J. D. Jain Vs. The Management of State
Bank of India & ANR  INSC 207 (17 December 1981)
ISLAM, BAHARUL (J) ISLAM, BAHARUL (J)
VARADARAJAN, A. (J)
CITATION: 1982 AIR 673 1982 SCR (2) 227 1982
SCC (1) 143 1981 SCALE (3)1884
Constitution of India 1950 Art. 226-Award of
Industrial Tribunal-Jurisdiction of High Court-interference-When arises.
Industrial Disputes Act 1947 S. 11
A-Complaint- Depositor against bank employee-Debit authority alteration
of-Withdrawal of excess money-Confession by employee to officer of alteration
and withdrawal-Holding of domestic enquiry-Non examination of depositor-Charge
of fraud and misappropriation proved-Employee discharged from service- Dispute
raised-Issue referred to Tribunal-Tribunal holding depositor (complainant) not
examined-Evidence against employee 'hearsay'-Directing reinstatement-High Court
in writ petition setting aside of tribunal-High Court Whether correct in interfering
with award-Award whether vitiated by misconception of law.
Labour Law-Domestic enquiry-Guilt whether to
be established beyond reasonable doubt-Proof of misconduct alone-Whether
sufficient, Words & Phrases 'hearsay'-Meaning of
The Appellant was working as a Cashier in a
Bank. A depositor who had a Savings Bank Account with the Bank came to the Bank
to receive his Pass Book. On receipt of his Pass Book from the Counter Clerk he
complained to the ledger keeper that, on a certain date he had withdrawn only
Rs. 500 but a debit entry of Rs, 1,500 had been shown in the Pass Book. The
Ledger keeper took the depositor to the Supervisor and The Agent and his
complaint was recorded. When the documents pertaining to the withdrawal were
examined it was found that the depositor had given a letter of authority to the
appellant authorising withdrawal from his account. The letter of authority
showed that it was for withdrawal of Rs. 1500 though there appeared to be some
interpolation suggesting that the figure of Rs. 500 had been altered lo the
figure of Rs. 1500.
A memorandum of charge was served on the
appellant by the Management respondent No. I and a disciplinary enquiry were
held. The Enquiry Officer submitted his report and his findings were that the
appellant had fraudulently altered the amount in the letter of authority given
by the depositor, withdrew Rs. 1500 from the depositor's account and paid Rs.
500 only to the depositor and 228 misappropriated Rs. 1500. In pursuance of the
enquiry the appellant was discharged from service.
The appellant having raised an industrial
dispute the matter was referred to the Industrial Tribunal. Before the Tribunal
the appellant denied the charges and pleaded that as the depositor was not
examined in the disciplinary enquiry there was no legal evidence before the
Enquiry officer for finding that he was guilty. Before the Tribunal the
Management examined no witnesses but produced documents and relied on them. The
Tribunal held that on the evidence before it the appellant could not be held
guilty as in the absence of the evidence of the depositor, the evidence
recorded was 'hearsay' and directed reinstatement to the appellant with full
The respondent moved the High Court under
Article 226 and 227 which held that the charge against the appellant had been
established and quashed the award of the Tribunal.
In the appeal to this Court it was contended
on behalf of the appellant: (1) that the Tribunal exercised its powers under
Section 11 A of the Industrial Disputes Act and the High Court exercising
powers under Article 226/227 had no jurisdiction to interfere with the award;
(2) the Tribunal rightly refused to rely on the evidence which was hearsay;
the depositor not having been examined, and
(3) the High Court committed an error in not considering the receipt executed
by the depositor showing payment of Rs. 1000 to the depositor.
Dismissing the appeal,
HELD: The award of the Tribunal is vitiated
by misconception of the law involved. It erred in holding that as Kansal
(depositor) was not examined, fraud and misappropriation on the part of
appellant cannot be held to be proved and in failing to appreciate the
confession made by the appellant to the higher officer that he had altered the
amount in figures and words in his own hand. [236 G]
1. In an application for a writ of certiorari
under Article 226 for quashing the award of an Industrial Tribunal the
jurisdiction of the High Court is limited. It can quash the award when the
Tribunal has committed an error of law apparent on the face of the record or
when the finding of facts of the Tribunal is perverse. [233 B] In the instant
case, three kinds of proceedings against the delinquent were possible: (i)
departmental proceedings and action, (ii) Criminal prosecution for the alleged
misappropriation of the amount, and (iii) civil proceedings for recovery of the
amount alleged to be misappropriated.
The respondent adopted the first course and instituted
the domestic enquiry. In such an enquiry guilt need not be established beyond
reasonable doubt; proof of misconduct may be sufficient. [234 G-235 A] State of
Haryana & Anr. v. Rattan Singh A.I.R. 1977 S.C. 1512, referred to 229 2.
The word 'hearsay' is used in various senses.
Sometimes it means whatever a person declares
on information given by someone else. [235 E] In the instant case, the Tribunal
after having made a detailed reference to the evidence of the witnesses found
that a complaint was made by Kansal and that the appellant confessed that he
had altered the debit authority, but held That as Kansal was not examined, this
was not direct evidence but was of the nature of 'hearsay' evidence, with
regard to the fact whether the appellant manipulated the documents, withdrew
the excess amount and misappropriated it, there is no direct evidence of any of
the witnesses except the appellant's confession. The evidence on which reliance
has been taken by the respondent is the confession and circumstantial evidence.
The evidence of Kansal would have been primary and material. if the fact in
issue were whether Kansal authorised the appellant to make the alterations in
the authority letter. But Kansal's complaint was to the contrary. No rule of
law enjoins that a complaint has to be in writing as insisted by the Tribunal.
For the purpose of a departmental enquiry, complaint substantiated by
circumstantial evidence is enough. What the respondent sought to establish in
the domestic enquiry was that Kansal had made a verbal complaint with regard to
the withdrawal of excess money by the appellant. On the factum of complaint of
Kansal the evidence of these four witnessess is direct as the complaint is said
to have been made by Kansal in their presence and hearing. It is not therefore
'hearsay'. The respondent has succeeded in proving that a complaint was made by
Kansal on the evidence of these four witnesses. [236 A-E] Subramaniam v Public
Prosecutor 1 W.L.R. 965, referred to
3. The receipt executed by Kansal showing
payment by the appellant of Rs. 1000 to the former is destructive of the
appellant's defence and on the contrary proves the respondent's case. [236
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 495 of 1979.
Appeal by special leave from the judgment and
order dated the 18th October, 1978 of the Delhi High Court in Civil Writ
Petition No. 1292 of 1975.
R.R. Garg, U.R. Lalit and Randhir Jain for
M.C. Bhandare, S.A. Shroff, S.S. Shroff and
Miss C.K Sachurita for Respondent No. 1.
The Judgment of the Court was delivered by
BAHARUL ISLAM J. This appeal by special leave is by the appellant, J.D. Jain.
who was a workman and whose services have been terminated by the management of
the State Bank of India (hereinafter called the respondent).
230 2. The material facts are these.
The appellant was working as a cashier in the
Meerut City Branch of the State Bank of India. On June 21, 1971, one Dishan
Prakash Kansal ('Kansal' for short) who had a Savings Bank account with the said
branch of the State Bank came to the Bank to receive 3 his Pass Book. On
receipt of the Pass Book from the counter clerk, Kansal complained to Wadhera
who was the Ledger-keeper, that on February 8, 1971, he had withdrawn only Rs.
500 but a debit entry of Rs. 1,500 had been shown in the Pass Book. Wadhera
thereupon took Kansal to the the Supervisor, R.P. Gupta, before whom Kansal
repeated his complaint. Necessary documents pertaining to the said withdrawal
were then examined and it was found that Kansal had given a 'letter of
authority' (which expression means, we are told, the withdrawal application
form) to the appellant on February 8, 1971 authorising him to withdraw the
amount from his account. The letter of authority showed that it was for
withdrawal of Rs. 1,500 though there appeared to be some interpolation
suggesting that the figure of Rs. 500 had been altered to the figure of Rs.
1,500. The matter was then brought to the notice of M. Ramzan, the Agent of the
State Bank, before whom also Kansal is said to have repeated his complaint.
3. Eventually on September 18, 1972, a
memorandum of charges was served on the appellant by the respondent stating,
inter alia that in the letter of authority, the appellant altered in his own
handwriting with different ink the amount of Rs. 500 to Rs. 1,500 and thus
received Rs. 1,000 in excess, passing only Rs. 500 to the pass-book holder, and
that he subsequently, on June 24, 1971, deposited Rs 250 in the account of
Kansal to liquidate a part or the amount misappropriated by him. The appellant
replied to the charges. He denied the allegations. Thereupon the respondent
appointed one Rajendra Prasad as an Enquiry officer and a formal disciplinary
enquiry was held against the appellant. The Enquiry Officer submitted his report
to the respondent on February 13, 1973. The findings of the Enquiry officer
were that the appellant had fraudulently altered the amount in the letter of
authority given to him by Kansal, withdrew Rs. 1,500 from Kansal's account and
paid Rs. 500 only to Kansal and misappropriated Rs. 1000. The disciplinary
authority on receipt of the report of the Enquiry officer passed the following
order (material portion only):- 231 "2. Although, the charges against you
are of a serious nature which would, in normal course, warrant your dismissal
from the service of the Bank, yet keeping in view your past record, I am
inclined to take a lenient view in the matter. Upon consideration of the
matter, I have tentatively come to the decision that your misconduct be condoned
and you be merely discharged of in terms of paragraphs 521 (5) (e) of the
Sastry Award read with para graph 18.28 of the Desai Award and paragraph 1.1 of
the Agreement dated the 31st March 1967 entered into between the Bank and the
State Bank of India Staff Federation. Before, however, I take a final decision
in the matter I would like to give you a hearing as to why the proposed
punishment should not be imposed upon you. To enable you to do so, I enclose
copies of the proceedings of the enquiry and findings of the Enquiry officer.
3. You may ask for a hearing or if you so
prefer show cause in writing within one week of receipt by you thereof. If you
fail therein, I will conclude that you have no cause to show in this
behalf." The appellant then submitted a representation to Shri V.B.
Chadha, the Regional Manager of the State Bank of India on June 15, 1973. Shri
Chadha after perusing the representation of the appellant and hearing him in
person, recommended that the proposed punishment should not be imposed upon the
appellant, on the grounds that Kansal had not been examined as a witness and
that there had been no written complaint against the appellant. The respondent,
however, did not accept the recommendation, and, by its memorandum of December
7, 1973, discharged the appellant from service with effect from the close of
the business on December 22, 1973.
4. The appellant then having raised an
industrial dispute, the Central Government, by its order dated January 17,
1975, referred the following issue to the Central Government Industrial
Tribunal at Delhi for adjudication:
"Is the management of State Bank of
India justified in discharging from service Shri J.D. Jain, Cashier of Meerut
Branch, with effect from 22nd December, 1973? If not to what relief is he
entitled ?" 232
5. Before the Tribunal, the appellant denied
the charges, He inter alia, pleaded that as Kansal was not examined in the
enquiry, there was no legal evidence before the inquiry officer for a finding
that he was guilty.
The Tribunal framed the following two
issues:- "1. Whether a proper and valid domestic enquiry was held by the
Bank and its effect ?
2. Is the management of State Bank of India
justified in discharging from service Shri J.D. Jain, Cashier of Meerut Branch
with effect from 22nd December, 1973 ? If not to what relief is he entitled
?" Before the Tribunal, the Management examined no witnesses but produced
certain documents and relied on them.
The appellant also did not adduce any
On a perusal of the evidence recorded by the
Enquiry officer, the Tribunal held that on the evidence before it, the
appellant could not be held guilty as, according to it, in the absence of the
evidence of Kansal, the evidence recorded was hearsay, with the result that it
directed reinstatement of the appellant with full back wages from 22nd
December, 1973. The respondent moved the High Court under Article 226 and 227
of the Constitution of India for quashing the award of the Tribunal. The High
Court held that the charges against the appellant had been established and
quashed the award of the Tribunal. It is against this judgment of the High
Court that the present appeal by special leave is directed.
6. Mr. R.K. Garg, learned counsel appearing
for the appellant makes three submissions before us:- (1) That the Tribunal
exercised its powers under Section 11 A of the Industrial Disputes Act and the
High , Court, exercising powers under Article 2261227 of the Constitution, had
no jurisdiction to interfere with the award of the Tribunal;
(2) The Tribunal in the perspective of the
broad contours of the case rightly refused to rely on the evidence which was
hearsay? Kansal not having been examined;
233 (3) Assuming the evidence could be relied
on, the High Court committed error in not considering the receipt executed by
Kansal showing payment of Rs. 1000 to Kansal and its judgment is vitiated.
7. In an application for a Writ of Certiorari
under Article 226 of the Constitution for quashing an award of an Industrial
Tribunal, the jurisdiction of the High Court is limited. It can quash the
award, inter alia, when the Tribunal has committed an error of law apparent on
the face of the record or when the finding of facts of the Tribunal is
perverse. In the case before us, according to the Tribunal, as Kansal was not
examined, the evidence before it was hearsay and as such on the basis thereof
the appellant could not be legally found guilty.
8. Before the Enquiry officer, the respondent
examined the following witnesses:
Gupta (Witness 1), Wadhera, the Ledger Keeper
(Witness 2), Mahesh Chander who was incharge of Savings Bank account on
8.2.1971 (Witness 3), M. Ramzan, Agent of the Bank (Witness 4), Sarkar (Witness
5), and Bhardwaj (Witness 6).
Bhardwaj was a leader of the employees' union
of the respondent. He did not support the case of the respondent.
The other witnesses supported the case of the
Witnesses Nos. 1, 2, 4 and 5 depose that a
verbal complaint was made by Kansal in their presence to the effect that he had
authorised the appellant to withdraw Rs. 500 which sum was paid to him, but the
entries showed that Kansal had withdrawn Rs. 1,500. Witnesses Vadhera, Ramzan
and Sarkar also deposed that the appellant had confessed before them that he
had made the alterations in the figure and in words of the sum. The Tribunal
after having made detailed references to the evidence of the above witnesses in
fact found, "All that this evidence thus, proves is that a complaint was
made by Shri Kansal and that the workmen confessed that he had altered the
debit authority. (emphasis added). Curiously, however, it held, "This
evidence, by no means prove that the workman altered the debit authority to
defraud or that he actually defrauded or that he mis.
appropriated the amount of Rs. 1,000 after
paying Rs. 500 only to Mr. Kansal from the amount of Rs. 1,500 withdrawn from
the bank by him as it was not direct evidence but was in the nature of 234
hearsay evidence since it was learnt through the medium of a third person and
that person was not available." It further held, "There can be no
hesitation, therefore, that the enquiry officer relied on hearsay evidence in
arriving at his findings and it vitiated the enquiry." It went on,
"All this could be enough for raising a suspicion only. In order to be
called 'proved' it needed evidence which was not there." It further
observed, "But the question was whether it was done without the consent or
knowledge of Mr. Kansal.
There was no evidence on the record to prove
it. The only person who could speak about it was Mr. Kansal. He did not appear
before the inquiry officer, therefore, there was no direct evidence that the
change that was admittedly made by the workman in the debit authority was without
Mr. Kansal's consent or knowledge or that it was designed to defraud "
(emphasis added) The positive findings of the Tribunal are:
(i) Kansal made the complaint as alleged by
(ii) The appellant confessed that he had made
the alterations charged with, as alleged by the management, (iii) By
implication it has also found that Rs. 1,000 in excess of the original amount
of Rs. 500 was received by the appellant as a result of the alternations. But
it has held that as Kansal was not examined, fraud and misappropriation on the
part of the appellant cannot be held to be proved, as the evidence was
9. The learned Tribunal, it appears, was
obvious of the fact that it was examining the evidence in a domestic enquiry,
and not the evidence in a criminal prosecution entailing conviction and
In a case like the one before us, three kinds
of proceedings against the delinquent are possible .
(i) departmental proceedings and action, (ii)
original prosecution for forgery and misappropriation, (iii) civil proceedings
for, recovery of the amount alleged to be misappropriated.
235 The respondent herein adopted course (i)
and instituted the domestic enquiry in which the principle applied by the
Tribunal is not applicable; in such an enquiry guilt need not be established
beyond reasonable doubt, proof of misconduct may be sufficient.
The learned Tribunal has committed another
error in holding that the finding of the domestic enquiry was based on
"hearsay" evidence. The law is well-settled that the strict rules of
evidence are not applicable in a domestic enquiry.
This Court in the case of State of Haryana
& Anr. v. Rattan Singh held:
"It is well-settled that in a domestic
enquiry the strict and sophisticated rules of evidence under the Indian
Evidence Act may not apply. All materials which are logically probative for a
prudent mind are permissible. There is no allergy to hearsay evidence provided
it has reasonable nexus and credibility."
10. The next question is, is the evidence in
the domestic enquiry really hearsay, as held by the Tribunal ? The word
'hearsay' is used in various senses. Sometimes it means whatever a person is
heard to say; sometimes it means whatever a person declares on information
given by someone else. (See Stephen on Law of Evidence).
The Privy Council it the case of Subramaniam
v/s. Public Prosecutor, observed: "Evidence of a statement made to a
witness who is not himself called as a witness may or may not be hearsay. It is
hearsay and inadmissible when the object of the evidence is to establish the
truth of that is contained in the statement. lt is not hearsay and is
admissible when it is proposed to establish by the evidence, not the truth of
the statement but the fact that it was made. The fact that it was made quite
apart from its truth, is frequently relevant in considering the mental state
and conduct thereafter of the witness or some other persons in whose presence
these statements are made." 236
11. In the instant case, the alleged
misconduct of the appellant was that he forged documents, withdrew Rs. 1,500. 1,000
in excess of the amount he was authorised to do and misappropriated the excess
amount of Rs. 1,000. With regard to the fact whether the appellant manipulated
the documents, withdrew excess amount and misappropriated it, there is, of
course, no direct evidence of any eye witness except the appellant's
'confession' referred to above. The evidence on which reliance has been taken
by the respondent is the confession and circumstantial evidence, namely, the
authority letter containing the admitted interpolations by the appellant in his
own handwriting in different ink, and the addition of the digit "I"
before 500. The evidence of Kansal would have been primary and material, if the
fact in issue were whether Kansal authorised the appellant to make the
alterations in the authority letter. But Kansal's complaint was to the
contrary. For the purpose of a departmental enquiry complaint certainly not
frivolous, but substantiated by circumstantial evidence, is enough. What the
respondent sought to establish in the domestic enquiry was that Kansal had made
a verbal complaint with regard to 1) the withdrawal of excess money by the
appellant in presence of the four witnesses, namely, Wadhera, Gupta, Ramzan and
Sarkar, aforesaid, against his advice. On the complaint of Kansal, the evidence
of these four witnesses is direct as the complaint is said to have been made by
Kansal in their presence and hearing; it is therefore, not hearsay.
As the respondent has succeeded in proving
that a comet plaint was made by Kansal on the evidence of the above-named four
witnesses, the respondent has succeeded. No rule of law enjoins that complaint
has to be in writing as insisted by the Tribunal.
12. The learned Tribunal has committed yet
another grevious error, in failing to appreciate the confessions made by the
appellant "in the presence of witnesses and to the higher officer who
appeared as witness" (as found by itself) namely, Wadhera, Ramzan, Gupta
and Sarkar, aforesaid. The confessions of the appellant before the said
witnesses were to the effect that he had altered the amount in figure and words
in his own hand.
The award of the Tribunal, therefore, has
been vitiated by misconception of the law involved in the case.
13. The last submission of Mr. Garg that the
judgment of the High Court had been vitiated as it had not taken into
consideration the receipt executed by Kansal showing payment by the appellant
of Rs. 1000 to the former is destructive of the appellant's defence. In 237 Our
opinion, this payment on the contrary, proves the respondent's case and
destroys the appellant's defence which was that he had withdrawn Rs. 1,500 as
advised by Kansal and paid the full amount to Kansal.
14. In our opinion the High Court was fully
in its jurisdiction in quashing the award of the Tribunal. This appeal has no
merit and is dismissed. We, however, leave the parties to bear their own costs.
N.V.K. Appeal dismissed.