| SooperKanoon Citation | sooperkanoon.com/352427 |
| Overruled By | State bank of India Vs. The Workmen of State Bank of India and another |
| Subject | Labour and Industrial |
| Court | Mumbai High Court |
| Decided On | Aug-23-1989 |
| Case Number | W.P. No. 494 of 1982 |
| Judge | H.W. Dhabe and ;M.B. Ghodeswar, JJ. |
| Reported in | 1990(1)BomCR650; (1989)91BOMLR411; (1994)IIILLJ481Bom |
| Acts | Industrial Disputes Act, 1947 - Sections 2 and 25F |
| Appellant | The Workmen of State Bank of India, Garhchiroli Branch |
| Respondent | The Presiding Officer, Central Govt. Tri. No. 2 and ors. |
| Advocates: | R.B. Pendharkar, Adv. |
| Disposition | Petition allowed |
1. The petitioner union has challenged the award of the Central Government Labour Court No. 1, Bombay answering against it the reference relating to the industrial dispute about the termination of services of Shri P.S. Sadavarte, who was working as a Clerk in the Respondent No. 2 State Bank of India.
2. Briefly, the facts are that Shri P.S. Sadavarte was working as a Clerk in the Garhchiroli Branch of the Respondent No. 2 State Bank of India during the relevant time. A departmental enquiry was held against him for certain acts of misconduct in which it was found by the Enquiry Officer that the charges against him were proved. However, the Competent Authority instead of dismissing him from service, decided to condone the misconduct and thus discharged him from service by offering him one month's wages in lieu of one month's notice. Accordingly, by an order dated 9.4.1970, the services of Shri Sadavarte were terminated on payment of one month's wages in lieu of one month's notice with effect from the date of the receipt of the said order. It may be seen that the aforesaid employee was a confirmed employee and had put 8 years of service before his termination.
3. The cause of the above employee was taken up by the petitioner union. Since the dispute was not amicably settled, the petitioner union filled an application before the Central Government Assistant Commissioner of Labour for initiation of conciliation proceedings in the matter under Section 12 of the Industrial Disputes Act, 1947 (for short the 'Act') and upon its failure to take necessary steps to refer the industrial dispute in this matter for adjudication to the Labour Court. Although the dispute was raised immediately after the termination of services of Shri Sadavarte and the conciliation proceedings resulted in failure, reference was made under Section 10(1) read with Section 12(5) of the Act for adjudication to the Central Government Labour Court at Bombay as late as on 24.11.1975. After this dispute was referred for adjudication to the Labour Court the parties filed their statement before it and led evidence in support of their respective cases. As per the usual practice, the learned Labour Court first framed a preliminary issue on the question whether the domestic enquiry held in the instant case was legal and proper. By an order dated 18.12.1978, the learned Labour Court held that the enquiry conducted in relation to the charges of misconduct against the concerned employee was legal and proper. The learned Labour Court thereafter considered the remaining issues on merit and by its award dated 2.3.1981, answered the reference against the petitioner. Feeling aggrieved, the petitioner has preferred the instant writ petition in this Court.
4. It is not necessary to go into all the contentions raised by the petitioner in the instant writ petition because we find that the contention raised on behalf of the petitioner that the termination of service of Shri Sadavarte in the instant case is illegal being in breach of the mandatory provisions of Section 25-F of the Act is well founded. It is true that the above contention is raised for the first time in the instant writ petition but may be seen that the fact that the retrenchment compensation payable under Section 25-F of the Act is not paid to the petitioner by the Respondent No. 2-Bank is not in dispute and the question whether the termination of services of Shri Sadavarte amounts to his retrenchment within the meaning of Section 25-F of the Act depends solely upon the interpretation of the rules about the conditions of service applicable to the employees of the respondent No. 2 - Bank. There is thus no investigation of any new facts and circumstances called for in the instant case to establish the fact of retrenchment of Shri Sadavarte. We have, therefore, allowed the petitioner to raise the above contention for the first time in the instant writ petition to which no serious objection is also raised on behalf of the respondent No. 2 Bank. There is, however, serious controversy between the parties upon the question whether the discharge of the employee concerned in the instant case viz., Shri Sadavarte amounts to his retrenchment within the meaning of the definition of the said expression given in Section 2(ooo) of the Act.
5. To appreciate the rival submissions, it is necessary to see that the service conditions of the workmen in the Respondent No. 2 - Bank are governed by the 'Sastry' Award, which came into force in 1964. The said award is binding between the parties. In the chapter relating to the 'Disciplinary Action' in the Sastry Award, para 521(4) gives which acts and omissions are gross misconducts on the part of the employees. Sub-para (5) of para 521 prescribes punishments for such gross misconducts. Since the interpretation of the said para is in issue in the instant writ petition, the said sub-para (5) of para 521 is reproduced below for ready reference:
'(5) An employee found guilty of gross misconduct may;
(a) be dismissed without notice, or
(b) be warned or censured, or have an adverse remark entered against him, or
(c) be fined, or
(d) have his increment stopped, or
(e) have his misconduct condoned and be merely discharged'.
6. Sub-para (10) of para 521 of Sastry Award lays down the procedure of departmental enquiry. Its sub-para (c) prescribes what factors should be taken into consideration by the management for deciding the question of punishment if the misconduct is proved against the delinquent employee. Sub-para (c) of sub-para (10) of para 521 is also reproduced below for ready reference:
'(c). In awarding punishment by way of disciplinary action, the authority concerned shall take into account the gravity of the misconduct, the previous record, if any, of the employee and any other aggravating or extenuating circumstances that may exist. Where sufficiently extenuating circumstances exist, the misconduct may be condoned and in case such misconduct is of the 'gross' type he may be merely discharged, with or without notice or on payment of a month's pay and allowances, in lieu of notice. Such discharge may also be given where the evidence is found to be insufficient to sustain the charge and where the Bank does not, for some reasons or other, think it expedient to retain the employee in question any longer in service. Discharge in such cases shall not be deemed to amount to disciplinary action'.
7. Sub-para (12) of para 521 of Sastry Award which is material for our purpose then lays down the guidelines for the Bank in respect of the disciplinary matters, including the guidelines for its Staff Superintendent who is the punishing authority so far as the workmen of the Bank are concerned. Sub-para 4.2 of sub-para (12) of para 521 is very much relevant to this matter and hence the same is reproduced below:
'521 (12)(412) - The proceedings and the findings of the Enquiry Officer should be sent to the Staff Superintendent. The Staff Superintendent would then scrutinise the proceedings of the enquiry and the findings of the Enquiry Officer, and if he is satisfied that the enquiry has been properly conducted and that the charges have been established, he would tentatively decide the punishment to be imposed on the concerned employee. A notice would then be sent to the Agent for being served on the employee asking him to show cause why the proposed punishment should not be imposed on him. The employee would also be furnished with a copy of the proceedings of the enquiry and a copy of the findings of Enquiry Officer to enable him to show cause against the proposed punishment. If the employee does not make any statement/contentions within the stipulated time, the Staff Superintendent would presume that he has no submissions to make and may proceed to make the final order. If the employee makes any submissions/contentions, the Agent should forward the same to the Staff Superintendent without any delay. The Staff Superintendent would then peruse the statements made by the employee. Thereafter, the Staff Superintendent would decide whether he should change the tentative punishment and impose a lesser punishment or impose no punishment at all. If he feels that the employee has not adduced any satisfactory reasons why the proposed punishment should not be imposed on him, the Staff Superintendent would confirm his tentative decision and impose the proposed punishment'.
8. The submission urged on behalf of the petitioner is that although the charge of misconduct was held to be proved against the employee concerned in the instant case viz., Shri Sadavarte, the management acting under Clause (e) of sub-para (5) of para 521 of Sastry Award had condoned the said Charge of misconduct proved against him and had merely discharged him by offering one month's wages in lieu of one month's notice. The submission is that the discharge of the employee concerned is not by way of punishment and hence it would amount to retrenchment within the meaning of the said expression given in Section 2(oo) of the Act. It is pertinent to see that the definition of the expression 'retrenchment' in the Act excludes termination of service by way of punishment. On the other hand, the submission on behalf of the Respondent No. 2-Bank is that although the employee concerned viz. Shri Sadavarte was discharged from service by giving one month's wages in lieu of notice, still the termination of his services is for the misconduct proved against him and hence the said discharge is 'by way of punishment' within the meaning of the said expression occurring in the definition of the word 'retrenchment' given in Section 2(ooo) of the Act.
9. In construing Clause (e) of sub-para (5) of para 521 of the Sastry Award under which the impugned order of discharge is passed by the management, while the learned Counsel for the petitioner has laid emphasis upon the words 'have his misconduct condoned and be merely discharged' to support his submission that the order of discharge passed thereunder is not by way of punishment, the learned Counsel for the Respondent No. 2 bank has laid emphasis upon the opening part of the sub-para (5) viz. 'An employee found guilty of gross misconduct may....' to urge that even the discharge under Clause (e) thereof is by way of punishment. Although the rival parties have highlighted the portions of Clause (e) of sub-para (5) which favour their submission, it has to be borne in mind that the duty of the Court in interpretation of statutes and in particular welfare statutes is to adopt a contextual interpretation. It is therefore necessary, in our view, to examine the scheme of the disciplinary procedure laid down in the Sastry Award and in particular its para 521, the relevant sub-paras of which we have extracted above. It is in the light of the scheme of the disciplinary procedure provided under the Sastry Award that we can understand the object and purpose of the provisions in Clause (e) of sub-para (5) of para 521 so as to arrive at its true, meaning and effect.
10. Turning to the Disciplinary Procedure incorporated in para 521 of the Sastry Award for the bank employees, it may be seen that its sub-para (4) lays down the acts of gross misconduct. It is no doubt true that the question of punishment for any gross misconduct/s proved against the delinquent employee is the subject matter of sub-para (5) of para 521. However, perusal of the said sub-para (5) would show that for a gross misconduct apart from the highest penalty of dismissal, lesser penalties can also be imposed which would mean that the punishing authority has to exercise its discretion in choosing what punishment as provided for in the said sub-para (5) should be imposed for the gross misconduct proved against the delinquent employee.
11. We may in the above context refer to sub-para (10) of para 521 of the Sastry Award which deals with the procedure of the departmental enquiry. The question as to how to exercise the discretion in awarding punishment to the delinquent employee is dealt with in sub-para (c) of the aforesaid sub-para (10) of para 521. It provides that in awarding punishment by way of disciplinary action the authority concerned shall take into account the gravity of the misconduct, the previous record, if any, of the employee and any other aggravating or extenuating circumstances that may exist. It then provides that where sufficiently extenuating circumstances exist the misconduct may be condoned and in case such misconduct is of the 'gross' type, the delinquent employee may be merely discharged with or without notice or on payment of a month's pay and allowances, in lieu of notice. It further provides that such discharge case also be given in cases where the evidence is found to be insufficient to sustain the charge and where the bank does not, for some reasons or the other, think it expedient to retain the employee in question any longer in service. What is important to be seen in the aforesaid sub-para (c) is that the discharge in such cases is not meant to amount to disciplinary action as is made clear in its last sentence.
12. The process of consideration by the punishing authority is contained in sub-para (4.2) of sub-para (12) of para 521. The said sub-para contemplates that although the misconduct may be proved against the delinquent employee, the Staff Superintendent who is the competent authority may decide to change the tentative punishment against the delinquent employee and may impose a lesser punishment or he may not impose any punishment at all upon the delinquent employee.
13. It is thus clear on reading the aforesaid sub-para (c) of sub-para (10) and sub-para (4.2) of sub-para (12) of para 521 which contains the procedure of the departmental enquiry and in particular the process of consideration of the question of imposition of punishment after the charge/s of gross mis-conduct/s is/are held to be proved against the delinquent employee that while considering the question of imposition of punishment the punishing authority i.e. the Staff Superintendent can come to the conclusion that in the facts of the case before him no punishment should be imposed and the delinquent employee should simply be discharged without casting any stigma upon him because it is expressly made clear in sub-para (c) of sub-para (10) of para 521 that such discharge shall not amount to disciplinary action against the delinquent employee. Read in the light of or in the context of the above provisions of para 521 of the Sastry Award, although the provisions of its sub-para (5) deal with the question of imposition of punishment upon an employee who is found guilty of gross misconduct, Clause (e) thereof does not provide for any punishment but provides for simple dis-charge of such employee because the conclusion reached by the punishing authority in the process of consideration of the question or imposition of punishment that no punishment should be imposed upon such employee in the facts and circumstances of the case is intended to be incorporated in the said clause. It is thus this contingency which is covered by Clause (e) of sub-para (5) of para 521 when it uses the expression 'have his misconduct condoned and be merely discharged'.
14. Turning now in the above context to the ordinary meaning or connotation of the expression 'condone' it would show that if the misconduct is condoned as provided in Clause (e) of sub-para (5), the delinquent employee would not be deemed to nave committed the same in which case his discharge from service would not be by way of punishment. The dictionary meaning of the expressions 'condonation' and 'condone' taken from Webster's Third New International Dictionary of the English language unabridged by Merriam Webster Vol. I are as follows:
'Condonation':
giving away, pardon of an offence, voluntary overlooking or implied forgiveness of an offence by treating the offender as if it had not been committed.
'Condone':
to pardon or forgive (an offence or fault)'.
15. The above dictionary meaning shows that by condonation the offence or the lapse or the misconduct or any sin committed by any person is wiped out. It is in this sense that the power of pardon conferred upon the President of India under Article 72 or upon the Governor under Article 161 of the Constitution of India is also understood. See K.M. Nanavati v. State of Bombay : 1961CriLJ173 . The learned counsel for the petitioner has drawn our attention to two decisions on the meaning of the word 'condone'. One is of the then Nagpur High Court in the case of District Council, Amraoti v. Vithal Vinayak Sapat AIR 1941 Nag 125 and another is of the Madhya Pradesh ' High Court in the case of Lal Andhraj Singh v. State of Madhya Pradesh : (1967)IILLJ531MP . In the case before the erstwhile Nagpur High Court, Justice Bose held that 'Once a master has condoned any misconduct on the part of his servant which would have justified dismissal or a fine, he cannot, after such condonation, go back upon his election to condone and claim a right to dismiss him or impose a fine or any other punishment in respect of the offence which has been condoned'. Following the above decision, the Division Bench of the Madhya Pradesh High Court has also held that the master cannot impose any punishment on a servant for misconduct which he has condoned. In taking the view, the Division Bench has also referred to the following English cases : Harton v. Mc. Murty (1960) 2. L.T. 297 : Phillips v. Foxell (1872) 7 Q B 666 : Roston Deep Sea Fishing v. Ansell (1888) 39 Ch.D 339; Federal Supply etc. v. Ingehrn and Piel, (1910) 80 L.J.P.C. 1; London General Omnibus Company v. Pease and Partners. Ltd., (1915) 1 K.B. fi98. The above decisions no doubt support the construction of Clause (e) of sub-para 5 of para 521 of the Sastry Award canvassed on behalf of the petitioner. We are also in entire agreement with the same.
16. It is thus clear from the perusal of the relevant provisions of the Sastry Award as well as after considering the meaning of the expression 'condone' that the action taken by the Respondent No. 2 Bank under Clause (e) of sub para (5) of para 521 of the Sastry Award cannot be construed as an action by way of punishment. It may he seen that for the purpose of finding out whether the termination is by way of punishment within the meaning of the definition of the expression 'retrenchment' given in Section 2(oo) of the Act, what has to be seen is whether under the provisions, relating to conditions of service of the delinquent employee the action taken against him is by way of punishment or not, particularly when the definition of the expression 'retrenchment' or any other provisions under the Act does not indicate what 'termination by way of punishment' means for the purpose of exclusion of such termination from the substantive part of the definition of the expression 'retrenchment' given under, the Act. It has therefore to be held that the discharge of the employee concerned in the instant case viz. Shri Sadavarte effected under Clause (e) of sub-para (5) of para 521 of the Sastry Award is not by way of punishment.
17. The learned Counsel for the Respondent No. 2 Bank has, however, in support of his submission that the discharge of the employee concerned in the instant case viz. Shri Sadavarte is by way of punishment relied upon the decisions of the Supreme Court in the case of Madan Gopal v. The State of Punjab and Ors. : (1964) II LLJ 68 and in the case of Moti Ram Deka v. General Manager, North East Frontier Railway : : (1964)IILLJ467SC . The learned counsel for the Respondent No. 2 Bank has also referred to certain other decisions to which it is not necessary to make any reference as they are more or less analogous to the decision of the Supreme Court in Madan Gopal's case cited supra because in all such cases the question decided by the Supreme Court was whether the order of termination of services of a temporary employee or a probationer or the order of reversion of an employee promoted on officiating basis is by way of punishment or whether it is a termination or discharge simpliciter. The latter case i.e., Moti Ram Deka's case is cited before us to show that the termination of services includes dismissal or discharge by way of punishment also. In our view, the above decisions of the Supreme Court are of no assistance to the Respondent No. 2 Bank in the instant case because the question whether the discharge is by way of punishment or not has to be considered in the instant case in the light of the relevant provisions in that regard of the Sastry Award. No such provisions were under consideration before the Supreme Court in the decisions relied upon on behalf of the Respondent No. 2 Bank.
18. In Moti Ram Deka 's case cited supra, what was challenged was a service rule applicable to the permanent railway employees which provided for termination of their services by giving them notice or wages in lieu of notice. The said service rule was challenged on the ground that it was violative of Articles 14 and 311(2) of the Constitution of India. The Supreme Court held in the said case that the above rule was an invasion upon the right of permanent Railway employees to continue in service till they reached the age of their superannuation and hence it amounted to their removal from service. Gajendragadkar, J. held that there were two alternative tests to determine whether the termination of services of a permanent employee amounted to his removal. Firstly whether he had a right to the post or the rank and secondly whether he has been visited with evil consequences of loss of pay and allowances. In either case the termination would amount to his removal from service because his right to the post would be prematurely invaded. Subba Rao, J. in his judgment in the above case adopted the reasoning that since from the rule prescribing punishment of dismissal and removal, the termination of employment of a probationer or a temporary employee by notice or wages in lieu of notice is excluded, all other termination of employment would fall within the expression 'dismissal' or 'removal'.
18-A. In the case of Madan Gopal cited supra and other analogous decisions, the question considered was whether the termination of services of a probationer or a temporary employee amounted to his dismissal or removal within the meaning of the said expression under Article 311(2) of the Constitution of India. By a series of its decisions including the decision in Madan Gopal's case, the Supreme Court laid down the law that the form of order is not conclusive and that the Court can go behind the order to determine whether the order of simple termination or discharge of a probationer or a temporary employee is really by way of punishment, in which case it would be within the mischief of Article 311(2) of the Constitution of India. The usual test made applicable as if the charge of misconduct is merely the motive for simple termination, such termination would not be by way of punishment but if that is the basis or the foundation of the order of termination of a temporary employee or a probationer, then it would amount to his punishment within the meaning of Article 311(2) of the Constitution of India.
19. In the above decisions of the Supreme Court, only general tests or principles are considered to determine in which cases the simple termination of service would be by way of punishment. However, as pointed out hereinbefore, in the instant case, the question whether simple termination is by way of punishment has to be considered in the light of the rules prescribed in para 521 of the Sastry Award. As held by us above, when recourse is taken to Clause (e) of sub-para (5) of para 521 of the Sastry Award under which the punishing authority takes a positive decision to condone the charge of misconduct against the delinquent employee, it would, in effect, wipe out the said charge of misconduct against him. The decisions relied upon on behalf of the Respondent No. 2 Bank are therefore of no assistance of it. In the context of Clause (e) of sub-para (5) of para 521 of the Sastry Award, the termination simpliciter of a bank employee effected thereunder cannot be by way of punishment. In fact, it is not open to the Respondent No. 2 Bank to dispute this fact because in the principal order dated 9.4.1970 of the Staff Superintendent on the basis of which the employee concerned viz., Shri Sadavarte is communicated his discharge simpliciter it is clearly stated in the last sentence that in terms of Sub-clause (c) of sub-para (10) of para 521 of the Sastry Award the discharge of the employee concerned would not amount to disciplinary action which would clearly show that even the punishing authority has not issued the order of discharge by way of punishment.
20. If the discharge of Shri Sadavarte from service is not by way of punishment, it would not be excepted from the definition of the expression 'retrenchment' given in Section 2(oqo) of the Act and would be covered by it. It is not in dispute that the retrenchment compensation as provided in Clause (b) of Section 25-F of the Act is not paid to Shri Sadavarte. His termination is therefore illegal and void being in non-compliance with the mandatory provisions of Section 25-F of the Act. It is thus liable to be set aside on this short ground.
21. The question which is now to be considered is about the relief to be granted to the employee concerned viz. Shri Sadavarte. Once it is held that the discharge of Shri Sadavarte from service is illegal and void, the normal relief to be granted to him is of reinstatement and full back wages. However, it is also well settled that in particular cases, the Court can depart from the above normal rule. As regards the question of reinstatement, it is necessary to see that Shri Sadavarte, after termination of his services, started law practice as an Advocate from June, 1978 and is still continuing his practice. We, therefore, asked the learned Counsel for the petitioner whether he is still interested in reinstatement in service. The learned Counsel for the petitioner has informed us that Shri Sadavarte does not consider himself to be well settled in practice and wants to go back to his service in the bank wherein the emoluments payable are higher and are lucrative particularly after the revision of pay scales and allowances of the bank employees. He has also stated before us that because of long service of 8 years put in the bank by Shri Sadavarte before termination of his service and because of continuity of service that he would get after his reinstatement Shri Sadavarte has very bright prospects of promotion in bank service and he is therefore interested in his reinstatement in service. There is no impediment pointed out on behalf of the bank for declining the relief of reinstatement to Shri Sadavarte. It may be seen that when there is non-compliance with the mandatory provisions of Section 25-F of the Act, the retrenchment is void ab initio and the employee concerned is entitled to reinstatement except in very exceptional circumstances as pointed out in the case of Surendra Kumar v. Industrial Tribunal-cum-Labour Court, New Delhi : (1981)ILLJ386SC . See also Mohan Lal v. Management, Bharat Electronics Ltd. : (1981)IILLJ70SC , Hari Mohan Rastogi v. Labour Court : (1984)ILLJ32SC . The petitioner has therefore to be granted the relief of reinstatement with continuity in service.
22. As regards the question of payment of back wages to Shri Sadavarte, although the said relief should normally follow there are certain circumstances in the instant case because of which the relief of payment of full back wages for the whole period from the date of termination till the date of reinstatement cannot be granted to him. In this regard, it may first be seen that there is an inordinate delay in making the reference to the Labour Court for adjudication in the instant case. Although the services of Shri Sadavarte were terminated on 9.4.1970, the reference for adjudication to the Labour Court was made in the instant case on 24.11.1975, i.e., after a period of about 5 years. It is true that for the inordinate, delay in making the reference none of the parties can be blamed but then looking to the protracted litigation from the date of termination till this date, the equity would require that both the parties should suffer equally with the result that the petitioner would be entitled to 50% of the back wages from 9.4.1970 to 24.11.1975. From 25.11.1975 till June 1978 when the above employee started his law practice, there is no material placed on record to show that he was in gainful employment during the said period. The learned counsel for the petitioner has urged before us that for a period of one year since the commencement of his practice Shri Sadavarte was not well settled in practice and his earnings out of the law practice were very poor. Taking into consideration the above factor, we feel that Shri Sadavarte should be entitled to full back wages from 24.11.1975 to 31.5.1979. However, from 1.6.1979, since the employee concerned was established in practice and was admittedly having earnings higher than the emoluments which he would have received in service, he would not be entitled to any back wages till the date of his reinstatement.
23. In the result, the instant writ petition is allowed. The impugned order of discharge of Shri P.S. Sadavarte dated 9.4.1970 is set aside and it is directed that he should be reinstated in service with continuity of employment and should be paid 50% of back wages from 9.4.1970 to 24.11.1975 and full back wages from 25.11.1975 to 31.5.1979. Rule made absolute in the above terms. No order as to costs.