Rangasami S. and Mgmt. of Vellandivalasu Weavers' Co-operative Production and Sales Society and Anr. Vs. Presiding Officer, Labour Court and Anr. (15.02.2001 - MADHC) - Court Judgment

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labour and industrial - termination of services - article 226 of constitution - petitioner employed in respondent no. 2 society - placed under suspension - dismissed from service after enquiry - challenge before labour court - labour court awarded compensation instead of order of re-instatement - appeal - petitioner admitted to have owned responsibility - negligence resulted in huge loss to respondent no. 2 - respondent no. 2 cannot be expected to take risk of continuing petitioner in employment and thereby provide further scope of loss to society - conduct of petitioner shows he failed to discharge duty with due diligence - held, labour court order justified. - f.m. ibrahim kalifulla, j. 1. these two writ petitions arise out of the award, dated june 30, 1994, passed in industrial dispute no. 1 of 1992 holding that the non-employment of the petitioner in w.p. no. 562 or 1995 hereinafter called the petitioner, was not justified, that however, he was not entitled for reinstatement, but would be entitled for a sum of rs. 40,000 in lieu of reinstatement. aggrieved against the said award, the petitioner filed w.p. no. 562 of 1995, while the second respondent-society in w.p. no. 562 of 1995 hereinafter called the second respondent filed w.p. no. 2335 of 1995 aggrieved against that part of the award in granting payment of compensation.2. the brief facts leading to the impugned award are that the petitioner was employed as a packer in the second respondent- society, that on an audit conducted in the second respondent-society in the month of june, 1976, shortage of textile goods and threads worth of rs. 35,418.77 was found out, that the petitioner along with one chinna gounder, clerk of erode unit of the second respondent-society was jointly held responsible for the textile stock of the second respondent-society, that both of them admitted their responsibility for the said deficit, that both of them were placed under suspension pending enquiry in the month of august, 1976, that criminal proceedings were launched against both the workmen and that while sri chinna gounder pleaded guilty and suffered a sentence, the petitioner contested the criminal case and was ultimately convicted and sentenced by way of imprisonment till rising of the court by the trial court on august 31, 1979 apart from fine of rs. 250 and in default to undergo rigorous imprisonment for one more month, that the verdict of the trial court was ultimately set aside by the appellate court on november 14, 1979 in c. a. no. 120 of 1979.3. the petitioner was issued with a show-cause notice under exhibit w10 on december 26, 1978, that the petitioner submitted his explanation to the said show-cause notice on january 22, 1979, that an enquiry was ordered to be held by the second respondent-society and by notice dated december 26, 1978, the petitioner was called upon to appear before the sub-committee on january 12, 1979 at 11 a.m., that though the petitioner appeared before the sub-committee on january 12, 1979, he walked out of the enquiry stating that the statement submitted by him can be taken as his evidence and the sub-committee can proceed with the enquiry on that basis. on behalf of the management witnesses were examined and the sub-committee also submitted its finding to the second respondent-society. based on the findings of the sub committee, by proceedings, dated may 17, 1979, the second respondent- society dismissed the petitioner from service by invoking bye-law 10(a) of the special bye-laws applicable to the second respondent-society.4. aggrieved against the said order of termination, the petitioner raised an industrial dispute which was referred for adjudication by g.o. ms. no.2855, dated december 20, 1981, and the same was numbered as i.d. no. 10 of 1982 on the file of labour court, coimbatore, which was subsequently transferred to the file of the first respondent-labour court, salem, and it was renumbered as i.d. no. 1 of 1992.5. by the impugned award, the first respondent held that at best, the petitioner can be held responsible only in respect of the goods entrusted to him for the purpose of sale in erode shandy and not for the entire stock of the erode unit of the second respondent-society, in which, the petitioner was employed. the first respondent also held that when the petitioner has shown nil defect in respect of the goods entrusted to him for sale in erode shandy and further when he had settled the accounts relating to the deficit pointed out in respect of the sales effected in erode shandy, the termination of the petitioner by the second respondent-society was not justified. nevertheless, the first respondent was of the view that considering the allegations levelled against the petitioner, it would not be conducive to put back the petitioner in the service of the second respondent- society and therefore instead of ordering reinstatement, the second respondent was directed to pay a sum of rs. 40,000 by way of compensation.6. the learned counsel for the petitioner would contend that when once first respondent came to the conclusion that the non- employment of the petitioner was not justified, in the absence of any acceptable material to show that, reinstatement cannot be awarded, the first respondent ought to have directed the reinstatement of the petitioner with back wages, continuity of service and all other attendant benefits. the learned counsel further contended that the conclusions of the first respondent to the effect that the petitioner was responsible only in respect of the goods entrusted to him for sale in erode shandy was fully justified having regard to the oral and documentary evidence available on record, that the said conclusion having been reached by the first respondent based on thorough analysis of the evidence placed before it, this court should not interfere with the said finding merely because a different conclusion is possible. the learned counsel further contended that the second respondent only conducted a farce of an enquiry and that the dismissal order not having been fully justified by the second respondent-management by placing legally acceptable material; the order of dismissal passed against the petitioner cannot be sustained. the learned counsel also contended that the order of dismissal under exhibit w3 having been passed pursuant to the resolution, under exhibit w12 which discloses that the dismissal was solely on the ground of criminal court conviction and the criminal court conviction having now been set aside by the appellate court under exhibit w14, on this ground as well, the order of termination is liable to be interfered with.7. as against the above said contentions of the learned counsel for the petitioner, the learned counsel for the second respondent would submit that the petitioner was imposed with the joint responsibility in respect of the stocks of the unit for which sri chinna gounder was invested with full responsibility, that the petitioner and the said chinna gounder were aware of their duties and responsibilities in respect of the stock entrusted to them, that the stock deficit of rs. 35,418.77 was arrived at based on internal audit conducted on june 30, 1976 for which necessary details were furnished by the petitioner along with chinna gounder, that the stock deficit of rs. 35,418.77 was also found to be proved as disclosed by exhibits m10 to m14, that thereafter when show-cause notice was issued under exhibit w10 stating that the petitioner was responsible for the said stock deficit along with chinna gounder, no acceptable explanation was submitted by the petitioner and in the circumstances, based on the enquiry held by the sub-committee on january 12, 1979 in which necessary evidence was placed in support of the charge levelled against the petitioner which also confirmed that the petitioner was squarely responsible for the stock deficit of rs. 35,418.77 along with the said chinna gounder. the learned counsel would therefore contend that the petitioner having been convicted by the criminal court in respect of the very same charge as on date of issuance of the order of dismissal, dated may 17, 1979, the first respondent labour court ought not to have interfered with the said order of dismissal passed by the second respondent-society.8. there is no dispute that there was a deficit of rs. 35,418.77 as on june 30, 1976 as noted in exhibit m13 prepared by the internal audit. the said factor was also accepted by all the employees including the petitioner as disclosed by exhibits m10 to m14. in such a situation when the petitioner was issued with a show-cause notice under exhibit w10 holding him alone responsible with chinna gounder for the stock deficit of rs. 35,418.77, the petitioner took the stand that he was only a packer having regard to the nature of the job performed by him. it was too much for the second respondent to expect that he was responsible for any deficit in the stock which was held only by the other employee chinna gounder. the petitioner also took the stand that the said chinna gounder having owned his responsibility for the textile stock of the main unit, and, inasmuch, as there was no stock deficit at all in respect of the goods entrusted with the petitioner for the purpose of sale at erode shandy, the order of punishment imposed against him was not justified.9. in this context, it would be very relevant to refer to exhibit m10 which also contained m29 and m32, vis-a-vis, the stand of the petitioner regarding his responsibility for the stock of the unit in which he was employed. m29 and m32 are the respective duty allocations made by the second respondent-society in respect of all its employees including the petitioner and chinna gounder. while chinna gounder was given over all responsibility of the unit, the petitioner was given joint responsibility in so far as the stock relating to textile was concerned. therefore, it is not in dispute that right from the year 1974, the petitioner was holding joint responsibility in respect of the textile goods available in the unit. the petitioner though was designated as packer, he was also held responsible for the stocks relating to goods entrusted with him for carrying out sale in erode shandy. the very purpose of investing the second respondent with joint responsibility along with chinna gounder was to ensure that the property namely textile stock of the unit as a whole was not frittered away by any of the employees of the said unit. in other words, though chinna gounder was entrusted with the entire, responsibility relating to the entire stock with a view to have a check in the matter of dealing with the stocks and in particular the textile goods, the petitioner was also held jointly responsible.10. it is significant to point out that at no point of time, the petitioner expressed his disinclination to accept joint responsibility in respect of the stock of textile goods. when once the petitioner was entrusted with joint responsibility it only meant that whatever stock deficit was noted in the unit, the petitioner was equally to answer all along with the other employee, namely, chinna gounder. while that is so, according to the petitioner, he being only a packer and even though exhibits m29 and m32 talks of joint responsibility, as a matter of practice, no such responsibility was practically expected of from the petitioner by the second respondent-society as could be! gathered from the oral evidence of management witnesses themselves. the petitioner would stress upon the fact that in exhibits m29 and m32 as well as exhibit m5 what was stated was that sri chinna gounder was fully responsible for the textile stock and therefore the investing of joint responsibility on the petitioner would not in any way clothe the second respondent-society to take action against the petitioner for any deficit found in the textile stock. in fact, the said contention of the learned counsel for the petitioner found favour with the first respondent labour court which held in the award that irrespective of the duties and responsibilities prescribed under exhibits m29 and m32, going by the practice prevailing in the second respondent-society, the petitioner cannot be held responsible for the textile stock.11. i am afraid the said conclusion of the first respondent cannot be sustained at all. i am of the view that the said conclusion reached by the first respondent in the light of the documentary evidence available on record is wholly perverse and the same is liable to be set aside. when the documents by way of exhibits m29 and m32 revealing in unequivocal terms that the petitioner was jointly responsible for any stock deficit in respect of textile goods and the said document contained the signature of the petitioner who also admitted of having been invested with the said joint responsibility under those exhibits, the conclusion of the first respondent totally ignoring the above said documentary evidence can only be characterised as a perverse finding. merely because chinna gounder was held fully responsible for the textile stock, the same did not mean that even when indisputably stock deficit was noted, no responsibility can be fixed on the petitioner. even the oral evidence of the management witnesses does not disclose that the petitioner was not in any way responsible for the stock deficit. the witnesses have only admitted that chinna gounder was entrusted with full responsibility while the petitioner was entrusted with joint responsibility. the petitioner also admitted that he was having joint responsibility in respect of the textile stock. in such circumstances, the conclusion of the labour court contrary to the evidence placed before it, only discloses its total wrong approach while arriving at its conclusion. it is one thing to say that where two different conclusions are possible, and the labour court reached one conclusion merely because a different conclusion is also plausible, the high court exercising its power under article 226 should not venture to set at naught the conclusion reached by the labour court. however, where based on the evidence available on record, the labour court could not have rendered such a conclusion, and if the labour court by a wrong approach reached such a conclusion there is no other way out for this court except to set aside such a wrong conclusion reached by the labour court. in that view of the matter, i am obliged to interfere with the award of the first respondent labour court in so far as it held that the petitioner cannot be held responsible for the textile stock of the unit.12. the other contention of the learned counsel for the petitioner that the second respondent did not hold proper enquiry before inflicting the punishment of dismissal is concerned, inasmuch as the enquiry relied upon by the second respondent- society was set at naught, the second respondent-society placed entire material before the first respondent labour court to sustain the order of dismissal passed against the petitioner and when the labour court had the opportunity to analyse the relative contentions of the petitioner as well as the second respondent, the manner in which the enquiry was held pales into insignificance. therefore the said contention does not in any way help the petitioner in this case.13. as regards the last contention of the learned counsel for the petitioner that the order of dismissal under exhibit w13 was based upon the resolution under exhibit w12 which was solely based on the criminal court conviction, as rightly contended by the learned counsel for the second respondent, on the date when the order of dismissal came to be issued, the petitioner was found guilty of the charges by the criminal court as disclosed by exhibit w8. in such circumstances, no fault can be found with the order of termination issued under exhibit w13. moreover, the order of termination which was resolved to be made under exhibit w12 was by invoking clause 10(a) of the bye-laws applicable to the second respondent-society. that is a general power vested with the second respondent-society for inflicting the punishment of dismissal on any of its employees. therefore in view of the fact that the allegation levelled against the petitioner with regard to textile stock deficit having been proved beyond doubt, the order of termination under exhibit w13 was fully justified having regard to the gravity of misconduct found proved against the petitioner. in such circumstances, the award of the first respondent holding that the non-employment was not justified is set aside.14. in the result, writ petition no. 2335 of 1995 is allowed and writ petition no. 562 of 1995 is dismissed. no costs. consequently, all the connected wm.ps. are closed.15. these petitions coming for hearing on wednesday, the seventh day of february, 2001 and having been posted this day for being mentioned and upon hearing the arguments of the aforesaid advocate on either side and having stood over for consideration till this day, the court made the following order;(1) after orders were pronounced on january 30, 2001 in the above writ petitions, at the instance of the learned counsel for the petitioner, these writ petitions were posted before the court today for being mentioned. (2) the learned counsel submitted that even assuming the petitioner was guilty of the misconduct levelled against him, having regard to the nature of the charges as held proved, the punishment of dismissal was too harsh and therefore the same should be modified. the learned counsel relied upon sathyamangalam co-operative urban bank ltd. v. deputy registrar of co-operative society and anr. and contended that the misconduct in this case could at best be held to be one due to negligence of the petitioner and not even wilful negligence and therefore applying the ratio of the judgment rendered in (supra), the petitioner should be imposed with a lesser punishment and not the capital punishment of dismissal. the learned counsel also contended that in any event, chinna gounder who was incharge of the branch haying made good the entire shortage owning his responsibility, the petitioner ought not to have been punished. the learned counsel also relied upon m.d. kuppuswamy and another in. re. 1966 (1) m.l.j. 409 for the proposition that in the matter of civil liability, there should be clear evidence to show that the petitioner was invested with the responsibility with regard to the stock held in the branch and in the absence of sufficient proof, the petitioner ought not to have been inflicted with serious punishment of dismissal. (3) on considering the above submission of the learned counsel for the petitioner, i am of the view that this is not a case of mere negligence which caused loss to the society. here is a case where sri chinna gounder and the petitioner tacitly admitted to have owned the responsibility in respect of the stock relating to the textile stock of the branch of the society. when once certain responsibilities were entrusted with the employees, it is their bounden duty to satisfactorily convince the authority as and when any shortage is noted in the stock entrusted with them. when the petitioner and chinna gounder were jointly responsible relating to the textile stock of the branch of the second respondent-society, merely because sri chinna gounder owned his responsibility for the entire stock, for reasons best known to him, the same will not absolve the petitioner of his responsibility. the society cannot act based on such conduct displayed by a co-employee. the society is entitled to rely upon the duties and responsibilities which it entrusted to its employees and proceed on that basis whenever any shortfall is noted. duties and responsibilities are not determined based on the conduct of the individual employees which may vary depending upon their own volition and relationship with their co-employees. therefore the petitioner cannot expect the society to act on the basis of the conduct of his co-employee chinna gounder and thereby ask the society to consider the imposition of punishment on that basis. when the petitioner was jointly responsible for the textile stock of the branch and when shortage. to an extent of more man rs. 25,000 in respect of textile alone was found to be in existence as on june 30, 1976, the said shortage cannot be held to have occurred merely due to the negligence of the petitioner. even assuming that the shortage was due to the negligence of the petitioner, the negligence in the case on hand having resulted in a huge loss to the second respondent co-operative society, the same cannot afford to take the risk of continuing the petitioner in employment and thereby provide scope for further loss to the society. having found the shortage, and the person responsible for the resultant shortage, the second respondent-society was fully justified in removing the petitioner from its service. the theory of negligence which is sought to be introduced by the petitioner is purely an after thought. the very purpose of entrusting the joint responsibility with the petitioner was to put a check on the other employee sri chinna gounder and thereby prevent any pilferage from taking place in the branch. the conduct of the petitioner only shows that he did not discharge the onerous responsibility vested with him with due diligence and the interest of the second respondent-society was not in any way protected by him. such conduct of the petitioner cannot be dealt with lightly by imposing a lesser punishment other than the dismissal. therefore i do not find any extenuvating circumstances to take a lenient view in the matter of punishment. therefore as held by me, the order of termination issued to the petitioner under exhibit w13 was fully justified and there is no scope to interfere with the same. this order shall also form part of the earlier order, dated january 30, 2001.