Central Bank of India Ltd. Vs.
Karunamoy Banerjee [1967] INSC 180 (18 August 1967)
18/08/1967 VAIDYIALINGAM, C.A.
VAIDYIALINGAM, C.A.
HIDAYATULLAH, M.
CITATION: 1968 AIR 266 1968 SCR (1) 251
CITATOR INFO :
R 1968 SC 236 (9)
ACT:
Industrial Dispute--Domestic
Enquiry--Employee admitting charges and pleading extenuating
circumstances--Examining him before other witnesses and asking him questions
whether violative of natural justice.
HEADNOTE:
The respondent who was an employee of the
appellant bank was charged with issuing unauthorised overdrafts to a
constituent. A domestic enquiry was held against him. In two written
explanations before the enquiry he admitted, the allegations against him and
only pleaded extenuating circumstances. At the enquiry he was examined in the
first instance; having again admitted his fault he was asked certain questions
by the Enquiry Officer in respect of the extenuating circumstances pleaded by
him. Two more witnesses were then examined by the Enquiry Officer.
Finally, according to the latter's report the
respondent was discharged. In proceedings under s. 33(2)(b) of the Industrial
Disputes Act, 1947 the Labour Court, Dhanbad held that the enquiry was bad for
violation of natural justice inasmuch as the respondent had teen examined
before other witnesses and was unduly cross-examined. The bank appealed by
special leave.
Held: The rules of natural justice as laid
down by this Court have tobe observed in the conduct of a domestic enquiry
against a workman. If the allegations are denied by the workman the burden of
proving the truth of those allegations will be on the management; and the
witnesses called by the management must be allowed to be crossexamined by the
workman and the latter must also be given an opportunity to examine himself and
adduce any other evidence that he might choose, in support of his plea. But if
the workman admits his guilt, to insist upon the management to let in evidence
about the allegations will be an empty formality. In such a case it will be
open to the management to examine the workman himself, even in the first
instance, so as to enable him to offer any explanation for his conduct, or to
place before the management any circumstances which will go to mitigate the
gravity of the offence. But, even then, the examination of the workman, under
such circumstances, should not savour of an inquisition. If, after the
examination of the workman the management chooses to examine any witnesses, the
workman must be given a reasonable opportunity to cross-examine those witnesses
and also to adduce any other evidence that he may choose. [259D-F] In the
present case the respondent in his written explanations had admitted the
charges and therefore there was no violation of natural justice in first
examining him.
The questions put to him were not unfair. The
Labour Court was wrong in not giving approval to his discharge. [258F;
259A, G] Associated Cement Co. Ltd., v.
Workman [1964] 3 S.C.R. 652, distinguished.
Strawboard Manufacturing Co. v. Gobind,
[1962] Supp. 3 S.C.R. 618, referred to.251 252
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 440 of 1966.
Appeal by special leave from the order dated
May 30, 1964 of the Central Government Labour Court, Dhanbad in Application No.
L.P. 123 of 1962.
H. R. Gokhale, C. A.,Chopra, P. C. Bhartari,
land 0. C.
Mathur, for the appellant.
Janardan Sharma, for the respondent.
The Judgment of the Court was delivered by
Vaidialingam, J. This appeal, by special leave, by the appellant Bank, is
directed against the order, dated May 13, 1964, of the Central Labour Court,
Dhanbad, rejecting an application, filed by the Bank, under s. 33(2)(b), of the
Industrial Disputes Act, 1947 (Act XIV of 1947) (hereinafter called the Act),
and declining to grant approval of the action taken, by the Bank, by way of
discharging the respondent-workman, from the Bank's services.
The respondent was, at the material time, the
Assistant Accountant, at the main Office of the Bank, at Calcutta. In view of
certain serious irregularities, noticed by the Bank, in respect of the work of
the respondent in the Current Accounts Department and, in particular, in
current account ledgers Nos. 4 and 6, by order dated March 8, 1961, the respondent
was suspended, with immediate effect. He was also informed that the charges
against him would be communicated, in due course.
By a further communication, dated March
13/14, 1961, the respondent was required to offer his explanation, in respect
of four allegations made in the said communication. The main allegations were
that, in respect of ledger 'accounts Nos. 4 and 6, standing in the names of
Messrs. Commercial Bureau and Messers Evergreen Paper Syndicate and Messrs.
Gokul Chand Radharam, respectively,
overdrafts had been allowed, by the respondent, from time to time, without
obtaining the sanction of the authorities competent to allow overdrafts. The
other allegations were to the effect that the respondent, who was charged with
the duty of supervising both these ledgers. did not bring to the notice. of the
authorities the said irregularities, that must have come to his knowledge, and
that the pass -book of ledger No. 4 was missing. The respondent sent a reply,
dated March 17, 1961, wherein he has admitted that, in the course of discharge
of his routine duties and responsibilities, in good faith and honestly, he had
granted overdrafts to the parties referred to, by the Bank, temporarily, in
excess of their credits or limits, without reference to the higher authorities.
He also admitted that it was a blunder on his part and that he should not have
done so. He offered an explanation to, the effect that he was led to believe in
the credit-worthiness of the individuals, because of their long association
with the Bank and also because of the fact that, on prior occassions,
overdrafts 253 had been granted to them, in excess of permissible limits.
He also stated that the Bank had not been put
to any financial loss because of his having granted the overdrafts;
but, he again admitted his negligence, in not
strictly abiding by the Bank's rules, when he made the overdrafts.
He, however, added that his conduct had
always been guided by good faith and honesty. This Was the answer, regarding
the main allegations, contained in the Bank's letter, dated March 13/14, 1961.
He also stated, regarding the other minor allegations, that it was not his duty
to report about the debit balances, which was the function of the ledgerkeeper,
and that he was not also responsible for the loss of the pass book, of ledger
No. 4. He wound-up his explanation by stating that his conduct, in making the
overdrafts, without obtaining the sanction of the higher authorities,, was an
omission which had been, unfortunately, committed by him, and he expresed
regret for the same and requested the management to excuse him, accepting his
explanation.
The appellant Bank was not satisfied with the
explanation offered by the respondent, and communicated a charge-sheet, on June
3, 1961. The main charges related to the overdrafts, paid by the respondent, in
ledger Nos. 4 and 6, without obtaining the permission of the proper sanctioning
authority. The Bank also informed the respondent that he would, be given a
further opportunity to explain his conduct, in relation to those matters, and
defend himself in the enquiry which would be held by the Agent of the Bank, on
June 20, 1961, at 3.30 p.m.
The respondent again sent a reply, dated July
11, 1961, to the charge-sheet served on him. In this reply also, he admitted
that, in the course of discharge of his routine duties and responsibilities, he
had allowed the parties, mentioned in the charge-sheet, to overdraw, in excess
of their credits, without reference to the higher authorities, and that it was
a blunder on his part which he should not have committed. But, he again
reiterated that he, in good faith and bona fide, was led to believe about the
creditworthiness of the parties, who had long association, with the Bank. He
also emphasized, here again, that the Bank had not been put to any financial
loss, because of his conduct.
He again admitted that this act of permitting
the parties concerned to overdraw, in excess of their limits, without reference
to the sanctioning authorities, amounted to negligence, but his conduct was
perfectly bona fide and honest. He also offered explanation, on the minor allegations,
to the effect that it was the duty of the ledgerkeeper to give the figures
regarding the overdrafts and that he had not done any mis-reporting to the
higher authorities.
Finally he made a plea that he had been
serving the institution for over 20 years without any blemish, and the
unfortunate omission, done by him, in the matter of not taking the sanction of
the higher authorities, might be excused, accepting his expression of regret,
254 The inquiry proceedings (conducted by the Agent, who was the Inquiry
Officer), produced before the Labour Court, shows that the respondent was
examined in the first instance.
After eliciting answers regarding the duration
of his employment, in the institution, and as to the nature of the work he was
discharging, he was asked about the charge-sheet served on him, as well as the
explanation, furnished by him.
The respondent has categorically answered to
the effect that he has understood the charge-sheet and that he does not want to
add anything more to the explanation that he has already submitted. This answer
must have reference to the explanation, furnished by him, on June 20, 1961, in
answer to the charge-sheet, wherein he has admitted his mistake in sanctioning
the overdrafts, to the parties concerned, without obtaining the sanction of the
appropriate authorities.
But, inasmuch as he has stated, in his
explanation, that on prior occasions also overdrafts have been allowed beyond
the permissible limits, certain questions were put to him, in respect of those
matters. The respondent, no doubt, appears to have stated that some of the
cheques, issued to the parties concerned, have been initialled by an Officer of
the Bank, Mr. Bhatena. The respondent, again, squarely admitted, in his
answers, that he has committed a blunder in granting advances, on his own
responsibility, of about Rs. 87,000. He has also admitted that he did not make
any reference to the Agent, when passing the cheques, regarding the accounts of
Messrs. Evergreen Paper Syndicate or Messrs. Gokul Chand Radharam.
During the course of the inquiry, the
respondent was allowed to search the records concerned, and trace, if possible,
any cheques that may have been initialled by Mr. Bhatena, and no such cheque
could be traced. Inasmuch as three other officers, whose conduct was being
enquired into, had made certain statements against the respondent, the latter
was asked as to whether he wanted to examine, or cross-examine those persons;
and the respondent very clearly stated that he did not like to cross-examine
anybody.
The Management then examined Mr. Bhatena and
Mr. Savkar, two Officers of the Bank, in the presence of the respondent. It is
also seen that the respondent has also put certain questions to those two
witnesses; and he has also stated that he has no further questions to be put to
them. At the conclusion of the recording of the evidence, it is seen that the
respondent finally made an appeal to the Enquiring Officer to consider his case
sympathetically, at the same time admitting his acts of omission, in the
discharge of his duties. He has also expressed his gratitude for the patient
hearing that has been given to him during the inquiry.
The Enquiry Officer, in his report, dated
November 10, 1961, has, after referring to the nature of the enquiry conducted
by him, 255 found the respondent guilty of the main charges of having permitted
the parties concerned, to obtain overdrafts, beyond the permissible limits,
without having obtained the sanction of the appropriate authorities. In this
connection, the Enquiry Officer has referred to the fact that these allegations
have been admitted by the respondent.
Regarding the other minor allegations, that
the respondent caused other officers to record debit balances incorrectly, and
the loss of the pass book relating to ledger No. 4, the respondent was
exonerated. The Enquiry Officer was of the view that the offence committed by
the respondent, of which he had, been found guilty, was very serious which
merited dismissal; but, in view of the long number of years of service put in
by the respondent and as no loss has resulted to the Bank itself, he held that
the respondent should be discharged from service.
The Bank communicated the order of discharge,
by its letter, dated June 27, 1962, enclosing a pay-order for Rs. 472.70 being
the wages for one month, viz., July 1962. The respondent, who had a right to
file an appeal, against this order of discharge, based upon the finding of the
Enquiry Officer, does not appear to have had recourse to any appeal, but, on
the other hand, filed a representation, dated July 11, 1962, before the
Managing Director of the appellant Bank. Even in this representation, he has
not, in any manner, attacked the enquiry proceedings, nor the findings recorded
by the Enquiry Officer. On the other hand, he again admitted his fault in
having permitted, overdrafts, to the parties concerned, without obtaining the
sanction of the appropriate authorities after expressing regret for his
conduct. He also stated that the Bank had not suffered any financial loss,
because of his conduct. Having due regard to these circumstances, he made a
plea for mercy being shown to him, by cancelling the order of discharge and
permitting him to resume his duties in the Bank. The Managing Director, by his
communication, dated September 17, 1962, rejected the representation made by
the respondent, and declined to reinstate him in the Bank's service.
In the meanwhile, inasmuch as an industrial
dispute was pending before the National Industrial Tribunal, the appellant had
filed, an application, before the said Tribunal, on March 17, 1962, under s.
33(2) of the Act, seeking approval of the action taken against the respondent,
on the basis of the recommendation of the Enquiry Officer.
This application was transferred to the
Central Government Labour Court, Dhanbad, on April 18, 1962. in the objections,
dated September 2, 1963, filed by the respondent before the Labour Court, for
the first time he raised the plea that in view of the advice given by the
officers of the Bank, he sent replies admitting his guilt regarding the
allegations made against him, by the Bank. He also raised the plea that the
overdrafts, that were given by him, to the parties concerned, were 256 really
due to oral orders given by the then Agent and the Superintendent, on
telephone. He also raised the plea that he was not allowed to represent his
case, through the Union, before the Enquiry Officer, nor was he allowed to
cross examine the persons making allegations against him.
We have elaborately referred to the matters,
mentioned above, because the question, that arises for consideration, in this
appeal, is as to the correctness of the view of the Labour Court, that the
domestic enquiry conducted by the Bank, as against the respondent, is not fair
and that principles of natural justice have been violated. The Labour Court, by
its order under attack. has held that the domestic enquiry, conducted by the
Bank, is not proper and that rules of natural justice have not been observed;
and, in consequence, it has declined to grant the approval, sought for, by the
Bank.
At this stage, it may be mentioned that the
Labour Court has held in favour of the management, that it has complied with
the proviso to s. 33(2)(b) of the Act, as interpreted, by this Court, in its
decision in Strawboard Manufacturing Co.
v. Gobind(1). That is, it has held that the
action of the Bank, by way of discharge, payment of wages and making of the
application for approval, have been taken as part of the same transaction. For
coming to the conclusion that the inquiry proceedings are violative of the
rules of natural justice, the Labour Court has given three reasons (i) in the
inquiry, the respondent has been examined, even in the first instance, and he
was cross-examined, to elicit points in support of the charges; (ii) the
respondent was not allowed to crossexamine witnesses; and (iii) the respondent
was prejudiced, in his defence, as he had to conduct his defence without the
assistance of the Union, during the enquiry.
There can be no controversy that the
principles of natural justice must be observed, in the conduct of a domestic
enquiry, and the workman, concerned, must be allowed reasonable opportunity to
defend himself. It has also been held, by this Court, that rules of natural
justice require that the workman, proceeded against, should be informed clearly
of the charges levelled against him; witnesses should be normally examined in
the presence of the employee, in respect of the charges; if statements, taken
previously and given by witnesses, are relied on, they should be made available
to the workman concerned the workman should be given a fair opportunity to
examine witnesses, including him-self in support of his defence; and the
Enquiry Officer should record his findings, based upon the evidence so adduced.
So far as grounds Nos. 2 and 3, given by the
Labour Court are concerned, it is clear from the record of the enquiry
proceedings, that the respondent was permitted to put questions to Mr Bhatena
and Mr. Savkar, who were examined, during the enquiry (1) [1962] Supp. 3 S.C.R.
618.
257 We have also referred to the fact that
the Enquiry Officer has recorded that the respondent has stated that he has no
further questions to be put to them. We have also referred to the fact that the
inquiry proceedings show that the respondent was specifically asked as to
whether he wanted to examine or cross-examine the three other Officers, whose
conduct was also under enquiry, and who had made certain statements against the
respondent; but the respondent categorically stated that he did not like to
examine or cross-examine any of those persons. The respondent has not stated,
even in the representations made by him to the Managing Director, that he was
not given any opportunity to cross-examine the witnesses produced in the
inquiry. Again, even in his evidence before the Labour Court, the respondent
has categorically stated that he has not made any request, in writing, for
being represented by the Union, at the inquiry. Apart from the fact that he has
no such right, even factually it is seen that he made no such request.
Therefore the findings of the Tribunal that
the respondent was not permitted to cross-examine the witnesses during the
domestic enquiry, and, that he was prejudiced in his defence because he was not
permitted to have the assistance of the Union, are both erroneous.
Then the question is as to whether the
inquiry proceedings can be considered to have been conducted in violation of
the rules of natural justice, inasmuch as the respondent was examined, even in
the first instance. We have already indicated that, as a fact, it is borne out
by the records that the respondent, so far as the inquiry against him was
concerned, was examined, in the first instance, and Mr.
Bhatena and Mr. Savkar, were examined later.
According to the Labour Court, the object of the management, in examining the
respondent, in the domestic enquiry even in the first instance, was to have the
charges substantiated by statements got out of the mouth of the employee,
rather than to examine witnesses for the Bank, in support of the charges. It is
the further view of the Labour Court that the respondent has been, so to say,
cross-examined, just to elicit points in substantiation of the charges. These
circumstances, according to the Labour Court, violate the principles of natural
justice and, as such vitiate the domestic enquiry.
In this connection, the Labour Court has
relied upon certain observations, contained in the judgment of this Court in
Associated Cement Co. Ltd., v. Workmen(1) viz.:
"It seems to us that it is not fair in
domestic enquiries against industrial employees that at the very commencement
of the enquiry, the employee should be (1) [1964] 3 S.C.R. 652, 661.
258 closely cross-examined, even before any
other evidence is led against him." and draws the inference that under no
circumstances should a workman, whose conduct is the subject of disciplinary
proceedings, by a domestic tribunal, should be examined, in the first instance.
We are of the opinion that no such conclusion could be drawn from the decision,
referred to above. In that case, it will be Seen', the management had
charge-sheeted one Malak Ram, with disorderly behaviour when a cinema, show was
being given. Malak Ram, at all stages, stoutly denied his having taken part in
any hooliganism or rowdyism, as alleged by the management. Under those
circumstances, instead of adducing evidence, in the first instance, regarding
the allegations made against Malak Ram, in the domestic enquiry, the management
commenced the proceedings, with a very close examination of Malak Ram himself.
The nature of the questions put to him also clearly indicated that the worker
was being cross-examined, and answers sought to be elicited in support of the
allegations made by the management. This Court, in coming to the conclusion
that the conduct of an enquiry, in that manner, constitutes a very serious
infirmity, made the observations, quoted above. Therefore, it will be seen,
that in that case, when the workman concerned was totally denying the
allegations made against him, it was the duty of the management to let in
evidence, in the first instance, to substantiate its allegations, and permit
the workman to cross-examine those witnesses and also permit him to let in
independent evidence, in defence of his plea; and this Court emphasized that
the normal rule to be followed, in such, enquiries, is, as stated above.
In the case before us, we have already
referred to the various proceedings that have taken place, from which it will
be seen clearly that the workman was' at all stages, admitting the truth of the
allegations made against him, by the management. In his communication, dated March
17, 1961, as well as, in his reply, to the charges, made by him on June 20,
1961, he has `categorically admitted that he has committed a mistake in
permitting the constituents concerned to overdraw, without obtaining the
sanction of, the appropriate authorities. Even when the enquiry proceedings
began, he had stated that he had nothing more to add, in respect of the charges
framed against him. When once the workman himself has, in answer to the charge
levelled against him, admitted his guilt, in our opinion, there will be nothing
more for the management to enquire into. That was the position in the case
before us. Therefore, we are not inclined to agree with the reasoning of the
Labour Court that when there has been an admission' of guilt, by the respondent
himself, it can still be stated, that there is a violation of the principles of
natural justice merely because of the fact that the workman was examined, in
the first instance. Nor, are we impressed with the further view, expressed by
the Labour Court, that the way in which answers 259 were elicited from the
workman, showed that there has been a cross-examination, by the management, to
obtain points in substantiation of the charges. We have gone through the entire
examination of the respondent at the domestic enquiry, and we are satisfied
that there is no such infirmity. In fact, the question of the management trying
to obtain answers to support the charges, does not arise at all, in this case
because the respondent has consistently admitted his guilt, at all stages. On
the other hand, the nature of the questions put to the respondent clearly
indicate that the management, when once the workman had, admitted his guilt,
was only giving him an opportunity to explain his conduct or to refer to
circumstances, if any, which could be taken into account in extenuation of his
conduct. The management had also permitted the respondent to put questions to
the other two witnesses, examined during the enquiry, viz., Mr. Bhatena and Mr.
Savkar.
We must, however, emphasize that the rules of
natural justice, as laid down by this Court, will have to be observed, in the
conduct of a domestic enquiry against a workman. If the allegations are denied,
by the workman, it is needless to state that the burden of proving the truth of
those allegations will be on the management; and, the witnesses called, by the
management, must be allowed to be cross examined, by the workman, and the
latter must also be given an opportunity to examine himself and adduce any
other evidence that he might choose, in support of his plea. But, if the
workman admits. his guilt, to insist upon the management to let in evidence
above the allegations, will, in our opinion, only be an empty formality. In
such a case, it will be open to the management to examine the workman himself,
even in the first instance, so as to enable him to offer any explanation for
his conduct, or to place before the management any circumstances which will go
to mitigate the gravity of the offence. But, even then, the examination of the
workman, under such circumstances, should not savour of an inquisition. If,
after the examination of the workman, the management chooses to examine any
witnesses, the workman must be given a reasonable opportunity to cross examine
those witnesses and also to adduce any other evidence' that he may choose.
Having considered the enquiry proceedings, in
its entirety, in this case, we are satisfied that there has been no violation
of the rules of natural justice. Therefore, it follows that the order of the
Labour Court, refusing to grant approval, as asked for, by the management, is
erroneous and, as such, it is set aside. In the result, the appeal is allowed-,
but parties will bear their own costs in this appeal.
G.C.
Appeal allowed.
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