Writ Petition No. 22989 of 2012 · The High Court
Case Details
- 1 - NC: 2025:KHC:10009 WP No. 22989 of 2012 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 22989 OF 2012 (L-RES) BETWEEN: SRI A R RANGANATH AGED ABOUT 48 YEARS S/O LATE M S RAMA RAO NO 37, 5TH MAIN,4TH CROSS THYRAGARAJANAGAR BANGALORE-560028. …PETITIONER (BY SRI. ABHINAV R .,ADVOCATE) AND: 1. THE CANARA BANK A GOVT OF INDIA UNDERTAKING NO 112,J C ROAD, BANGALORE-560002 REPRESENTED BY ITS GENERAL MANAGER(P). 2. THE GENERAL MANAGER AND APPELLATE AUTHORITY CANARA BANK,NO 112,J C ROAD, BANGALORE-560002. 3. THE DEPUTY GENERAL MANAGER AND DISCIPLINARY AUTHORITY CANARA BANK, NO 112, J C ROAD, BANGALORE-560002. (BY SRI. P UDAYASHANKAR RAI.,ADVOCATE FOR R1 TO R3) …RESPONDENTS Digitally signed by VANAMALA N Location: High Court of Karnataka - 2 - NC: 2025:KHC:10009 WP No. 22989 of 2012 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 19.9.05 OF THE DISCIPLINARY AUTHORITY IE., THE R3 AWARDING COMPULSORY RETIREMENT TO THE PETITIONER AT ANNX-F; QUASH THE ORDER DATED 7.8.06 OF THE APPELLATE AUTHORITY IE., THE R2 REJECTING THE APPEAL AS PER ANNX-G; QUASH THE ORDER OF THE INDUSTRIAL TRIBUNAL-CUM-LABOUR COURT DATED 10.1.12 IN C.R. NO.136/07 VIDE ANNX-J. THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD ORDER The petitioner, while working as a Clerk with M/s Canara Bank [the respondent – which is referred to as ‘the Bank] at its Malur Branch, is served with a Charge Memo under the Canara Bank Service Code, and this has ultimately resulted in the Disciplinary Authority's Order dated 19.09.2005 directing his compulsory retirement. The petitioner has challenged the Disciplinary Authority's Order dated 19.09.2005 - 3 - NC: 2025:KHC:10009 WP No. 22989 of 2012 in appeal, but unsuccessfully. The Appellate Authority has dismissed the petitioner's appeal by the Order dated 07.08.2006. The petitioner is also unsuccessful in the reference in CR No.136/2007 on the file of the Central Government Industrial Tribunal cum Labour Court, Bengaluru [for short, 'the Tribunal']. The reference is by the Central Government1 as contemplated under Section 10[1][d] of the Industrial Disputes Act, 1947 [for short, 'the ID Act']. 2. The petitioner was working as a 'Clerk' with the Bank at its Malur Branch between 16.08.1999 and 14.10.2004, and he is kept under suspension during this period. The petitioner is subsequently served with the Charge Memo, and the sum and substance of the imputations are as follows: • The petitioner has "deliberately caused a shortage of cash of Rs.10,000/- on 1 The Order of Reference is dated 10.08.2007 in No.I- 12012/70/2007 [IR-BII] - 4 - NC: 2025:KHC:10009 WP No. 22989 of 2012 02.09.2004 with an ulterior motive" and is therefore guilty of gross misconduct as is contemplated under Regulation 3[j] and [m] of Chapter XI of the Canara Bank Service Code. • The petitioner has indiscriminately discounted thirty cheques issued in his name and in the names of others for a sum of Rs.2,20,600/- and he has intentionally removed the discounted instruments from the Branch records to prevent presentation of the cheques in time to gain pecuniary benefits. He has indulged in, ‘unfair practice of discounting of cheques for accommodation" and is guilty of gross misconduct under Regulations 2[A][i] and 3[m] of the Canara Bank Service Code. 3. The petitioner and the Bank have examined their respective witnesses in the inquiry - 5 - NC: 2025:KHC:10009 WP No. 22989 of 2012 which has followed the service of Charge Memo, and they have also marked certain documents as exhibits. The Inquiry Officer has filed a Report concluding that
Legal Reasoning
the first Charge against the petitioner is not proved, but the Inquiry Officer has opined that the petitioner is guilty of the second Charge. The Disciplinary Authority, in its tentative findings dated 30.06.2005, has disagreed with the Inquiry Officer's opinion on the first Charge but has agreed with the Inquiry Officer's opinion on the second Charge. 4. The petitioner is served with a copy of the Inquiry Officer's Report with tentative findings, and the petitioner has filed his response dated 25.07.2005. The Disciplinary Authority, reiterating the tentative findings as aforesaid, has found the petitioner guilty of even the first Charge offering him reasons to justify such a conclusion. However, the Disciplinary Authority has not separately reasoned on the second Charge. The Disciplinary Authority - 6 - NC: 2025:KHC:10009 WP No. 22989 of 2012 vide its Order dated 19.09.2005 has imposed the punishment of compulsory retirement. 5. The Appellate Authority, considering the petitioner's grievance with the Disciplinary Authority's Order dated 19.09.2005, has dismissed the appeal by its Order dated 07.08.2006. The Appellate Authority’s conclusions are summarized as follows. [i] The petitioner on a previous occasion had reported short payment, and he was cautioned without assigning Cash Duties from 28.08.2004, and it was only because of certain administrative exigencies he was assigned cash duties on 02.09.2004. [ii] The petitioner has attempted to explain shortage of cash stating that he had overpaid the customers who presented Exhibits-D1 and D2 for cash payment of Rs.530/- and Rs.1,599/- relying upon the - 7 - NC: 2025:KHC:10009 WP No. 22989 of 2012 details of denominations entered on the reverse of one of these two cheques, but the amount covered under these instruments will be only in sum of Rs.9,900/- and the petitioner has not explained the shortfall of Rs.100/-. [iii] The petitioner’s explanation for the shortage of cash declared by the petitioner on 02.09.2004 cannot be examined in isolation and it must be considered in the light of his admissions and specific circumstances. When so considered, the deliberate act of the petitioner is established. The punishment of compulsory retirement is commensurate with the gravity of the proved misconduct. 6. Upon the Reference by the Central Government, the Tribunal, while examining whether the inquiry against the petitioner is fair and proper, - 8 - NC: 2025:KHC:10009 WP No. 22989 of 2012 has permitted both the petitioner and the Bank to complete their pleadings permitting them to complete their evidence. The Bank has examined its Inquiry Officer as MW-1 and marked Exhibits-M1 to M17 which are essentially the Charge Sheet dated 26.02.2005, the records of the inquiry proceedings, the Inquiry Officer's finding, the Disciplinary Authority’s tentative findings and the Orders resulting in the Appellate Authority's Order dated 07.08.2006. The petitioner has not examined his witness nor marked any document, but he confronted the copies of the instruments dated 30.08.2004 and 01.09.20042 before the Investigating Officer in the cross examination. These exhibits are also part of the documents exhibited on behalf of the respondents. 7. The Tribunal by its Order dated 08.04.2011 has found that the inquiry against the petitioner is fair, and the Tribunal has thereafter 2 The petitioner relies upon as per Exhibits.D1 and D2 to justify that he cannot be accused of shortage of cash. - 9 - NC: 2025:KHC:10009 WP No. 22989 of 2012 heard the petitioner and the Bank's representatives for a decision by its impugned Order dated 10.01.2012. The Tribunal's decision is in answer to the two questions framed for its consideration. The first question is whether the Disciplinary Authority is justified in reversing the Inquiry Officer's Opinion on Charge No.1, and the next question is whether the punishment of compulsory retirement is proportionate to the Charge proved. 8. The Tribunal has recorded that the petitioner, in his Explanation dated 18.03.2005 to the first Charge, has admitted that there was a shortage of cash of Rs.10,000/- on 02.09.2004 and that he had no alternative but to request the Branch- In-Char to debit this amount in the Sundry Assets Register, and the Tribunal has opined that this amounts to an admission. The Tribunal has also observed that admittedly there were allegations of short payments on 28.04.2003, but these - 10 - NC: 2025:KHC:10009 WP No. 22989 of 2012 proceedings were closed because of an amicable settlement. 9. On the petitioner's defense that the shortage of cash was during the day when he had dealt with cash of Rs.10,56,484.96/- and that he had made excess payments as against instruments for Rs.530/- and Rs.1,599/- [as per Exhibits.D1 and D2], the Tribunal has concluded that this defense is an afterthought observing that the petitioner has not offered this explanation earlier, or in his response to the Charge Memo dated 18.03.2005. The Tribunal has opined that the Disciplinary Authority has rightly concluded that the details of denominations as mentioned in Exhibit.D2 are in a different ink and that the amount as per such denominations only add up to Rs.9,900/-. 10. The Tribunal, on the punishment of compulsory retirement being commensurate with the gravity of Charges, has relied upon the Disciplinary - 11 - NC: 2025:KHC:10009 WP No. 22989 of 2012 Authority's finding on the second Charge [.i.e., deliberately withholding the cheques discounted from being sent to collection to gain an undue advantage] to opine that the petitioner, if continued in service, will misuse his position and defame the Bank, and as such, there is no reason for interference with the punishment of compulsory retirement.
Legal Reasoning
11. Sri Abhinav R, the learned counsel for the petitioner, submits that the petitioner is found guilty of the first Charge [the shortage of cash at the closure of the day on 02.09.2004] because [i] of the statement by the Manager [MW-1] that the petitioner on that day had stepped out of the Bank premises in the evening for some time, [ii] the inference from this statement is that the petitioner had gone out to collect the cash declared as shortage and debited to sundry assets and [iii] he did not make a statement about excess payment to the payees who had drawn/ issued Cheques as per Ex.D1 and Ex.D2 in his - 12 - NC: 2025:KHC:10009 WP No. 22989 of 2012 Statement to the Investigating Officer on 14.09.2004. The learned counsel’s arguments in these regards are as follows. On the Manager's Statement: 11.1 The Manager has indeed stated that the petitioner stepped out in the evening on 02.09.2004 [as per Exhibit-M38], but in her cross examination she has categorically admitted she was not aware of the petitioner going out in search to contact the customer to whom the excess credit is allegedly made, and that this statement in the cross examination entirely undermines the first circumstance that is held against the petitioner. On the adverse inference 11.2 The Inquiry Officer and the Disciplinary Authority have drawn inference against the petitioner because he had an opportunity to explain the shortage of cash on 14.09.2004 when the Investigating Officer visited the Branch for the second - 13 - NC: 2025:KHC:10009 WP No. 22989 of 2012 time as part of the investigation but the petitioner has volunteered no information. If indeed the petitioner knew that he would have to meet the allegation that he had deliberately made excess payments as against Exhibits.D1 and D2, he would have volunteered such information. The Tribunal has overlooked the fact that the petitioner was not served with the Charge Memo on the day the Investigation Officer took the petitioner’s statement, and the petitioner could not have foreseen or predicted that he would be served with Charge Memo even on the ground of cash shortage. On the defense based on the Cheques Ex D 1 and 2 11.3 The Disciplinary and Appellate Authorities [and the Tribunal] having observed that though the petitioner relies on Exhibits.D1 and D2 to justify that there was excess payment to the concerned payee resulting in the shortage of cash, this statement is neither part of his reply nor suggested to the Manager who has certified the debit in the sundry assets. - 14 - NC: 2025:KHC:10009 WP No. 22989 of 2012 However, the petitioner has confronted Exhibits.D1 and D2 to the Investigating Officer because he is examined in the last and he has verified the documents to justify the accusation of the shortage of cash. 11.4 On this Charge, Sri Abhinav R next argues that the defense must be examined in the light of the facts that the Manager has admitted in her cross examination that she has approved the debit in the Sundry Assets Ledger after all efforts were made to verify the reasons for shortage of cash at the closure of the day, and that on that day, the cash transaction was more than Rs.9,50,000/-. The learned counsel also submits that inference is wrongly drawn against the petitioner only because the denomination mentioned in the reverse of Exhibit.D2 is Rs.9,900/- when admittedly shortage of cash is Rs.10,000/- and shortfall of Rs.100/- is not accounted, but this - 15 - NC: 2025:KHC:10009 WP No. 22989 of 2012 inference is not justified given the volume of the transaction on the particular date. On the second Charge: 11.5 Sri Abhinav R submits that the Charge essentially has two parts viz., the discounting of about thirty cheques drawn by his wife, his brother, his acquaintance/s for a total sum of Rs.2,20,600/- and ensuring that the discounted cheques are intentionally removed from the Bank records to prevent presentation of the cheques in time to gain pecuniary benefits. However, if the petitioner has discounted the cheques in terms of the Regulation, there could be no allegation of misconduct and that though the Management examined as many as seven witnesses [including the Manager and the Investigating Officer], none of them have spoken about the petitioner having played any part in the delay in the cheques presented and there is no evidence whatsoever about the petitioner intentionally removing the discounted cheques. - 16 - NC: 2025:KHC:10009 WP No. 22989 of 2012 12. Sri P Udayashankar Rai, the learned counsel for the Bank, on the other hand, submits that the Inquiry Officer has rightly considered the circumstances marked against the petitioner [i] that the Manager has stated that the petitioner had stepped out of the Bank at the end of the day for some time; [ii] that there was an earlier allegation of excess payment resulting in the petitioner being denied all the duties of a Cashier and this incident being resolved amicably by intervention of customers and others; [iii] that the petitioner has not offered any explanation whatsoever for the details of the denomination being entered in an ink that is different from the ink that is otherwise found on the instrument; [iv] that the excess amount is mentioned as Rs.9,900/- but the shortage of cash is Rs.10,000/-. The learned counsel submits that the Authorities and the Tribunal have rightly examined the evidence in arriving at a consistent decision; that - 17 - NC: 2025:KHC:10009 WP No. 22989 of 2012 this Court under Article 226 of the Constitution of India cannot re-appreciate the evidence. 12.1 Sri P Udayashankar Rai, on the second Charge, without disputing that the Bank’s Regulations enable an employee to discount cheques and that there is no evidence against the petitioner removing any instrument as is alleged, submits that the accusation against the petitioner is that he has misused the discounting facility taking advantage of his office. The learned counsel argues that this part of the Charge is proved with the petitioner admitting that he has indeed discounted the cheques drawn by his wife/her proprietary concern/co-employee/his brother and that only because the Regulations enable discounting, it cannot be construed that the petitioner could have resorted to the facility to draw for himself an advantage which is not contemplated under the Regulations. - 18 - NC: 2025:KHC:10009 WP No. 22989 of 2012 13. These rival submissions are considered answering these questions. [a] Whether the decision to retire the petitioner compulsorily is based on the relevant facts and the evidence. [b] If the answer to this question is in negative, what order will be just and proper in the facts and circumstances of the case? 14. It is settled that the writ Courts will interfere even with a Labour Court’s finding on fact in exercise of jurisdiction under Article 226 of the Constitution of India when it is established that such decision is perverse or when wrong legal principles are applied or when wrong questions are posed for consideration or when relevant factors have not been taken into consideration or when the findings are arrived based on irrelevant facts or for extraneous considerations. In this context, this Court must refer - 19 - NC: 2025:KHC:10009 WP No. 22989 of 2012 to the decision of the Apex Court in 'State of Haryana and Others v. Devi Dutt and Others'3. 14.1 The material facts, be it on first or second Charges, are admitted. The petitioner has reported a shortage of cash of Rs.10,000/- on 02.09.2004 and some kind of effort is made at the closure of the Banking Hours on that day to verify the reason for this shortage. The Manager, when unable to ascertain the reason, has permitted debiting this amount in the Sundry Assets Ledger. The Manager has not stated [when the Investigating Officer has visited the Bank on the second occasion as part of the investigation] that the petitioner stepped out of the Bank after the banking hours. The Manager has made this statement for the first time on 14.09.20044. In the cross examination, the Manager has admitted that she has made such statements to the Investigating Officer, but when pressed further about she being 3 (2006) 13 SCC 32 4 This statement is marked as Exhibit.M38 - 20 - NC: 2025:KHC:10009 WP No. 22989 of 2012 aware of the petitioner going out in search of a customer who had taken the benefit of excess credit, she has categorically stated 'no'. 14.2 The next set of circumstances which are material and admitted are that the Investigating Officer on 14.09.2004 has asked the petitioner about the transactions resulting in the second Charge but nothing about the first Charge, and as such, his statement [Exhibit.M37] to the Investigating Officer on that day contains nothing about the shortage of cash accepted. The petitioner, as of this date, was not issued with any notice which indicated that he would be asked to explain this shortage. 14.3 The final set of circumstances which are material is that the petitioner has not taken the defense that he has inadvertently made an excess payment under Exhibits.D1 and D2 in the reply statement, or when this is put to the Manager in the cross examination. This defense is for the first time - 21 - NC: 2025:KHC:10009 WP No. 22989 of 2012 put out in the cross examination of the Investigating Officer. The details of the denomination on Exhibit.D2, which is relied upon to substantiate that there was excess payment under Exhibits.D1 and D2, are in different ink and only adds up to Rs.9,900/- and not Rs.10,000/- [the reported shortage of cash]. 14.4 The circumstances that have prevailed with the Disciplinary Authority to differ from the Inquiry Officer/ Appellate Authority and the Labour Court is the admitted fact of shortage of cash on earlier occasion with another allegation of shortage of cash and the statement by the Manager that the petitioner had stepped out of the Bank after the banking hours. The Manager’s evidence is crucial because she has approved the debit in the Sundry Assets Ledger at the closure of the Banking Hours of the day, but in her cross – examination the Manager has denied knowing that the petitioner had gone out in search of a customer to whom the excess credit is - 22 - NC: 2025:KHC:10009 WP No. 22989 of 2012 allegedly made. This undermines the relevance of this statement. 14.5 The second circumstance viz., the admitted antecedent cannot be material because it is undisputed that the petitioner was not Charge sheeted, and that no proceedings were started as there was an amicable resolution with the assurance that he will not be assigned cashier duty for the relevant period. The two material circumstances are thus undermined and the admission that there was a shortage of cash in itself would not render the petitioner culpable especially with the Manager certifying the shortage after some kind of tentative enquiry at the closure of the business hours on the day without imputing the petitioner. 14.6 If the respondents have established no other circumstance, this Court is of the view that it would be a case of no evidence and the deficiencies in the defense that is projected belatedly cannot take - 23 - NC: 2025:KHC:10009 WP No. 22989 of 2012 place of the evidence that should have been placed on record by the Bank, and the Bank has failed to place on record cogent evidence. This Court is of the view that the internal Authorities [Disciplinary and Appellate Authorities] have not considered the relevant circumstances on the first Charge and the relevant facts on this Charge are ignored. However, the Labour Court has not considered these circumstances but has proceeded only on the footing that the petitioner has admitted the shortage of cash and that there was another prior incident of short payment. 14.7 The next Charge against the petitioner is about availing the discounting facility and deliberately removing the discounting cheques from the Branch's records to prevent the presentation of the cheques. The Inquiry Officer, the Disciplinary/Appellate Authorities and the Tribunal have proceeded, even according to Sri P Udayashankar Rai, only on the admitted fact that the - 24 - NC: 2025:KHC:10009 WP No. 22989 of 2012 petitioner has discounted his cheques and the cheques by his wife/her concern and brother. It is not disputed before this Court that the respondents have issued Circular [Exhibit.D3] permitting employees to discount cheques. 14.8 These Regulations envisage discounting of employees’ self cheques or other approved outstation cheques subject to the condition that the cheques cannot be discounted beyond one-month’s gross salary without prior permission of the General Manager. Further, according to these Regulations such cheques may be drawn in favour of the employee individually or jointly in favour of the employee and his/ her spouse or in favour of the spouse only and the cheques drawn in favour of the spouse should be treated on par with the cheques of the customers. 14.9 The Charge is that the petitioner has discounted about thirty cheques but how it would - 25 - NC: 2025:KHC:10009 WP No. 22989 of 2012 violate these Regulations is not set forth in the Charge Memo. This Court must opine that the Authorities, to begin with, should have first explained how the act of discounting would amount to a misconduct and substantiate such specific Charge by evidence, and in the absence thereof and the permissibility of discounting under the Regulation, the mere admission that cheques are discounted cannot render the petitioner liable for misconduct. This gains significance when seen in the context of the next part of the Charge viz., that the petitioner has intentionally removed the discounted cheques from the Branch's records to delay presentation of the cheques. 14.10 If this part of the Charge had to be proved, the Bank's witnesses should have at least spoken about the petitioner having removed some discounted instruments. It is undisputed that none of the Bank's witnesses have spoken about this. If the - 26 - NC: 2025:KHC:10009 WP No. 22989 of 2012 Inquiry Officer has committed an error in not considering these circumstances, it is perpetuated by both the Disciplinary/Appellate Authority and the Labour Court. Therefore, this Court must intervene as regards the findings on the second Charge as well. 14.11 The petitioner, consequent to the decision to compulsorily retire him, has been admitted to pensionary benefits based on his last drawn salary and two-third of the pension that he would have otherwise been entitled to. Sri Abhinav R and Sri P Udayashankar Rai have been heard on the relief that the petitioner would be entitled to with this Court opining that the Bank has failed to prove the Charges against him. It is stated in unison that the petitioner because of this finding will be entitled to notional fixation of the pension based on the last salary that he would have drawn if he had continued in employment but for the impugned order subject to the pension that he has received. - 27 - NC: 2025:KHC:10009 WP No. 22989 of 2012 14.12 On the monetary relief that the petitioner would be entitled to for the period between the dismissal order’s date and this date, Sri Abhinav R submits that appropriate percentage of back wages is up to the age of superannuation. However, the learned counsel does not dispute that this is an aspect that must be considered in the peculiarities of this case such as the lapse of time [of over two decades]; that the petitioner has attained the age of superannuation about a year and half back; that the petitioner has not let in any evidence on being unemployed during this period. 14.13 If these circumstances are considered, there cannot be an order for payment of back wages and he would only be entitled to some amount as would be just and reasonable, and this Court, on a careful consideration of the circumstances [including the scope of the petitioner's job], is of the opinion that - 28 - NC: 2025:KHC:10009 WP No. 22989 of 2012 a lump sum amount would be just and proper but with directions to the respondents to notionally fix the pension that the petitioner would be entitled to if he had continued in service subject to continuity of service and consequential benefits. In the light of the afore, the following:
Decision
ORDER [a] The petition is allowed. [b] The impugned order dated 19.09.2005 [Annexure-F] of the Disciplinary Authority [the third respondent], the impugned order dated 07.08.2006 [Annexure-G] of the Appellate Authority [the second respondent] and the impugned order dated 10.01.2012 in C.R. No.136/2007 [Annexure-J] of the Labour Court are quashed. [c] The petitioner is granted the benefit of full pension effective from the date he would - 29 - NC: 2025:KHC:10009 WP No. 22989 of 2012 have retired with such pension being fixed notionally based on the salary that he would have earned as on the relevant date with continuity of service and all other benefits. [d] The petitioner will be entitled to a sum of Rs.5,00,000/- [Rupees Five Lakhs Only] towards global compensation for the period upto the date of retirement. [e] The respondents, in compliance with the direction, shall fix pension as aforesaid and do what is needed and communicate the decision in that regard within three [3] months from the date of receipt of a certified copy of this order and the amount of Rs.5,00,000/- shall also be paid within such time. The petitioner shall file a representation with the third respondent - 30 - NC: 2025:KHC:10009 WP No. 22989 of 2012 within a period of four [4] weeks from the date of receipt of the certified copy. Sd/- (B M SHYAM PRASAD) JUDGE AN/-