Municipal Corporation of Greater
Bombay Vs. P. S. Malvenkar & Ors [1978] INSC 106 (5 May 1978)
SINGH, JASWANT SINGH, JASWANT BHAGWATI, P.N.
CITATION: 1978 AIR 1380 1978 SCR (3)1000 1978
SCC (3) 78
CITATOR INFO :
RF 1980 SC1893 (172) D 1991 SC 101 (17,166,226,278)
ACT:
Termination of service-Competent authority
puts the initials in the draft order and the order communicated by his
Executive Assistant, whether valid.
Industrial Employment (Standing Orders)
Order, 1946 S. 21(2), 23 and 26, scope of.
HEADNOTE:
The services of Respondent No. 2, a permanent
clerk in the Bombay Electric Supply and Transport Undertaking, which is run by
the appellant Were terminated from the close of work on January 23, 1968 as her
record of service was unsatisfactory. The communication dated January 20, 1968
was from the Executive Assistant to the General Manager and it also stated that
she should be paid one month's wages in lieu of notice and would also be
eligible for all the benefits as might be admissible under the Standing Orders
and Service Regulations of the Undertaking. The appeal preferred by her against
this order to the Assistant General Manager having remained unsuccessful, she
made an application before the Labour Court under Section 42 (4) of the Bombay
Industrial Relations Act contending that the order terminating her services was
invalid, as it was not passed by the competent authority as envisaged by the
Standing Order and that the so called Executive Assistant to the General
Manager had no authority to terminate her services because no validity
sanctioned post of that designation existed on 20th or 23rd. January, 1968. It
was also contended that the aforesaid order besides being mala fide, was
violative of the principles of natural justice in as much as the same was
passed without holding any enquiry. The Labour Court dismissed the application.
The respondent, s appeal before the President of the Industrial Court was
however allowed. The Industrial Court held that the impugned orders bore only
the initials of the General Manager and therefore it was passed by an authority
which was lacking in authority, the wording "unsatisfactory service
record" cast a stigma and was patently punitive attracting the
nonobservance of Standing Order No. 26 which did not create an absolute right
in the management to terminate the services of an employee for misconduct
without holding an enquiry or giving her a fair opportunity of being heard. A
Writ application filed by the appellant was dismissed holding inter alia that
the fact that Standing Order 26 required reasons to be mentioned in the order
terminating the services of an employee did not mean that an order of dismissal
on the ground of misconduct could be converted into an order of discharge
simpliciter by mentioning therein the nature of misconduct.
Allowing the appeal by special leave, the
Court
HELD : 1. Whether a written document or order
bears full signatures or only initials of the competent authority does not,
make any significant difference nor does the affixation of signature by
initials on a document or order detract from its authenticity unless the law or
the rule specifically requires full signature to be affixed thereto to make it
authentic. [1005 E1F] In the instant case : (a) the impunged order terminating the
respondent's services was in fact and in reality passed by the General Manager
himself who was the competent authority as defined by clause (e) of Standing
Order 3 and was merely communicated by his Executive Assistant to the
respondent;
(b) since it is established on the record
that the impugned order 1001 was in fact and in reality made by the General
Manager and there is nothing to indicate that it was not consciously made by
him, it could not have been ,quashed on the ground that it was passed by an incompetent
authority. [1005 C, 6- H]
2. The question whether a particular order
terminating the service of an employee is by way of punishment or not has to be
determined on the facts and circumstances of each case and the form of the
order is not decisive of the matter.
[1006 B] Under Standing Orders, two powers
are given to the management; one is the power to impose punishment for
misconduct after a disciplinary inquiry under clause (2) of the Standing Order
21 read with Standing Order 23 and the other is the power to terminate the
service of an employee by one calendar month's written notice or pay in lieu
thereof under Standing Order 26. The question is as to which power has been exercised
by the Management in a particular case and this question has to be determined
_having regard to the substance of the matter and not its form. Now, one thing
must be borne in mind that these are two distinct and independent powers and as
far as possible, neither should be construed so as to emasculate the other or to
render it ineffective. One is the power to punish an employee for misconduct
while the other is the power to terminate simpliciter the service of an
employee without any other adverse consequences. [1006 B-D]
3. Proviso (i) to clause (1) of Standing Order
26 requires that the reason for termination of the employment should be given
in writing to the employee when exercising the power of termination of service
of the employee under Standing Order 26. Therefore, when the service of an
employee is terminated simpliciter under Standing Order 26, the reason for such
termination has to be given to the employee and this provision has been made in
the Standing Order with a view to ensuring that the Management does not act in
an arbitrary manner' The management is required to articulate the reason which
operated on its mind in terminating the service of the employee. But merely
because the reason for terminating the service of the employee is required to
be given-and the reason must obviously not be arbitrary, capricious or
irrelevant-it would not necessarily in every case make the order of termination
punitive in character so as to require compliance with the requirement of
clause (2) of Standing Order 21 read with Standing Order 23.
Otherwise, the power of termination of
service of an employee under Standing Order 26 would be rendered meaningless
and futile, for in no case it would be possible lo exercise it. Of course, if
misconduct of the employee constitutes the foundation for terminating his
service, then even if the order of termination is purported to be made under
Standing Order 26, it may be liable to be regarded as punitive in character and
hence attracting procedure of clause (2) of Standing Order 21 read with
Standing Order 23, though even in such a case it may be argued that the
management has not punished the employee but has merely terminated 'his service
under Standing Order 26. [1006 D-H] In the present case, the order of
termination cannot be regarded as punitive in character so as to invoke the, applicability
of clause (2) of Standing Order read with Standing Order 23 reason given for
terminating the service of the respondent was unsatisfactory record of service.
No misconduct was alleged against the respondent. nor was any misconduct made
the foundation for passing the impugned order of termination. The order of
termination was clearly not passed by way of punishing the respondent for Any
misconduct. The view that the service of the respondent was not satisfactory
was undoubtedly based on past incidents set out in the record but for each of
these incidents punishment in one form or another had' already been meted out
to her and it was not by of punishment for any of these incidents, but because
as gathered from these incidents her recorded of service was unsatisfactory
that her service was terminated by the management understanding order 26. 26
[1006 H, 1007 A-B] 13 -329 SCI/78 1002 Even if the view were taken that the
impugned order of termination of service of the respondent was punitive in
character and could not have been. passed save and except as a result of a
disciplinary inquiry held under clause (2) of Standing Order 21 read with
Standing Order 23, the impugned order cannot be struck down as invalid the
ground of non-compliance with the requirement of the Standing Orders, since
respondent no. 2 availed of the opportunity open to her before the Labour Court
when the appellant adduced.' sufficient evidence justifying the action taken by
the management. The appellant produced satisfactory evidence to show that the
impugned order terminating the service of the respondent was justified and
hence the impugned order must be sustained despite its having been passed
without complying with the requirements of clause (2) of Standing Order 21 read
with Standing Order
23. No distinction can be made between cases
where the domestic enquiry is invalid or defective and those where no enquiry
has in fact been held as required by the relevant Standing Orders and in either
case it is open to the employer tojustify his action before the Labour Tribunal
by adducing all relevant evidence before it.
[1007 C-E] The Punjab National Bank Ltd.v.
Its Workmen, [1960] 1 S.C.R. 806, Management of Ritz Theatre (P) Ltd. v. Its
Workmen, [1963] 3 S.C,R. 461, Workmen of Motipur Sugar Factory P. Ltd. v.
Motipur Sugar Factory, [1965]', 3 S.C.R.
588, Delhi Cloth and General Mills Co. Ltd.
v. Ludh Budh Singh, [1972] 1 LLJ 180, State Bank of India v. R. K. Jain and
Ors. [1972] 1 S.C.R. 755, Workmen of M/s Firestone' Tyre and Rubber Company of
India (P) Ltd. v. Management and Ors.
[1973] 3 S.C.R. 587 and Cooper Engineering
Ltd v.Shri P. P. Mundhe [1976] 1 S.C.R. 361 followed.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 2161 of 1977.
Appeal by Special Leave from the Judgment and
Order dated 5- 7-1977 of the Bombay High Court in Special Civil Application No.
614/72.
K. K. Singhvi, P. H. Parekh, D. C. Shroff, C.
B. Singh, Kailash, Basudev and Mrs. Manju Sharma for the Appellant.
K. Rajendra Choudhary and Mrs. V. D. Khanna
for RespondentNo. 2.
The Judgment of the Court was delivered by
JASWANT SINGH, J. This appeal by special leave which is directed against the
judgment and order dated July 5, 1977 of the Bombay High Court dismissing the
appellant's special civil application No. 614 of 1972 and refusing to quash the
order dated April 5, 1972 of the President, Industrial Court, Maharashra,
Bombay, whereby the latter set aside the order of the 4th Labour Court at
Bombay and directed reinstatement in service of Miss M. P. Padgaonkar, respondent
No. 2 (hereinafter referred to as 'the respondent') with full back wages on the
ground that her termination of service was bad in law raises the: following
questions :- "whether the termination of service of a permanent employee
of the Bombay Electric Supply and Transport Undertaking on account of his
unsatisfactory record of service can be regarded as punitive so as to compel
the employer to hold a disciplinary enquiry? 1003 whether such termination can
be effected by giving in writing to the employee the aforesaid reason for
termination and one calendar month's written notice or pay including allowances
admissible in lieu thereof ? For a proper determination of the abovementioned
questions, it is desirable, to state the, circumstances which have given rise
to the appeal. The respondent who was working since February 4, 1959 as a clerk
in grade A/G-V in the Consumers Department (North) of the B.E.S.T. (Bombay
Electric Supply & Transport) Undertaking (hereinafter refer- red to for the
sake of brevity as 'the Undertaking') which is run by the appellant was
informed by the Executive Assistant to the General Manager of the Undertaking
vide communication dated January 20, 1968, that her services would stand
terminated from the close of work on January 23, 1968, as her record of service
was unsatisfactory. It was, however stated in the communication that she would
be paid one, months wages in lieu of notice and would also be eligible for all
the benefits as might be admissible under the Standing Orders and Service:
Regulations of the Undertaking. The appeal preferred by her against this order
to the Assistant General Manager having remained unsuccessful, the respondent
made an application before the Labour Court under section 42(4) of the Bombay
Industrial Relations Act contending that the order terminating her services was
invalid as it was not passed by the competent authority as envisaged by the
Standing Order and that the so called Executive Assistant to the General
Manager had no authority to terminate her services because no validly sanctioned
post of that designation existed on 20th or 23rd January, 1968. It was also
contended by the respondent that the aforesaid order ter Manating her services
besides being mala fide was violative of the principles of natural justice
inasmuch as the same was passed without holding any etquiry or giving her a
reasonable opportunity of defending herself against the vague and general
allegations which formed the basis of the order. The Labour Court dismissed the
application observing that though the post of Executive Assistant did not exist
at the relevant time, the termination did not suffer from the vice of mala
fides nor could it be said to be invalid as it was actually effected by the
General Manager and was merely communicated by his Executive Assistant. The
Labour Court further held that despite the fact that unsatisfactory record of
service was mentioned as the reason for termination, it could not be said to be
punitive. Aggrieved by this order of the Labour Court, the respondent filed an
appeal to the President of the Industrial Court which was allowed by him vide
his order dated April 5, 1972 on the findings that J. P. Fernandes who used the
appellation of the Executive Assistant to the General Manager was not competent
or authorised to terminate the service of the respondent; that the, conclusion
of the Labour Court that the impugned order was made by the General Manager
himself was not warranted by the facts and conduct.
of the parties; that the law required the authority
invested with the power of terminating the services of an employee to exercise
that power in a conscious manner reflecting, 'due 'care 'and 1004 attention and
the draft order (Exhibit 41) which merely bore the initials of the General
Manager could not be regarded as a valid substitute for the conscious exercise
of the power;
that the order which expressly stated the
unsatisfactory record of service as the reason for terminating the respondent's
services and thus cast a stigma on her was patently punitive and that Standing
Order 26 did not create an absolute right in the management to terminate the
services of an employee for misconduct without holding an enquiry or giving him
a fair opportunity of being heard.
Accordingly, the Industrial Court held that
the impugned order was bad in law on both the counts viz. (i) that it was
passed by an authority which was absolutely lacking in competence and (ii) that
despite its punitive character, it was passed without holding a domestic
enquiry or giving an opportunity to show cause thereby violating the principles
of natural justice. The appellant thereupon made an application to the High
Court under Article 226 of the Constitution challenging the order of the
President of the Industrial Court. The High Court dismissed the petition
holding inter alia that the fact that Standing Order 26 required reasons to be
mentioned in the order terminating the services of an employee did not mean
that an order of dismissal on the ground of misconduct could be converted into
an order of discharge simpliciter by mentioning therein the nature of
misconduct. It is against this judgment and order of the High Court that the
present appeal is directed.
Appearing for the appellant, Mr. K. K.
Singhvi has, in the first instance urged that the order terminating the
respondent's services could not be held to have been passed by an authority
which was lacking in competence as it was actually made by the General Manager
and was merely communicated over the signatures of his Executive Assistant.
Mr. Singhvi has alternatively urged that the
Corporation having accorded sanction to the creation of the post of Executive
Assistant on the Management Establishment (which was from time to time included
in the Establishment Schedule prepared and sanctioned by the B.E.S.T.
Committee) for the period beginning from 25th July 1967 to- 30th September 1974
vide Resolution No. 1083 passed by it under section 460-R of the Bombay
Municipal Corporation Act No. 111 of 1888 at its meeting held on 16th December,
1974, even the Executive Assistant bad plenary authority to take the impugned
action.
The learned counsel has next contended that
the impugned order was one of discharge or termination of service simpliciter
and could not be regarded as punitive regard being had to the fact that besides
one month's, pay in lieu of notice, the respondent was paid all the benefits
admissible to her under the Standing Order, and Service Regulations; that it
was only to satisfy the requirement of proviso (1) to Standing Order 26 that
unsatisfactory record of service was mentioned in the order as the reason for
termination; that Standing Orders gave two options to the appellant (1) to
terminate the service of the respondent in the manner it had one, or (2) to
impose the penalty of dismissal as a result of a domestic enquiry. He has
further submitted that even if the order is treated as punitive which could not
have been passed-without the prescribed enquiry, it could hot be hold to be bad
In law as it was made good by the appellant on merits by adducing evidence
before the Labour Court.
1005 It has on the other hand, been argued by
the learned counsel appearing on behalf of the respondent that the order
suffered from an inherent infirmity in that it was passed by the Executive
Assistant to the General Manager who did not.
have de jure existence on the relevant date
in view of the fact that the duration of the post held by him had not been
validly extended by the Corporation. He has further contended that as the
impugned order which clearly cast aspersion the respondent amounted to an order
of dismissal, it could not have been passed without complying with the
formalities prescribed by the Standing Orders.
All these rival contentions require careful
examination.
The question as to whether the post of
Executive Assistant to the General Manager validly existed on the relevant date
or not does not require to be gone into as we are satisfied that the impugned
order terminating the respondent's services was in fact and in reality passed
by the General Manager himself who was the competent authority as defined by
clause (e) of Standing Order 3 and was merely communicated by his Executive
Assistant to the respondent.
This is amply home out from, the material
placed before the Labour Court. The I draft of the termination order (Exhibit
41) which has been duly proved by Dandekar who was working as Personnel Officer
on the relevant , date clearly shows that it was put up before the General
Manager by the Superintendent of the Consumers Department and was duly approved
and initialled by the former. In this state of affairs, we are unable to
appreciate the observations of the Industrial Court that since the decision to
terminate the service of an employee is an act consciously to be undertaken and
performed by the concerned officer, the mere initialling of the draft order by
the General Manager was not enough to make it an authenticated order of
termination.
Whether a written document or order bears
full signatures or only initials of the competent authority does not, in our
judgment, make any significant difference nor does the affixation of signature
by initials on a document or, order detract from its authenticity unless the
law or the rule specifically requires full signature to be affixed thereto to
Make it authentic. In Volume 5 of Stroud's Judicial Die- tionary-of Words and
Phrases (Fourth Edition), it is stated by reference to the decision in Re
Wingrove 15 Jur. 91 that signature by initials is good. Again as stated in
Black's Law Dictionary (1951 Edition) speaking generally when a person attaches
his signature to a written document he does so in token of knowledge, approval
or acceptance. Then again according to Chambers New English Dictionary, the
word sign' means a mark with a meaning. We are, therefore, of the opinion that
since it is established on the record that Manager and there is othing to
indicate that it was not consciously made by him, it could not have been
quashed on the ground that it was passed by an incompetent authority.
1006 Let us now proceed to consider whether
the impugned order was covered by Standing Order 26 or it was punitive in
character and could not, therefore, be passed except after a disciplinary
inquiry under clause (2) of Standing Order 21 read with Standing Order 23, It
is now well settled that the question whether a particular order terminating
the service of an employee is by way of punishment or not have to be determined
on the facts and circumstances of each case and the form of the order is not decisive
of the matter. Here, under Standing Orders, two powers are given to the
management one is the power to impose punishment for misconduct after a
disciplinary inquiry under clause (2) of Standing Order 21 read with Standing
Order 23 and the other is the power to terminate the service of an employee by
one calendar month's written notice or pay in lieu thereof under Standing Order
26. The question is as to which power has been exercised by the management in
the present case and this question has to be determined having regard to the
substance of the matter and not its form. Now, one thing must be home in mind
that these are two distinct and independent powers and as far as possible,
neither should be construed so as to emasculate the other or to render it in-
effective. One is the power to punish an employee for misconduct while the
other is the power to terminate simpliciter the service of an employee without
any other adverse consequence. Now, proviso (1) to clause (1) of Standing Order
26 requires that the reason for termination of the employment should be given
in writing to the employee when exercising the power of termination of service
of the employee under Standing Order 26. Therefore, when the service of an
employee is terminated simpliciter under Standing Order 26, the reason for such
termination has to be given to the employee and this provision has been made in
the Standing Order with a view to ensuring that the management does not act in
an arbitrary manner. The management is required to articulate the reason which
operated on its mind in terminating the service of the employee. But merely
because the reason for terminating the service of the employee is required to
be given-and the reason must obviously not be arbitrary, capricious or
irrelevant-it would not necessarily in every case make the order of termination
punitive in character so as to require compliance with the requirement of
clause (2) of Standing Order 21 read with Standing Order 23. Otherwise, the
power of termination of service of an employee under Standing Order 26 would be
rendered meaningless and futile, for in no case it would be possible to
exercise it. Of course, if misconduct of the employee constitutes the
foundation for terminating his service, then even if the order of termination
is purported to be made under Standing Order 26, it may he liable to be
regarded as punitive in character attracting the procedure of clause (2) of
Standing Order 21 read with Standing Order 23, though even in such a case it
may be argued that the management has not punished the employee but has merely
terminated his service under Standing Order 26. It is, however, not necessary
for us in the present case to pronounce on this controversy, since we find that
in the present case the reason given for terminating the service of the
respondent was unsatisfactory record of service. No misconduct was alleged
against the 1007 respondent nor was any misconduct made the foundation for
passing the impugned order of termination. The order of termination was clearly
not passed by way of punishing the respondent for any misconduct. The view that
the service of the respondent was not satisfactory was undoubtedly based on
past incidents set out in the record but for each of these incidents punishment
in one form or another bad already been meted out to her and it was not by way
of punishment for any of these incidents, but because as gathered from these
incidents. Her record of service was unsatisfactory that her service, was
terminated by the management under Standing Order 26. It is, therefore, not
possible for us to regard the order of termination as punitive in character so
as to invite the applicability of clause (2) of Standing Order 21 read with
Standing Order 23.
But even if the view were taken that the
impugned order of termination of service of the respondent was punitive in
character and could not have been passed save and except as a result of a
disciplinary inquiry held under clause (2) of Standing Order 21 read with
Standing Order 23, the impugned order cannot be struck down as invalid on the
ground of non compliance with the requirement of these 'Standing Orders, since
the respondent No. 2 availed of the opportunity ,,open to her before the Labour
Court when the appellant adduced sufficient evidence justifying the action
taken by the management. The appellant produced satisfactory evidence to show
that the impugned order terminating the service of the respondent was justified
and hence the impugned order must be sustained despite its having been passed without
complying with the requirements of clause (2) of Standing Order 21 read with
Standing Order 23. We are fortified in this view by a catena of decisions of
this Court where it has been consistently held that no distinction can be made
between cases where the domestic enquiry is invalid or defective and those
where no enquiry has in fact been held as required by the relevant Standing
Orders in either case it is open to the employer to justify his action before
the Labour Tribunal by adducing all relevant evidence before it.
(See The Punjab National Bank Ltd. v. Its
Workmen (1960) 1 S.C.R. 806, Management of Ritz Theatre (P) Ltd. v. Its Workmen
(1963) 3 S.C.R. 461, Workmen of Motipur Sugar Factory (Private) Ltd. v. Motipur
Sugar Factory (1965) 3 S.C.R. 588, Delhi Cloth and General Mills Co. Ltd. v.
Ludh Budh Singh (1972) 1 LLJ 180, State Bank of India v. R. K. Jain and Ors.
(1972) 1 S.C.R. 755, Workmen of Messrs Firestone Tyre & Rubber Company of
India (P) Ltd. v. Management & Ors. (1973) 3 S.C.R. 587 and Cooper
Engineering Limited v. Shri P. P. Mundhe (1976) 1 S.C.R. 361.
For the foregoing reasons, we allow the
appeal, set aside the judgment and order of the High Court and, uphold the
impugned action of the appellant's management. In view of the Court's order
dated September 19, 1977, the appellant shall pay costs quantified at Rs.
1.500/- (One thousand and five hundred) to respondent No. 2. This Judgment
should not, however, stand in the way of respondent No. 2 being paid Rs. 15,000/-
by the appellant which, in view of 1008 former's unfortunate position, the
appellant's learned counsel was good enough on our suggestion to agree to pay
her as an ex-gratia payment. This amount of Rs. 15,0001- shall be in addition
to the amount of Rs. 1,500- which the appellant is required to pay to
respondent No. 2 by way of costs.
s.R Appeal allowed.
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