Chandra Bhan Singh vs State Of U.P. & 3 Others
2017 Latest Caselaw 4828 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Reserved
 

 
Court No. - 18
 

 
Case :- WRIT - A No. - 41804 of 2014
 

 
Petitioner :- Chandra Bhan Singh
 
Respondent :- State Of U.P. & 3 Others
 
Counsel for Petitioner :- H.P. Pandey,Shyam Narain
 
Counsel for Respondent :- C.S.C.,A.L. Yadav, Shiv Nath Singh
 

 
Hon'ble Mrs. Sangeeta Chandra,J.

1. This writ petition has been filed by the petitioner challenging the orders dated 08.05.02014 and 03.06.2006 passed by the Managing Director, Uttar Pradesh Sahkari Gram Vikas Bank, Ltd., respondent No. 2 and with a further prayer to issue direction to respondent Nos. 2 and 3 to treat the services of the petitioner from 07.02.1996 to 07.06.2006 "in continuity from the period of suspension" and to pay all consequential benefits to the petitioner.

2. The brief facts relevant for deciding the controversy are that the petitioner Chandra Bhan Singh was initially engaged in 1976 as Field Officer in U.P. Sahkari Gram Vikas Bank Ltd. through the selection of U.P. Cooperative Institutional Service Board Lucknow. An inquiry was initiated against the petitioner in 1996 on the charges of financial and other irregularities and the petitioner was placed under suspension in February, 1996. The petitioner was charged with negligence in performance of his duties and when the Regional Manager inspected the Bank Branch in Jhansi, where the petitioner was Branch Manager and the loan files prepared under the supervision of the petitioner were found incomplete and the Regional Manager had, therefore, come to the conclusion that the proposed loans were passed on forged documents.

3. The Inquiry Officer had considered the evidence and had recorded a finding that no financial loss had occurred to the Bank, but there was a full possibility that such loss would have occurred if such irregularity had not been detected by the Regional Manager. On this finding of the Inquiry Officer, the Appointing Authority had dismissed the petitioner.

4. The petitioner challenged the order of dismissal dated 09.06.1997 in Civil Misc. Writ Petition No. 23033 of 1997 (Chandra Bhan Singh vs Managing Director U.P. Sahkari Gram Vikas Bank Ltd.) on the ground that no opportunity of hearing was given to the petitioner in the regular disciplinary proceedings and the order of dismissal was not proportionate to the charge levelled against the petitioner. This Court found that even if the findings of the Inquiry Officer were to be accepted, there was no financial loss caused to the Bank, and therefore, the petitioner did not deserve the order of dismissal for embezzlement. This Court, therefore, set aside the impugned order of dismissal dated 09.06.1996 and directed the respondents to reconsider the quantum of punishment to be imposed upon the petitioner keeping in view the finding arrived at by the Inquiry Officer with respect to the main charge. 5. After the Writ Petition No. 23033 of 1997 was allowed by this Court on 06.10.2005, the Managing Director of the Bank cancelled the order of dismissal and reinstated the petitioner on 03.06.2006 by imposing three penalties. Five increments of the petitioner were stopped with cumulative effect, besides censure entry was directed to be recorded in his service record and the period the petitioner remained under suspension i.e. from February, 1996 till the order of reinstatement in June, 2006 was to be treated as period not spent on duty, and therefore for the said period on the principle of "no work no pay", no remuneration was given to the petitioner.

6. Aggrieved by the said order of punishment, the petitioner preferred an appeal before the Chairman, Uttar Pradesh Cooperative Institutional Service Board, Lucknow, which was partly allowed on 13.12.2006 and the order of punishment of withholding five increments cumulatively was modified to the extent that only one increment was to be withheld permanently. A further direction was issued to the petitioner to approach the Bank with regard to other penalties imposed i.e. of censure entry and non payment of salary during the period when the petitioner remained out of service. The petitioner again approached the Chairman of the Bank, the respondent No. 3 on 06.01.2007. The representation of the petitioner was kept pending till 20.10.2008 when it was rejected as time barred.

7. The petitioner challenged the order dated 20.10.2008 in Writ A No. 4511 of 2009 (Chandra Bhan Singh vs State of U.P. & others) and this Court set aside the order dated 20.10.2008 and issued a direction to the Bank Authorities to pass a reasoned and speaking order on the representation of the petitioner within a specified period.

8. In compliance of the order dated 07.02.2014 passed by this Court, the petitioner again approached the Bank, but the Managing Director rejected the representation of the petitioner on 08.05.2014 on the ground that no new fact had been brought to the notice of the authority to review its earlier order and it was undisputed that the petitioner had not rendered any service to the Bank with effect from the date of order of dismissal till his reinstatement.

9. Mr P.N. Saxena, learned Senior Advocate assisted by Mr H.P. Pandey, learned for the petitioner has pointed out to this Court that after the reinstatement of the petitioner in 2006, the petitioner retired from service on 31.07.2007.

10. It has been argued by learned Senior Advocate that as per the Regulations applicable to the petitioner, a copy of which has been produced before this Court, Regulation 170 prescribed penalties, which can be given to a Bank employee and there is no such penalty, which allows non payment of salary to the petitioner on the Principle of "no work no pay". Besides, the Regulations applicable to the petitioner do not contemplate such a situation where the petitioner was wrongfully not allowed to function by passing the dismissal order on 09.06.1997, which dismissal order was eventually set aside by this Court on 06.10.2005 in Writ Petition No. 23033 of 1997, when this Court found that no financial loss was caused to the Bank by the alleged misconduct of the petitioner.

11. Learned counsel for the petitioner has relied upon the order passed by this Court on 06.10.2005. From a perusal of the order dated 06.10.2005, it is apparent that this Court was satisfied that extreme penalty of dismissal was not warranted as no financial loss was caused to the Bank or embezzlement done by the petitioner could be proved. Even after the judgment and order dated 06.10.2005 was passed, the Bank took almost eight months for passing the order of reinstatement on 03.06.2006. The Principle of "no work no pay" shall not apply in the case of the petitioner as he was wrongfully prevented from performing his duties, although he was willing and ready to render his service to the Bank.

12. Learned counsel for the petitioner has relied upon the following judgments of the Hon'ble Supreme Court and this Court:

(i) Deepali Gundu Surwase vs Kranti Junior Adhyapak Mahavidyalaya (D.Ed.) and others, 2013 (10) SCC 324;

(ii) Dev Prakash Tewari vs U.P. Cooperative Institutional Service Board, Lucknow and others, 2014 (7) SCC 260;

(iii) U.P. Cooperative Bank Ltd. and others vs Presiding Officer, Labour Court and others, 2011 (4) ADJ 157;

(iv) Kishori Lal vs Chairman Board of Directors, 2011 (4) ADJ 401.

13. The Hon'ble Supreme Court in Deepali Gundu Surwase (supra) was considering the case where the appellant's services had been dispensed with and the appellant challenged the order in appeal. The School Tribunal allowed the appeal and directed the Management to pay full back wages to the appellant. The Tribunal had taken into account the fact that the appellant was kept under suspension and she was not gainfully employed after termination of her services and therefore, she is entitled to full back wages.

14. The Management of the School challenged the order of the Tribunal in a writ petition before the Bombay High Court and the learned Single Judge examined the issues and expressed his agreement with the order of the Tribunal insofar as it had found that the appellant had been wrongfully kept under suspension and decision to terminate her services was vitiated as it violated the Principle of Natural Justice. However, the learned Single Judge set aside the direction given by the Tribunal for payment of back wages by placing reliance upon the judgments of the Hon'ble Supreme Court and of the High Court, wherein it was said that reinstatement should not be followed by an order granting full back wages automatically. There should be pleadings on record that the employee was not gainfully employed from the date of suspension till reinstatement. Such pleadings not being there on record, no order with respect to payment of back wages could have been made.

15. The appellant approached the Hon'ble Supreme Court and argued that while she had pleaded that she was not gainfully employed, no evidence was produced by the Management to prove the contrary, and she could not have been deprived of full pay and allowances for the entire period during which she was forcibly kept out of job.

16. The Hon'ble Supreme Court considered the arguments raised by the respondents therein that before the Tribunal, the appellant had not produced any evidence that during the period of suspension and during the period when she remained terminated from service, she was not employed elsewhere.

17. The Supreme Court thereafter observed that the Rule of reinstatement with back wages propounded in 1960's and 70's has been considerably diluted and the Courts/Tribunal cannot order payment of back wages as a matter of course in each and every case of wrongful termination of service. The employee concerned should not only plead, but also prove that he/she was not gainfully employed during the intervening period.

18. The Hon'ble Supreme Court considered the powers of School Tribunal in view of the Rules framed in this regard by the State Government and then observed in paragraph 17 as under:

"17. The very idea of restoring an employee to the position which he held before dismissal or removal or termination of service implies that the employee will be put in the same position in which he would have been but for the illegal action taken by the employer. The injury suffered by a person, who is dismissed or removed or is otherwise terminated from service cannot easily be measured in terms of money. With the passing of an order which has the effect of severing the employer employee relationship, the latter's source of income gets dried up. Not only the concerned employee, but his entire family suffers grave adversities. They are deprived of the source of sustenance. The children are deprived of nutritious food and all opportunities of education and advancement in life. At times, the family has to borrow from the relatives and other acquaintance to avoid starvation. These sufferings continue till the competent adjudicatory forum decides on the legality of the action taken by the employer. The reinstatement of such an employee, which is preceded by a finding of the competent judicial/quasi judicial body or Court that the action taken by the employer is ultra vires the relevant statutory provisions or the principles of natural justice, entitles the employee to claim full back wages. If the employer wants to deny back wages to the employee or contest his entitlement to get consequential benefits, then it is for him/her to specifically plead and prove that during the intervening period the employee was gainfully employed and was getting the same emoluments. Denial of back wages to an employee, who has suffered due to an illegal act of the employer would amount to indirectly punishing the concerned employee and rewarding the employer by relieving him of the obligation to pay back wages including the emoluments. " (emphasis supplied).

19. The Hon'ble Supreme Court considered the law as laid down by three Judges Bench in Hindustan Tin Works Pvt. Ltd. vs Employees of Hindustan Tin Works Pvt. Ltd., 1979 (2) SCC 80 and the judgment rendered by another three Judges Bench in Surendra Kumar Verma vs Central Government Industrial Tribunal-cum-Labour Court, New Delhi, 1980 (4) SCC 443 and came to the conclusion that the law has been developed further. Reliance cannot be placed on a strait-jacket formula for awarding relief of back wages.

20. The Supreme Court observed that the Tribunal/Labour Court has been given the power to direct reinstatement with full back wages, but the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the Rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular. If there is no application of mind to the question of back wages by the Labour Court and there is no pleading or evidence whatsoever on this aspect whether the employees was gainfully employed during the long interregnum when he remained out of job, the issue relating to payment of back wages should be considered and decided by the Court and the Court mould the relief on the basis of evidence led.

21. The Hon'ble Supreme Court in the aforesaid case of Deepali Gundu Surwase (supra) has considered the law with respect to industrial disputes, wherein retrenchment orders or termination orders were challenged and were set aside.

22. The Hon'ble Supreme Court considered the question as decided in J.K. Synthetics Ltd. vs K.P. Agrawal and Another, 2007 (2) SCC 433, wherein two Judges Bench had observed that there is also a misconception that whenever reinstatement is directed, "continuity of service" and "consequential benefits" should follow, as a matter of course. The disastrous effect of granting several promotions as a "consequential benefit" to a person, who has not worked for 10 to 15 years and who does not have the benefit of necessary experience for discharging the higher duties and functions of promotional posts, is seldom visualised while granting consequential benefits automatically. Whenever courts or tribunals direct reinstatement, they should apply their judicial mind to the facts and circumstances to decide whether "continuity of service" and/or "consequential benefits" should also be directed. With regard to back wages and whether they should be awarded in full or partially, any income received by the employee during the relevant period on account of alternative employment or business was a relevant factor to be taken note of while awarding back wages. Therefore, it was necessary for the employee to plead that he was not gainfully employed from the date of his termination. While an employee cannot be asked to prove the negative, he had to at least assert on oath that he was neither employed nor engaged in any gainful business or venture and that the did not have any income. Then the burden will shift to the employer.

23. The Hon'ble Supreme Court in J.K. Synthetics (supra) also considered several judgments and held that most cases where back wages were awarded, related to retrenchment/termination, which were held to be illegal and invalid for non-compliance with statutory requirements or related to cases where the Court found that the termination was motivated or amounted to victimization. Such decisions however, were found to be having no application to the case where dismissal or removal or compulsory retirement is by way of punishment for misconduct in a departmental inquiry, and the court confirms the finding regarding misconduct, but only interferes with the punishment being of the view that it is excessive, and awards a lesser punishment, resulting in the reinstatement of employee. Where the power under Article 226 is exercised by any court to interfere with the punishment on the ground that it is excessive and the employee deserves a lesser punishment, and a consequential direction is issued for reinstatement, the court is not holding that the employer was in the wrong or that the dismissal was illegal and invalid. The court is merely exercising its discretion to award a lesser punishment. Till such power is exercised, the dismissal is valid and in force. When the punishment is reduced by a court as being excessive, there can be either a direction for reinstatement or a direction for a nominal lump sum compensation. And if reinstatement is directed, it can be effective either prospectively from the date of such substitution of punishment (in which event, there is no continuity of service) or retrospectively, from the date on which the penalty of termination was imposed (in which event, there can be a consequential direction relating to continuity of service). What requires to be noted in cases where finding of misconduct is affirmed and only the punishment is interfered with (as contrasted from cases where termination is held to be illegal or void) is that there is no automatic reinstatement; and if reinstatement is directed, it is not automatically with retrospective effect from the date of termination. Therefore, where reinstatement is a consequence of imposition of a lesser punishment, neither back wages nor continuity of service nor consequential benefits, follow as a natural or necessary consequence of such reinstatement. In cases where the misconduct is held to be proved, and reinstatement is itself a consequential benefit arising from imposition of a lesser punishment, award of back wages for the period when the employee has not worked, may amount to rewarding the delinquent employee and punishing the employer for taking action for the misconduct committed by the employee. That should be avoided. Similarly, in such cases, even where continuity of service is directed, it should only be for purposes of pensionary/retirement benefits, and not for other benefits like increments, promotions, etc.

24. The Hon'ble Supreme Court has further observed that there are two exceptions to this effect held as propounded by it. The relevant paragraph is being quoted herein-below:

"But there are two exceptions. The first is where the court sets aside the termination as a consequence of employee being exonerated or being found not guilty of the misconduct. Second is where the court reaches a conclusion that the inquiry was held in respect of a frivolous issue or petty misconduct, as a camouflage to get rid of the employee or victimise him, and the disproportionately excessive punishment is a result of such scheme or intention. In such cases, the principles relating to back wages, etc. will be the same as those applied in the cases of an illegal termination."

25. The Hon'ble Supreme Court in Deepali Gundu Surwase (supra) has however observed that the observations made in J.K. Synthetics Ltd. (supra) that on reinstatement the employee/workman cannot claim continuity of service as of right, is contrary to the ratio of the judgments of three Judges Benches referred to above, and cannot be treated as good law.

26. The Hon'ble Supreme Court found on the facts of the case that the appellant's services had been wrongly dispensed with. The School Tribunal had found the action of the management to be wholly arbitrary and vitiated due to violation of the rules of natural justice. The Tribunal has further found that the allegations levelled against the appellant were frivolous. The Tribunal had also taken cognizance of the statement made on behalf of the appellant that she was not gainfully employed anywhere, and the fact that the management had not controverted the same and ordered her reinstatement with full back wages. The Hon'ble Supreme Court observed that the High Court erred in setting aside the order passed by the School Tribunal.

27. Learned counsel for the petitioner has also relied upon the judgment in Dev Prakash Tewari (supra), which was the case of an employee governed by UP Cooperative Societies Employees' Service Regulations, 1975, as is the case of the writ petitioner herein, the Division Bench of the Hon'ble Supreme Court was considering the case, where appellant had challenged the continuing of disciplinary proceedings after his retirement and the High Court relying upon the decision of the Hon'ble Supreme Court in U.P. Cooperative Federation Ltd. vs L.P. Rai, 2007 (7) SCC 81 held that there was no ground to interfere with the disciplinary proceeding and directed to complete the same within the specified period of time. The appellant contended that the disciplinary proceeding was not completed for more than three years and in the absence of any provision in the Regulations providing for continuation of disciplinary proceeding after retirement of the employee, the respondents could not continue the disciplinary proceeding against the appellant after his superannuation.

28. The Hon'ble Supreme Court found that there is no provision in the Regulations of 1975 for initiation or continuation of disciplinary proceeding after retirement of the appellant nor is there any provision stating that in case misconduct is established, a deduction could be made from his retiral benefits.

29. The Hon'ble Supreme Court found that judgement rendered in the case of U.P. Cooperative Federation Ltd. (supra) the earlier judgment of the High Court in the case of Bhagirathi Jena vs Orissa State Financial Corporation, 1999 (3) SCC 666, was not brought to the notice of the Court and no contention was raised pertaining to the provision of Regulation of 1975. The respondent could not be permitted to continue the disciplinary proceeding and impose punishment of reduction in the retiral benefits payable to the appellant. It held that the enquiry had lapsed, the moment the appellant retired and the appellant was entitled to get full retiral benefits inasmuch as the enquiry had lapsed. The Hon'ble Supreme Court observed that obviously the appellant would have to get the balance of the emoluments payable to him including arrears of salary and allowances and all retiral benefits in accordance with the Rules and Regulations.

30. Learned counsel for the petitioner has also relied upon the decision in the case of U.P. Cooperative Bank Ltd. and others vs Presiding Officer Labour Court and others (supra). This Court in the aforesaid case was considering the question as to whether non holding of oral inquiry can vitiate the entire proceeding or not and has relied upon the judgments of this Court and of the Hon'ble Supreme Court and has held that if no oral inquiry is held, it amounts to denial of principles of natural justice to the delinquent employee.

31. This Court relied upon the judgment rendered in Brijendra Prakash Kulshrestha vs Director of Education and others, 2007 (3) ADJ 1 (DB), wherein this Court considered the applicability of "no work no pay" and it has been held that an employer cannot deny salary to an employee, who is always willing and ready to work but was not allowed to do so by an act or omission directly attributable to the employer.

32. In Kishori Lal vs Chairman Board of Directors, (supra), this Court was considering the case of the petitioner, who was initially appointed as a Messenger in Aligarh Gramin Bank. The petitioner was charge sheeted on several grounds of misconduct and then dismissed after regular disciplinary proceedings. After holding the petitioner guilty of misappropriation of an amount of Rs. 1310/- from one Sukhvir Singh received by him on 08.01.1988 and not deposited the same in the Bank. The petitioner therein challenged the dismissal order on the ground of non-supply of relevant documents and non affording of reasonable opportunity of hearing and relied upon the judgment rendered by the Hon'ble Supreme Court in the case of State of U.P. vs Saroj Kumar Sinha, 2010 (2) SCC 772 to hold that the entire disciplinary proceedings were vitiated due to non-supply of documents to the petitioner. This Court also considered the question whether charge levelled against the petitioner amounted to misconduct or not and found that there was no charge of violation of Regulation 26 in the charge sheet. The Charge has to be specific, clear and precise. Neither Regulation 26 nor Regulation 19 nor Regulation 30 were attracted, therefore, the charge against the petitioner could not be said to be of misconduct as detailed in the Regulation.

33. This Court relied upon a judgment rendered in the case of A.L. Kalra vs Project Equipment Corporation of India Ltd. AIR 1984 SC 1361 and came to the conclusion that if something is not within the realm of the Regulations and cannot be said to be a breach of Conduct Regulations applicable in a particular service, the employee cannot be held guilty of misconduct for punishment under Regulations.

34. Having found the charge of misconduct having been wrongfully imposed upon the petitioner, this Court further considered the question as to whether punishment imposed upon the petitioner was commensurate to the gravity of the charge or not and came to the conclusion that the charge relates to non-fulfillment of promise to a neighbour by receiving some money from him and not depositing the same in the Bank, the Court found that it was not the case of the Bank that the petitioner was directed by the Bank Authorities at any point of time to deposit the amount or repay the person concerned and the petitioner did not comply with the same. The Court found that the amount of Rs.1310/- in 1988 was a petty amount and the charge was not directly related with the petitioner's functioning in the Bank or his relations with Bank Officials or his employer directly. Even applicability of Conduct Regulation was found doubtful. In these circumstances, the Court found that the punishment imposed upon the petitioner was highly excessive and disproportionate to the gravity of charges.

35. With regard to relief admissible to the petitioner therein the Court observed in paragraph 58 thus:

"58. Now coming to another important aspect about relief. It is not the case of respondents that petitioner was gainfully employed elsewhere during the period he was out of job. On the contrary, as a result of illegal order of dismissal, petitioner and his entire family must have suffered a social stigma as also financial hardships. It is quite conceivable that this ignominy is faced by the entire family of petitioner. No amount of money can compensate this social humiliation, illegal torture an outclassed attribute of neighbour and other difficulties. It must have been faced by petitioner and his entire family throughout. An attempt to provide consequential benefits to petitioner by this Court is only a meager compensation for huge loss, which basically cannot be compensated in terms of money. The departmental authorities, in fact must be much more careful and vigilant when they initiate disciplinary proceedings against an employee concerned on certain charges so that effective procedural requirement is observed in words and spirit. They must also ensure that a person should not be unnecessarily harassed as that affects not only individual bread earner but the entire family. This Court can take judicial cognizance of the fact that higher rank officials and employees, if face a small delay in payment of salary, become restless and even resort to observe strike etc. That being so, the severest punishment of dismissal compel the employee and his entire family to stand in a situation of starvation and also denuded the other facilities like health, education, clothing etc, which virtually, if not a death in terms of medical precision, something near to it. Normally the employers, to wriggle out such circumstances, try to invoke principle of ''No work No Pay' ignoring the fact that work has not been performed by employee concerned not on account of himself but for the circumstances created by employer. Such a principle in a case like this, if applied would amount to confer a premium upon employer of a fault of his own. This would amount to allowing him(employer) to take advantage of his own wrong, which is not permissible in law particularly in a court of equity and justice. It is against all canons of justice. It is always open to employer concerned to cover up loss, which it may sustain towards making of payment to such an employee by recovering such amount from those officials who defied statutory requirement as also the procedure and pass illegal order. Instead of penalizing a poor employee, who has no option but not to render service to employer pursuant to illegal order passed by employer the accountability should be shouldered by the responsible officer/authority.

36. Having considered the law as settled by the Hon'ble Supreme Court in Deepali Gundu Surwase (supra) and it being already held by the Supreme Court that the judgment in J.K. Synthetics (supra) cannot be approved of, this Court deems it appropriate to set aside the impugned orders. The petitioner shall be entitled to arrears of salary w.e.f. 07.02.1996 and his services till his reinstatement shall be considered as continuous for all consequential reliefs.

Order Date :- 22.09.2017

Sazia