Madras High Court
M.Dinakaran vs The Management on 6 April, 2022
W.A(MD)No.450 of 2011
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 06.04.2022
(Reserved on 23.03.2022)
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
and
THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR
W.A(MD)No.450 of 2011
M.Dinakaran ... Appellant
vs.
1.The Management,
A876, Cumbum Urban
Co-operative Society,
Nehruji Street, Cumbum,
Theni District-625 516.
2.The Presiding Officer,
Labour Court,
District Court Buildings,
Mellur Road, Madurai-625 020. ... Respondents
Appeal filed under Clause 15 of Letters Patent, against the order
dated 27.01.2011 in W.P(MD)No.9607 of 2005.
For Appellant : Mr.T.Ravichandran
For R1 : Mr.J.Mathesh
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W.A(MD)No.450 of 2011
JUDGMENT
R.SUBRAMANIAN, J.
AND
N.SATHISH KUMAR, J.
The appellant/writ petitioner challenges the order of the Writ
Court made in W.P(MD)No.9607 of 2005, dated 27.01.2011, in and by
which, the Writ Court had allowed the writ petition filed by the
Management, challenging the award of the Labour Court which directed
the reinstatement of the appellant with continuity of service and
backwages.
2. The facts that led to the filing of the writ petition are as
follows:-
The appellant who was working as a Clerk in the 1 st respondent
Co-operative Society from 1986 onwards, was suspended on
29.02.1996. A charge memo was issued on 21.03.1996, accusing the
appellant of conniving with the Secretary for misappropriation of jewel
loan amount. The charges that were levelled against the appellant are
that the appellant helped the Secretary to misappropriate the loan
amounts temporarily. A domestic enquiry was conducted and a finding
of guilt was pronounced. The Management accepted the report of the
enquiry officer and terminated the services of the appellant on
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W.A(MD)No.450 of 2011
16.05.1997. The order of termination also revealed that the termination
takes effect from the date of suspension.
2.1. The appellant, therefore, moved the Labour Court under
Section 2A(2) of the Industrial Disputes Act, 1947, seeking a direction
for reinstatement. The Labour Court, upon a consideration of the
evidence on record, found that the misappropriation was done by the
Secretary and the only complaint against the appellant was that he did
not inform the higher officials about the misappropriation. Therefore,
the Labour Court held that the punishment of dismissal from service is
too harsh. The Labour Court also took note of the fact that the Deputy
Registrar of Co-operative Societies had fixed the liability on the erstwhile
Secretary Mr.Kottaimayan and absolved the appellant from any liability.
The Labour Court concluded that the punishment that is awarded to the
appellant is disproportionate to the proven delinquency. The Labour
Court, in fact, recorded a finding that the termination with retrospective
effect, that is from the date of suspension, is also not valid. On the
above findings, the Labour Court set aside the order of termination and
directed reinstatement of the appellant with all attendant benefits
including backwages.
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W.A(MD)No.450 of 2011
2.2. The award of the Labour Court was challenged before this
Court. The Writ Court found that being a bank employee, the appellant
should have acted with utmost bonafides and he should have reported
the misdeeds of the Secretary immediately to the Management. The
Writ Court refused to buy the argument of the appellant that it was the
Secretary Mr.Kottaimayan, who has been dealing with the jewel loan
accounts and the appellant was only in possession of the keys of the
locker.
2.3. In answer to the argument that the entire loss has been
made good by the Secretary, the Writ Court concluded that the
repayment of the loan amount would not absolve the appellant of the
delinquency and therefore, the same cannot be an answer in the
disciplinary proceedings. The finding of the Deputy Registrar in the
proceedings under Section 87 of the Tamil Nadu Co-operative Societies
Act, regarding the liability also, was not taken into account by the Writ
Court, since both operated in different fields. The Writ Court relied upon
the findings of the enquiry officer in the report dated 07.12.1996 to
conclude that the appellant and the Secretary were jointly responsible
for the misappropriation of jewel loan amount and the appellant has not
informed the cheating acts of the Secretary of the Society on different
dates to the higher officials. The Writ Court considered the duty of a
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W.A(MD)No.450 of 2011
bank employee and the trust that is imposed by the public on the banks
to conclude that the award of the Labour Court should be set aside. On
the above conclusions, the Writ Court allowed the writ petition and set
aside the award of the Labour Court and the order imposing the
punishment of dismissal was revived.
3. Mr.T.Ravichandran, learned counsel appearing for the
appellant would vehemently contend that the Writ Court overlooked the
fact that the Secretary was the superior officer and he was in-charge of
the affairs of the Society. He would point out that as a Secretary, he
was in a dominating position and the appellant being a Clerk, had to
obey his commands. He would also point out that the appellant has
even attained the age of superannuation and all that he would be
entitled to at this distant point of time, would be backwages and he
would plead that the Court should take a sympathetic or humanitarian
view.
4. Contending contra, Mr.J.Mathesh, learned counsel appearing
for the Management would submit that no doubt, the loss caused
because of the illegal acts of the Secretary have been made good by
him, but at the same time, the appellant cannot be allowed to go scot-
free for his misdeeds, that is, not informing the Society about the
dereliction of duty on the part of the Secretary.
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W.A(MD)No.450 of 2011
5. We have considered the rival submissions.
6. The charge memo issued against the appellant is not that
the appellant has indulged in misappropriation. The first three charges
accused the appellant of being hand-in-glove with the Secretary and not
bringing the misdeeds of the Secretary to the knowledge of the higher
officials. The 4th and 5th charges are consequent upon the first three
charges. The appellant in his explanation has said that the Secretary
was in a dominating position and he had influenced the will of the
appellant. He had also stated that he would make good the money in
the very near future and the interest of the Society would not suffer.
The enquiry officer had not recorded a finding that the appellant was
responsible or the appellant had misappropriated the funds of the
Society. The one and the only charge or the proven charge against the
appellant is that he did not bring the misdeeds of the Secretary to the
notice of the Society then and there. It is also seen that the Deputy
Registrar of Co-operative Societies has exonerated the appellant from
liability in the proceedings under Section 87 of the Act. Though the
claim was made by the Society against the appellant and the Secretary,
the Deputy Registrar of Co-operative Societies has held that it is only
the Secretary who is responsible for the loss caused to the Society and it
is he who has to recoup the same. The Labour Court has taken note of
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W.A(MD)No.450 of 2011
the above aspects and has held that punishment of dismissal from
service would be disproportionate.
7. The order of dismissal with retrospective effect from the
date of suspension is also unknown to service law. No doubt, the Writ
Court had held that as a bank employee, a very high degree of integrity
is required from the appellant and he should have reported the
misdeeds of the Secretary forthwith. As rightly pointed out by the
learned counsel for the appellant, the Writ Court has lost sight of the
fact that the appellant being a Clerk, is subordinate to the Secretary and
the Secretary was holding a dominant position and was able to influence
the will of the appellant. It is very common for a junior employee to
either turn a blind eye to the misdeeds of the seniors or to refrain from
reporting the same to the higher-ups. We are not giving a clean chit to
the appellant. At the same time, if we put ourselves in the position of
the appellant, we find that it would have been very difficult for the
appellant to have taken a call to report the misdeeds of the Secretary to
the higher-ups. We should also bear in mind that the employer is a Co-
operative Society in which, a Secretary wields lot of power than in case
of other banking institutions.
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W.A(MD)No.450 of 2011
8. We find that the punishment imposed namely, dismissal
from service for the proven charges, is shockingly disproportionate. The
Writ Court has referred to certain judgments which arose out of cases
where other banking institutions were involved. If the functioning of a
Co-operative Society which is involved in money lending is examined in
terms of the hierarchy, the Secretary wields a real position of power and
dominance. The same is not the case of other banking institutions.
Even under the very provisions of the Co-operative Societies Act, a
Secretary of a Co-operative institution is in a key position and the other
employees have to be subservient to him and they cannot take a call
independently. We are, therefore, unable to endorse the views of the
Writ Court, where it held that as an employee of a banking institution,
the appellant must have reported the misdeeds of the Secretary to the
higher-ups, as he is a trustee of the funds of the customers. No doubt,
a certain amount of trust is imposed upon the employees of a bank by
the customers, but at the same time, the hierarchical system in the
bank should also be taken into account while concluding that the
appellant is guilty.
9. We, therefore, find that the punishment is disproportionate
and in the normal course, we must have remitted the matter for re-
consideration of the punishment to the Management. But, in the case
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W.A(MD)No.450 of 2011
on hand, such a recourse would cause more harm and prejudice to the
appellant, since he has already attained the age of superannuation. He
was aged about 46 years in the year 2005 and therefore, he would be
aged atleast 63 years now. He has, therefore, attained the age of
superannuation. We, therefore, modify the punishment into one of
compulsory retirement from the date of the order imposing punishment
that is, 16.05.1997. The appellant would be entitled to all monetary
benefits as he has been compulsorily retired on 16.05.1997.
10. In fine, the Writ Appeal is partly allowed and the order dated
27.01.2011 made in W.P(MD)No.9607 of 2005 is set aside. The
punishment imposed is modified to one of compulsory retirement on and
from 16.05.1997. No costs.
(R.S.M., J.) (N.S.K., J.)
06.04.2022
Index : Yes / No
bala
To
1.The Presiding Officer,
Labour Court,
District Court Buildings,
Mellur Road, Madurai-625 020.
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W.A(MD)No.450 of 2011
R.SUBRAMANIAN, J.
AND
N.SATHISH KUMAR, J.
bala
PRE-DELIVERY JUDGMENT MADE IN
W.A(MD)No.450 of 2011
DATED : 06.04.2022
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