State Bank Of India. vs Sh. C.P. Kanak & Anr
2010 Latest Caselaw 3011 Del

                *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                             W.P.(C) 1298/1987

%                                               Date of decision: 1st July, 2010

STATE BANK OF INDIA.                                             ..... Petitioner
                   Through:                 Mr. Rajiv Kapur, Advocate.

                                       Versus

SH. C.P. KANAK & ANR.                                        .... Respondents
                    Through:                Dr. Sumant Bharadwaj & Ms.
                                            Archana Pathak Dave, Advocates.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?                   Yes

2.       To be referred to the reporter or not?                   Yes

3.       Whether the judgment should be reported                  Yes
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner Bank by this writ petition impugns the award dated 23rd

February, 1987 of the Industrial Tribunal, though holding the disciplinary

proceedings held prior to the dismissal of the respondent no.1 workman to be fair

and proper and in accordance with the principles of natural justice and though

also holding the respondent no.1 workman guilty of temporary embezzlement, as

also found by the Inquiry Officer and the Disciplinary Authority of the petitioner

Bank, but holding the punishment of termination of service by way of discharge

or dismissal to be harsh and quashing the same and directing the petitioner Bank

to reinstate the respondent no.1 workman with continuity of service but without

any back wages.

2. The respondent no.1 workman joined the employment of the petitioner

Bank as a Clerk on 22nd August, 1978 and was posted at the Khurja Branch of the

petitioner Bank on 3rd October, 1978 and assigned to the cash department. On

11th April, 1979 he was charged with the misappropriation committed on 3rd

October, 1978 i.e. on the very first day of his posting as aforesaid in the Khurja

Branch of the petitioner Bank. The charge against the respondent no.1 workman

was that on 3rd October, 1978, a cash deposit voucher of Rs.5,000/- with cash

was tendered at the counter manned by him for credit to the Savings Bank

account of one Smt. Prabha Aggarwal; it was the case of the petitioner Bank that

the respondent no.1 workman deposited only Rs.1,500/- out of the said

Rs.5,000/-, by altering the amount in words and figures indicated on the voucher

and by affixing the receipt stamps on the voucher in a way so as to conceal the

said alteration. It was further the charge that the respondent no.1 workman

thereby misappropriated the balance of Rs.3,500/-. It was yet further the charge

that the respondent no.1 workman however on 7th October, 1978 i.e. barely after

four days, filled in a voucher for Rs.3,500/- and managed to deposit the same in

the account of the aforesaid Smt. Prabha Aggarwal. Before the Labour Court, it

was the further case of the petitioner Bank that the account holder Smt. Prabha

Aggarwal had issued cheques on aforesaid account and which were returned

dishonored on account of misappropriation of Rs.3,500/- aforesaid by the

respondent no.1 workman and in which regard a complaint was made by the

account holder on 5th October, 1978 and to avoid detection and prosecution, the

respondent no.1 workman on 7th October, 1978 deposited Rs.3,500/- as aforesaid

in the account of Smt. Prabha Aggarwal.

3. The aforesaid findings have now attained finality, the respondent no.1

workman having not challenged the award.

4. The Industrial Tribunal inspite of holding that the banks are institutions of

trust and confidence and the consequence of an employee found guilty of

misappropriation would be punishment of termination of service by discharge or

dismissal, altered the punishment as aforesaid for the reason of three extenuating

circumstances; firstly, for the reason of the respondent no.1 workman being a

member of a Scheduled Caste; secondly, for the reason of the respondent no.1

workman as on 3rd October, 1978 having very little experience having joined the

employment of the petitioner Bank only on 22nd August, 1978 and lastly for the

reason of contributory mistake of the petitioner Bank in, on the very first day of

the posting of respondent no.1 workman at the Khurja Branch, posting him on

the cash counter when he was totally inexperienced. Yet, another extenuating

circumstance stated was of no loss having been caused to the petitioner Bank

because of the amount embezzled having been deposited by the respondent no.1

workman after a lapse of four days only.

5. This Court vide ex parte order dated 8th May, 1987 issued Rule in the writ

petition and also stayed the operation of the award aforesaid. The respondent

no.1 workman applied under Section 17B of the ID Act and vide order dated 15th

December, 1987 the petitioner Bank was directed to pay the last drawn salary

from the date of the award to the respondent no.1 workman. The subsequent

application of the respondent no.1 workman for payment of amounts higher than

the last drawn salary under Section 17B was dismissed. The counsels for the

parties have been heard.

6. The scope of the writ petition in the circumstances aforesaid, is limited i.e.

whether the Industrial Tribunal was justified in interfering with the punishment

meted out to the respondent no.1 workman inspite of holding a valid

departmental enquiry preceding the order of termination of service to have been

held and inspite of also holding the respondent no.1 workman guilty of the

serious misconduct of embezzlement of funds of the customers of the petitioner

Bank.

7. The counsel for the petitioner Bank contends that the same cannot be

done. Arguments were addressed relying on the following judgments:-

(i) State of Meghalaya Vs. Mecken Singh N. Marak (2008) 7 SCC

580 laying down that while considering the question of

proportionality of sentence imposed on a delinquent at the

conclusion of departmental enquiry, the court should also take into

consideration the mental set-up of the delinquent, the type of duty

to be performed by him and similar relevant circumstances which

go into the decision-making process--if the charged employee

holds the position of trust where honesty and integrity are inbuilt

requirements of functioning, it would not be proper to deal with the

matter leniently and misconduct, in such cases has to be dealt with

iron hands.

(ii) State Bank of India Vs. Ramesh Dinkar Punde (2006) 7 SCC 212

laying down that in the banking business absolute devotion,

diligence, integrity and honesty needs to be preserved by every

bank employee and in particular the bank officer so that the

confidence of the public/depositors is not impaired and further that

it is for this reason that when a bank officer commits misconduct,

for his personal needs and against the interest of the bank and the

depositors, he must be dealt with iron hand and he does not

deserve to be dealt with leniently.

(iii) Damoh Panna Sagar Rural Regional Bank Vs. Munna Lal Jain

(2005) 10 SCC 84 laying down that the court should not interfere

with the administrator's decision unless it was illogical or suffers

from procedural impropriety or was shocking to the conscience of

the court, in the sense that it was in defiance of logic or moral

standards--the court would not go into the correctness of the

choice made by the administrator and the court should not

substitute its decision for that of the administrator. The scope of

judicial review was held to be limited to the deficiency in the

decision-making process and not the decision.

(iv) Ganesh Santa Ram Sirur Vs. State Bank of India (2005) 1 SCC

13 to the effect that employees of a bank are expected to act and

discharge their functions in accordance with the rules and

regulations of the bank and acting beyond one's authority is by

itself a breach of discipline and trust and a misconduct.

(v) T.N.C.S. Corporation Ltd. Vs. K. Meerabai (2006) 2 SCC 255 on

the proposition that interference is not permissible unless the orders

passed by the quasi judicial authority are clearly unreasonable or

perverse or manifestly illegal or grossly unjust. It was further held

that loss of confidence is the primary factor and not the amount of

money misappropriated and in such cases there is no place for

generosity or misplaced sympathy on the part of judicial forums

and interfering therewith or with the quantum of punishment

awarded by the disciplinary and the Appellate Authority. In this

case also the delinquent official was dealing with public money and

engaging in financial transactions and acting in a fiduciary capacity

and considering the said factors it was held that highest degree of

integrity and trustworthiness is a must and unexceptionable. The

counsel for the petitioner Bank contends that the same is the

position in the present case.

(vi) Disciplinary Authority-cum-Regional Manager Vs. Nikunja

Bihari Patnaik (1996) 9 SCC 69 on the proposition that no

organisation, more particularly, a bank can function properly and

effectively if its officers and employees do not observe the

prescribed norms and discipline and no proof of loss is really

necessary.

(vii) Regional Manager, U.P. SRTC Vs. Hoti Lal (2003) 3 SCC 605

and

(viii) V. Ramana Vs. A.P. SRTC (2005) 7 SCC 338

(ix) Divisional Controller, KSRTC Vs. A.T. Mane (2005) 3 SCC 254

all reiterating the law as laid down in the judgments aforesaid.

8. The counsel for the petitioner Bank on inquiry informed that the

respondent no.1 workman would be now 55 years of age and the retirement age

in the bank is 60 years.

9. The counsel for the respondent no.1 workman sought to argue on the

merits of the guilt of the respondent no.1 workman held proved by the Inquiry

Officer, Disciplinary Authority and upheld by the Industrial Tribunal. However

in view of the finding of the Industrial Tribunal of the domestic enquiry held

preceding the order of dismissal of the respondent no.1 workman to be valid and

justified and there being no challenge to the same even in the counter affidavit of

the respondent no.1 workman, this Court cannot revisit the said finding.

10. Though there is considerable force in the judgments supra cited by the

counsel for the petitioner Bank but a careful perusal thereof reveals that all are

cases of writ petitions preferred with respect to domestic enquiry/departmental

proceedings and none of the cited cases are of variation of the punishment by the

Industrial Adjudicator, as in the present case. The Courts in all the aforesaid cited

cases were concerned with the powers of judicial review of the punishment

meted out by the Disciplinary Authorities. However, there is a vast difference in

the powers of the High Court in judicial review of the orders of the Disciplinary

Authorities and the powers of the Industrial Adjudicator. Section 11A of the ID

Act, 1947 is as under:-

"11A. Powers of Labour Courts, Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of workmen.--Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour

Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct re- instatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require:

Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter."

11. The Supreme Court recently in Mahindra and Mahindra Ltd. Vs. N.B.

Naravade AIR 2005 SC 1993 had occasion to consider the scope of Section 11A

(supra). It was held that though after the introduction of Section 11A in the ID

Act, certain amount of discretion is vested in the Industrial Adjudicator in

interfering with the quantum of punishment awarded by the management where

the concerned workman is found guilty of misconduct but the discretion is

available only on the existence of certain factors like punishment being

disproportionate to the gravity of misconduct so as to disturb the conscience of

the Court, or the existence of the any mitigating circumstances which requires the

reduction of the sentence, or the past conduct of the workman which may

persuade the Industrial Adjudicator to reduce the punishment. It was further held

that in the absence of any such factor existing, the Industrial Adjudicator cannot,

by way of sympathy alone exercise the power under Section 11A and reduce the

punishment.

12. In the present case, the Industrial Tribunal has not acted on the

consideration of sympathy alone but has listed out the four

extenuating/mitigating circumstances for interfering with the punishment

imposed by the Disciplinary Authority of the petitioner Bank. Though one of

such circumstance is of the respondent no.1 workman being a member of

Scheduled Caste but that also cannot be said to be a sympathetic factor alone. It

is a settled position that scheduled castes have suffered disadvantages and have

been denied facilities for development and growth; they have been held to require

protective preferences, facilities and benefits so as to enable them to compete on

equal terms with the more advantageous and developed section of the

community. In the entirety of the facts in the present case, and especially

considering the defence of the respondent no.1 workman though disbelieved, the

lack of experience/opportunity/avenues of development available to the

respondent no.1 workman was contributory to the incident aforesaid, though

undoubtedly a misconduct.

13. I may notice that on the request of the respondent no.1 workman, the

petitioner Bank has filed before this Court a photocopy of the voucher. It has

further been revealed that out of Rs.5,000/- aforesaid tendered for deposit in the

Bank Account of Smt. Prabha Aggarwal, Rs.1,500/- was by way of a bearer

cheque issued by the husband of the said account holder drawn on the same Bank

and Rs.3,500/- was by way of cash. Though the amount mentioned in words on

the voucher is Rs.5,000/- but the amount in cash in hand is clearly written as

Rs.1,500/-. There does not appear to be any attempt of fudging as was the charge.

The possibility of the respondent no.1 workman on his first day at the cash

counter getting confused by deposit under a single voucher of a bearer cheque of

Rs.1,500/- and cash of Rs.3,500/- cannot be ruled out. It is further the case of the

respondent no.1 workman that the subsequent voucher dated 7th October, 1978 of

deposit of Rs.3,500/- though in his hand was at the instance of the other officers

of the petitioner Bank.

14. The powers of the Industrial Adjudicator under Section 11A are certainly

wider than the powers of this Court under Article 226 of the judicial review as

held in U.B. Gadhe Vs. G.M., Gujarat Ambuja Cement Pvt. Ltd. AIR 2008 SC

99 as under:

"The High Court, as noted above, has not considered the case in the background of Section 11A of the Act. Under Section 11A, wide discretion has been vested in the Tribunal in the matter of awarding relief according to the circumstances of the case, whereas in the writ jurisdiction it is extremely limited."

Thus, the judgments aforesaid cited by the petitioner Bank with respect to the

exercise of power by this Court under Article 226 cannot apply to the Industrial

Adjudicator.

15. The other three extenuating factors given in the impugned award for

reducing the punishment also cannot be said to be such which are not relevant or

are extraneous. The same fall within the circumstances laid down in Mahindra

and Mahindra Ltd. (supra) on the existence of which the Industrial Adjudicator

becomes entitled to exercise power under Section 11A. Once the power under

Section 11A is held to have been exercised validly, the judicial review thereof by

this Court is again limited. Without this Court finding the exercise of such power

by the Industrial Adjudicator to be illogical, no interference is permissible

therein. In Krishan Singh Vs. Executive Engineer, Haryana State Agricultural

Marketing Board (2010) 2 SCALE 848 it was held:

"Wide discretion, is, therefore, vested in the Labour Court while adjudicating an industrial dispute relating to discharge or dismissal of a workman and if the Labour Court has exercised its

jurisdiction in the facts and circumstances of the case to direct reinstatement of a workman with 50% back wages taking into consideration the pleadings of the parties and the evidence on record, the High Court in exercise of its powers under Articles 226 and 227 of the Constitution of India will not interfere with the same, except on well settled principles laid down by this Court for a writ of certiorari against an order passed by a court or a Tribunal".

In Harjinder Singh Vs. Punjab State Warehousing Corporation AIR 2010 SC

1116, it was held:

"Before concluding, we consider it necessary to observe, that while exercising jurisdiction under Articles 226 and/or 227 of the Constitution in matters like the present one, the High Courts are duty bound to keep in mind that the ID Act and other similar Legislative instruments are social welfare legislations and the same are required to be interpreted keeping in view the goals set out in the Preamble of the Constitution and the provisions contained in Part IV thereof in general and Article 38, 39 (a) to

(e), 43 and 43A in particular, which mandate that the State should secure a social order for the promotion of welfare of the people, ensure equality between men and women and equitable distribution of material resources of the community to sub- serve the common good and also ensure that the workers get their dues."

I am thus, not inclined to interfere with the award impugned in this writ petition.

16. However, that again is not the end of the matter. As noticed above, the

respondent no.1 workman is now over 55 years of age having less than 5 years of

service left. He has in the past over 30 years worked with the petitioner Bank

barely for a few months. Should, in these circumstances, the award of

reinstatement be maintained? Reinstatement in terms of the award is with

continuity of service. Reinstating the respondent no.1 workman today with

continuity of service after 30 years would disturb the harmony in the cadres of

the petitioner Bank. The respondent no.1 workman having no experience of

working in a bank for the last 30 years cannot be beneficially used by the

petitioner Bank. For this circumstance alone, I am inclined to alter the award. It

is deemed expedient, only for the aforesaid reasons, to substitute the relief

granted of reinstatement with continuity of service though without back wages,

with the relief of lump sum compensation in lieu thereof.

17. The compensation in lieu of reinstatement and back wages has to be real

and not illusory and has to represent the financial benefits accruing to the

petitioner Bank by not so reinstating the respondent no.1 workman. If the relief

of reinstatement were to stand, the petitioner Bank would become liable to pay

the emoluments of the respondent no.1 workman from the date of the award till

now or such percentage thereof as may be allowed considering that the

respondent no.1 workman has not worked for the petitioner Bank and after

deduction therefrom the amounts paid as aforesaid vide order under Section 17B

of the ID Act. The said order was also not at the rate of minimum wages but at

the rate of last drawn wages. If the respondent no.1 workman was reinstated, the

petitioner Bank would also become liable to pay his emoluments till the age of

his superannuation and also for his family pension. As against this, the possibility

of the respondent no.1 workman having worked and/or engaged in other

profitable activities in the last 30 years cannot be ruled out; it is highly unlikely

that he has been sitting idle all along. In all these circumstances, in my opinion,

the lump sum compensation in lieu of reinstatement with continuity of service, of

Rs.5 lakhs besides the amounts already received under Section 17B is

appropriate.

18. The writ petition is accordingly dismissed, but by modifying the relief

given in the award impugned in the writ petition, of reinstatement with continuity

of service to the relief of payment of lump sum compensation of Rs.5 lakhs

besides the amount already received/due to the respondent no.1 workman under

the order aforesaid under Section 17B of the ID Act. The said amount of Rs.5

lakhs be paid by the petitioner Bank to the respondent no.1 workman within six

weeks hereof, failing which the same shall also incur interest at the rate of 9%

per annum.

With aforesaid directions, the writ petition is disposed of.

No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 1st July, 2010 bs