Venugopal V. and anr. Vs. Management of Reed Relays and Electronics Ltd. and anr. - Court Judgment

Excerpt:
- securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has jurisdiction to pass interim orders under section 17 of the securitisation act in appropriate cases. the tribunal is empowered to grant interim stay subject to such conditions as may be deemed proper including condition of deposit. even under section 69 of the transfer of property act, the only remedy of the borrower whose mortgage has invoked section 69 of the transfer of property act, is to file a civil suit and in such suit the court has power to grant injunction and to impose condition for the grant thereof--section 17; [a.p. shah c.j., f.m. ibrahim kalifulla & v. ramasubramanian, jj] proceedings under section 17 power of the tribunal to pass any interim order held, once the possession of the secured asset is taken, there would be no occasion for the tribunal to order redelivery of possession till final determination of the issue. in other words, it is only when the tribunal comes to the conclusion that any of the measures, referred to in section 13 (4) taken by the secured creditor are not in accordance with the provisions of the act and the rules made thereunder, then only the tribunal can restore possession of such secured assets to the borrower. by virtue of sub-section (7) of section 17 of the securitisation act read with section 19 (12) of the recovery of debts due to banks and financial institutions act the tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deems fit and proper to impose, but it does not in any way override the special provisions contained in section 17(3) of the securitisation act. the statutory scheme of the securitisation act is such that the borrower could take recourse to application under section 17 only if one or other measure is taken by the secured creditor, and the tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the act. the scheme cannot be bypassed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings under section 17--sections 17, 13 (4); [a.p.shah, c.j., f.m. ibrahim kalifulia &v. ramasubramanian, jj] scope of enquiry under section 17 held, the main purpose of the securitisation act, and in particular section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the court. therefore, in an application under section 17, the tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing with the same under section 13. all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the tribunal in the proceedings under section 17. it is for the tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the act and legally sustainable. however, while considering the question of validity of the action of the bank, it is not necessary for the tribunal to adjudicate the exact amount due to the secured creditors. in other words, the purpose of an application under section 17 is not the determination of the quantum of claim per se as the tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under section 13(4)--sections 17(4), 13(4) ; [a.p. shan c.j.,f.m.ibrahim kalifulla & v. ramasubramanian, jj] appeal right of bank held, the right of the bank is not automatically suspended upon filing of an appeal by borrower under section 17 of the securitisation act and the bank as secured creditor can proceed to auction secured asset where no stay is granted by the tribunal. there is nothing in section 17 of the securitisation act which would indicate that the legislature intended that there would be automatic stay of recovery proceedings by bank under section 13(4) on filing an appeal by borrower under section 17. use of the expressions if and then under section 17 would not mean that the bank can take one or more measures laid down under section 13(4) only if the tribunal declares that the action taken already is in accordance with the provisions of the securitisation act and the rules made thereunder. use of the word if does not connote a condition precedent. it is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they harmonized with the object of the statute and which effectuate the object of the legislature. the provisions of section 17 must, therefore, receive such construction at the hands of the court as would advance the object and at any event not thwart it. in other words, the principle of purposive interpretation should be applied while construing the said provisions. the securitisation act is enacted to provide a speedy and summary remedy for recovery of thousands of crores which were due to the banks and financial institutions. ar. lakshmanan, j.1. the above writ appeal is directed against the order dated february 20, 1991 in w.p. no. 3206 of 1986, confirming the order of dismissal passed by the labour court, upholding such dismissal by the management/first respondent herein.2. the short facts leading to the filing of the writ appeal are as follows :the appellants were employed by the first respondent managment as workers from 1977. the appellants having found that the service conditions of the employees needed improvement, organised a union called reed relays and electronics limited employees union in september, 1980. the first appellant is the executive committee member and the second appellant is the vice president of the union. aggrieved by the activities of the union in placing demand, the first respondent retrenched four workmen as a retaliatory measure. the union protested against the action of the first respondent management. subsequently there was a lay-off of the workmen and the workmen also went on strike. thereupon the management and the union entered into a settlement under section 12(3) of the industrial disputes act, 1947 on january 24, 1981. clause (3) of the said settlement, which is relevant for the purpose of this case, reads as follows:'it is agreed that the management will rescind the order of suspension imposed on ten workmen vide their notice dated january 12, 1981. it is, however, agreed that the management will reserve the right td initiate disciplinary action against three or four workmen. however, while finalising the disciplinary proceedings, the management will consult the commissioner of labour ii, madras, for his opinion.' the management initiated disciplinary action against four workmen including the appellants herein on the charges of using abusive language and preventing the workers from going to work during strike. they were dismissed after enquiry by the first respondent. aggrieved by the order of the first respondent, the appellants along w.ith two others, raised anjndustrial dispute, challenging the validity of their non-employment, which culminated in a reference, to the adjudication of the labour court, madras, which took up the case on its file as i.d. no. 243 of 1982. the labour court adjudicated upon the issue on the non-employment of both the appellants as well as that of the other two persons, who are not parties to the writ proceedings. the labour court, after holding that the domestic enquiry conducted by the first respondent was not fair and proper, itself conducted an enquiry, permitting the parties to lead evidence and ultimately held that the dismissal of the appellants is justified and passed the award dated may 31, 1985. aggrieved by the award passed by the labour court, the appellants have filed w.p. no. 3206 of 1986, to quash the order, dated may 31, 1985 passed in i.d. no. 243 of 1982, insofar as it upholds the order of dismissal passed by the first respondent against the appellants and direct the management to reinstate the appellants with full back-wages, continuity of service and other attendant benefits.3. the writ petition was resisted by the management contending that the orders passed by the labour court ordering dismissal of the appellants is justified in that the labour court itself conducted the enquiry after permitting the parties to lead evidence and ultimately held that the dismissal of the appellants is justified, and therefore, it is contended on behalf of the management that the order of the labour court does not call for any interference.4. before the learned single judge, six contentions were raised. they are :(1) subsistence allowances were not paid as interim relief by the labour court during the pendency of the proceedings before the said court, and such non-payment of the subsistence allowance was not fair and proper and would vitiate the award passed by the labour court.(2) the first respondent/management has no certified standing orders and in the absence of certified standing orders, the model standing orders will apply to the management by virtue of section 12 of the industrial employment (standing orders)act, 1946.(3) the impugned order passed by the labour court upholding the dismissal of the appellants from service is bad in law inasmuch as the said order of dismissal had been passed in violation of clause (3) of the settlement reached under section 12(3) of the act, because the deputy commissioner of labour ii, madras, was not consulted by the management while finalising the disciplinary proceedings against the appellants.(4) awarding disproportionate punishment even for proved misconduct would amount to victimisation and the labour court has not considered the appellants' case of victimisation especial ly when both the appellants are officebearers of the union.(5) extreme penalty of dismissal of the appellants is not called for in this case and the labour court failed to consider the quantum of punishment under section 11-a of the act.(6) termination from the date of supension is illegal, since such a retrospective order of dismissal is invalid at least with regard to the retrospective portion of the order of dimissal.5. the learned single judge, in his well considered order, has rejected the first five contentions and allowed the sixth contention, which relates to the retrospective order of dismissal from the date of suspension. the learned single judge has made it clear that the order of dismissal passed against the appellants will be operative only from december 20, 1981, viz., the date of order of dismissal passed by the management and it will not have retrospective effect from the date of order of suspension passed against the appellants, viz., june 1, 1981 in the case of the first appellant and may 29, 1981 in the case of the second appellant and that the first appellant would be entitled to the arrears of wages from june 1, 1981 to december 20, 1981 and the second appellant would be entitled to the arrears of wages from may 29, 1981 to december 20, 1981. subject to the above relief given to the appellants, the writ petition was dismissed.6. the very same contentions were reiterated before us by the learned counsel for the appellants at the time of hearing this writ appeal. so far as the first contention is concerned, we are of the view that admittedly the appellants have not filed any application before the labour court seeking interim relief of subsistence allowance during the pendency of the proceedings before the labour court and when the appellants have not even made any claim for interim relief, as rightly pointed out by the learned counsel for the first respondent, there is no merit in the contention of the learned counsel for the appellants that the non-payment of subsistence allowance as interim relief by the labour court during the pendency of the proceedings would vitiate the award passed by the labour court. we see therefore no substance in this contention and the said contention is, therefore, rejected.7. as regards the second contention, we are of the view that this contention also has no merit. it is true that the first respondent management has no certified standing orders, and therefore the model standing orders will apply to the first respondent. according to the standing order 16(1) of the model standing orders framed under the tamil nadu industrial employment (standing orders) rules, 1947, the following acts shall be treated as misconduct:'...........threatening, abusing, intimidating or assaulting any workman outside the premises of the establishment, if such threat, abuse, intimidation or assault is in connection with the employment in the establishment.against the appellants, a charge was framed on april 3, 1981 that at about 5.30 a.m., they along with others, trespassed into the house of one ethiraj, abused him in filthy language, threatened him not to go to work, obtained a leave letter from him on false ground and obtained signatures of the said ethiraj in three blank papers to be utilised by them in future. the second charge against the first appellant venugopal was that on december 23, 1980 at about 8.45 a.m., he along with others, way laid the vehicle tnh 5221 while the same was entering into the factory premises and prevented the car from getting inside, dragged mr. devarajan out of the car and assaulted him. against the second appellant ganapathi also a second charge was framed on december 24, 1980 to the effect that he along with other workers, prevented the car tnh 5221 from going out of the factory. a cursory perusal of the above charges framed against the appellants will go to show that those charges will squarely fall under the standing order 16(t) of the model standing orders. ethiraj, m.w. 7, has also stated in his evidence that the appellants along with others, came to his house, abused him in filthy language and also obtained his signatures on three blank papers and threatened him not to go to the factory and not to attend the duty on that date. the labour court, in our view, has rightly accepted the evidence of m. w.7 and held that the management has proved the charges against both the appellants. the labour court has clearly held that the appellants have abused m. w. 7 with filthy language, threatened him with dire consequences, if he attended the duty, likewise m.w. 6 in his evidence has also deposed that he was threatened and obstructed by the appellants. he further stated that on the fateful day when tnh 5221 in which he (m.w. 6) was also coming to the factory, was entering the company gate, several workers obstructed it from entering the premises, opened the door and pulled devarajan outside and attempted to beat devarajan. it is clear from this evidence that the persons, who obstructed and prevented m.w. 6 included the two appellants herein and also others. likewise the labour court has also accepted the evidence of m.w. 4 in arriving at the conclusion. in our opinion, the labour court has rightly come to the conclusion that the management has proved the charges framed against the appellant. there is no infirmity in the finding of the labour court, since it is based on evidence of m.ws. 4, 6 and 7. therefore this contention also fails.8. the third contention of the learned counsel for the appellants is that the impugned order passed is bad in law, since the same has been passed in violation of clause (3) of the settlement reached under section 12(3) of the act, because the deputy commissioner labour ii, madras, was not consulted by the management while finalising the disciplinary proceedings against the appellants. it is also contended that the said requirement is a mandatory one as per the terms of section 12(3) settlement and failure on the part of the management would vitiate the order of dismissal. we are unable to appreciate this contention as well. it is true that the management has neither consulted the deputy commissioner labour ii, madras, nor obtained his opinion before finalising the disciplinary proceedings. such violation of clause (3) of section 12(3) settlement, in our opinion, would render the domestic enquiry conducted by the management unfair and improper, but will not vitiate the award of the labour court. as already stated, the labour court after holding that the domestic enquiry conducted by the first respondent was not fair and proper, itself conducted the enquiry by permitting the parties to lead evidence and ultimately reached the conclusion that the dismissal of the appellants is justified and passed the award, dated may 31, 1985. in these circumstances, we are unable to accept this contention of the learned counsel for the appellants.9. the fourth contention relates to the awarding of disproportionate punishment even for a proved misconduct, would amount to victimisation when both the appellants are office bearers of the union. we have already held that the labour court on the basis of the evidence available on record, has rightly held that the charges framed against the appellants were proved. the gravity of the offence proved against the appellants in this case is such, that it cannot be considered that punishment inflicted on the appellants is grossly disproportionate and such imposition of punishment, amounts to victimisation.10. the last contention of the learned counsel for the appellants relates to the award of extreme penalty of dismissal on the appellants, which according to the learned counsel for the appellants, was not called for in this case. we are unable to accept the above contention. the evidence let in by the management discloses that the appellants have not only used indecent and threatening language against the other co-workers, but have also prevented the other workers from entering the factory premises and discharging their lawful duties. in fact, the evidence of m.w.6 would disclose that the first appellant venugopal, along with others, waylaid the vehicle tnh 5221 while the same was entering the factory premises and dragged devarajan outside the car and assaulted him. such an indecent action cannot at all be tolerated in the facts and circumstances of the case. the labour court, therefore, rightly has come to the conclusion that such an act on the part of the appellants warrants only the extreme punishment of dismissal. in our opinion, courts should not encourage the use of indecorous or indecent and violent behaviour, exhibiting thereby indiscipline. such acts on the part of the workmen should be discouraged at any cost. since the appellants were terminated from service for serious misconduct proved and established before the labour court. no interference is called for in the finding of the labour court, which is based on the evidence let in, in this case.11. the learned single judge himself in his concluding part of his order has granted relief to the appellants to the effect that the order of dismissal passed against the appellants will be operative only from december 20, 1981, i.e., the date of order passed by the management and it will not have the retrospective effect from the date of order of suspension passed against the appellants, viz.. from june 1, 1981 in the case of the first appellant and may 29, 1981 in the case of the second appellant and that the first appellant would be entitled to the arrears of wages from june 1, 1981 to december 20, 1981 and the second appellant would be entitled to the arrears of wages from may 29, 1981 to december 20, 1981. we are not interfering with that portion of the order passed by the learned single judge.12. the appellants have miserably failed to prove the allegation of victimisation and violation of section 12(3) settlement. the order of the learned single judge is perfectly in order and therefore no interference is called for. the writ appeal, therefore, fails and accordingly the same is dismissed. however, there will be no order as to costs.