Syndicate Bank vs K. Periaswami
2014 Latest Caselaw 7159 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI


+                           W.P.(C) No.4984 /2013

%                            Judgment delivered on: 24 th December, 2014


       SYNDICATE BANK                                      ..... Petitioner
                       Represented by:   Mr.S.K. Taneja, Senior
                                         Advocate     with     Mr.Puneet
                                         Taneja, Advocate.
                            Versus
       K. PERIASWAMI                                    ..... Respondent
                       Represented by:   Mr.L.K.Singh and Ms. Sonal
                                         Sinha, Advocates.


CORAM:
HON'BLE MR. JUSTICE SURESH KAIT

SURESH KAIT, J.

1. The present petition is directed against the impugned award dated

12.12.2012, passed by the Central Government Industrial Tribunal

No.1, Karkardooma Courts Complex, Delhi, whereby the learned

Tribunal reduced the punishment of the respondent from removal of

service to the discharge simpleciter entitling him to claim retiral

benefits.

2. Mr.S.K.Taneja, learned senior counsel appearing on behalf of the

petitioner submitted that the petitioner Bank issued the chargesheet

against the respondent/workman on the allegations as under:-

"That you were functioning as Clerk at our Foreign Exchange Branch, Connaught Place, New Delhi, during the period between 19.7.91 and 28.7.97.

That you were placed under suspension vide proceedings No.ZOD/IRC/SUS.W.03/97 dated 1/3.10.97 of Asst. General Manager, Zonal Office, New Delhi, pending initiation of disciplinary action for certain allegations against you in the matter of opening of various Saving Bank/Current Accounts in your name/in the name of your wife/in the name of other persons through your introduction and carried out various transactions of unusual nature through these accounts."

3. Mr. Taneja submitted that after giving opportunity to the

respondent/workman, an inquiry was held and the respondent was

removed from service. Being aggrieved, the respondent/workman

raised an industrial dispute and vide order dated 23.09.2011, the learned

Tribunal held the inquiry valid and proper by recording as under:-

"11. Ex.MW1/24 is based on evidence, produced before the Enquiry Officer. Findings recorded are in consonance with the plethora of facts proved. It cannot be said that the conclusion drawn are against the material available on the record. There are correction between the evidence and findings recorded by the Enquiry Officer. Considering the facts in entirety, it is concluded that the report is not perverse. In view of the reason detailed above, I find no reason to conclude the enquiry was violative of principles of natural justice.

12. The claimant projects that the bank had not allowed to him to engage an advocate to defend himself before the Enquiry Officer. In domestic enquiry, no such right is available to a charge-sheeted employee. He can seek assistance of his colleague or an office bearer of his union. Claimant does not dispute that such an opportunity was given to him, but he had not availed it. There was no obligation on the bank to allow him to be represented by an advocate. Therefore the enquiry cannot be said to be unfair or unjustified on that account.

13. He assails the enquiry on the count that a case was registered against him by the CBI. After investigation, CBI did not find any material to prosecute him. A closer report was filed, which was accepted by the Special Judge. He passed an order Ex.WW1/38 in that regard. Contention advanced by the claimant does not have any substance. CBI was concerned with commission of a cognizable offence. When no criminal offence could be established, a closer report was filed. However the domestic enquiry was based on distinct and different facts. The bank proceeded against the claimant, since he engaged himself in trade/business outside the scope of duties. Closer report by the CBI in criminal case would not provide any accolade to the claimant.

14. In view of the above reasons I find that the enquiry was in consonance with principles of natural justice. Virus of the enquiry is up held. The preliminary issue is answered in favour of the bank and against the claimant."

4. Moreover, the learned Tribunal in the impugned award recorded

as under:-

"28. As projected above, order of the Special Judge accepting the closure report and forming an opinion that there was no material to warrant trial of the claimant would not espouse his cause. As brought over the record, claimant opened saving bank accounts No.3785 on 31/7/91, account number 4116 on 29/6/92 and account No.4410 on 4.3.94. Saving bank account No.4503 was opened in the name of his wife on 20/07/94, with his introduction. Thus it has come over the record that various accounts were opened by the claimant in his name as well as in the name of his wife, with a view to route transactions involving huge turnover, which fact is sufficient to conclude that he was involved in business beyond the scope of his employment. When turnover worth crores took place in those accounts, authorities concerned with law and order became suspicious and arrested the claimant. His arrest got wide publicity in the media and image of the bank was tarnished. Claimant could not refute that his dealings in the aforesaid accounts put his employer's name to disregard.

29. An employee is expected to promote interest of his employer in connection with the job for which he was engaged. Contract of an employment engrafts a stipulation that the employee should serve his mater with

good faith and fidelity. Thus it was expected of the claimant to inform his employer in respect of the bank drafts, which he routed through the aforesaid four accounts. He opted not to inform his employer in that regard. Once there were heavy turnovers in the aforesaid accounts, wherein crores of rupees were involved, this proposition is conclusive of the fact that of the claimant indulged in business beyond the scope of his employment. For business activities he never took his employer in confidence, nor obtained permission in this regard. Further more activities of the claimant had tarnished the image of his employer. His acts and conduct proved detrimental to fair image of the bank. Consequently it is clear that through his aforesaid acts the claimant acted prejudicial to the interest of his employer and committed gross misconduct. Financial loss is not only criteria to be taken into account, while awarding punishment for a misconduct. The misconduct committed by the claimants is serious one and penalty for such misconduct should be harsher one. Such an employee cannot be retained in service."

5. Despite, the learned Tribunal has shown sympathy and leniency

towards the workman by recording reasons in para 30 of the award as

under:-

"30. Question would arise as to whether punishment of dismissal is the only appropriate penalty for the misconduct. As detailed above, Special Judge, CBI, recorded as opinion that there was no material warranting trial of the claimant for an offence of assets disproportionate to known sources of his income. However, it is clear that commercial angel of such acts

cannot be ruled out. The claimant was moved with an idea to gain out of those acts, which were done by him beyond the scope of his employment. Further more he put reputation of his employer to stake and tarnished fair image of the bank. These facts, coupled with his more than 20 years unblemished service, making me to comment that punishment of dismissal from service can neither be called proportionate nor appropriate to his misconduct. This punishment is excessive to the acts of his misconduct. Considering all facts and circumstances projected by the claimant, I am of the view that indulgence by the Tribunal is called for. Therefore the Tribunal holds that punishment lesser than dismissal is to be awarded to the claimant, without making the bank to retain him in service. Hence punishment of discharge simpleciter from service would meet the ends of justice. This punishment would relieve the bank from retaining the claimant in service and the claimant would receive his retiral benefits. These issues are, therefore, answered accordingly."

6. Mr. Taneja, learned senior counsel submitted that the

respondent/workman was doing business without the knowledge and

permission of the petitioner Bank and the transactions have taken place

in crores, which tarnished the image of the petitioner. Therefore, such a

person, especially in the Banking institution, does not deserve any

leniency and sympathy.

7. To strengthen his arguments, learned senior counsel has relied

upon a case of LIC of India Vs. R. Dhandapani (2006) 13 SCC 613,

wherein the Apex Court held as under:-

7. It is not necessary to go into in detail regarding the power exercisable under Section 11A of the Act. The power under said Section 11A has to be exercised judiciously and the Industrial Tribunal or the Labour Court, as the case may be, is expected to interfere with the decision of a management under Section 11A of the Act only when it is satisfied that punishment imposed by the management is wholly and shockingly disproportionate to the degree of guilt of the workman concerned. To support its conclusion the Industrial Tribunal or the Labour Court, as the case may be, has to give reasons in support of its decision. The power has to be exercised judiciously and mere use of the words 'disproportionate' or 'grossly disproportionate' by itself will not be sufficient.

8. Learned senior counsel has also relied upon the case bearing

No.LPA 622/2012, titled as 'R.K. Rohilla (Deceased) Through LRs

Vs. Syndicate Bank', decided on 17.12.2012, whereby the Double

Bench of this Court held as under:-

"9. Once it is found as aforesaid, the deceased workman clearly acted dishonestly. Significantly, the Industrial Adjudicator also did not absolve the deceased workman and punished him with stoppage of four increments with

cumulative effect. The question which arises is, whether for the conduct as aforesaid, was the Industrial Adjudicator justified in interfering with the punishment? The answer obviously has to be "No". No employer, particularly a Bank, can be compelled to continue with a dishonest employee who by the very nature of his employment has access over moneys of others lying entrusted with the Bank.

9. Mr. Taneja submitted that the learned Tribunal has erred by

reducing the punishment because it is the prerogative of the

Management to give appropriate punishment in the facts and

circumstances of the case, when the learned Tribunal has already held

that the misconduct of the respondent/workman is serious one and also

held him guilty of the charges leveled against him in the chargesheet.

Therefore, there was no occasion for the learned Tribunal to hold that

the punishment given to the respondent/workman is disproportionate to

the gravity of misconduct committed by him.

10. Mr. Taneja further submitted that the learned Tribunal also failed

to consider that as per the settled law, the courts should not interfere

with the administrative decision of punishment unless it was illogical or

shockingly disproportionate to the conscience of the court in the sense

that it was defiance of logic or moral logic.

11. To strengthen his arguments, learned senior counsel has relied

upon the case of Syndicate Bank & Ors. Vs. Venkatesh Gururao

Kurati (2006) 3 SCC 150, wherein the Apex Court held that:-

".....this is no ground for converting the order of removal from service into compulsorily retirement. On the question of punishment being disproportionate to the charges framed and proved, we are of the view that the charges framed and proved are grievous in nature, which would normally attract removal from service, if such charges were proved. We are also of the view that sentiments and compassion have no role to play in such a situation when the gravity of misconduct such as this has been found well proved against the respondent."

12. On the other hand, Mr. L.K.Singh, learned counsel appearing on

behalf of the respondent/workman submitted that the respondent was

arrested by CBI and his arrest came in Media. Whatever the image of

the petitioner Bank was tarnished, that was not because of the

respondent, however, only because the Media flared the issue. Since,

CBI had no evidence against the respondent/workman, therefore, filed

the closure report, which was accepted by the concerned Court and the

said report had attained finality, being not challenged by any authority.

Moreover, a case for possessing assets disproportionate to known

sources of his income was registered against the respondent/workman,

however, in that case also he has been acquitted vide order dated

13.08.2013.

13. Learned counsel for the respondent fairly conceded that the

respondent/workman accepted the money by way of cheques or pay

orders from different persons from his native place or from part of

South India only for the purpose that when they would come to Delhi,

they can withdraw the amount and use the same for their expenses.

Further submitted, no doubt aforesaid mistake was committed by the

respondent/workman, however, that was not so grave in nature, that he

can be removed from service. Even, if it is considered as 'misconduct',

the lesser punishment could have been awarded by the petitioner Bank,

however, the respondent was removed from service, which has been

rightly reduced by the learned Tribunal. Moreover, the

respondent/workman worked for more than 20 years with Bank without

any blemished record. Moreover, in a case, he was arrested by CBI, no

material or evidence was found, hence, CBI filed the closure report.

And, in case of disproportionate assets, the respondent has been

acquitted by the competent court. Thus, no misconduct has been

proved against him.

14. Learned counsel submitted that presently respondent is around 59

years old and is not able to seek any employment and earn his

livelihood, therefore, this Court may not interfere with the award dated

12.12.2012 passed by the learned Tribunal.

15. I have heard the learned counsel for the parties.

16. The petitioner is aggrieved of the award dated 12.12.2012,

whereby the learned Tribunal reduced the punishment of the

respondent from removal of service to the discharge simpliciter

entitling him to claim retiral benefits.

17. It is pertinent to mention here that vide order dated 23.09.2011,

the learned Tribunal held the enquiry valid and proper.

18. It is not in dispute that the power exercisable under section 11-A

of the Act, the Industrial Tribunal or the Labour Court, as the case may

be, is expected to interfere with the decision of a management only

when it is satisfied that punishment imposed by the management is

wholly and shockingly disproportionate to the degree of guilt of the

workman concerned. The power has to be exercised judiciously and

mere use of the words 'disproportionate' or 'grossly disproportionate' by

itself will not be sufficient.

19. In the case of Uttar Pradesh State Road Transport Corporation

Vs. Nanhe Lal Kushwaha (2009) 8 SCC 772 wherein the Apex Court

has held that if the charged employee holds a 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.

20. In the case of Employers, Management, Colliery, M/s. Bharat

Coking Coal Ltd. Vs. Bihar Colliery Kamgar Union 2005 Lab.I.C.

1341 (SC) wherein the Apex Court has held that where the order of the

Tribunal substituting the punishment of dismissal with that of

reinstatement without back wages and stoppage of one increment for

the misconduct of assault was held to be unjustified.

21. It is pertinent to mention here that the learned Tribunal in the

impugned award recorded that the order of the Special Judge accepting

the closure report and forming an opinion that there was no material to

warrant trial of the claimant would not espouse his cause. The

respondent workman opened saving bank account No.3785 on 31/7/91,

account number 4116 on 29/6/92 and account No.4410 on 4.3.94.

Saving bank account No.4503 was opened in the name of his wife on

20/07/94, with his introduction. Thus, various accounts were opened

by the respondent in his name as well as in the name of his wife, with a

view to route transactions involving huge turnover, which fact is

sufficient to conclude that he was involved in business beyond the

scope of his employment. When turnover worth crores took place in

those accounts, authorities concerned with law and order became

suspicious and arrested the respondent. His arrest got wide publicity in

the media and image of the bank was tarnished.

22. It is further recorded that an employee is expected to promote

interest of his employer in connection with the job for which he was

engaged. Contract of an employment engrafts a stipulation that the

employee should serve his mater with good faith and fidelity. Thus it

was expected of the respondent to inform his employer in respect of

the bank drafts, which he routed through the aforesaid four accounts.

He opted not to inform his employer in that regard. Once there were

heavy turnovers in the aforesaid accounts, wherein crores of rupees

were involved, this proposition is conclusive of the fact that of the

respondent indulged in business beyond the scope of his employment.

His acts and conduct proved detrimental to fair image of the bank.

Consequently it is clear that through his aforesaid acts the respondent

acted prejudicial to the interest of his employer and committed gross

misconduct. The misconduct committed by the serious one and

penalty for such misconduct should be harsher one.

23. Despite, the learned Tribunal has shown sympathy and leniency

towards the workman by recording that the Special Judge, CBI,

recorded its opinion that there was no material warranting trial of the

respondent for an offence of assets disproportionate to known sources

of his income. However, it is clear that commercial angle of such acts

cannot be ruled out. These facts, coupled with his more than 20 years

unblemished service making the Tribunal to comment that punishment

of dismissal from service can neither be called proportionate nor

appropriate to his misconduct.

24. The fact remains that the respondent workman was doing

business without the knowledge and permission of the petitioner bank

and the transactions have taken place in crores. Such a person,

especially in the banking institution, does not deserve any leniency and

sympathy.

25. In the case of R.K. Rohilla (supra) the Double Bench of this

Court held that no employer, particularly a Bank, can be compelled to

continue with a dishonest employee who by the very nature of his

employment has access over moneys of others lying entrusted with the

Bank.

26. In the case of Venkatesh Gururao Kurati (supra) the Apex

Court held that on the question of punishment being disproportionate

to the charges framed and proved, which are grievous in nature,

normally attract removal from service. Sentiments and compassion

have no role to play in such a situation when the gravity of misconduct

such as this has been found well proved against the respondent.

27. Keeping in view the facts recorded above and the settled law,

there was no occasion before the Tribunal to reduce the punishment

imposed upon the respondent from removal of service to the discharge

simpliciter entitling him to claim retiral benefits.

28. Accordingly, the award dated 12.12.2012 passed by the Industrial

Tribunal is hereby set aside.

29. Consequently, the writ petition is allowed with no order as to

costs.

SURESH KAIT (JUDGE)

DECEMBER 24, 2014 Sb/RS