Tamil Nadu Civil Supplies Corporation Ltd. v. A.P. Kathirvelu

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 9.6.2008CORAMTHE HONOURABLE MR. JUSTICE K. CHANDRUW.P. Nos. 4911 and 14633 of 1998Tamil Nadu Civil Supplies Corporation Ltd.Rep. by the Senior Regional ManagerThiruvannamalai.. Petitioner in both W.Ps. Vs.1.A.P. Kathirvelu.. R1 in W.P. No. 4911 of 19982.R. Vijayarangam.. R1 in W.P. No. 14633 of 1998 3.The Labour Court Vellore .. R2 in both W.Ps. Petitions filed for issuance of writ of Certiorari calling forthe records of the second respondent relating to the Award passed inI.D. No. 418 of 1992 dated 04.11.1997 published in Tamil NaduGovernment Gazette, Part II Section 2 dated 24.12.1997 and I.D. No.400 of 1992 dated 18.3.1998 respectively quash the same. For Petitioner : Mr. A. ArumugamFor Respondent 1 in: Mr. S. VenkataramanW.P. No. 4911 of 1998For Respondent 1 in : Mr. Bharath ChakravathyW.P. No. 14633 of 1998 for M/s Sai, Bharath and IlanCOMMON ORDERHeard the arguments of Mr. A. Arumugam, learned counsel for thepetitioner and Mr. S. Venkataraman, learned counsel appearing for thefirst respondent in W.P. No. 4911 of 1998 and Mr. BharathChakravarthy, learned counsel for the first respondent in W.P. No.14633 of 1998 and perused the records.2.The petitioner is the Tamil Nadu Civil Supplies CorporationLtd. represented by its Senior Regional Manager, Thiruvannamalai.It is a wholly owned Government Company registered under Section 617of the Companies Act. In W.P. No. 4911 of 1998, the writ petition https://hcservices.ecourts.gov.in/hcservices/ is directed against the Award dated 04.11.1997 passed by the LabourCourt made in I.D. No. 418 of 1992 wherein and by which, thepetitioner was directed to reinstate the first respondent(A.P.Kathirvelu) with full backwages, continuity of service and allother attendant benefits. In W.P. No. 14633 of 1998, the writpetition is directed against the Award dated 18.3.1998 passed by thesecond respondent Labour Court made in I.D. No. 400 of 1992 whereinand by which the first respondent (R. Vijayarangan) was directed tobe reinstated with full backwages and other attendant benefits.3.The writ petitions were admitted on 03.4.1998 and 22.9.1998respectively. Pending the writ petitions, by an order dated29.6.1998, this Court directed the petitioner to pay Rs.1400/- fromApril 1998 every month pending disposal of the writ petition in termsof Section 17B of the Industrial Disputes Act [for short, 'I.D.Act']. By another order dated 29.6.1998, this Court directed thepetitioner to deposit a sum of Rs.1,12,000/- in a Nationalised Bankand on such deposit, the first respondent was directed to withdrawquarterly interest.4.In W.P. No. 14633 of 1998, by an order dated 12.11.1998,similar orders were passed in respect of first respondentR.Vijayarangam. It is now stated that the said Vijayarangam reachedthe age of superannuation on 31.5.2003.5.In view of the fact that the arguments addressed in both thewrit petitions were common, these matters were dealt with togetherand a common order is being passed. 6.The first respondents in both the writ petitions wereworking as Junior Assistants and when they were working inThiruvannamalai Godown, there was a heavy shortage of variouscommodities and they were solely responsible for the same. Both ofthem were suspended by an order dated 05.10.1984. Notwithstandingtheir explanation, an additional charge-memo dated 16.5.1985 wasgiven to them directing them to show cause as to why a sum ofRs.22,26,629.20 should not be recovered from them besides takingfurther disciplinary action on the said issue. The firstrespondents denied the responsibility for the loss and requested forinspection of the records. An enquiry was conducted in which theirstatements alone were recorded by the Enquiry Officer, who held thatthe charges were proved on the basis of the explanation submitted bythem. The first respondents were dismissed by an order dated01.8.1991 by the petitioner. Also, recovery proceedings wereinitiated demanding a sum of Rs.27,02.978.50. Out of this, A.P.Kathirvelu was held responsible for loss caused to the extent ofRs.6,43,491.40 and R. Vijayarangam was held to have caused a loss ofRs.5,15,705.85. https://hcservices.ecourts.gov.in/hcservices/

7.The first respondents filed writ petition before this Courtbeing W.P. No. 10762 of 1992 and the same was dismissed by an orderdated 05.10.1999. This Court granted liberty to the petitionerCorporation to seek civil remedy for the recovery of amount.Likewise, in the recovery notice dated 14.6.1992, recovery of a sumof Rs. 7,35,994.20 was also caused against D.Viswanathan, QualityInspector. The said Viswanathan was also dismissed from service byan order 17.7.1991. He filed two writ petitions before this Courtbeing W.P. Nos. 5050 of 1992 and 9393 of 1992 challenging both thedismissal and the recovery order. P. Sathasivam, J. (as he thenwas), by a judgment dated 24.3.2000, allowed the writ petitions andin the operative portion found in paragraph 8, observed as follows:-".... Therefore, the order challenged in this writpetition dismissing the writ petitioner from theservice which was affirmed by the appellate authorityis set aside. However, liberty is given to thecompetent authority to proceed afresh against the writpetitioner in accordance with Regulation 4. As observedby R.Balasubramanian, J., in the said decision that theSenior Regional Manager has no authority to commenceand complete the disciplinary enquiry upto the stage ofpunishment as has been done in this case, the materialsso concluded by him during such course have to beeschewed from the records. In view of the settingaside the order of dismissal, the writ petitioner isentitled to reinstatement with all attendant monetarybenefits. The respondents are directed to implementthe order regarding reinstatement with attendantmonetary benefits as mentioned above on or before31.5.2000...."8.The said matter was taken on appeal by the petitionerCorporation in W.A. Nos. 796 and 797 of 2000. A Division Bench ofthis Court presided by R. Jayasimha Babu, J. upheld the order of thelearned Judge. But, however, the said Viswanathan had passed awayin the meanwhile and this Court disposed of the writ appeals with thefollowing observations:Para 3:"In this case, the writ petitioner being no more, noquestion of reinstatement in service can arise.Having regard to the nature of the charges, we have inother similar matters declined to grant backwages.By reason of the writ petitioner being no more, thiscase cannot be treated any differently. His heirswill not be entitled to receive any amount as backwagesto the deceased employee. Had he been alive, hewould have been reinstated with liberty to the employerto hold a fresh enquiry against him.Para 4:So far as the amount ordered to be recovered isconcerned, it is submitted by counsel at bar, that no https://hcservices.ecourts.gov.in/hcservices/ part of that sum had so far been recovered. Counselfor the heirs of the employee says that the employeehas not left any property. The liabilities of thelegal representatives is only limited to the propertyowned by the deceased and which property is in theirhands.The question of recovery from the legal representativesdoes not arise. These writ appeals are accordinglydisposed of." 9.In the meanwhile, the first respondents also proceeded withcriminal action before the Judicial Magistrate, Thiruvannamalai inC.C. No. 1013 to 1016 of 1987. After a trial, which took nearly 18years, the first respondents were acquitted by the learned JudicialMagistrate vide judgment dated 07.7.2005. The said order was notappealed and it had become final. As against the dismissal, thefirst respondents raised a dispute before the Government LabourOfficer and finally the matters were taken by the second respondentLabour Court as I.D. Nos. 418 of 1992 and 400 of 1992 respectively.10.In I.D. No. 418 of 1992, on behalf of the first respondent,14 documents were filed and they were marked as Exs. W.1 to W.14 andon behalf of the petitioner Management, 10 documents were filed andthey were marked as Exs. M.1 to M.10. Likewise, in I.D. No. 400 of1992, which was tried along with two other disputes, 64 documentswere filed on behalf of the workmen and they were marked as Exs. W.1to W.64 and on behalf of the petitioner Management, 12 documents werefiled and they were marked as Exs. M.1 to M.12. In both thedisputes, no oral evidence was let in by the parties. In thecounter statements filed in both the I.Ds., the petitionerCorporation did not seek for any alternative prayer, viz., that inthe event of the Labour Court coming to the conclusion that theenquiry held by them was vitiated, they should be allowed to leadfresh evidence before the Labour Court.11.The Labour Court, after going through the oral anddocumentary evidence, came to the conclusion that the domesticenquiry held against the first respondents were not in accordancewith the principles of natural justice. It also held that thepetitioner Corporation has one main godown and 33 satellite godownsand since in the domestic enquiry, no witnesses were produced and noexhibits were marked, the dismissal of the two workmen was not legaland proper. It also held that even though the charges were basedupon registers and records, they were not marked in the enquiry andthat the link between the first respondents and the shortage was notestablished. It also held that one Raghavan, Bill Clerk, who wassimilarly charge-sheeted, was restored by the Management vide orderdated 19.9.1996 marked as Ex. W.14. Since the petitioner https://hcservices.ecourts.gov.in/hcservices/ Corporation had not asked for any opportunity to lead fresh evidence,the Labour Court passed the two Awards holding that the firstrespondents were not guilty of any misconduct and, therefore, theyare entitled for reinstatement with backwages as noted already. Itis against these Awards, the present two writ petitions have beenfiled as noted already.12.When these matters came up for final hearing, a learnedJudge passed an interim order dated 22.6.2007 and called for freshfindings from the Labour Court after giving opportunity to bothparties. It is necessary to refer to paragraphs 3 to 5 of the saidorder.Para 3:"On a perusal of the charge memo issued to therespective first respondents, I find that the provedallegations resulted in mishandling and monetary lossof Rs. 22,26,629.20 to the petitioner. It may be thatthe concerned authorities of the petitioner did notproduce relevant materials before the secondrespondent – Labour Court, at the time when thedisputes were taken up for hearing. But on thatscore, I feel that the respective first respondentscannot be allowed to go scotfree in spite of seriousallegations of malfeasance or misfeasance in respectof the essential commodities meant for publicdistribution, that too, to the value of more than Rs.22 lakhs.Para 4:I therefore feel that a final opportunity can beextended to the petitioner to establish the chargesbefore the second respondent – Labour Court, bycalling for a finding from the second respondent –Labour Court as regards the proof of misconductalleged against the respective first respondents inthe charge memo dated 20.9.1984 and the additionalcharge memo dated 16.5.1985. The above coursehas to be adopted, since the allegations relate backto the year 1984 and it will not be appropriate toremand the cases to the Labour Court.Para 5:In the circumstances, the petitioner is directed toappear before the second respondent – Labour Court.The Registry is directed to send back the records tothe second respondent – Labour Court and the secondrespondent – Labour Court shall reopen the disputesand permit the petitioner to to let in necessaryadditional evidence in support of the charges levelledagainst the respective first respondents in the chargememo dated 20.9.1984 and 16.5.1985. It is also openfor the respective first respondents herein to let in https://hcservices.ecourts.gov.in/hcservices/ necessary rebuttal evidence on their side to disprovethe charges. The second respondent – Labour Courtshall render a finding and submit its findings to thisCourt within three months from the date of receipt ofthe records from the Registry of this Court."13.Pursuant to the interim order, the second respondent LabourCourt recorded evidence both oral and documentary. In I.D. 418 of1992 (A.P. Kathirvelu), 16 documents were filed and they were markedas Exs. W.1. To W.16 and on the side of the petitioner Corporation,83 documents were filed and they were marked as Exs. M.1 to M.83.While the first respondent examined himself as W.W. 1, on the side ofthe petitioner Corporation, four witnesses were examined as M.W.1 toM.W. 4. Likewise, in I.D. No. 400 of 1992 (R. Vijayarangan), 70documents were filed and they were marked as Exs. W.1 to W.70 and onthe side of the petitioner Corporation, 139 documents were filed andthey were marked as Exs. M.1 to M.139. While the first respondentexamined himself as W.W. 1, the petitioner Corporation examined thevery same four witnesses as M.W.1 to M.W. 4. The Labour Court, byits order dated 07.01.2008, in both the I.Ds., held as follows:-"... that the charges, about mishandling of registersof godown and causing loss of stock of commodities formisappropriating such commodities, along with otherstaff, levelled against the petitioner – workmen underthe charge Memos dated 20.9.1984 and 16.5.1985 havebeen proved." 14.After the findings along with the original records were sentto this Court, the matter was listed and final arguments were heardin the writ petitions.15.Learned counsel for the first respondents pressed intoservice the following arguments:-(a)This Court, by its interim order dated 22.6.2007, ought notto have called for any new findings when the employer hadnot sought for any such relief before the Labour Court.(b)The Constitution Bench of the Supreme Court has held whileinterpreting Section 11-A of the I.D. Act that unless theemployer seeks for an opportunity in the form of a pleadingfound either in the counter statement or in any otherpetition before the arguments, the Labour Court has nopower to ask the parties to lead evidence afresh.(c)The Labour Court even in the order of remit, relied uponthe materials and documents which were referred to in theoriginal enquiry proceedings and no reliance can be placedon any materials, which were recorded in a vitiatedenquiry. https://hcservices.ecourts.gov.in/hcservices/ (d)The findings rendered by the Labour Court on remand, is notbased upon any record and the Labour Court had notdiscussed the entire evidence before rendering the finding.(e)In any event, the fact that the first respondents wereacquitted by the Criminal Court on the same charges, mustbe taken note of by this Court before imposing punishment.(f)The fact that another similarly charge-sheeted workman byname, A. Raghavan, Bill Clerk, was taken into service byorder dated 19.9.1996 (Ex. W.14) marked before the LabourCourt, was not considered before passing the impugnedorder.(g)The Quality Inspector D. Viswanathan for whose benefit, thetwo workmen had helped, directly approached this Courtagainst his dismissal along with recovery proceedings inW.P. Nos. 5050 of 1992 and 9393 of 1992 and the same wasset aside vide order dated 24.3.2000. The said order ofthe learned Judge was also upheld by the Division Bench inW.A. Nos. 706 and 707 of 2000 vide judgment dated26.9.2003. Therefore, the petitioners for merely havinggone to the Labour Court, should not be penalised. (h)One of the worker had also reached the age ofsuperannuation on 31.5.2003 during the pendency of theproceedings and leniency must be shown in their cases also.16.However, Mr. R.Arumugam, learned counsel appearing for thepetitioner Corporation, submitted that the long arm of this Court isvested with power under Article 226 of the Constitution is broadenough to call for findings from the Labour Court and allopportunities were given to the workmen. He also submitted thatthis being heavy loss to the Corporation, they should be dealt withseverely and no sympathy should be shown to them.17.Learned counsel for the petitioner relied upon the judgmentof the Supreme Court in U.P. State Road Transport Corporation v.Suresh Pal, [(2006) 8 SCC 108] and referred to the following passagefound in paragraph 7 of the said judgment:- Para 7:"Short question for our consideration in the presentcase is whether the punishment which has been modifiedby the learned Single Judge is justified or not? Thelearned Single Judge found that the punishmentawarded in the present case is disproportionate to theguilt of the delinquent. So far as the guilt of thepetitioner is concerned, in the domestic enquiry ithas been found that the petitioner is guilty of notissuing tickets to the twenty passengers and the samefinding of the domestic enquiry has been upheld by the https://hcservices.ecourts.gov.in/hcservices/ Labour Court and the High Court. The petitioner was aConductor and holding the position of trust. If anincumbent like the petitioner starts misappropriatingthe money by not issuing a ticket and pocketing themoney thereby causing loss to the Corporation thenthis is a serious misconduct. It is unfortunate thatthe petitioner was appointed in 1988 and in the firstyear of service he started indulging in malpracticethen what can be expected of him in the future. Ifthis is the state of affairs in the first year ofservice and if such persons are allowed to be let offwith the light punishment then this will be a wrongsignal to the other persons similarly situated.Therefore, in such cases the incumbent should beweeded out as fast as possible and the same has beenupheld by the Labour Court. We are firmly of the viewthat such instances should not be dealt with lightlyso as to pollute the atmosphere in the Corporation andother co-workers."18.In the light of the rival contentions, it must be statedthat in the absence of the employer (petitioner) pleading before theLabour Court seeking for opportunities to lead fresh evidence, theLabour Court has no power to record any evidence. 19.A Constitution Bench of the Supreme Court in Karnataka StateRoad Transport Corporation v. Lakshmidevamma [(2001) 5 SCC 433] hastaken the said view as can be seen from the following passages foundin paragraphs 18 to 20 of the said judgment:-Para 18:"There is one other reason why we should accept theprocedure laid down by this Court in Shambhu Nath Goyalcase. It is to be noted that this judgment wasdelivered on 27-9-1983. It has taken note of almost allthe earlier judgments of this Court and has laid downthe procedure for exercising the right of leadingevidence by the management which we have held isneither oppressive nor contrary to the object andscheme of the Act. This judgment having held the fieldfor nearly 18 years, in our opinion, the doctrine ofstare decisis requires us to approve the said judgmentto see that a long-standing decision is not unsettledwithout a strong cause.Para 19:For the reasons stated above, we are of the opinionthat the law laid down by this Court in the case ofShambhu Nath Goyal v. Bank of Baroda is the correct lawon the point.Para 20:In the present case, the appellant employer did notseek permission to lead evidence until after the LabourCourt had held that its domestic enquiry was vitiated. https://hcservices.ecourts.gov.in/hcservices/ Applying the aforestated principles to these facts, weare of the opinion that the High Court has rightlydismissed the writ petition of the appellant, hence,this appeal has to fail. The same is dismissed withcosts."20.Even earlier, the Supreme Court in Neeta Kaplish v.Presiding Officer, Labour Court and another [(1999) 1 SCC 517] hasheld that no part of the records found in a vitiated enquiry can berelied upon by the Labour Court and if the employer does not make therequest to lead fresh evidence, they will have to suffer for theconsequences. This position has been made clear by referring to thefollowing passages found in paragraphs 24 to 27 of the said judgment:-Para 24:"In view of the above, the legal position as emergesout is that in all cases where enquiry has not beenheld or the enquiry has been found to be defective, theTribunal can call upon the management or the employerto justify the action taken against the workman and toshow by fresh evidence that the termination ordismissal order was proper. If the management does notlead any evidence by availing of this opportunity, itcannot raise any grouse at any subsequent stage that itshould have been given that opportunity, as theTribunal, in those circumstances, would be justified inpassing an award in favour of the workman. If, however,the opportunity is availed of and the evidence isadduced by the management, the validity of the actiontaken by it has to be scrutinised and adjudicated uponon the basis of such fresh evidence.Para 25: In the instant case, the appellant had questioned thedomestic enquiry on a number of grounds including thather own answers, in reply to the questions of thePresiding Officer, were not correctly and completelyrecorded and that the Enquiry Officer was not impartialand was biased in favour of the respondent. It wasfurther contended that her own witnesses were notcalled and she was not given the opportunity to leadevidence. The Labour Court has discussed a few of thesegrounds but has not given any finding on the bias ofthe Enquiry Officer or the ground relating toincorrectly recording the statement of the appellant.The Labour Court, however, found that the enquiry wasnot fairly and properly held. It was after recordingthis finding that the Labour Court called upon theManagement to lead evidence on merits which it did notdo. https://hcservices.ecourts.gov.in/hcservices/ Para 26:Learned counsel for the appellant (sic respondent)contended that in spite of the direction by the LabourCourt to the respondent-Management to lead evidence, itwas open to the Management to rely upon the domesticenquiry proceedings already held by the EnquiryOfficer, including the evidence recorded by him, and itwas under no obligation to lead further evidence,particularly as the Management was of the view that thecharges, on the basis of the evidence already ledbefore the Enquiry Officer, stood proved. It was alsocontended that under Section 11-A, the Labour Court hadto rely on the “materials on record” and since theenquiry proceedings constituted “material on record”,the same could not be ignored. The argument isfallacious.Para 27:The record pertaining to the domestic enquiry would notconstitute “fresh evidence” as those proceedings havealready been found by the Labour Court to be defective.Such record would also not constitute “material onrecord”, as contended by the counsel for therespondent, within the meaning of Section 11-A as theenquiry proceedings on being found to be bad, have tobe ignored altogether. The proceedings of the domesticenquiry could be, and were in fact, relied upon by theManagement for the limited purpose of showing at thepreliminary stage that the action taken against theappellant was just and proper and that a fullopportunity of hearing was given to her in consonancewith the principles of natural justice. This contentionhas not been accepted by the Labour Court and theenquiry has been held to be bad. In view of the natureof objections raised by the appellant, the record ofenquiry held by the Management ceased to be “materialon record” within the meaning of Section 11-A of theAct and the only course open to the Management was tojustify its action by leading fresh evidence asrequired by the Labour Court. If such evidence has notbeen led, the Management has to suffer theconsequences."21.Even before this Court, the petitioners have not prayed thatthey should be given a fresh opportunity to lead evidence before theLabour Court. On the contrary, in ground No. (k) found in theaffidavit, they were insisting that the enquiry conducted by them wasfair and proper. 22.In the light of the above, this Court is unable to sustainthe interim order dated 22.6.2007 passed by this Court for which nobasis has been made by the petitioner. Further, when the employer https://hcservices.ecourts.gov.in/hcservices/ has no power to seek for leading any fresh evidence before the LabourCourt, in the absence of the pleading, this Court cannot provide anysuch opportunity in exercise of its power under Article 226 of theConstitution. 23.It must be stated that even though the interim order passedby this Court was given effect to by the parties, such an interimorder cannot decide the outcome of the final order to be passed inthe main writ petition. This position of law has been clarified bythe Supreme Court in State of Punjab and others v. Dev Raj andothers [2007 (8) SCC 302] and it once again reiterated the same view.The opinion of Dr. Arijit Pasayat, J. as found in paragraph 9 of thesaid judgment may be reproduced usefully:Para 9:".... It is a settled position in law that whiledeciding the dispute finally the court ought not to beinfluenced by the fact that some interim arrangementshad been made. Such interim arrangements are alwayssubject to the outcome of the main dispute...."24.The Labour Court while rendering the findings called for bythis Court, did not refer to all the material aspects of the case andhas made a superficial finding. There is no discussion withreference to the oral evidence of the parties and, therefore, thisCourt has no hesitation to reject the findings submitted by theLabour Court pursuant to the interim order passed by this Court. 25.This leaves out the only question regarding the validity ofthe impugned Awards challenged in both the writ petitions. TheLabour Court correctly held that there was no legal evidence in the domestic enquiry and the findings are also perverse. Italso came to the correct conclusion that in the absence of anypleadings, no opportunity to lead fresh evidence can be given to theemployer.26.Apart from these facts, as correctly contended by thelearned counsel for the first respondents, this Court in the case ofD. Viswanathan, Quality Inspector, quashed the proceedings of boththe dismissal and the recovery proceedings and that had become final.Even in respect of one A. Raghavan, Bill Clerk, who was similarlycharge-sheeted and was subsequently let off, there is no satisfactoryexplanation from the petitioner Corporation. Added to the same, thefirst respondents were also acquitted by the Criminal Court onsimilar charges.27.Under the above said circumstances, this Court finds thatthere are no infirmities or illegalities in the impugned Awardschallenged in these two writ petitions. Accordingly, both the writpetitions fail and they stand dismissed. However, there will be noorder as to costs. The petitioner Corporation is directed to https://hcservices.ecourts.gov.in/hcservices/ implement the Awards of the Labour Court within a period of eightweeks from the date of receipt of a copy of this order. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.griToThe Labour Court Vellore + 1 CC To Mr.S.Venkarataraman, Advocate SR NO.27982+ 1 CC To Mr.A.Arumugam, Advocate SR NO.27632,27631+ 1 CC To M/s. Sai, Bharath & Ilan, Advocate SR NO.27593 Common Order in W.P. Nos. 4911 and 14633 of 1998SSV(CO)SRA(13/06/2008)