Canara Bank by its General Manager,I.R. Section, Head Office,112, J.C.Road,Bangalore-2... v. The Presiding Officer, Industrial Tribunal, Chennai

In the High Court of Judicature at MadrasDated: 29.01.2008Coram:The Honourable Mr.Justice ELIPE DHARMA RAOandThe Honourable Mr.Justice S.R.SINGHARAVELUWrit Appeal No.572 of 2002Canara Bank by itsGeneral Manager,I.R.Section,Head Office,112, J.C.Road,Bangalore-2...Appellant/Petitioner..vs..1. The Presiding Officer, Industrial Tribunal, Chennai.2. N.Krishnamoorthy..Respondents/RespondentsWrit Appeal filed under Clause 15 of the Letters Patent, againstthe Order passed in W.P.No.1313 of 1996 dated 14.12.2001. Petitionfiled under Article 226 of the constitution of India to issue a writ ofCertiorari call for the records of the 1st respondent in I.D.No.33/92and quash its Award dated 19.9.95.For Appellant : Mr.Karthick for M/s.T.S.Gopalan & Co.,For Respondents : Mr.N.G.R.Prasad for M/s.Row & Reddy for R2 JUDGMENTS.R.SINGHARAVELU, J.,The writ appeal is directed against the order of the learned singleJudge dated 14.12.2001 in W.P.No.1313 of 1996.2. The case of the appellant/petitioner is that the second https://hcservices.ecourts.gov.in/hcservices/ respondent employee who was working as a Shroff, Uthamapalayam Branch ofthe Bank was charge sheeted for alleged misconduct within the meaning ofChapter-XI Regulation 3 Clause(I) of the Canara Bank Service Code. Thecrux of the charge is that the second respondent by making wrongfulentries in the record, had caused cash shortage of Rs.50,000/- and hadmisappropriated the said amount. The criminal complaint which was filedagainst him ultimately ended in acquittal by order dated 16.12.1988.Subsequently, disciplinary proceedings commenced and charge memo wasissued on 31.01.1989. An enquiry was conducted and on the basis of theEnquiry Officer's findings and recommendations, the Deputy GeneralManager being the Disciplinary Authority dismissed the second respondentfrom service. Aggrieved by the same, the employee raised a dispute inI.D.No.33 of 1992. Though the Industrial Tribunal, Chennai, by itsorder dated 19.09.1995, found that the charges were established;however, in the facts and circumstances of the case, the punishment ofdismissal was set aside and the management was directed to reinstate himin service without continuity of service and without backwages andimposed a punishment of withholding four increments with cumulativeeffect. Hence, the bank filed the writ petition to quash the awardpassed by the Tribunal.3. After hearing both sides and perusing the records, the learnedJudge dismissed the writ petition. Aggrieved by the same, thepetitioner bank filed the present appeal.4. Heard the learned counsel for both sides.5. The second respondent, by name, Krishnamoorthy was working as aShroff in the Uthamapalayam Branch of Canara Bank. He was chargesheeted for alleged misconduct. The charge is that the 2nd respondent,by making wrongful entries in the record, had caused cash shortage ofRs.50,000/- and also had misappropriated the same. A criminal complaintfiled against him in this regard ended in acquittal by order dated16.12.1988. Subsequently, disciplinary proceedings commenced and chargememo was issued on 31.01.1989. The Deputy General Manager was thedisciplinary authority. He, accepting the Enquiry Officer's reports andfindings, had dismissed the second respondent from service.6. Aggrieved over the same, the second respondent employee raised adispute in I.A.33 of 1992. Though the Industrial Tribunal, by its orderdated 19.09.1995 found that the charges were established, the punishmentof dismissal was set aside and the management was directed to reinstatehim without continuity of service and without backwages and imposed thepunishment of withholding four increments with cumulative effect.7. After sustaining the charges as proved and imposing punishmentof stoppage of four increments with cumulative effect upon setting asidethe order of dismissal, the order of the Tribunal was grounded on forthe following charges: https://hcservices.ecourts.gov.in/hcservices/ (i) The delinquent belongs to Scheduled Caste;(ii) The bank did not lose anything because he had repaid theamount;(iii) Unemployment in our country;(iv) The delinquent had already suffered mental torture;(v) There will be no chance for him to get another job if he isdismissed on the ground of misappropriation;(vi) Punishment of dismissal at a young age is very severe;(vii) He had unblemished record of service prior to theincident.8. As against the said award of the Tribunal, the employer CanaraBank has preferred W.P.1313 of 1996 in order to quash the said awarddated 19.09.1995.9. The learned single Judge, while dealing with the above reasonsgiven by the Tribunal, has found that except the last ground No.(vii),all other reasons given by the Tribunal are perverse and unsustainableto justify a person, who is found guilty of misappropriation for beingreinstated in service. It was further held that the exercise ofdiscretion by the Tribunal was positively unreasonable.10. The Tribunal ultimately held, among others, that the orderdismissing the employee has to be set aside and the entire proceedingshave to be started afresh at the stage of Enquiry Authority giving showcause notice to the delinquent again as regards his recommendations ofpunishment. Since the proceedings relate to action which was initiatedin the year 1987, the learned single Judge thought that no usefulpurpose would be served by recommencing the proceedings once again after14 years. Therefore, the learned single Judge found that though thereasons given by the Tribunal for interfering with the quantum ofpunishment were not proper, yet taking into account the employee hadunblemished earlier service, it was held that the bank may use itsdiscretion and post him in any equivalent post which does not involveany sensitive work or handling monetary matters. The following are thereasons given for the above decision taken by the learned singleJudge;(I) The Enquiry Officer, apart from rendering his finding, hadgone a step further and recommended the punishment ofdismissal.(II) Clause 11 of Specific Code of Service provides that inawarding punishment, the authority shall take into account thegravity of the misconduct, previous record of the employee andany other aggravating or extenuating circumstances which mayexist. The learned single Judge has found that in this case,there is no dispute about the fact that the disciplinaryauthority had not complied with this requirement.(III) The observation in (1996)(D) SCC 364 (State Bank ofPatiala ..vs.. S.K.Sharam that principles of natural justice https://hcservices.ecourts.gov.in/hcservices/ would assume importance only in the event of prejudice beingcaused to the party, will not apply to the facts of the presentcase as the said requirements are embodied in the serviceconditions nor has the delinquent waived those requirement.While on these above points the order of dismissal suffered, it was heldthat there is no need for re-enquiry after 14 years from the initiationof the proceedings i.e.1987. Therefore, the learned single Judgedirected the employer to post the employee in any equivalent post,which does not involve any sensitive work or handling monetary matters.11. Mr.Karthick, learned counsel appearing for the appellant bankvehemently contended that honesty is required in its full sense of theterm, especially in banking industry and when a Shroff like the 2ndrespondent, who is to handle public money was found guilty of the chargeof misappropriation to the tune of Rs.50,000/-, it is quite dangerous toreinstate him, especially when both Tribunal as well as the learnedsingle Judge found that factually the misappropriation was provedagainst the said employee.12. Mr.N.G.R.Prasad, learned counsel appearing for the 2ndrespondent submitted that right from the beginning it is a total denialof the charge of misappropriation. Simply because he has not preferredany proceedings against the award in I.D.No.33 of 1992, he is notestopped from submitting his arguments regarding his case that thecharge has not been legally proved against him.13. So far as the act of misappropriation is concerned, as per theevidence of the management witness one Kannan, the brother of thepetitioner, came to the bank on the date of alleged occurrencei.e.26.11.1987, got the amount of Rs.50,000/- and deposited in'Kshemanidhi cash certificate with Corporation Bank, Namakkal on30.11.1987. Copy of the said Certificate Ex.M.E.24 was marked in theenquiry proceedings, which was objected to. Relying upon theobservation made in 1987(2) L.L.J 404, the arguments advanced on theside of the employee that reliance cannot be placed on copies of fixeddeposits and therefore, Ex.M.E.24 is to be eschewed. But the Tribunalheld that the original is not in the custody of the issuing bank or thatof the employer in this case; when it is found only in the custody ofKannan, the brother of the petitioner, the latter ought to have examinedhis brother, who would either produce the original or be competent todeny the copy through Ex.ME.24. Therefore, the evidence of Ex.ME.24-thecopy of the Nidhi Certificate was accepted. Even accepting that Kannan,the brother had deposited a sum of Rs.50,000/- on 30.11.1987 in theCorporation Bank, Namakkal, unless it is proved that, that money wasobtained from the delinquent employee, Krishnamoorthy, then no case ofmisappropriation will get established. 14. Again, simply because the delinquent has subsequently remitted https://hcservices.ecourts.gov.in/hcservices/ the shortage amount of Rs.50,000/- into the employer Bank, that does notmean that he had admitted the alleged offence of embezzlement. Allthrough the proceedings of the domestic enquiry, he was denying thecorrectness of the documents and the corrections supplied thereon.Therefore, any attempt on his part in avoiding the criminal proceedingsrunning the risk of being getting arrested by the police on complaint bythe employer cannot be labelled as an admission on his part. So, theact of subsequent remittance of the shortage amount may not be taken asan admission on his part. There can also be no conviction in thecriminal proceedings based upon admission especially, evidence in proofof the offence is lacking. Even in a case of domestic enquiry, wherethe theory of preponderance of probability is applied, it is not as ifguilt could be admitted based upon which service can be terminated.There should be enough material against the delinquent in proof of thecharge levelled against him. Thus, when there is no satisfactoryevidence for alleged delivery of amount of Rs.50,000/- by the delinquentto his brother Kannan, the latter's deposit even if proved inCorporation Bank, Namakkal would not constitute the proof of the charge.Similarly, as mentioned earlier the subsequent remittance may not alsogo against the delinquent. 15. Mr.N.G.R.Prasad, learned counsel pointed out that the chargeitself is only for shortage of money and not the charge ofmisappropriation and submitted that the punishment cannot go beyond thescope of charges. However, emphasis was laid on the point that thecharges have not at all been proved; and that under the guise ofreappraisal of evidence, this Court cannot become blind in respect ofmechanical manner in which the Tribunal has viewed the evidence onrecord on the side of the management; especially in this case, where thedelinquent has left the bank premises at 5.00 PM on 26.11.1987, the dateof occurrence, after handing over the amount at collection in cash inthe said bank, namely, Rs.2,47,000/-. Subsequently, it was found thatthere was shortage of Rs.50,000/- and so at about 8.00 PM he was takenfrom a cinema theatre; in the meantime even according to the evidence onthe side of the management, the Manager had supplied correction inEx.M.E.4 as if it is Rs.2,97,000/-. Ex.M.E.2 debit slip and Ex.M.E.4receipt for the remittance of the cash to the Currency Chest were saidto have been prepared by the Clerk Jayakumar, who was examined as M.W.3.In Ex.M.E.4 there was omission to mention 10 rupee denomination. Thatwas subsequently filled up by the Manager after the currency chestpeople reported that there was a omission of 10 rupee denomination.Likewise, Ex.M.E.4 receipt for the remittance of the cash to thecurrency chest prepared by none else than the Clerk Jayakumar alsocontained the figure of Rs.2,97,000/-, which was written in words asRs.2,47,000/-. The very same Clerk Jayakumar states that he has writtenEx.M.E.2 and 4 only as per Ex.M.E.3 which was the denomination slipprepared by the delinquent; wherein also in figure it is Rs.2,47,000/-and in words it is Rs.2,97,000/-. Who has supplied that correction isnot known. In this context, it is to be emphasized that the delinquent https://hcservices.ecourts.gov.in/hcservices/ denied that he supplied such corrections in Ex.M.E.3. Then the questionarises as to why the clerk Jayakumar, who claims to have writtenEx.M.E.2 and 4 keeping down Ex.M.E.3 which was prepared by delinquent,has not applied his mind about the two set of figures given in Ex.M.E.3.Any normal prudent person in the place of clerk Jayakumar should haveimmediately brought the correction in Ex.M.E.3 indicating two figures tothe Manager, which has not been done so. This would go to probabilisethat at the time when clerk Jayakumar received Ex.M.E.3 from thedelinquent, it contained no correction; and it get strengthened the factthat two figures in Ex.M.E.4 were not scribed by clerk Jayakumar and hewrote only one figure that was supplied correction by the Manager at thelater point of time. Therefore, the origin of Ex.M.E.4 contained onlyone figure. Inasmuch as it was a replica of Ex.M.E.3 naturallayEx.M.E.3 should have contained only one figure and that is why nocomplaint was made by clerk Jayakumar to the Manager at the time of hisreceipt of Ex.M.E.3. Thus, the probability is that Ex.M.E.3 would besupplied with two figures only at a later point of time and who suppliedis still a mystery. 16. Another question that would arise is that although Ex.M.E.2and 4 were prepared by Clerk Jayakumar and the second figure wassupplied by the manager as a correction in Ex.M.E.4, then why shouldJayakumar himself make two figures in Ex.M.E.2. Now, the answer made byJayakumar before the domestic enquiry was that he prepared Ex.M.E.2 and4 on the basis of rough denomination slip given by the delinquentthrough Ex.M.15, where mention was made as Rs.2,97,000/-. Ex.M-15 issaid to be the payment waste entry. It was claimed to have been at thehandwriting of the delinquent. Even though the denial was made by him,no scientific proof is available to show that Ex.M-15 was prepared bydelinquent himself.17. Thus, explanation given on the side of the management was thatoriginally delinquent gave Ex.M.E.3 containing figure of the amount ofRs.2,47,000/-, based upon which Ex.M.E.2 and 4 were prepared by clerkJayakumar; that subsequently when omission of 10 rupee denomination wasfound and reported by currency chest people, the manager suppliedcorrection in Ex.M.E.4 as Rs.2,97,000/-; that after finding Ex.M-15 thepayment waste entry, wherein the delinquent seems to have made an entryof Rs.2,97,000/-, then the other person in the office have correctedcorresponding supply in Ex.M.E.2 also. Now, the whole question thatrevolves round is as to who has written Ex.M.15, so that it could becopied down in other document like Ex.M.E.2. Even here scientific proofis lacking against the second respondent workman.18. One more important context is that when a particular amount istendered by delinquent to the currency chest officials and when theyhave received the same at 5.00 PM is it proper on their part to tell at8.00PM and especially when the delinquent had left the premises even at5.00 PM that there is shortage. It is for them to have verified the https://hcservices.ecourts.gov.in/hcservices/ amount and received from the delinquent. Once they received so, theyshould not fumble upon the quantum that was received and express it insupplying some corrections in record. Had they put their hands downimmediately when receipt of money was made from delinquent and if it wascounted in his presence and verified, then one can fix the liabilityupon the delinquent. When that was not done and some corrections werealso admitted in the records regarding the quantum that was received,then they themselves would give a room for any delinquent to say that hehas remitted the correct amount and somebody was responsible for theshortage. When this kind of probability comes into picture, it is verydifficult to fix the liability on one individual. Before ever a criminalliability is fastened upon an individual, proof is required and evenwhat is contemplated in domestic enquiry is only preponderance of theprobability, all the probability should be such that they indicate theguilt of the delinquent and only that the latter. When once theprobability goes to indicate somebody else also, then the means in andby which one was squarely fixed cannot be said to be correct.19. Learned counsel for the appellant bank relied onP.D.Agarwal ..vs.. State Bank of India and others ((2006) 8 SCC 776),wherein it was held that "the validity of the disciplinary proceedingand/or justifiability thereof on the ground of delay or otherwise hadnever been raised by the appellant before any forum. It was not his caseeither before the Appellate Authority or before the High Court that byreason of any delay in initiating the disciplinary proceeding he hadbeen prejudiced in any manner whatsoever. It may be true that delayitself may be a ground for arriving at a finding that enquiry proceedingwas vitiated in the event it is shown that by reason thereof thedelinquent officer has been prejudiced, but no such case was made out".But, in the present case, there was no delay in initiating disciplinaryproceedings and, hence, this decision is not applicable to the case onhand.20. Further, he relied on a judgment in SLP (c) No.14491 of 2001,(UCO Bank, Chandigarh & others ..vs.. Hardev Singh), wherein it wasobserved as follows:"One expects the higher standards of honesty and integrity.When admittedly small amounts deposited by the bank'scustomers do not find their way into the coffers of the bankbut land up in the pocket of an employee, to say that thecharge is not serious or the embezzlement is not intentionalwould be gross understatement, the least to say. The chargeframed was serious and normally punishment of dismissal fromservice would have been logical course to take. Keeping inview the past service of the respondent and other relevantfactors into consideration, the punishment of removal only wasimposed. The Bank, in a sense, has been more then consideratetowards the respondent because with the punishment of removal https://hcservices.ecourts.gov.in/hcservices/ being imposed pensionary benefits etc.are not denied. Thedecision of the High Court to direct the reinstatement wasuncalled for". 21. Reliance is placed upon the decision Suresh Pathrella ..vs..Oriental Bank of Commerce (2006-AIR SCW 573-SC), wherein it was held asfollows:"....every officer of the bank at all times take all possiblesteps to protect the interest of the bank and discharge hisduties with utmost integrity, devotion and diligence and donothing which will be unbecoming of a bank officer. It is acase of loss of confidence in the officer by the bank. In sucha situation, it would be a futile exercise of judicial reviewto embark upon the decision of the disciplinary authorityremoving the officer from service, preceded by an enquiry, andto direct the bank to take back the officer in whom the bankhas lost confidence, unless the decision to remove the officeris tainted with malafide, or in violation of principles ofnatural justice and prejudice to the officer is made out". 22. In the case of Regional Manager, U.P.SRTC..vs.. Hoti Lal (2003)3 SCC 605, the Supreme Court has held as follows:"If the charged employee holds a position of trust wherehonesty and integrity are inbuilt requirements offunctioning, it would not be proper to deal with the matterleniently. Misconduct in such cases has to be dealt withiron hands. Where the person deals with public money or isengaged in financial transaction or acts in a fiduciarycapacity, the highest degree of integrity and trustworthinessis a must and unexceptionable. Judged in that background,conclusions of the Division Bench of the High Court do notappear to be proper. We set aside the same and restore orderof the learned single Judge upholding order of dismissal".23. On the other hand, learned counsel for the second respondentworkman relied on Asstt.General Manager, SBI ..vs.. Thomas Jose andanother ((2000) 10 SCC 280) wherein it was held that, "A bank deals with public moneys. Misappropriation by anemployee of a bank is misappropriation of public moneys andmust be treated very differently. Misconduct such as thiscannot be treated as lightly as it has been done. We thinkthat the appropriate order should at least have been ofreinstatement without back wages plus a direction that thefirst respondent would not be entitled to any increments for asubstantial period with all the cumulative consequences ofsuch an order". https://hcservices.ecourts.gov.in/hcservices/ This decision is applicable to the case on hand in all fours.24. As stated earlier, the Tribunal has set aside the punishment ofdismissal and directed the management to reinstate the second respondentwithout continuity of service and without backwages and imposed thepunishment of withholding four increments with cumulative effect. Thelearned single Judge, while confirming the order of the Tribunal, hasobserved that the bank may use its discretion and post him in anyequivalent post which does not involve any sensitive work or handlingmonetary matters. We are in full agreement with the order passed by thelearned single Judge.25. For the foregoing reasons and taking into consideration thedecision of the Apex Court in (2000) 10 SCC 280 (cited supra), we are ofthe considered view that there is no reason to interfere with the orderof the learned single Judge. Accordingly, the writ appeal is dismissed.No costs.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarglToThe Presiding Officer,Industrial Tribunal,Chennai.+1cc to Mr.T.S.Gopalan & Co., Advocate Sr 3944+1cc to M/s.Row & Reddy, Advocate Sr 3699CU (CO)km/13.2. Writ Appeal No.572 of 2002