The Management of Secunderabad Club v. 1. K. Subrahmanyam

Petition Under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court rnay be pleased to vacate the interim orders daled 2610412024 granted in lA No.'l of 2024 in WP No.11352 ot 2024 by permitting the petitioner to withdraw thre deposited awarded amount of Rs.3,00,000/- from the 2nd respondent herein in the interest of justice. Counsel for the Petitioner : SRI C.NIRANJAN RAO Counsel for the Respondent No.1 : SRI CH.INDRA SENA REDDY Counsel for the Respondent Nos.2 & 3 : G.P FOR LABOUR The Court made the following ORDER ..'-fr.ry ,. '.w' -i '1 HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No. 11352 OF 2024 ORDER: The case of petitioncr - Mar agement ol Secunde rabad Club is that thc I "f Respondent u hilc working as Cashier committed certain cash irregularities by n,)t accounting the summer camp fccs collccted from the mcm bers and an amount of Rs. 7O00/- was not accounLed, u,hcr-r erquircd, hc shouted against HOD ir-r a gross insubordinarc mtrnner. To the shor,r' causc r-rotice clated 02-08 2018, cxplzrrr:rtion d:rLcd 07 08-2O18 u,as submitted admitting his bchi.rviour. Thcrca[ter, on enquiry, thc Enquiry Ofiicer submitted report fincling the charges partly proved. Ttrercfore, considering the ir:LviL1. of the miscondLlct, lhe 1"t Respondent \A,as terminared b,'crder d:rted 08-12-2018. On 12 l2-2(\la, the l rcsponccnt receivcd Rs. 6,52,2121- undcr thrcc different chcqucs tow rrcls full and final settlement of account, without any protest and eltcashed the same. Thereafter, he fllcd a claim (S.E.No. 5 of 20O9) before the 2nd Ri:spondent suppressing lhe said fact. Tl-re said Authority ulde order dated 16-06-2003 grantcd Rr;. .3,0O,000/ as compensation in licu ol' reinstatement and back q,ages. l Aggricvcd thereby, petitioner filcd Second Appeal No. 4 of 2023 before the 3.d Respondent Authoriff by depositing Rs. 3,OO,O00/ ordered by the 2^d Respondent Authorily. Similarly, the 1.r Respondent also filed S.A.No. 3 of 2C23 against the order of awarding compensalion. The Authority passed the t. common order dated 09-Ol-2024 directing petitioncr to reinstate the 1st Respondent into service with full back lvages, attendant benefits and con[inuity o[ service and also dirccted them to pay 9o/o interesl till the date of actual payment. Hence, thc presen t Writ Pctition.

2. Learned counscl for petilioncr Sri C. Niranjan Rao submits that the 3,d Respondent Authority ought to have considered that misappropriation oi funds is a serious miscor-rduct, hcnce, ought not to have granted re instaLement in a routine manner. Accorcling to learned counsel, petitioner club is a non-profit organization with about 7OO0 members; it was established in 1878 by the British Government for their Army officials in a private premise ancl Entry to the club premises was restricted to the members and their families and no outsider can come to the club as a matter of right; therefore, it is evident that Petitioner club does not come under the purview of the ') Telangana Stzrte Shops and Establishment Act, I 9li8 and the provisions o[ t I're said Act are not applicable to it. '['h,:refore, the Authority does nol have jurisdiction to enterta n thr: above Applications. The said issuc, though raised, r,r.a s n )t properly answered b_v I he 3rd respondent, hence, the impuqned rtrdcr is liable to be sel aside.

2.1 It is submitted that the 3.d respondr'nr Authority had not discr-Lssecl the factum of the I'r responc!',rt rr-ceiving Rs.6,52,21'2/- without any protcst towards ternrnal br:nefits and deposilcd ilmount of Rs. 3,OO,000/ -. The I ,r r-cspondent having received the said amount as a conscqucnce of rcmoval cannot seek to raise any dispute about his rerroval without retuning to thc managemenl the amount and the s:rme has been uphcld by thc Supremc Court in Man Singh u. Mdnii Suzuki Ind.ia Limited t .

2.2 1'he Authority passed the order in a bir,rs:d rnanner and being a Quasi-Judicial authority, it cannot j.rrtrp 1o such conclusions. In fact, a grave and single incident is s rflicient to take a disciplinary action against an earrin g employee. Moreover, r-rsing abusive language against supcr ior \\'arrants '{4tt1 t+ scc 662 ,l 't 1 severe disciplinary action as per the Judgment of Hon'ble Supreme Court in Nlahindra & Mahindra Ltd. a. N.B Naravade 2 and the lou.e r Authority failed to consider the same in a convenient manner. Thereforc, the said ippugned order is liable to be set aside. It is further stated, the termination order was issued follou'ing due process of law, hence, the 3'd respondent Authority cannot order for reinstatement with back wages. The 1., rcspondent has not produced any evidence [hat he is not gainfulty employed during the litigation period and in absence of the same, the 3'd respondent Authority cannot give a direction to pay full back wagcs and the said direction is contrary to thc principles laid down by the Hon'ble Supreme Court in Municipal Council, Sujanpur a Surindet Kum.an3 and The Divisional controller I(SRTC Vs GM Vittal Raoa. Thereforc, thc ordcr passed by thc 3'0 respondent Authority is liable to be set aside and in fact, considering the nature of work, the said Authority oughl not to havc granted any relief to the 1st respondent.

3. While issuing notice, this Court, on 26.04.2024, granted interim suspension oI the order impugned. 2oo5 LLR sc 360 "' r zooo LLp sc 662 o 2ot2 LLR sc 8 @v ) 4 . Thc 1 't respondent put foruard his casc zts undcr: Bv the order impugned, the 3'd rt:spondent by appreciating thc matcrial available on record passcd thc orders in accordanc<: with the TS Shops & Establishme rls Act, 1988 and also in ar:cordance with law. Therefore, the said,rrder necds no interferenr:c. A specific hnding was given tht | 'there is no record to show that lhc incident on O2.08.2O 18 o<:cttrred in thc prescnce ol Vice-President and other staff as observcd by lhc Enquiry Olli<:e r. The others u,ho were examint:d belirre thc trnquiry Oflict:r did not speak about Lhe said incidt'r-rt. Thcrcforc, tl-re linding of thc trnquiry Oflicer on the second clrarge is not based on souncl reasoning. When charges arc rlot proved, lermination oi the employee issued under Ex.Al1 is liable to bc se t aside anrl the appellant in SE No.3 of 2O2i" : nd the: lst respondent. in SA No.4 of 2023, Mr. K. Subr,th:nanvarn is entitlcd for reinstalement'. It is stated, ever sitr,-c the clate ol illegal termrnation, he could not secure alternat,' cmpk)yment and he also hled a Petition before the 3rd respondent lo withdraw the deposited amount from the 2nd rer;pondent, but the former rcfused. 6 (

4.1 It is further stated that as per Section 48(3) of the 1988 Act, petitioner had not deposited the awarded back wages before hling the present Writ Petition. Therefore, the Writ Petition is not maintainable and the same- is liable to be dismissed. As per Seclion 48(4), petitioner has to pay last drawn monthly wages every month during the pendency of the Writ Petition as the 3rd respondent has directed the petitioner herein to reinstate me into service with all consequential benefits.

5. Heard Sri Ch. Indrascna Reddy, learncd cournsel for the 1s1 responden t-

6. Having pcrused the material on record and having heard learned counsel on cither side, it is to be seen that the objective of the Club is to providc various indoor or outdoor gamcs, library and readir-rg room lacilities and soci:rl gatherings; it is contemplated to private mcmbers and their families with facilities for their cultural, social and intellectual advancement; members can use the facilities of canteen, bar, billiard room, tennis, badminton and cards which include indoor and outdoor games. There are about TOOO members of the club which was established in 1878 by the British Government for their Army 'bffrtiats w 1 { 7 . The contention of learned counsel [o - gretitioner is that 'Club' doe s not come under the purview of Telangana State Shops and Dstablishments Act, 1988 and the prcrnsions o[ the said Act are not applicable to it. According to ht:m, club is solely surviviltg on the subscription and fee paid b,.i,,s rnembers and any amount of discipline and misappropriatic n by lhe staff members rvill affect the general discipline in the Or ganisation. ln support of his contention, he relied on the jucigrncn t ol' the Hon'ble Supr-cme Court in Bangalore Turf t)lub Ltd. u. Regional Director, ESI Corporations whcrcin the I lor-r,ble Supreme C}rurt held that 'the word 'shop' has not br:en delined either in the ESI Act or in the notification is,sued by the appropriatc government under Section 1(5). H -:r-r,:e, in our opinion, thr: mearring of 'shop' will be thal uscrl in common parlance. ln r:ommon parlance when q,e go for shcpping to a market, we do not mean going to a racing club. Hence, prima facie, u,c are of the opinion that the appellant club is not a shop rvithin the meaning of the Act or the notification issued by the appropriatc government. In our opinion, the error in the judgment in the case of Hyderabad. Race Club (supra) is that it ' arn :ooq sc 2q65 8 has been presumed therein that ali establishments are covcred by the Act. That is not correct. Only such establishments are covered as are notified under Section (5) in the oflicial gazette." In view of the above judgment, this Court is in agreement with the contention of Iearned counsel thaL pclitioner club is not covered under the Act and at the threshold, the order impugned has to be set aside.

8. Apart from that, the 3'd rcspondent in its conclusions stated that single incident is not sulficient to tzlke disciplinary action against the errir-rg employee. This Court is not inclined to subscribe to such a finding in view of the judgment of the Hon'ble Supreme Court in N.B. Narauo,de's ca-se (supra). Petitioner is a club wherc members gather lor relaxation and enjoyment and it cannot be trcatcd on par with business establishments. The Enquiry Officcr in his report l-rad already held that behaviour of applicant is not tolerable for thc discipline and harmony of the club. The 2",r responden t Authority also held that behaviour of the I.t respondent does not appear to be conducive to the atmosphcre that is requircd in a social club. Hence, reinstatement was not au,arded, but however, considering the other hnding of the Enquiry Officer to --'W 9 the elfect thzrt from the statements of all the wi -nc:sses ol the managernent. it u'as categorically stated that the lsr respondent u,as honest in cash handling and perlect in rer.dcring clutics and belbre this, therc r,r,as no. such charge of misrrpltropria t ion, lhe 2n(r respondcnt Authority granted further colnpensarion of Rs.3 lacs in addition to thc one already granted to hirn, in lu:u of reinstatcmen[. Petitioner in the reply also statcr-l that thc I "r respouclr:nt u.as given several oral advises while he u,as in sen,ice, hencc, he has ltut in unblemished rccorcl of scrvicc is not corrcct. flere, it ts to be remembercd thal it is sertlccl princrpk'of Iau that reillstatemcnt cannot bc or<Lrred tr,hcrr :rr.r employce is involved in serious misconduct as per th(l judgment of the Ilon'ble Supremc Court in GM Vittq.l,s casr:. In thc light of thc sirid -judgment, thc 3,d respondent is u,ronrl in clirccting rcinsLatcrncr)t on the ground that it is clear that there is only onc incidcnt that occurred on O2nd August when [he cmployec u,as provokecl and Lh:rt the applicant / chargecl r m:lo1,ce lost his cool an<l spoke aloud; considering the entirc r:ase, Itrnt of the firm opinion that a mere single incident of l,rsing tcmper that too whc.n a false charge was raised againsl him cannot bc thc sole reason to deny his reinstatement. The seccncl charge of T I I ,l t0 insubordination of causing insult to superiors arose in a situation when the charged employee \\ras provoked on a non- existing charge. The fact that the first charge relating to financial matters was not proved itself shorvs that the charged employee was worried because he is being falsely accused of misappropriation of funds; it is but natural that any person ri.he n falsely accused loses tempcr anci gets provoked. '

9. Further, as regards ar.r,arding back-r,,,ages is concerned, thc l.t respondent failed to prove that he is not gainfully employed, hence, lhe 3.d respondcnt is not justificd in awarding back-wages, in view of the judgment of the Hon'l-rlc Apcx Court in Surind.er Kumar's case (supra) and J.K. Sgnthetics Ltd. u. K.P. Agranoal6. I 0. Takifrg the totality of thc circumstanccs into account, this Court is of the firm opinior-r that Writ Petition deserves to be allowed. However, in vieu' of the fact that 1st respondent rendered 12 years of service and the lact that co-officers stated that he is an honest officcr and scrvcd the Club to the satisfaction of the officers, this Court directs petitioner club to pay the l"t respondent lump sum of Rs. 15 o (2007) 2 scc 43i Ir '.*aFHr. 1l.t --.Jr' --, To SA LS lacs (Rupccs lifteen lacs onty) in lieu of reinst:rtt:mcn L, apart from Rs.6,52. 21'2 / - already paid under three ditlcr.ent cheques tor'vards full ar-rd final settlement and Rs. 3 lzrcs;, its is evident from the copics o[ chcques annexed and D.D.No. 9(>2336, dated

17.O7.2023 u'h:ch, according to petitioncr, werc .ct eived l>y tl-re 1st respondent, rvilhoul any protest. Payment o Rs. 15 lacs bc madc within krrrr wecks from thc datc of rece ipl c f a copv of this order. 1i COSTS

1.2 closed The Writ Petition is accordingly, d sposcd of. No Miscellancous Applications, if anr shzrll stand //TRUE COPY// SD/.P. PONNA KRISHNA SISTANT REGISTRAR i SECTION OFFICER ments Act 1988 -cum- B ravan, RTC X Roads, '1. The Authority under Telangana Shops and Establi S Assistant Commissioner of Labo Hyderabad, TAKS Hyderabad.

2. The Appellate Authority under Telangana Shops and Establishments Act 1988 and Dbbuty Commissioner ffiyOer"aOaa, TAkS Bhavzrn, RTC X Roads, Hyderabad. 3. Two CC's to G.P FOR LABOUR, High Court for the State of Telangana at Hyderabad. (OUT)

4. One CC to SRI C NIRANJAN RAO, Advocate [OPUC] 5. One CC to SRI CH.INDRA SENA REDDY, Advocate [C)PIJC] 6. Two CD Copies YV I t HIGH COURT DATED:1 910812025 i --.-:' ./;,:',' 'r I \" /i Q- l '-) )i-: ol ..1. E :; r-i,: - -\ SEP 2025 .t z, -i' ORDER WP.No.11352 ot 2024 DISPOSING OF THE W.P WITHOUT COSTS. ^"*t"A Y^u z\ ''