Karnataka High Court
Virupaxi S/O. Irabasappa Kati vs The Karnataka Lingayat Education ... on 23 July, 2021
Author: Ravi V.Hosmani
Bench: Ravi V.Hosmani
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 23RD DAY OF JULY 2021
BEFORE
THE HON'BLE MR.JUSTICE RAVI V.HOSMANI
WRIT PETITION No. 68576/2011 (L-TER)
C/W W.P. NO.63129-130/2011
IN WP. No.68576/2011
BETWEEN:
SRI. VIRUPAXI S/O. IRABASAPPA KATI,
AGED ABOUT 54 YEARS,
R/AT PLOT NO. 313, SHREE BUILDING,
SHIVABASAV NAGAR, BELAGAVI.
...PETITIONER
(BY SRI.T.M. NADAF AND BASKAR L. PATIL, ADVOCATE)
AND
1. THE KARNATAKA LINGAYAT EDUCATION SOCIETY,
COLLEGE ROAD, BELAGAVI,
REPRESENTED BY ITS CHAIRMAN.
2. THE KLE SOCIETY'S HOSPITAL AND
MEDICAL RESEARCH CENTRE,
NEHRU NAGAR, BELAGAVI.
REPRESENTED BY ITS MEDICAL DIRECTOR
AND CHIEF EXECUTIVE.
... RESPONDENTS
(BY SRI. MALLIKARJUNSWAMY B. HIREMATH, ADVOCATE)
2
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE
AWARD PASSED BY THE ADDITIONAL LABOUR COURT, HUBLI,
DATED: 30/10/2010 PASSED IN KID. NO.40/2005, ONLY SO FAR
AS IT RELATES TO DENIAL OF BACK WAGES TO THE PETITIONER,
COPY AS PER ANNEXURE AND ETC.,
IN WP. No.63129-130/2011
BETWEEN:
1. THE KARNATAKA LINGAYAT EDUCATION SOCIETY,
COLLEGE ROAD, BELAGAVI-590001,
BY ITS CHAIRMAN.
2. K.L.E. SOCIETY'S HOSPITAL AND
MEDICAL RESEARCH CENTRE,
NEHRU NAGAR, BELAGAVI-590001,
BY ITS MEDICAL DIRECTOR AND CHIEF EXECUTIVE.
...PETITIONERS
(BY SRI.T.M. NADAF AND BASKAR L. PATIL, ADVOCATE)
AND
SRI. VIRUPAXI S/O. IRABASAPPA KATI,
AGED ABOUT 54 YEARS,
R/AT PLOT NO. 313, "SHREE BUILDING",
SHIVABASAV NAGAR, BELAGAVI-590001.
... RESPONDENT
(BY SRI. MALLIKARJUNSWAMY B. HIREMATH, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS
LEADING TO THE PASSING OF THE IMPUGNED AWARD
DATED:30/10/2010, PASSED BY THE ADDITIONAL LABOUR COURT,
HUBLI IN KID NO.40/2005 (ANNEXURE-N) AND ETC.,
3
THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 16.07.2021, COMING ON FOR
'PRONOUNCEMENT OF ORDER THIS DAY, THE COURT, MADE THE
FOLLOWING:
ORDER
These writ petitions are filed challenging the award dated 30.10.2010 passed by the Addl. Labour Court, Hubballi in KID No. 40/2005. While W.P. No. 68576/2011 is filed by the workman seeking for award of back wages denied by the Labour Court, W.P. No. 63129/2011 is filed by the management against the award insofar as its interference with the order of punishment passed against the respondent-workman by the management.
2. For the sake of convenience, the parties hereinafter will be referred to as 'management' and 'the workman' respectively.
3. The brief facts as stated are that the management is an educational society registered under Societies Registration Act and also under Bombay Public Trusts Act. It runs several educational institutions and hospitals. The KLE Society's Hospital & Medical Research Centre at Nehru Nagar, Belagavi (hereinafter referred to as the 'hospital') is one such, the workman was employed as Clerk cum Cashier in the Accounts Department of the hospital. His 4 responsibilities were to attend to the work of cash counter as per the schedule of duty and to deposit the cash collected during banking hours in the bank account of the hospital and the cash collected thereafter to be deposited in the safe locker.
4. While he was on duty on 15.04.2002, he attended the work of cash counter at Inpatient Department wherein a sum of `3,88,780/- was collected. After depositing `3,62,800/- into the Canara Bank Extension Counter, he retained sum of `25,980/-. Thereafter, on 16.04.2002, he collected a sum of `3,02,383/- between 1 p.m. to 8 p.m. at Inpatient Department cash counter during second shift. Another cashier, i.e., Sri S.B. Mallannavar, had collected a sum of `3,32,549/- during the first shift on 16.04.2002. The said S.B.Mallannavar deposited the cash collected amount in the locker of the hospital, in the presence of the workman who was in possession of the safe locker keys. The workman was therefore in custody of the cash and the locker as the keys were in his custody. Thus, a total of `6,29,549/- was in his custody. But it was later on complained by the workman that the entire amount of `6,29,549/- was missing. The Accounts Officer of the Hospital 5 lodged Police complaint with the Market Yard Police Station in Crime No. 71/2002.
5. After an internal investigation and finding sufficient cause against the workman, the management has issued an Article of Charge to the workman. The charge made against the workman included an allegation that there was misappropriation of amount of `6,29,529/- by the workman with the aid of M.T. Umrani and Ravi Vaggar.
6. The workman submitted reply claiming to be innocent. He refuted the allegations and requested the management to conduct a thorough enquiry/ investigation to find out and punish the real culprit and to drop the proceedings against him. Not satisfied with the reply, the management proceeded to hold departmental enquiry by appointing Enquiry Officer.
7. Disciplinary enquiry was conducted with the due participation of the workman. After conclusion of the enquiry, the Enquiry Officer submitted a report holding the workman guilty of dereliction of duty and negligence and also breach of trust. 6
8. After receipt of the Enquiry Report, the management issued second show cause notice to the workman enclosing copy of the enquiry report. The workman did not submit any representation against the findings of the Enquiry Officer.
9. On consideration, the management / Disciplinary Authority accepted the findings of the Enquiry Officer and passed an order of punishment of dismissal from service against the workman.
10. Aggrieved by the order of dismissal, the workman filed a claim petition before the Addl. Labour Court, Hubli under Sec. 10(4)-A of the Industrial Disputes Act. The management entered appearance and filed objections denying the claim petition averments and contending that the management on being satisfied about the findings of the Enquiry Officer regarding the charges of financial irregularity held proved against the workman, proceeded to impose punishment of dismissal from service. The Departmental Enquiry was conducted in a fair and legal manner and after affording due opportunity of participation to the workman and therefore the order of punishment did not call for any interference. 7
11. Based on pleadings, Labour Court framed following issues.
1. Whether the domestic enquiry held against the first party is fair and proper?
2. Whether the respondent-management is justified in dismissing the petitioner-claimant from service by its order dated 22.07.2005?
3. What order?
12. The Labour Court treated issue No.1 as preliminary issue. The management got marked the entire enquiry proceedings marked with consent as ExsM.1 to M.104. Thereafter, the workman got marked three documents as Exs.W.1 to W.3 by consent. On consideration, the preliminary issue was answered in the affirmative.
13. Thereafter, the workman examined himself as WW1. The management did not lead any evidence. On consideration, the Tribunal answered issue No.2 in the negative and issue No.3 by allowing the claim petition in part, setting aside the order dated 22.07.2005 dismissing the workman from service and directing reinstatement of the workman into service with continuity of service 8 and other consequential benefits, but, without back wages. Assailing the award, both the management as well as the workman have preferred separate writ petitions which are clubbed together.
14. Sri T.M. Nadaf, learned counsel for the workman submitted that the workman was appointed as S.D.C. in the hospital during 1988. From the year 1999, he was working as Clerk at Inpatient Department Cash Counter in the hospital. On 16.04.2002 he performed duty during second shift and admitted cash collections at the IPD counter. He also admitted that the cash collected during the first shift by Sri S.B. Mallannavar to have been deposited in the safe locker. Though the next day, the cash was found missing from the safe locker, by him, it was not misappropriated by him. The Police after investigation filed 'C' report before the Court declaring their inability to trace the culprit which indicated that the workman was not guilty of misappropriation. It was also contended that after the completion of the second shift duty by the workman, the custody of the locker and the keys would not have been with him and therefore it was 9 highly probable that someone else might have made away with the cash.
15. It was also contended that though the Articles of Charge contained an allegation that the workman had misappropriated a sum of `6,29,529/- with the aid of two other persons, said persons were not subjected to any departmental proceedings and therefore, the act of management in singling out the workman for departmental enquiry and punishment amounted to victimization.
16. The punishment was also challenged on the ground of proportionality. It was submitted that the workman had served the management for nearly 17 years without any antecedents. The police investigation into the incident was inconclusive as evidenced by the police filing 'C' report. Even during the enquiry, the workman. was not held guilty of misappropriation. Under the circumstances, the punishment of dismissal from service would be shockingly disproportionate. The Labour Court though empowered, failed to exercise jurisdiction vested with it u/s 11A of the Industrial Disputes Act, as regards quantum of punishment. The workman is denied terminal benefits and even gratuity denied to him. 10
17. The Labour Court after sifting through the evidence, held that the findings of the enquiry officer were based on circumstantial evidence and as there was no direct evidence to establish the charge of misappropriation, the order of termination from service was unjustified. However, the Labour Court denied backwages to the workman. The only reason assigned is that the workman was working in Bellad Company and he was giving tuition to children and his wife was doing domestic work and earning income, which was not sufficient nor justified to deny backwages. Merely on the ground that the workman had engaged in some nominal job for earning livelihood and sustaining himself during the pendency of the industrial dispute is not sufficient to deny backwages completely. On the said ground, learned counsel sought for allowing the writ petition filed by the workman and for dismissal of the writ petition filed by the management.
18. On the other hand, Shri. B.C. Prabhakar, learned counsel appearing for Shri. M.B. Hiremath, Advocate, for the management in W.P.No.63129/2011 submitted that the finding of the Labour Court on issue No.1 was in the affirmative, i.e., the departmental 11 enquiry held by the management was found to be fair and proper. Therefore, the jurisdiction of the Labour Court would be restricted to examining the matter on victimisation and proportionality of punishment only. Referring to the decision of the Hon'ble Supreme Court in State of Hariyana Vs. Rattan Singh, reported in AIR 1977 SC 1512, submitted that in a domestic enquiry, the strict and sophisticated ryes of evidence under the Evidence Act may not apply. All material which are logically probative for a prudent mind are permissible. There is no allergy to hear-say evidence provided it has reasonable nexus and credibility. The departmental authorities and administrative tribunal must be careful in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Evidence Act.
19. It is further held that the sufficiency of evidence in proof of the finding by a domestic tribunal is beyond scrutiny. Absence of any evidence in support of a finding is certainly available for the court to look into because it amounts an error of law.
20. In the case on hand, the Labour Court after holding that the domestic enquiry was fair and proper, has immersed itself into 12 the evidence recorded during the departmental enquiry and after holding that the evidence relied upon was circumstantial and there was no direct evidence to establish the charge of negligence in handling the cash belonging to the management proceeded to interfere with the quantum of punishment. The interference by the Labour Court belied the findings of fact recorded by it. The charge against the workman was negligence in handling the responsibility and safeguarding the cash belonging to the management. While giving its findings on issue no.2, the Labour Court held as follows:
".....It is admitted that the workman was working as a cash clerk in IPD cash counter in the second shift on 16.04.2002. The workman has also admitted that he had Rs.25,980/- collected on 15.04.2002. He has also admitted that Rs.3,32,549/- was kept in the safe locker by Sri.Malannavar. However the workman has contended that he is not certain about the quantum of the amount. Never the less he has admitted that Sri.Malannavar kept the amount in the safe locker. The workman has admitted that he had collected Rs.2,71,000/- in IPD cash counter on 16.04.2002 and he has kept the same in the safe locker. Therefore it is crystal clear that the workman was entrusted with Rs.6,29,529/- belonging in to the management and more or less the same is admitted by the workman."
21. It is undisputed fact that the cash amount of `.6,29,529/-, was found missing the next day. Such being the 13 case, the management had initiated the disciplinary proceedings against the workman as he was entrusted with the responsibility of safeguarding the cash belonging to the management. As the cash was lost, the charge of failure or neglect in performing his responsibilities was established. The standard of proof in departmental enquiries was that of preponderance of probabilities unlike in criminal cases, where it is proof beyond reasonable doubt. It was further submitted that the result of criminal prosecution would not bind the departmental proceedings, even if it is not totally irrelevant. Therefore, jurisdiction exercised by the Labour Court to interfere with the quantum of punishment was contrary to law. On the above grounds, learned counsel sought for dismissal of the workman's writ petition and for allowing the management writ petition by quashing the award passed by the Labour Court and restoring the order of punishment imposed by the management.
22. In support of his submissions, learned counsel relied upon the following decisions:
i) Usha Breco Mazdoor Sangh Vs. Management of Usha Breco ltd., & others., reported in (2008) 5 SCC 554, for the proposition that once the legality and validity of domestic enquiry was held to be fair and proper, 14 jurisdiction of Labour Court would be limited and has to be exercised judiciously.
ii) Divisional Controller Vs. M.G. Vittal Rao, reported in (2012) 1 SCC 442, for the proposition that standard of proof in criminal case and domestic enquiry are different. And also for the proposition that, in case of loss of confidence in employee, reinstatement cannot be directed and in case of misconducts of grave nature, like corruption or theft, no punishment other than dismissal is appropriate.
iii) Bharath Iron Works Vs. Bhagubhai Balubhai Patel and Others, reported in 1976(1) SCC 518, for the proposition that victimisation is a serious charge by an employee against the employer and therefore, it must be properly and adequately pleaded giving all particulars upon which the charge is based to enable the employer to fully meet them. The charge must not be vague or indefinite being as it is an amalgam of facts as well as inferences and attitudes and that the onus of establishing the plea of victimisation will be upon the person pleading it. Since, charge of victimisation is a serious matter reflecting to a degree upon the subjective attitude of the employer evidenced by acts and conduct, these have to be established by safe and sure evidence. Mere allegations, vague suggestions and insinuations are not enough and that such victimisation even if established must be directly connected with the activities of the concerned employee, inevitably leading to the penal action without the necessary proof of a valid charge against him.
23. From the above submissions, it is not in dispute that after completion of the first shift duty, Shri S.B. Malannavar, the workman performed the duty on the second shift. As such he was 15 incharge of the cash counter at inpatient department on 16.04.2002. He admitted to have seen a sum of `.6,29,529/- being kept inside the locker. During that time, he was in possession of the key to the locker. It is further not in dispute that the entire cash was found missing the next day.
24. The charge against the workman was committing theft of amount of `.6,29,529/-, handling of cash negligently, which amounts to dereliction of duty, misconduct, committing fraud against the institution, criminal breach of trust, dishonesty and misappropriation. Departmental enquiry was conducted on the charges. The workman participated in enquiry and cross-examined management witnesses and also led evidence.
25. The enquiry officer, held the charge of dereliction of duty and negligent handling of cash has proved, as the workman had admitted custody of the cash, which was later found missing without any justifiable explanation by the workman, even the charge of misappropriation, dishonesty and indiscipline were established.
16
26. After receipt of the enquiry report, the disciplinary authority afforded an opportunity to the workman on the findings of the enquiry officer and thereafter, proceeded to pass the order of punishment by accepting the findings of the enquiry officer. As the findings on the charges led to breach of relationship of trust, the management proceeded to impose capital punishment of termination from service.
27. The challenge to the order of punishment before the Labour Court was on the ground of violation of principles of natural justice; singling out the workman for departmental proceedings, even though, the workman was charged committing the misconduct with the aid of others and also on the ground of non-application of independent mind by the disciplinary authority on the findings of the enquiry officer.
28. The Labour Court after holding the departmental enquiry as fair and proper, proceeded to sift through the evidence recorded during departmental enquiry and on finding that there was no direct evidence to establish the charges, set-aside the order of punishment and directed reinstatement of the workman with 17 continuity of service and consequential benefits by denying backwages.
29. The main issue that is required to be decided in these petitions is, whether the exercise of jurisdiction by the Labour Court was justified? While it is contended by the management that jurisdiction of the Labour Court to examine the matter on merits of charges and evidence available, would be extremely limited except in case of perversity, victimisation and proportionality etc.
30. On the other hand, the workman is assailing the award insofar as denial of backwages. There is no challenge to the findings of the Labour Court on the preliminary issue. Indeed, as held by the Supreme Court in Usha Breco' case (supra), the contours of judicial review exercisable by a Court/tribunal on the findings in departmental proceedings have been succinctly laid down in the celebrated decision of Rattan Singh (supra). The interference with the findings of the enquiry officer by the Labour Court is admittedly not on the ground that there was no evidence available to support the charges and the findings. But, it is on the ground that there was no direct evidence available. The Labour Court was also led by the 18 'C' report filed in the criminal prosecution, even though, the findings thereon would not be binding, unless the charges were the same, witnesses examined were also the same. Such being not the case herein, the basis for exercise of jurisdiction by the Labour Court is indeed contrary to the law declared by the Hon'ble Supreme Court in the decision cited by the learned counsel for the management.
31. Insofar as victimisation, the workman has merely stated in the claim petition that the management witness, who had deposed against the workman to have committed the misconduct with the aid of two other employees had failed to name them during investigation by the police. Though, the counsel for the management had taken sufficient time to file objections and lead evidence against the 'C' report had failed to do so, leading to acceptance of the 'C' report by the Court. However, in the departmental proceedings, the evidence of the management witness, which was not disclosed during criminal investigation was taken into account. Though, learned counsel for the workman made a valiant effort to canvass the ground of victimisation by 19 contending that the management had not initiated any disciplinary proceedings against the two other named accomplices and therefore there was victimisation, it is seen that there was no specific ground of victimisation urged before the Labour Court. There were no sufficient or clear pleadings substantiating the same. In the absence of a clear attempt by the workman before the Labour Court, an otherwise illegal award cannot be sustained on a vague ground of victimisation canvassed for the first time before this Court.
32. The charge against the workman is negligence and dishonesty in handling cash belonging to the management. The same is indeed a grave and serious charge. As held by the Hon'ble Supreme Court in M.G. Vittal Rao's case (supra), the punishment of dismissal from service cannot be held to be justified. There is no finding by the Labour Court that the punishment imposed shocks the conscience of the Court. Therefore, even on the ground of doctrine of proportionality, the punishment imposed by the management on the proved charges cannot be justified.
33. In view of the above, Writ petition No.63129-30/2011 filed by the management is allowed, the award passed by the 20 Labour Court is set-aside. The order of punishment dated 22.07.2005 passed by the management dismissing the workman from service is restored.
In view of the award passed by the Labour Court being set- aside, W.P.No.68576/2011 filed by the workman is dismissed as devoid of merits.
However, dismissal of the workman's writ petition would not come in the way of the workman approaching the authorities under the Gratuity Act, seeking gratuity.
SD JUDGE Bvv/psg*