Management, Pandiyan Roadways Corp. Ltd. Vs. N. Balakrishnan  Insc 579
(15 May 2007)
S.B. Sinha & Markandey Katju
CIVIL APPEAL NO. 2534 OF 2007 [Arising out of S.L.P. (Civil) No. 12280 of
2006] S.B. SINHA, J :
1. Leave granted.
2. Respondent herein was employed as a helper at Kumuli Depot of Appellant.
A criminal complaint was lodged against him for alleged commission of theft of
Rs.37,086.05 on 03.11.1985. A disciplinary proceeding was also initiated
against him. He pleaded not guilty to the said charge both before the
disciplinary authority as also the criminal court. In the disciplinary
proceeding, he was, however, found to be guilty of the said charge. He was
dismissed from services only after a show cause notice was served on him.
3. Appellant filed an application for approval of the said order of removal
purported to be in terms of Section 33(2)(b) of the Industrial Disputes Act,
1947 (for short, 'the Act'). Approval sought for was not granted on the premise
that in passing the said order of termination, Clause 17(5) of the Certified
Standing Orders of the Corporation, which required the management to take into
account the past record before passing the order of dismissal, was not complied
4. During pendency of the said proceedings before the Tribunal, admittedly
the Criminal Court held the respondent not guilty of commission of the charge
of removal of the said amount of Rs. 37,086.05. He was, therefore, acquitted.
5. A Writ Petition was filed by the appellant questioning the said Order of
the Labour Court which was marked as Writ Petition No. 1485/1990. A learned
Single Judge of the said Court allowed the Writ Petition. Aggrieved by and
dissatisfied therewith, Respondent preferred an appeal before a Division Bench
of the High Court. By reason of the impugned judgment, the said appeal has been
allowed holding :
"14. Unfortunately, the learned Judge while accepting the case of
Management, committed two errors. The first one is that he proceeded that the
charge leveled against the workman relates to misappropriation. It is not in
dispute that based on the complaint of the Management, prosecution was launched
against the workmen for the offence of theft, which also ended in acquittal in
C.C. No. 75 of 1986 on the file of Judicial Magistrate, Uthamapalyam dated
14.10.1987. Secondly, the learned Judge committed an error in holding that when
an employee is involved in the case of misappropriation of funds, no lesser
punishment than the dismissal from service can be imposed. However, according to
the learned Judge when a major punishment is to be imposed depending upon the
nature or gravity of the offence, then the factors mentioned in clause 17(5) of
the Standing Orders have some relevance."
6. Appellant is, thus, before us.
7. Mr. T. Harish Kumar, learned counsel appearing on behalf of the
appellant, would submit that Clause 17(5) of the Certified Standing Orders of
the Corporation cannot be held to be imperative in character. According to the
learned counsel, in a case of misconduct involving criminal breach of trust,
the employer would be justified in imposing a punishment of termination of
services and in that view of the matter, question of looking into the past
conduct of the employee would not arise.
8. It was contended that past conduct of an employee would be taken into
consideration, only in the event the misconduct proved is not a grave one. In a
matter involving commission of grave misconduct on the part of the workman, it
was contended, there is no place for generosity or sympathy and the case has to
be dealt with firmly. Reliance, in this behalf, has been placed on Janatha
Bazar (South Kanara Central Cooperative Wholesale Stores Ltd.) and Others v.
Secretary, Sahakari Naukarara Sangha and Others (2000) 7 SCC 517] and
Divisional Controller, KSRTC (NWKRTC) v.
A.T. Mane [(2005) 3 SCC 254].
9. The learned counsel argued that it was not a case where the High Court
could have taken into consideration the question as to whether the punishment
imposed was shockingly disproportionate to the misconduct proved. It was urged
that the jurisdiction of the Labour Court in considering the petition under
Section 33(2)(b) Act being limited; it could not reappraise the evidence
adduced in the disciplinary proceeding. Even acquittal in a criminal proceeding
Mr. Harish Kumar submitted, could not have any effect in a domestic enquiry, in
view of the fact that the standard of proof in criminal proceeding and domestic
enquiry is entirely different. Strong reliance, in this behalf, has been placed
on South Bengal State Transport Corporation v. Sapan Kumar Mitra and Others
[(2006) 2 SCC 584] and N.
Selvaraj v. Kumbakonam City Union Bank Ltd. and Another [(2006) 9 SCC 172].
10. Mr. S. Guru Krishna Kumar, learned counsel appearing on behalf of the
respondent, on the other hand, would submit that it is not a case where this
Court should exercise its discretionary jurisdiction under Article 136 of the
Constitution of India. It was contended that clause 17(5) of the Certified
Standing Orders was clearly applicable and the conditions laid down therein
must be considered before imposition of punishment keeping in view its
cumulative effect. The learned counsel would contend that clause 17(5) of the
Certified Standing Orders is mandatory in character. It was also contended that
admittedly past conduct of the respondent has not been considered while
imposing the punishment. It was urged that the conduct of the respondent was
otherwise blemishless otherwise. Our attention, in this behalf, has been drawn
to the fact that in terms of the order of the Labour Court refusing to grant
approval, the respondent was taken back in service in the year 1989 and since
then he has been working in the bank without any blemish whatsoever. The
learned counsel would submit that the order of acquittal passed by the Criminal
Court having been taken into consideration by the Division Bench, the same
should be considered to be an additional factor apart from the factors
contained in Clause 17(5) of the Certified Standing Orders.
11. Clause 17(5) of the Standing Orders of the Corporation reads as under :
"In awarding the punishment under this standing order the employer
shall take into account the gravity of the misconduct, the previous record of
the workman and any other extenuation or aggravating circumstances that may
12. On a plain reading of the said provision and particularly in view of the
fact that the word "shall" has been used, prima facie it would be
construed to be imperative in character. It may, however, be held to be directory
in certain situation. While construing a statute of this nature, the context
plays an important role. Interpretation of a statute would also depend upon the
fact situation obtaining in the case. There are, however, certain exceptions to
the said rule. The question came up for consideration before this Court in U.P.
State Electricity Board v. Shiv Mohan Singh and Another [(2004) 8 SCC 402]
wherein it was, inter-alia, noticed :
"96. Ordinarily, although the word shall is considered to be imperative
in nature but it has to be interpreted as directory if the context or the
intention otherwise demands. (See Sainik Motors v. State of Rajasthan, AIR para
97. It is important to note that in Crawford on Statutory Construction at p.
539, it is stated:
271. Miscellaneous implied exceptions from the requirements of mandatory
statutes, in general.Even where a statute is clearly mandatory or prohibitory,
yet, in many instances, the courts will regard certain conduct beyond the
prohibition of the statute through the use of various devices or principles.
Most, if not all of these devices find their justification in considerations of
justice. It is a well-known fact that often to enforce the law to its letter
produces manifest injustice, for frequently equitable and humane
considerations, and other considerations of a closely related nature, would
seem to be of a sufficient calibre to excuse or justify a technical violation
of the law.
105. Only because the expression shall has been employed in sub-section
(4) of Section 4, the same may not be held to be imperative in character having
regard to the fact that not only, as noticed hereinbefore, a contract of
apprenticeship commences but also in view of the fact that an application for
registration of apprenticeship contract is required to be made within a period
of three months in terms of Rule 4-B of the Apprenticeship Rules, 1992. The Act
nowhere provides for the consequences of non-registration.
109. It is now a well-settled principle of law that if the language used
in a statute is capable of bearing more than one construction, the true meaning
thereof should be selected having regard to the consequences resulting from
adopting the alternative constructions. A construction resulting in hardship,
non-fulfilment of the purpose for which the statute has been brought in force
should be rejected and should be given that construction which avoids such
13. Yet again in P.T. Rajan v. T.P.M. Sahir and Others [(2003) 8 SCC 498],
this Court observed :
"45. A statute as is well known must be read in the text and context
thereof. Whether a statute is directory or mandatory would not be dependent on
the user of the words shall or may. Such a question must be posed and answered
having regard to the purpose and object it seeks to achieve.
46. What is mandatory is the requirement of sub-section (3) of Section 23 of
the 1950 Act and not the ministerial action of actual publication of Form 16.
47. The construction of a statute will depend on the purport and object for
which the same had been used. In the instant case the 1960 Rules do not fix any
time for publication of the electoral rolls. On the other hand Section 23(3) of
the 1950 Act categorically mandates that direction can be issued for revision
in the electoral roll by way of amendment in inclusion and deletion from the
electoral roll till the date specified for filing nomination.
The electoral roll as revised by reason of such directions can therefore be
amended only thereafter. On the basis of direction issued by the competent
authority in relation to an application filed for inclusion of a voters name, a
nomination can be filed. The person concerned, therefore, would not be
inconvenienced or in any way be prejudiced only because the revised electoral
roll in Form 16 is published a few hours later. The result of filing of such
nomination would become known to the parties concerned also after 3.00 p.m.
48. Furthermore, even if the statute specifies a time for publication of the
electoral roll, the same by itself could not have been held to be mandatory.
Such a provision would be directory in nature. It is a well-settled principle
of law that where a statutory functionary is asked to perform a statutory duty
within the time prescribed therefor, the same would be directory and not
(See Shiveshwar Prasad Sinha v. District Magistrate of Monghyr, Nomita
Chowdhury v. State of W.B. and Garbari Union Coop. Agricultural Credit Society
Swapan Kumar Jana)
49. Furthermore, a provision in a statute which is procedural in nature
although employs the word shall may not be held to be mandatory if thereby no
prejudice is caused. (See Raza Buland Sugar Co. Ltd. v. Municipal Board,
Rampur, State Bank of Patiala v. S.K. Sharma, Venkataswamappa v. Special Dy.
Commr. (Revenue) and Rai Vimal Krishna v. State of Bihar.)"
14. In Ashok Lanka and Another v. Rishi Dixit and Others [(2005) 5 SCC 598],
it was held :
"53. The question as to whether a statute is mandatory or directory
would depend upon the statutory scheme. It is now well known that use of the
expression shall or may by itself is not decisive. The court while construing a
statute must consider all relevant factors including the purpose and object the
statute seeks to achieve. (See P.T.
Rajan v. T.P.M. Sahir and U.P. SEB v. Shiv Mohan Singh.)"
15. There cannot also be any doubt that ordinarily consequences flowing from
contravention of an imperative character of a statute has to be given effect
to. A statutory provision may be substantive or procedural. If it is
substantive, the requirements laid down in the statute should ordinarily be
complied with. However, when the provisions contain a procedural matter,
substantial compliance thereof would serve the purpose.
16. Application of a statute or principle of law, however, may vary from
case to case.
17. Only because the statute is imperative, it may not necessarily lead to a
declaration that the order impugned is a nullity.
18. In State Bank of Patiala and Others v. S.K. Sharma [(1996) 3 SCC 364],
this Court has, inter alia, laid down the law in the following terms :
"33. We may summarise the principles emerging from the above
discussion. (These are by no means intended to be exhaustive and are evolved
keeping in view the context of disciplinary enquiries and orders of punishment
imposed by an employer upon the employee):
(4)(a) In the case of a procedural provision which is not of a mandatory
character, the complaint of violation has to be examined from the standpoint of
substantial compliance. Be that as it may, the order passed in violation of
such a provision can be set aside only where such violation has occasioned
prejudice to the delinquent employee.
(b) In the case of violation of a procedural provision, which is of a
mandatory character, it has to be ascertained whether the provision is
conceived in the interest of the person proceeded against or in public
interest. If it is found to be the former, then it must be seen whether the
delinquent officer has waived the said requirement, either expressly or by his
conduct. If he is found to have waived it, then the order of punishment cannot
be set aside on the ground of the said violation. If, on the other hand, it is
found that the delinquent officer/employee has not waived it or that the provision
could not be waived by him, then the Court or Tribunal should make appropriate
directions (include the setting aside of the order of punishment), keeping in
mind the approach adopted by the Constitution Bench in B.
Karunakar18. The ultimate test is always the same, viz., test of prejudice
or the test of fair hearing, as it may be called."
19. Ordinarily, although sub-clause (5) of Clause (17) of the Certified
Standing Orders is required to be complied with, the same, in our opinion,
would not mean that in a given situation, there cannot be any deviation
therefrom. In a case where dismissal or removal of service is to be ordinarily
followed, e.g. in a case of grave misconduct like misappropriation, strict
enforcement of the rule may not be insisted upon.
When, we say so, we are not oblivious of the law that an executive agency is
ordinarily bound by the standard by which it professes its actions to be
judged. [See Harjit Singh & Another v. The State of Punjab & Another
[2007) (3) SCALE 553]. But where a procedural provision merely embodied the
principles of natural justice, in view of the decision of this Court in State
Bank of Patiala (supra), the question as to whether the principle has been
followed or not, will depend upon the fact situation obtaining in each case.
[See Ashok Kumar Sonkar v. Union of India & Others [2007 (3) SCALE
20. It will be useful to note that in State of Punjab and Others v.
Sukhwinder Singh [(1999) SCC (L&S) 1234], this Court has held that the
words "gravest act of misconduct" occurring in Rule 16.2(1) of the
Punjab Police Rules need not be used in the order of punishment, as it can be
found out from the factual matrix obtaining in each case.
21. However, there is another aspect of the matter which cannot be lost sight
of. Respondent, in the meanwhile, has been acquitted. The factum of his
acquittal has been taken into consideration by the Division Bench, which was
considered to be an additional factor. Ordinarily, the question as to whether
acquittal in a criminal case will be conclusive in regard to the order of
punishment imposed upon the delinquent officer in a departmental proceeding is
a matter which will again depend upon the fact situation involved in a given
22. There are evidently two lines of decisions of this Court operating in
the field. One being the cases which would come within the purview of Capt.
Paul Anthony v. Bharat Gold Mines Ltd. and Another [(1999) 3 SCC 679] and G.M.
Tank v. State of Gujarat and Others [(2006) 5 SCC 446].
However, the second line of decisions show that an honourable acquittal in
the criminal case itself may not be held to be determinative in respect of
order of punishment meted out to the delinquent officer, inter alia, when :
(i) the order of acquittal has not been passed on the same set of fact or
same set of evidence; (ii) the effect of difference in the standard of proof in
a criminal trial and disciplinary proceeding has not been considered. [See
Commissioner of Police, New Delhi v. Narender Singh (2006) 4 SCC 265], or;
where the delinquent officer was charged with something more than the
subject-matter of the criminal case and/or covered by a decision of the Civil
Court. [See G.M. Tank (supra), Jasbir Singh v. Punjab & Sind Bank and
Others - 2006 (11) SCALE 204, and Noida Enterprises Assn. v. Noida &
Others - 2007 (2) SCALE 131 Para 18]
23. In Narinder Mohan Arya v. United India Insurance Co. Ltd. and Others
[(2006) 4 SCC 713], this Court held :
"39. Under certain circumstances, a decision of a civil court is also
binding upon the criminal court although, converse is not true. (See Karam
Chand Ganga Prasad v. Union of India). However, it is also true that the
standard of proof in a criminal case and civil case is different.
40. We may notice that in Capt. M. Paul Anthony v.
Bharat Gold Mines Ltd., this Court observed: (SCC p.
695, para 35) "35. Since the facts and the evidence in both the
proceedings, namely, the departmental proceedings and the criminal case wee the
same without there being any iota of difference, the distinction, which is
usually drawn as between the departmental proceedings and the criminal case on
the basis of approach and burden of proof, would not be applicable to the
41. We may not be understood to have laid down a law that in all such
circumstances the decision of the civil court or the criminal court would be
binding on the disciplinary authorities as this Court in large number of
decisions points out that the same would depend upon other factors as well. See
e.g. Krishnakali Tea Estate v.
Akhil Bharatiya Chah Mazdoor Sangh and Manager, Reserve bank of India v. S.
Mani. Each case is, therefore, required to be considered on its own facts.
24. In Delhi Cloth and General Mills Co. v. Ganesh Dutt and Others [(1972) 4
SCC 834], this Court stated :
"31. Mr. Sharma referred us to Paragraph 40 of the Certified Standing
Orders of the appellant Company Ex.
M-4 to the effect that in the order deciding to dismiss the workman, the
appellant Company has not taken into account, as it is bound to, the previous
record, if any, of the workmen. This contention cannot be accepted because in
the order dated May 9, 1966, communicated to each of the workmen, in the
penultimate paragraph it has been stated that while arriving at the decision to
dismiss the employees from the service for misconduct, all relevant
circumstances including the past record of service, have been fully taken into
consideration. So far as we could see, no challenge has been made by the
workmen that the appellant has not taken into account his past record."
25. We are, however, of the opinion that it is not a fit case where this
Court should exercise its extra extra-ordinary jurisdiction under Article 136
of the Constitution of India. Respondent has been taken back in service in the
year 1989. The occurrence took place in the year 1985. The application under
Section 33(2)(b) of the Act was filed on 16.06.1986. It was rejected by an
order dated 19.4.1989. Respondent, thereafter, was taken back in service.
Despite the fact that the Writ Petition filed by the appellant was allowed on
08.10.1999, by reason of an interim order of stay granted by the Division
Bench, he continued in his service. By reason of the impugned judgment, the
Division Bench, as noticed hereinbefore, set aside the judgment of the learned
Single Judge. Respondent is merely a class IV employee, it does not hold any
office of confidence. He was not charged with an offence of criminal breach of
26. Thus, it is now well-settled principle of law that this Court shall not
exercise its jurisdiction under Article 136 of the Constitution of India, only
because it may be lawful to do so. [See Transmission Corporation of A.P.
Ltd. v. Lanco Kondapalli Power (P) Ltd. (2006) 5 SCC 540] and Chandra Singh
and Others v. State of Rajasthan and Another [(2003) 6 SCC 545].
27. For the reasons aforementioned, the appeal is dismissed. However, in the
facts and circumstances of the case, there shall be no order as to costs.
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