is further contention of the petitioner that he has not breached any Standing Orders and he served the respondent - Company of more than 35 years by keeping good track record of service. The respondent - Company considering his sincerity and honesty has promoted him from time to time. Therefore, he requested to drop the charges.
25. Not satisfied with the objections, the Enquiry Officer appointed by the respondent - Company has conducted enquiry and come to a conclusions based on the oral and documentary evidence including the statements of the employees of the respondent - Company i.e., MDs.10 to 14 and held that the charges levelled against the petitioner were proved, charge sheeted employee was deserting the work spot and visiting various departments and shops during the working hours for collection and distribution of Chit Fund money. Ultimately, based on the enquiry report, 32 the Disciplinary Authority proceeded to remove the petitioner from service as contemplated under Clause - 22.2 (iii) of the Standing Orders of the respondent - Company.
26. On the claim petition filed under Section 10 (4-A) of the I.D. Act, the Tribunal by an order dated 09.02.2011 held that the Domestic Enquiry held is fair and proper. After considering the entire material on record, the Tribunal by the impugned award rejected the claim petition.
27. Though, several contentions raised by learned counsel for the petitioner and learned counsel for the respondent, the materials on record indicate that the entire case of the respondent - Company is that the petitioner was doing Chit Fund business inside the factory premises and collecting Chit Fund monthly premium and the petitioner was having the amount of Rs.1,31,580/- in his table and in his pant and also 33 found that some slips containing chit transaction details. Therefore, he was involved in Chit Fund business inside the factory premises. It is the specific contention of the petitioner that he was not doing any private business inside the factory and the amount with him was his personal money and he has worked in the factory for more than three and half decades (35 years) without any adverse remarks.
28. It is also clear from the records that according to the charge sheet, the petitioner was doing Chit Fund business with the employees of the respondent - Company. As could be seen from Annexure-A series, the statements of the employees of the respondent - Company, who are colleagues of the petitioner specifically stated on oath that the petitioner was running Chit Fund business at his residence and most transactions are outside the factory premises during lunch hours because of the company circular 34 and security strictness. They have stated that they are also members of the Chit Fund business being run by the petitioner in his residence. The petitioner examined as WW.1 has stated on oath that there are 35 members in Chit Fund business who are the employees of the respondent - Company. The material on record clearly depicts that along with the petitioner, the employees who made statement as per Exs.MD.10 to 14 and other co-employees of the respondent - Company are also members of the Chit Fund business being run by the petitioner in his residence. The respondent - Company has not issued any Articles of charge memo either to the employees whose statement has been recorded by the respondent - Company as per Exs.MD.10 to 14 or to other employees who are the members of the Chit Fund business. If the Standing Orders applied to the petitioner, who is running the Chit Fund business in his residence then the said Standing Orders shall also apply to other members who are also employees of the 35 respondent - Company. If the petitioner doing any transaction with the members, it amounts to other members also doing the transaction of Chit Fund business. Therefore, without issuing charge memo to other members of the Chit Fund, issuing charge memo only to the petitioner is in utter violation of Articles 14, 19(g) and 21 of the Constitution of India. It is not the case of the respondent - Company that any employee of the respondent - Company should not involve in any private business outside the factory premises. Except the evidence of MWs.1 to 3, the Secretary Intelligence Subedar, Assistant Security Officer, who are interested witnesses of the respondent - Company, no other material or any independent evidence is forthcoming from the records to show that the petitioner was running Chit Fund business inside the factory premises. There is no material to show that for how many years the petitioner was running the Chit Fund business. If the case of the respondent - Company is 36 accepted, why it has continued the petitioner in service for more than 35 years. Taking into consideration his absolute integrity and blemishless service, he has been promoted from Group-B Mechanic to Stores Superintendent and no departmental enquiry was initiated for more than 35 years (3½ decades) that is the one of the circumstances, this Court is of the considered opinion that the action of the respondent - Company removing the petitioner from service shocks the conscience of this Court.
29. It is also not in dispute that the Standing Orders of the respondent - Company has prescribed minor and major penalties, which reads as under:
"22. Penalties for misconduct The following penalties may, for good and sufficient reasons, be imposed for misconduct. 22.1 The following shall constitute minor penalties:
(i) Censure or Warning;37
(ii) Fine, subject to the provisions of the Payment of Wages Act;
(iii) Suspension without wages for a period not exceeding 4 days.
22.2 The following shall constitute major penalties:
(i) Stoppage of increment;
(ii) Reduction to a lower grade of post or
lower stage in a time scale;
(iii) Removal from service which does not
disqualify for future employment;
(iv) Dismissal from service."
30. The four charges contained in the charge memo depicts that the petitioner was engaged in a private business or unauthorized trade within the company premises, entering to other shops and collection of money within the company premises. There is no charge against the petitioner about dereliction of duty. In the absence of any specific charge, the enquiry report submitted by the Enquiry Officer that the petitioner was deserting the work spot 38 and based on the said report, the Disciplinary Authority proceeded to hold that the petitioner has deserted the work for collection and distribution of Chit Fund money cannot be accepted. It is not case of the respondent - Company that he has misappropriated any amount of the Company and it is also not the case of the respondent that the amount with the petitioner i.e., a sum of Rs.1,31,580/- in terms of the charge memo was belongs to the respondent - Company. The entire records reveals that the respondent never claimed that the said money was belongs to them and the petitioner has misused his power as Stores Superintendent in Stores Department and that there is financial implication is on the respondent. It is also not the case of the respondent that the charges levelled against the petitioner amounts to serious misconduct and unbecoming to the public servant of the respondent - Company. Taking into consideration the charges issued and the defence taken and not taking any action against 39 other members of the Chit Fund business including the employees who made statements as per Exs.MD.10 to 14 is amounts to discrimination among the employees of the respondent - Company. Even assuming, the charges are proved and that itself is not amounts punish the petitioner by removing him from service. The disciplinary authority has proceeded to impose extreme punishment of removal from service only on the basis of the enquiry report and same has been confirmed by the Labour Court ignoring both oral and documentary evidence and surrounding circumstance. The respondent - Company has not initiated any enquiry proceedings against other 35 members including the employees who made statement as Exs.MD.10 to 14, which shocks conscious of this Court and the same is disproportionate to the gravity of the charges. The Disciplinary Authority as well as the Labour Court ought to have imposed minimal punishment or other punishments as stated supra in 40 terms of the Standing Orders of the respondent - Company instead of removal. Taking into consideration the discrimination between the petitioner and other employees of the respondent - Company who were also involved in Chit Fund business along with the petitioner, the matter requires for reconsideration by the Disciplinary Authority.
31. The Hon'ble Supreme Court while considering the punishment/penalty imposed by disciplinary/appellate authority in departmental enquiry against a public servant is disproportionately excessive so as to shock the judicial conscience in the case of B.C. CHATURVEDI vs. UNION OF INDIA AND OTHERS reported in (1995) Supreme Court Cases 749 at para No.18 held as under: "18. A review of the above legal position would establish that the disciplinary authority, and on appeal the appellate authority, being fact-finding authorities have 41 exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in the magnitude or gravity of the misconduct. The High Court/Tribunal, while exercising the power of judicial of review, cannot normally substitute its own conclusion on penalty and impose some other penalty. If the punishment imposed by the disciplinary authority or the appellate authority shocks the conscience of the High Court/Tribunal, it would appropriately mould the relief, either directing the disciplinary/appellate authority to reconsider the penalty imposed, or to shorten the litigation, it may itself, in exceptional and rare cases, impose appropriate punishment with cogent reasons in support thereof."
32. The Hon'ble Supreme Court while considering the provisions of Articles 226 and 311 of Constitution of India, in the case of Deputy Commissioner, KVS & Ors. vs. J.Hussain reported in 42 AIR 2014 Supreme Court 766 has held that it is the disciplinary authority with whom lies the discretion to decide as to what kind of punishment is to be imposed on delinquent. This discretion has to be exercised objectively keeping in mind the nature and gravity of charge. Punishment imposed on delinquent - found to be disproportionate - Court cannot itself impose particular punishment - Court has to refer matter to disciplinary authority to impose proper punishment and held as under:
"6. When the charge proved, as happened in the instance case, it is the disciplinary authority with whom lies the discretion to decide as to what kind of punishment is to be impose. Of course, this discretion has to be examined objectively keeping in mind the nature and gravity of charge. The Disciplinary Authority is to decide a particular penalty specified in the relevant Rules. Host of factors go into the decision making while Authority is to decide a 43 particular penalty specified in the relevant Rules. Host of factors go into the decision making while exercising such a discretion which include, apart from the nature and gravity of misconduct, past conduct, nature of duties assigned to the -delinquent, responsibility of duties assigned to the delinquent, previous penalty, if any, and the discipline required to be maintained in department or establishment where he works, as well as extenuating circumstances, if any exist. The order of the Appellate Authority while having a re-look of the case would, obviously, examine as to whether the punishment imposed by the Disciplinary Authority is reasonable or not. If the Appellate Authority is of the opinion that the case warrants lesser penalty, it can reduce the penalty so imposed by the Disciplinary Authority. Such a power which vests with the Appellate Authority departmentally is ordinarily not available to the Court or a Tribunal. The Court while undertaking judicial review of the matter is not supposed to substitute its own opinion on reappraisal of 44 facts. (See: Union Territory of Dadra & Nagar Haveli V. Gulabhia M. Lad (2010) 5 SCC 775:
(2010 AIR SCW 3785). In exercise of power of judicial review, however, the Court can interfere with the punishment imposed when it is found to be totally irrational or is outrageous in defiance of logic. This limited Scope of judicial review is permissible and interference is available only when punishment is shockingly disproportionate, suggesting lack of good faith. Otherwise, merely because in the opinion of the Court lesser punishment would have been more appropriate, cannot be a ground to interfere with the discretion of the departmental authorities.
7. When the punishment is found to be outrageously disproportionate to the nature of charge, principle of proportionality comes into play. It is, however, to be borne in mind that this principle would be attracted, which is in tune with doctrine of Wednesbury Rule of reasonableness, only when in the facts and circumstances of the case, penalty 45 imposed is so disproportionate to the nature of charge that is shocks the conscience of the Court and the Court is forced to believe that it is totally unreasonable and arbitrary. This principle of proportionality was propounded by Lord Diplock in Council of Civil Service Unions V. Minster for Civil Service in the following words"
" Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads of the grounds on which administrative action is subject to control by judicial review. The first ground I would call "illegality", the second "irrationality" and the third "procedural impropriety". This is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of proportionality".
9. To be fair to the High Court, we may mention that it was conscious of the 46 narrowed scope of the doctrine of proportionality as a tool of judicial review and has stated so while giving lucid description of this principal in the impugned judgment. However, we are of the view that its is the application of the principle on the facts of this case where the High Court has committed an error while holding that the punishment was shocking and arbitrary. Moreover, while interfering therewith, the High Court has itself prescribed the punishment which according to it, "would meet the ends of justice", little realizing that the Court cannot act a disciplinary authority and impose a particular penalty. Even in those cases where it is found that the punishment is disproportionate to the nature of charge, the Court can only refer the matter back to the Disciplinary Authority to take appropriate view by imposing lesser punishment, rather than directing itself the exact nature of penalty in a given case."
47
33. This Court find it difficult to fathom a reason for placing such excessive reliance on the defence and evidence adduced by the respondent - Company, which clearly indicates that the appreciation of evidence by the authorities below is found to be wholly unsatisfactory and the conclusions drawn are perverse and contrary to the material on record. The judgments relied upon by the counsel for the parties have no application to the facts and circumstances of the present case.
34. The Hon'ble Supreme Court while considering the punishment of dismissal from service in an identical circumstances in the case of Collector Singh vs. L.M.L. Limited, Kanpur reported in (2015) 2 Supreme Court Cases 410 held at para Nos.9, 14 and 15 as under:
"9. Jurisdiction under Article 136 of the Constitution is extraordinary and interference with the concurrent findings of fact recorded by the Courts below is 48 permissible only in exceptional cases and not as a matter of course. Where the appreciation of evidence is found to be wholly unsatisfactory or the conclusion drawn from the same is perverse in nature, in exercise of the jurisdiction under Article 136 of the Constitution, this Court may interfere with the concurrent findings for doing complete justice in the case. In the facts and circumstances of the case, in our view, it is a fit case to exercise the jurisdiction under Article 136 of the Constitution to interfere with the conclusion of the Labour Court upholding the punishment of dismissal as affirmed by the High Court.
14. Having said that the punishment of dismissal from service is harsh and disproportionate, this Court in ordinary course would either order reinstatement modifying the punishment or remit the matter back to the disciplinary authority for passing fresh order of punishment. But we are deliberately avoiding the ordinary course. We are doing so because nearly two decades have passed 49 since his termination and over these years the appellant must have been gainfully employed elsewhere. Further, the appellant was born in the year 1955 and has almost reached the age of superannuation. In such circumstances, there cannot be any order of reinstatement and award of lump sum compensation would meet the ends of justice. Considering the length of service of the appellant in the establishment and his deprivation of the job over the years and his gainful employment over the years elsewhere, in our view, lump sum amount of compensation of Rs. 5,00,000 would meet the ends of justice in lieu of reinstatement, back wages, gratuity and in full quit of any other amount payable to the appellant.
15. In the result, the impugned order of the High Court dated 24.9.2012 passed in Collector Singh v. L.M.L. Ltd. confirming the award of the Labour Court is set aside and the appeal is allowed. The respondent management is directed to pay the amount of compensation of Rs 5,00,000 to the appellant 50 within a period of six weeks from the date of receipt of copy of this order failing which, the said amount is payable with interest @ 9% p.a. thereon.
35. Therefore, the punishment imposed by Disciplinary Authority confirmed by the Labour Court is found to be disproportionate to the gravity of the charge memo issued, shocks judicial conscience of this Court, which requires modification by the Disciplinary Authority. Therefore, the point raised in the present writ petition has to be answered in the negative holding that the Labour Court is not justified in confirming the removal order passed by the Disciplinary Authority dated 16.04.2009 and the petitioner has made out a strong case for interference exercising the powers of this Court under Articles 226 and 227 of the Constitution of India.51
36. In view of the aforesaid reasons, writ petition is allowed. The impugned order dated 09.02.2011 and the Award dated 31.12.2011 rejecting the reference made under Section 10 (4-A) of the I.D. Act confirming the order of removal by the Disciplinary Authority dated
16.04.2009 are hereby set aside. The matter is remanded to the Disciplinary Authority for fresh consideration keeping in view that the petitioner has retired from service after attaining the age of superannuation and he had received the entire pensionary benefits from 1974 till the date of his removal and in the light of the dictums of the Hon'ble Supreme Court stated supra and in accordance with law expeditiously.
Sd/-
JUDGE Srt