Deputy Vice President (HR), Federal Bank Limited v S. Ashraf Ex-Substaff and The Central Government Industrial Tribunal, Cum Labour Court, Ernakulam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **FRIDAY, THE 10TH DAY OF JULY 2020 / 19TH ASHADHA, 1942** ## **WP(C).No.11668 OF 2020(G)** ## **PETITIONER/S:** **DEPUTY VICE PRESIDENT (HR) FEDERAL BANK LIMITED, REGD OFFICE.FEDERAL TPWERS, ALUVA-683 101.** **BY ADVS. SMT.LATHA ANAND SRI.M.N.RADHAKRISHNA MENON SRI.S.VISHNU (ARIKKATTIL) SRI.RADHAKRISHNA PILLAI B SHRI.SIDHARTH P.S. SHRI.RISHI VARMA T.R.** ## **RESPONDENT/S:** **1 S.ASHRAF EX-SUBSTAFF, CHARUVILLAVEEDU, MEVERKAL, ALAMKODU P.O.ATTINGAL (VIA)-695 101, KERALA 2 THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, CUMLABOUR COURT, 138/377, A-2, KARITHALA LANE, KARSHAKA ROAD, ERNAKULAM-682 016.** **R2 BY ADV. SHRI.P.VIJAYAKUMAR, ASG OF INDIA** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15-062020, THE COURT ON 10-07-2020 DELIVERED THE FOLLOWING:** **WP(C).No.11668 OF 2020(G)** **2** ## **JUDGMENT** ## **Dated this the 10[th] day of July 2020** Petitioner, a banking company registered under the Banking Regulation Act through its Deputy Vice President, in the instant writ petition laid challenge to the award Ext.P19 dated 18.10.2019. 2. The facts leading to passing of the award and its challenge are that the terms and conditions of staff including the disciplinary action are governed by the bipartite settlement (herein after referred to as 'BPS') between the representatives of Indian Banks Association and various unions representing employees of the Banks. The aforementioned BPS was earlier entered into on 19.10.1966 and later on substituted/modified on 10.04.2002, Exts.P1 and P2 respectively. The respondent No.1 was employed as a sub-staff at Perumathara Branch, Thiruvananthapuram. He alleged to have fraudulently withdrawn an amount of Rs.16,000/- from SB Account No.1942 of one K.Ashraf on 12.10.1990. The commonality was in the name ie., Ashraf. Management recieved a complaint from the **WP(C).No.11668 OF 2020(G) 3** customer resulting into filing of a police complaint before the Kadinakulam Police Station as crime No.46/91. The first respondent was arrested and placed under suspension vide order dated 29.9.1992. The police after investigation, filed the report under Section 420, 468 and Section 471 of Indian Penal Code. The learned Judicial Magistrate vide judgment dated 30.4.1998 convicted the petitioner for the offences aforementioned and sentenced to undergo simple imprisonment. 3. Against the aforementioned judgment of the Judicial Magistrate, an appeal was preferred before the Sessions Court and vide judgment dated 20.4.2003, Ext.P5, the first respondent was acquitted. 4. Learned senior counsel assisted by Smt. Latha Anand, learned counsel appearing on behalf of the petitioner submits that based on the conviction as per Ext.P3, the petitioner management dismissed him from the service of the bank as per order dated 12.9.1998 in accordance with the provisions of para 19.3(b) of BPS dated 19.10.1966, Ext.P1 and superseded by clause 3(b) of Exhibit P2 BPS dated 10.04.2002. But despite that the labour court in reference under Section 2A has set aside the aforementioned dismissal order and ordered for **WP(C).No.11668 OF 2020(G) 4** reinstatement of the first respondent from the date of acquittal ie., 20.06.2003. The award aforementioned is wholly atrocious, illegal, fallacious, and not sustainable. Counsel for the petitioner in view of the aforementioned facts, challenged the award by raising following submissions: i. Rule 3 of Ext.P2 provides that when an employee has committed an offence, the bank is at liberty to take steps to prosecute employee and in the event of said prosecution ending in conviction, he can either be dismissed or a lesser punishment can be given. But if he be acquitted, it shall be open to the management to proceed against him as per the provisions set out below in Clauses 11 and 12 relating to discharge. ii. Clause 11 of Ext.P2 envisages communication of disciplinary action whereas clause 12 a procedure to be followed like issuing of charge-sheet, enquiry, explanation to defend, effective hearing etc. In the present case, the first respondent was terminated with three months in lieu of notice. If the tribunal was of the view that there was no sufficient evidence to find him guilty, ought not to have been interfered with discharge notice as it shall not amount a disciplinary action. Assuming for an arguments that the Tribunal found there was no sufficient **WP(C).No.11668 OF 2020(G) 5** material, it ought to have treated discharge and refrained from interfering with the termination order. iii. The Tribunal swayed away in not applying judicious mind as in Ext.P14, the claim statement it was specifically pleaded that the domestic enquiry culminated into dismissal thus it cannot be sauid there was non compliance of principles of natural justice. Even the enquiry officer was examined as MW1 and enquiry file was marked as M1. It was next contended that if at all the Tribunal ought to have framed the preliminary issue, whether the enquiry was vitiated or sustainable. Thereafter, in view of the pleadings in the written statement given a chance for availment of additional evidence, irrespective of proviso to Section 11A of Industrial Disputes Act, 1947. The only issue left behind for Tribunal was sustainability of the punishment. The Tribunal misdirected with regard to appreciation of evidence in domestic enquiry. If the Tribunal was of the view that the enquiry was vitiated for any reasons, such as procedure adopted by enquiry officer or correctness of finding, an opportunity to adduce evidence afresh to make out the charges ought to have been given. In support of the submissions, reliance has been laid to the judgment of the **Hon'ble Supreme Court in 1996** **WP(C).No.11668 OF 2020(G) 6** **(4) SCC 374 Bharath forge Co.Ltd. v. A.B Zodge and another.** 5. I have heard the learned counsel for the petitioner and of the view that there is no force and merit. Section 11(A) of 1947 Act, empowers the Tribunal to assess an evidence whether the decision of the employer was justified but its scope to lead an additional evidence was enlarged in view of the judgment referred to above. Petitioner though a averred in written statement for additional evidence. In my view, such ratio of decidendi culled out in paragraph 7 of the judgment cited above would not be applicable, it reads thus: “A domestic enquiry may be vitiated either for noncompliance of rules of natural justice or for perversity. Disciplinary action taken on the basis of a vitiated enquiry does not stand on a better footing than a disciplinary action with no enquiry. The right of the employer to adduce evidence in both the situations is well-recognised. In this connection, reference may be made to the decisions of this Court in Workmen of Motipur Sugar Factory (P) Ltd. Vs. Motipur Sugar Factory (P) Ltd. (1965 (II) LLJ 162 (SC>). State Bank of India Vs. R.K.Jain (1971 (III) LLJ 599 (SC>). Delhi Cloth General Mill Co. Ltd. Vs. Ludh Budh Singh (1972 (1) LLJ 180 (SC>) and Firestone Tyre Co.s Case (supra). The stage at which the employer should ask for permission to c additional evidence to justify the disciplinary action on merits was indicated by this Court in Delhi Cloth and General Mill's case (supra). In Sankar Chakrabarty's case (supra), the contention that in every case of disciplinary action coming before the Tribunal, the Tribunal as a matter of law must frame preliminary issue and proceed to see the validity or otherwise of the enquiry and then serve a fresh notice on the employe- by calling him to adduce further evidence to sustain the charges, if **WP(C).No.11668 OF 2020(G)** **7** the employer chooses to do so, by relying on the decision of this Court in the case of Cooper Engineering Ltd. (1975 (2) LLJ 379 (SC>), has not been accepted. The view expressed in Delhi Cloth Mill's case (supra) that before the proceedings are closed, an opportunity to adduce evidence would be given if a suitable request for such opportunity is made by the employer to the Tribunal, has been reiterated in Sankar Chakrabarty's case after observing that on the question as to the stage as to when leave to adduce further evidence is to be sought for, the decision of this Court in Cooper Engineering Ltd. has not overruled the decision of this Court in Delhi Cloth Mill's case. There is no dispute in the present case that before the closure of the proceedings before the Tribunal, payer was made by the employer to lead evidence in support of the impugned order of dismissal. Hence, denial of the opportunity to the employer to lead evidence before the Tribunal in support of the order of dismissal cannot be justified.” 6. In the domestic enquiry, the employer miserably failed to prove the identity of person who had withdrawn the amount or any other independent evidence establishing the role of first respondent. It is not a case that the enquiry was perverse or without any evidence or the employer could not discharge the burden proving the charges served upon the first respondent. The documentary evidence marked in criminal proceedings were also marked in the enquiry which ultimately entailed into acquittal by the Sessions court. It is settled law that the management has to lead an independent evidence than what has been led a criminal court to establish the guilt of the employee in the domestic enquiry. Thus there was hardly any justification for granting opportunity to employer for leading **WP(C).No.11668 OF 2020(G)** **8** additional evidence in terms of the judgment referred above. Accordingly, the argument of the learned counsel for the petitioner on this point is rejected. As regards the applicability of clauses 11 and 12 of BPS of 2002, in order to appreciate the argument, it is expedient to extract clauses 3, 11 and 12 of BPS. **3.** (a) When in the opinion of the management an employee has committed an offence, unless he be otherwise prosecuted, the bank may take steps to prosecute him or get him prosecuted and in such a case he may also be suspended. (b) If he be convicted, he may be dismissed with effect from the date of his conviction or be given any lesser form of punishment as mentioned in clause 6 below. (c) If he be acquitted, it shall be open to the management to proceed against him under the provisions set out below in clauses 11 and 12 infra relating to discharges. However, in the event of the management deciding after enquiry not to continue him in service, he shall be liable only for termination of service with three months pay and allowances in lieu of notice. And he shall be deemed to have been on duty during the period of suspension, if any, and shall be entitled to the full pay and allowances minus such subsistence allowance as he has drawn and to all other privileges for the period of suspension provided that if he be acquitted by being given the benefit of doubt he may be paid such portion of such pay and allowances as the management may deem proper, and the period of his absence shall not be treated as a period spent on duty unless the management so directs. (d) If he prefers an appeal or revision application against his conviction and is acquitted, in case he had already been dealt with as above and he applies to the management for reconsideration of his case, the management shall review his case and may either reinstate him or proceed against him under the provisions set out below in Clauses 11 and 12 infra relating to discharge, and the provision set out above as to pay, allowances and the period of suspension will apply, the period up-to-date for which full pay and allowances have not been drawn being treated as one of suspension. In the **WP(C).No.11668 OF 2020(G)** **9** event of the management deciding, after enquiry not to continue him in service, the employee shall be liable only for termination with three months pay and allowance in lieu of notice, as directed above. **11.** When it is decided to take any disciplinary action against an employee such decision shall be communicated to him within three days thereof. **12.** The procedure in such cases shall be as follows: (a) An employee against whom disciplinary action is proposed or likely to be taken shall be given a chargesheet clearly setting forth the circumstances appearing against him and a date shall be fixed for enquiry, sufficient time being given to him to enable him to prepare and give his explanation as also to produce any evidence that he may wish to tender in his defence. He shall be permitted to appear before the Officer conducting the enquiry, to cross-examine any witness on whose evidence the charge rests and to examine witnesses and produce other evidence in his defence. He shall also be permitted to be defended- (i) (x) by a representative of a registered trade union of bank employees of which he is a member on the date first notified for the commencement of the enquiry. (y) where the employee is not a member of any trade union of bank employees on the aforesaid date, by a representative of a registered trade union of employees of the bank in which he is employed: OR (ii) at the request of the said union by a representative of the state federation or all India Organization to which such union is affiliated: OR (iii) with the Bank's permission, by a lawyer. He shall also be given a hearing as regards the nature of the proposed punishment in case any charge is established against him. (b) Pending such inquiry or initiation of such inquiry he may be suspended, but if on the conclusion of the enquiry it is decided to take no action against him he shall be deemed to have been on duty and shall be entitled to the full wages and allowances and to all other privileges for the period of suspension; and if some punishment other than dismissal is inflicted the whole or a part of the period of suspension, may, at the discretion of the management, be treated as on duty with the right to a corresponding portion of the wages, allowances, etc. **WP(C).No.11668 OF 2020(G)** **10** (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 bank does not, for some reason 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. (d) If the representative defending the employee is an employee of the same bank at an outstation branch within the same State, he shall be relieved on special leave (on full pay and allowances) to represent the employee and be paid one return fare. The class of fare to which he will be entitled would be the same as while traveling on duty. In case of any adjournment at the instance of the bank/enquiry officer, he may be asked to resume duty and if so, will be paid fare for the consequential journey. He shall also be paid full halting allowance for the period he stays at the place of the enquiry for defending the employee as also for the days of the journeys which are undertaken at the bank's cost. Explanation: 'State' for the purpose, shall mean the area which constitutes a political State, but this explanation will not apply to SBI. (e) An enquiry need not be held if: (i.) the bank has issued a show cause notice to the employee advising him of misconduct and the punishment for which he may be liable for such misconduct. (ii.) the employee makes a voluntary admission of his guilt in reply to the aforesaid show cause notice; and (iii) the misconduct is such that even if proved the bank does not intend to award the punishment of discharge or dismissal. However, if the employee concerned requests a hearing regarding the nature of punishment, such a hearing shall be given. (f) An enquiry need not also be held if the employee is charged with minor misconduct and the punishment proposed to be given is warning or censure. However, **WP(C).No.11668 OF 2020(G)** **11** (i) the employee shall be served a show cause notice advising him of the misconduct and the evidence on which the charge is based; and (ii) the employee shall be given an opportunity to submit his written statement of defence, and for this purpose has a right to have access to the documents and material on which the charge is based; (iii) if the employee requests a hearing such a hearing shall be given and in such a hearing he may be permitted to be represented by a representative authorized to defend him in an enquiry had such an enquiry been held. (g) Where an employee is charged with a minor misconduct and an enquiry is not held on two previous occasions, an enquiry shall be held in respect of the third occasion. 7. On perusal of the extracted portion of BPS clause (d) empowers the management either to reinstate or proceed against him under the provision set out in clauses 11 and 12 relating to discharge. Clauses 11 and 12 only prescribe a procedure in respect of the domestic enquiry. No material has been placed on record or contemplated to lead an additional evidence in terms of the judgment cited (supra). The labour court also examined facts culminated into charging the workman on the premise that on the date of occurrence workman used to be deployed to handle the work which was normally handled by clerical staff. On 12[th] October 1990, the first respondent/workman was handling SB Section and received a withdrawal slip and after entering in the ledger the same was handed over to MW-1 for approval and after approval of the **WP(C).No.11668 OF 2020(G)** **12** payment the same was released to the person who presented the withdrawal slip. When the withdrawal slip was presented without passbook it was the role of the sanctioning authority to identify the Presenter and not that of the workman. As per the statement of MW-1 he confirmed the identity of the presenter before approving the same. Even a token number of 104 on the reverse side of the withdrawal form was also allotted. The labour court examined the report of the enquiry and found that cashier of the bank could not identify the person who received the cash from the Bank against Ext.ME-9 withdrawal slip. In the absence of any proof of charges with regard to the misappropriation and fraud, I am in agreement with the finding of the labour court in ordering reinstatement with back wages ie., from the date when the Sessions Court acquitted the workman. The cumulative observations of mine do not warrant any interference of judicial review under Article 226 of the Constitution of India with the well reasoned findings in the award, Ext.P9. Accordingly, the writ petition is dismissed. ## **Sd/-** ## **AMIT RAWAL** sab **JUDGE** **WP(C).No.11668 OF 2020(G)** **13** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF EXTRACT OF THE RELEVANT PROVISIONS RELATING TO THE DISCIPLINARY ACTION DATED 19.10.1966** - **EXHIBIT P2 TRUE COPY OF THE EXTRACT OF THE PROCEDURE AS PER BIPARTITE SETTLEMENT DATED 10.4.2002** **EXHIBIT P3 TRUE COPY OF THE JUDGMENT OF JFMC DATED 30.4.1998** - **EXHIBIT P4 TRUE COPY OF THE TERMINATION ORDER DATED 12.9.1998 ISSUED TO THE 1ST RESPONDENT** - **EXHIBIT P5 TRUE COPY OF JUDGMENT DATED 20.6.2003 SETTING ASIDE THE CONVICTION AND SENTENCE ACQUITTING THE 1ST RESPONDENT** - **EXHIBIT P6 TRUE COPY OF CHARGE-SHEET DATED 19.7.2004 ISSUED BY THE PETITIONER MANAGEMENT TO THE 1ST RESPONDENT** - **EXHIBIT P7 TRUE COPY OF EXPLANATION DATED 3.8.2004 SUBMITTED BY THE 1ST RESPONDENT TO THE PETITIONER** - **EXHIBIT P8 TRUE COPY OF THE FINDINGS OF THE INQUIRY OFFICER DATED 3.10.2005** - **EXHIBIT P9 TRUE COPY OF REPRESENTATION DATED 12.11.2005 SUBMITTED BY THE 1ST RESPONDENT TO THE PETITIONER** - **EXHIBIT P10 TRUE COPY OF MEMORANDUM DATED 16.12.2005 EXHIBIT P11 TRUE COPY OF THE PROCEEDINGS OF THE DISCIPLINARY AUTHORITY DATED 23.12.2005** **EXHIBIT P12 TRUE COPY OF TERMINATION ORDER DATED 7.1.2006 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT** **EXHIBIT P13 TRUE COPY OF ORDER DATED 24.3.2006 OF THE APPELLATE AUTHORITY** **EXHIBIT P14 TRUE COPY OF CLAIM STATEMENT DATED 25.6.2007 SUBMITTED BY THE 1ST RESPONDENT** **WP(C).No.11668 OF 2020(G) 14** **EXHIBIT P15 TRUE COPY OF REINSTATEMENT ORDER DATED 1.8.2007 SUBMITTED BY THE PETITIONER TRAVERSING THE CONTENTIONS OF THE 1ST RESPONDENT** **EXHIBIT P16 TRUE COPY OF AWARD DATED 6.10.2008 REINSTATEMENT OF THE 1ST RESPONDENT FROM THE DATE OF ACQUITTAL EXHIBIT P17 TRUE COPY OF JUDGMENT IN WPC 9797/2009 DATED 6.7.2017 EXHIBIT P18 TRUE COPY OF JUDGMENT IN WA NO 1915 OF 2017 DATED 22.9.2017 EXHIBIT P19 TRUE COPY OF AWARD OF THE 2ND RESPONDENT DATED 18.10.2019 HOLDING THAT THE ACTION OF THE PETITIONER IS NOT LEGAL AND JUSTIFIABLE EXHIBIT P20 APPLICATION TO OPEN TO SD ACCOUNT (ME-2) EXHIBIT P21 PHOTO COPY OF ME DOCUMENT EXHIBIT P22 PHOTO COPY OF ME DOCUMENT EXHIBIT P23 PHOTO COPY OF DOCUMENT EXHIBIT P24 PHOTO COPY OF ME DOCUMENT EXHIBIT P25 PHOTO COPY OF ME DOCUMENT EXHIBIT P26 PHOTO COPY OF ME DOCUMENT EXHIBIT P27 PHOTO COPY OF ME DOCUMENT**