Bombay High Court
The Amravati Zilla Parishad ... vs Manohar S/O. Ramraoji Raut on 19 August, 2016
Bench: A.S. Chandurkar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
WRIT PETITION NO.6718 OF 2015
PETITIONER: The Amravati Zilla Parishad Shikshan
Sahakari Bank Ltd. through its
General manager, R/o C/o The
Amravati Zilla Parishad Shikshak
Sahakari Bank Ltd., Congress nagar
road, Near Railway bridge Amaravati,
Tahsil & District Amravati.
-VERSUS-
RESPONDENT: Manohar S/o Ramraoji Raut, Aged 60
yrs, Occupation : Retired, R/o C/o
Shri Annasaheb Kuche,
Rukhmininagar, Amravati, Tahsil &
District Amaravati.
Shri A. M. Ghare, Advocate for the petitioner.
Mrs. S.S. Wandile, Advocate for the respondent.
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CORAM: A.S. CHANDURKAR, J.
Date when arguments
were concluded : 19th July, 2016
Date when Judgment
is pronounced : 19th August, 2016
J U D G M E N T :
1. Rule. Heard finally with the consent of learned
Counsel for the parties.
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2. The petitioner is aggrieved by the adjudication of the
claim for damages in lieu of reinstatement awarded to the
respondent in the dispute filed by the respondent under Section 91
of the Maharashtra Co-operative Societies Act, 1961 [hereinafter
referred to as the "said Act"].
3. The respondent was appointed on the post of clerk at
the petitioner - Bank which is duly registered under the provisions
of the said Act. The respondent was thereafter promoted to the
post of Branch Manager. During his course of service, a
departmental enquiry was conducted against him on charges of
financial misappropriation. After issuing a show cause notice on
27-3-2000 and pursuant to the report submitted by the Enquiry
Officer, the Bank terminated the services of the respondent on 28-
4-2000. The respondent being aggrieved filed a dispute under
Section 91 of the said Act before the Cooperative Court seeking a
declaration that the resolution resulting in termination of his
services was illegal. The relief seeking declaration that the
respondent continued in service with benefits of continuity and full
back wages was also sought. This dispute was contested by the
Bank and the reliefs sought by the respondent were opposed.
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4. The Co-operative Court by judgment dated 16-6-2001
dismissed the dispute. The respondent filed an appeal before the
Cooperative Appellate Court. This appeal was also dismissed on
3-5-2002. Being aggrieved the respondent filed Writ Petition
No.3819/2002 challenging the aforesaid adjudication. This Court
by judgment dated 23-7-2013 came to the conclusion that the
charge-sheet issued to the respondent was without legal authority,
as the same was issued by a person who was not competent to do
so. On that basis, the order of termination dated 28-4-2000 based
on the resolution passed by the Board of Directors dated
23-4-2000 was set aside. This Court further held that the
respondent not being a "workman" was not entitled for relief of
reinstatement with back wages. It was found that the respondent
had superannuated during pendency of the writ petition on
30-4-2013. Liberty was granted to the respondent to seek
damages for wrongful termination and in lieu of reinstatement.
For that purpose, the dispute filed by the respondent was restored
and he was permitted to apply for amendment of the dispute with
a further liberty to the parties to lead evidence in support of their
respective stands.
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5. Pursuant to the aforesaid order, the respondent
amended the dispute claiming damages in view of reinstatement.
According to the respondent, he was getting salary of Rs.13,850/-
per month when his services were terminated. If the respondent
would have retired on reaching the age of superannuation, he
would have got salary of Rs.34,660/- per month. According to him,
the total amount of salary which he would have earned was
Rs.52,02,000/-. By seeking damages of Rs.10,00,000/- on account
of mental pain and agony, the respondent claimed a total amount
of Rs.62,02,000/- as damages. This claim was opposed by the
Bank. The respondent examined himself and justified the amount
of damages claimed by him. The Co-operative Court held that the
respondent was entitled to receive damages equivalent to the
salary which he would have got if his services had not been
terminated. By the order dated 11-8-2014, the respondent was
held entitled to an amount of Rs.36,75,153/- with interest
at 12% per annum. This amount was determined on the basis of
his monthly salary of Rs.34,660/-.
The petitioner being aggrieved by the aforesaid award
approached the Cooperative Appellate Court. By judgment dated
30-9-2015, the Cooperative Appellate dismissed the appeal
preferred by the Bank and confirmed the award passed by the
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Cooperative Court. Being aggrieved the petitioner has filed the
present writ petition.
6. Shri A. M. Ghare, the learned Counsel for the Bank
stated that both the Courts misdirected themselves by granting
damages in lieu of reinstatement by equating the same with the
amount of salary which the respondent would have received had
his services not been terminated. He submitted that the award of
damages on this premise would have the effect of granting full
back wages which relief had been refused by this Court. It was
urged that there was no evidence led by the respondent seeking
damages except bringing on record the amount of salary that the
respondent would have drawn had he been in service. The learned
Counsel submitted that the departmental proceedings were held
against the respondent on account of charges of financial
misappropriation and the proceedings were set aside only on the
technical ground that the charge-sheet had been issued by a
person who was not competent to do so. Considering the
responsible post held by the respondent, grant of such
exorbitant damages would amount to granting premium for such
misconduct. He submitted that the Hon'ble Supreme Court in O.P.
Bhandari Vs. Indian Tourism Development Corporation Ltd.,
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[ (1986) 4 SCC 337] has found grant of salary and allowances
from the date of termination till retirement in such circumstances
to be unreasonable. He also relied upon the decision of the Hon'ble
Supreme Court in State of Punjab & Ors. Vs. Dr. Harbhajan
Singh Greasy [1996 (4) SCALE 195]. He, therefore, submitted
that both the Courts erred in passing the impugned award.
7. Smt. S. S. Wandile, the learned Counsel for the
respondent supported the impugned judgment. It was submitted
that once it was found that the resolution dated 23-4-2000 and the
consequent order of termination dated 28-4-2000 being illegal,
it would be clear that the services of the respondent had been
wrongly terminated. There being no reason whatsoever to
terminate services of the respondent, he would be entitled to
receive entire salary from the date of termination till his
superannuation by treating him to be in service. The amount of
salary that the respondent would have earned was not in dispute
and, therefore, both the Courts were justified in granting such
compensation in favour of the respondent. It was submitted that
the Bank did not lead any evidence whatsoever to dispute the
claim of the respondent. The learned Counsel further submitted
that the respondent had been acquitted of the charge of
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misappropriation by the Court of the learned Judicial Magistrate
First Class, Chandur Bazar as per the judgment in Regular
Criminal Case No.166/2000 dated 9-7-2013. It was, therefore,
clear that the entire basis for proceeding against the respondent
had ceased to exist and the grant of compensation in the form of
salary for the period from the date of termination of services till
retirement was the correct yardstick adopted by both the Courts.
The learned Counsel sought to support the impugned judgment by
relying upon the judgments of the Hon'ble Supreme Court in
Jasbir Singh Vs. Punjab and Sind Bank and others [(2007) 1
SCC 566], Novartis India Limited Vs. State of West Bengal and
others [(2009) 3 SCC 124] and Deepali Gundu Surwase Vs.
Kranti Junior Adhyapak Mahavidyalaya & others [ (2013) 10
SCC 324]. Reliance was also placed on the judgment of the
Madhya Pradesh High Court in Wit Petition No.606/2005 (District
Central Cooperative Bank Limited Vs. Shri Madanlal S/o
Bhanwarlal Udiya) decided on 22-4-2016. It was, therefore,
submitted that no case was made out to interfere in writ
jurisdiction.
8. The learned Counsel for the parties have been heard at
length. I have given due consideration to the submissions urged
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on their behalf. In the earlier round of adjudication, this Court had
held that the order of termination dated 28-4-2000 was illegal on
the ground that the charge-sheet issued to the respondent had
been issued by a person who was not authorized to issue the
same. After denying the prayer for grant of relief of reinstatement
with back wages, liberty was granted to the respondent to seek
damages for wrongful termination and in lieu of reinstatement.
From the aforesaid adjudication, it is clear that the order of
termination has been set aside on the ground that the
departmental proceedings held against the respondent were
without force of law. As the respondent was holding the post of
Branch manager and he not being a "workman", he was disentitled
for the relief of reinstatement with back wages. In this back drop,
the challenges as raised would have to be adjudicated.
9. The respondent by amending the dispute sought
damages that were equivalent to the salary that he would have
earned had he been in service till his superannuation. A chart
showing entitlement to total salary of Rs.36,75,153/- for aforesaid
period was placed on record. These figures were not disputed by
the petitioner and the said relief came to be granted to the
respondent.
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If the claim for reinstatement with full back wages was
specifically refused, it is difficult to comprehend as to how the
respondent could be held entitled to receive damages in the form
of salary which the respondent could have earned if he would have
been in service. In other words, the relief of reinstatement with
full back wages having been specifically denied to him, he has
been granted full back wages in the form of damages. Relief that
has been denied directly cannot be claimed indirectly. On this
short ground, it is clear that both the Courts misdirected
themselves by granting compensation in the form of full back
wages. The impugned judgment results in miscarriage of justice to
the petitioner and hence a case for interference under Article 227
of the Constitution of India has been made out.
10. In O.P. Bhandari (supra), the appellant therein was
holding the post of Manager in a hotel when his services were
terminated. The Regulation providing for giving a simple notice of
ninety days or by paying salary for the notice period while doing
away with the services of a permanent employee was found to be
illegal. In that context, the Hon'ble Supreme Court considered the
question as to whether it was obligatory to direct reinstatement
when the concerned Regulation was found to be void. A distinction
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was noticed on the basis of the post held by the concerned
employee. It was observed that where the employee belonged to
the higher level in the managerial cadre, in public interest the
management could not be thrusted with such personnel in whom
for reasonable grounds it did not have trust or faith. In that
context, it was observed that reasonable compensation could be
directed to be paid in lieu of reinstatement. In the facts of said
case, it was found that the services of the appellant therein were
terminated eight years prior to his superannuation. It was
observed that granting salary and allowances for this period of
eight years was unreasonable. The Hon'ble Supreme Court
proceeded to award compensation equivalent to 3.33 years service
including allowances as admissible. This decision is, therefore, an
authority on the aspect for determination of compensation in lieu
of reinstatement when the employee concerned is from a higher
level in the managerial cadre.
11. In Jasbir Singh (supra), the services of a peon were
terminated on the ground that he had forged the signature of a
depositor. The said employee was acquitted in criminal
proceedings. It was found that despite failure in the civil
proceedings as well as criminal proceedings, the services of the
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said peon were terminated. Hence, an order of reinstatement with
back wages and continuity of service came to be passed. It is to be
noted that the employee therein was holding the post of peon.
In Novartis India Limited (supra), while considering the
aspect of back wages in relation to a sales representative, the
Hon'ble Supreme Court did not interfere with the direction to pay
full back wages. In Deepali Gundu Surwase (supra), the manner in
which the back wages are to be awarded in the case of wrongful
termination of services has been laid down. It has been observed
that in case of wrong termination of service reinstatement with
continuity in service was the normal rule. The appellant therein
was a teacher. Similarly, the respondent in District Central Co-
operative Bank Ltd. [supra] was working as an Accountant.
12. In the present case, the respondent was holding a
responsible post of Branch Manager. Departmental proceedings
were held against him on the charge of financial misappropriation.
Though it is true that the respondent has been acquitted of the
criminal charge, it cannot be lost sight of that the relief of
reinstatement with full back wages stands denied to him in the
earlier adjudication that has attained finality. As the respondent
not a "workman", he was was not held entitled to the aforesaid
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relief. In this background, therefore, I am inclined to follow the
law as laid down by the Hon'ble Supreme Court in O.P. Bhandari
(supra) but with some slight modification.
13. In O.P. Bhandari (supra), two relevant facts that can be
noted are that the period of service that could have been rendered
from the date of termination till the date of superannuation was of
eight years. Another factor that was taken into consideration was
that in the year 1986, the rate of interest prevailing was 15% per
annum. After taking these factors into account, the compensation
was determined as being equivalent to 3.33 years salary.
In the present case, the date of termination from
service is 28-4-2000 while date of superannuation is 30-4-2013.
Thus, this period is of almost thirteen years. Another factor to be
taken note of is that the current rate of interest is 9% per annum.
Considering the fact that the petitioner is a Cooperative Bank, in
my view, compensation equivalent to five years salary on the basis
of the last pay and allowances drawn by the respondent would be
reasonable compensation to which the respondent would be
entitled on the basis of the decision of the Hon'ble Supreme Court
in O. P. Bhandari (Supra). The decisions relied upon by the
learned counsel for the respondent are found distinguishable on
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facts.
14. As a sequel to the aforesaid findings, the following
order is passed:
(1) Award passed by the Cooperative Court in Dispute
No.576/2000 dated 11-8-2014 and confirmed by the Cooperative
Appellate Court in Appeal No.43/2014 dated 30-9-2015 is partly
modified. The respondent is held entitled to receive compensation
equivalent to five years salary including allowances drawn by him.
This amount would be determined on the basis of his last drawn
salary.
(2) The respondent would also be entitled to the amount
of provident fund and other retirement benefits as per his service
conditions that would be computed on the basis of the payments
that would be made to him as per clause (1).
(3) The respondent has been permitted to withdraw an
amount of Rs.5,00,000/- deposited in this Court as per order dated
23-3-2016. Time of three months is granted to the petitioner to
make the balance payment in terms of this order. The petitioner
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would be at liberty to withdraw the amount of Rs.5,00,000/- along
with interest accrued to enable it to make necessary payments to
the respondent.
(4) Rule is made absolute in aforesaid terms with no order
as to costs.
JUDGE
//MULEY// ig CERTIFICATE
I certify that this Judgment/Order uploaded is a true and
correct copy of original signed Judgment/Order.
Uploaded by : R.B. Hedau, Uploaded on : 19th Aug., 2016
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