w w w . L a w y e r S e r v i c e s . i n



Kisan Sahkari Chini Mills Ltd Thru General Manager & Others v/s Presiding Officer Labour Court Lko & Another


Company & Directors' Information:- GENERAL MILLS INDIA PRIVATE LIMITED [Active] CIN = U15510MH1995PTC094741

Company & Directors' Information:- G N GENERAL MILLS PRIVATE LIMITED [Strike Off] CIN = U15311DL1981PTC012466

Company & Directors' Information:- KISAN LIMITED [Dissolved] CIN = U99999MH1950PLC010492

    Misc. Single No. 30350 of 2016

    Decided On, 04 July 2019

    At, High Court of Judicature at Allahabad

    By, THE HONOURABLE MRS. JUSTICE SANGEETA CHANDRA

    For the Petitioner: Sudhanshu Chauhan, Rakesh Kumar Yadav, Advocates. For the Respondent: Ambrish Kumar Pandey, C.S.C, Amit Bose, Ashok K. Shukla, Advocates.



Judgment Text

1. Heard learned counsel for the petitioners and Sri Amit Bose for respondent no.2.

2. The petitioners, a Cooperative Sugar Mill, have challenged the Award dated 9.8.2016 passed by the Presiding Officer, Labour Court, Lucknow in Adjudication Case No.58 of 2006.

3. It has been submitted by the learned counsel for the petitioners Sri Sudhanshu Chauhan that respondent no.2 was appointed as a daily wage Weighment Clerk on seasonal basis on 1.6.1983 and was made permanent on the post of Seasonal Weighment Clerk w.e.f. 1.1.1988. On 8.2.1991, the respondent no.2 was placed under suspension for wrongly weighing an empty vehicle as allegedly carrying cane, thereby causing a loss of two quintals of cane to the Mill.

4. During the enquiry, the respondent no.2 admitted the misconduct and apologized and was allowed to continue in service. On 19.3.1998, respondent no.2 purchased 8156.71 quintals of cane and supplied only 7828.48 quintals of cane to the Mill, thereby misappropriating 228.23 quintals of cane worth Rs.14,964.48. The respondent no.2 was again placed under suspension but he admitted his misconduct and apologized. He was let off with a warning.

5. In between 29.12.1998 and 2.1.1999, respondent no.2 was posted as Weighment Clerk at Purchase Centre Rampur Mathura-B situated at Sitapur. He purchased 5218.79 quintals of cane and supplied only 4425.18 quintals of cane. The loss of 793.61 quintals of cane resulted in misappropriation of Rs.61,107.97. Also, respondent no.2 did not handover charge of 50 quintals of leftover cane on the plot at the Purchase Centre to the incumbent transferred in his place, namely, Ram Kripal Dhar, who was posted at the said Purchase Centre w.e.f. 3.1.1999. It led to a loss of 50 quintals of cane. Moreover, respondent no.2 also absented himself from work w.e.f. 3.1.1999 to 5.1.1999 for which, he was suspended on 7.1.1999. A charge sheet was issued to him in respect of three charges on 27.5.1999.

6. Respondent no.2 filed his reply on 25.10.1999 to the charge sheet, where he admitted the loss of 793.61 quintals of cane, but alleged that Rampur Mathura-B Purchase Centre was adjacent to Rampur Mathura-A Purchase Centre and some farmers taking advantage of the crowd had got their cane weighed again at Rampur Mathura-A Purchase Centre. Respondent no.2 alleged that he was inexperienced and, therefore, prayed that whatever loss has been caused to the Mill, should be recovered from his dues by adjustment in future. With regard to the second charge of loss of 50 quintals of cane, the respondent no.2 alleged that before he could handover the charge, again farmers had lifted the said leftover cane. With regard to the third charge of absence w.e.f. 3.1.1999 to 5.1.1999, the respondent no.2 submitted a medical certificate, saying that he was suffering from cold and fever. The enquiry officer fixed the date for personal hearing and examination of witnesses on 31.1.1999. The respondent no.2 was examined as also the employers witnesses. Respondent no.2 was given opportunity to cross-examine the employer's witnesses also. However, he stated before the enquiry officer that he had nothing further to say except that some farmers had taken advantage of the situation regarding the two Purchase Centres and had got their cane weighed fraudulently. However, respondent no.2 refused to tell the names of such farmers on the ground that they were influential people and that he would face a threat to his life. Respondent no.2 also admitted that he did not file any FIR nor sent any written complaint to the occupier of the Mill with regard to conduct of certain cane growers. With regard to the second charge, respondent no.2 admitted that some farmers had lifted 50 quintals of leftover cane, as the charge could not be handed over to Ram Kripal Dhar as respondent no.2 fell ill.

7. The enquiry officer on the basis of statements recorded during personal hearing, sent an enquiry report dated 4.11.1999 to the petitioners finding the respondent no.2 guilty of two charges of misappropriation of cane and causing monetary loss to the Mill. With regard to the third charge of unauthorized absence, respondent no.2 was exonerated.

8. On 12.11.1999, a show cause notice was issued. In the show cause notice, the finding of the enquiry officer on all the three charges were reproduced verbatim as they were stated in the enquiry report. The show cause notice was served upon the respondent no.2's son at his residence by the cane accountant and thereafter it was sent through registered post, which returned with an endorsement of respondent no.2 not being available on the address shown. Eventually, show cause notice was also published in a News Paper on 26.11.1999. It has been submitted that no reply was filed by respondent no.2.

9. On 14.12.1999, an order of dismissal from service and recovery of an amount of Rs.61,107.97 was passed. Respondent no.2 approached this Court against the punishment order by filing Writ Petition No.519 (SS) of 2000, which was disposed of on 10.1.2006 by this Court with an observation that the petitioner may file an application for reference under the U.P. Industrial Disputes Act. Consequently, an application was moved and a reference was made on 17.5.2006 by the Government to the effect "whether the removal from service of respondent no.2 was justified and if not, to what effect?"

10. The reference was returned unanswered by the Labour Court on the ground that in view of the decision of the Supreme Court in Ghaziabad Zila Sahkari Bank Ltd. vs. Additional Labour Commissioner, 2007 (11) SCC 756, the Labour Court had no jurisdiction and the only authority constituted is under the U.P. Cooperative Societies Act, 1965 to consider and decide such disputes.

11. The order of the Labour Court dated 11.8.2010, returning the Reference as well as the order on the Application for Recall rejected on 7.9.2010, were challenged in Writ Petition No.6800 (MS) of 2010. The Court after detailed hearing and exchange of affidavits, allowed the writ petition by its judgment and order dated 4.7.2011 and directed the Presiding Officer, Labour Court to consider and decide the Adjudication Case No.58 of 2006 on merits.

12. The Labour Court on being remanded the matter, again rejected the reference on grounds of maintainability on 19.11.2012 and the respondent no.2 again approached this Court in Writ Petition No.1885 (MS) of 2015. This writ petition was allowed by this Court on 12.8.2015 with a direction to the Labour Court to decide the Adjudication Case No.58 of 2006 on merits.

13. The Labour Court thereafter considered the reference order. A preliminary issue regarding validity of domestic enquiry was framed, which was decided in favour of respondent no.21.7.2016. It was held by respondent no.1 that no copy of the enquiry report was given to respondent no.2 and no witnesses were examined and no finding was recorded by the enquiry officer. On the preliminary issue of validity of the domestic enquiry being decided in favour of respondent no.2, the respondent no.1 considered the evidence on record afresh and observed on the basis of admission made by respondent no.2 before the enquiry officer in his reply to the charge sheet and in his oral statement, that admission is the best form of evidence under the Evidence Act and respondent no.2 was rightly held guilty of loss of sugar cane, leading to monetary loss.

However, without further enquiry in the matter, respondent no.1 held that respondent no.2 was merely guilty of negligence and carelessness and not of malfeasance or misappropriation. It observed that dismissal of employee was not warranted and directed reinstatement. It, however, permitted the petitioners to recover the loss of more than rupees sixty one thousand as aforesaid, from the future dues of respondent no.2 and directed punishment of stoppage of three annual increments permanently and a censure entry in his annual confidential roll to be recorded. With regard to back wages, without any finding being recorded regarding the employment or otherwise of respondent no.2, the respondent no.1 directed payment of 50% of back wages.

14. The petitioners being aggrieved has approached this Court. At the time of admission of the writ petition, this Court had passed a conditional interim order on 22.12.2016 by which, the impugned Award was stayed, subject to reinstatement of respondent no.2 and payment of salary month to month on the post held by him. Consequent to the passing of the interim order, respondent no.2 had been reinstated and was being paid salary month to month and has also retired.

15. It has been submitted by the learned counsel for the petitioners that once it was found by the Tribunal that domestic enquiry was held in violation of principles of natural justice, it conducted the enquiry on its own as per Section 6(2-A) of the U.P. Industrial Disputes Act and came to the conclusion that the admission is the best form of evidence. Respondent no.2 had admitted to the loss of cane and consequent monetary loss to the Mill and had offered that the same be recovered from his future dues. Respondent no.1 was satisfied with the correspondence placed before it with regard to purchase of cane on various dates w.e.f. 29.12.1998 to 3.1.1999 and to the supply of the said purchased cane to the Sugar Mill and the loss so caused. Respondent no.1 had also observed that Challan No.97080 dated 4.1.1999 had been submitted and verified also before the Labour Court and rejected the contention made by respondent no.2 before it that there was no evidence in support of the charges levelled against the workman. Even after holding that loss of cane and consequent monetary loss was proved on evidence submitted by the Sugar Mill before the Labour Court, the Labour Court has held that such loss had been caused due to negligence and not malfeasance.

16. It has been submitted by the learned counsel for the petitioner that no doubt under Section 6(2-A) of the U.P. Industrial Disputes Act, the Tribunal can interfere in the punishment awarded to the workman but it has to give specific finding on the question whether the punishment was disproportionate to the misconduct and was in gross contravention of the Standing Orders. The respondent no.2 even in the past had been held liable for misappropriation and causing loss to the Mill and he had duly admitted his guilt and promised to be careful in future and, therefore, was allowed to remain in service. On this occasion also when charge sheet was issued to respondent no.1, in his reply submitted on 25.10.1999 and in his oral statement before the enquiry officer on 3.11.1999, the respondent no.2 had admitted the fact of causing loss to the Sugar Mill. Respondent no.1 also arrived at a categorical finding that the petitioners Sugar Mill had suffered monetary loss on account of conduct of respondent no.2 and that the charges stood duly proved and yet it interfered in the punishment imposed by the employer.

17. Learned counsel for the petitioners has submitted that the Supreme Court has repeatedly held that the punishment should be proportionate to the gravity of misconduct and the Tribunal can look into the gravity of the misconduct and the punishment awarded on grounds of proportionality. However, in case of misappropriation, the only punishment is dismissal.

18. It has been submitted by the learned counsel for the petitioners that looking to the past conduct of respondent no.2 where he was repeatedly found liable for monetary loss caused to the employer, the punishment of dismissal was rightly rightly imposed by the employer and it could not have been interfered with by the Labour Court. There is no observation by the Labour Court in the Award to the effect that the punishment was disproportionate to the misconduct. Moreover, while reinstating respondent no.2 and observing that there is nothing on record to show that respondent no.2 had not been employed elsewhere, it had granted 50% of back wages.

19. The petitioners had submitted before respondent no.1 that they had lost confidence in respondent no.2 and loss of confidence was a valid ground for dismissal or removal but reinstatement had been ordered with a lesser punishment of withholding of three annual increments permanently. It has also been argued by the learned counsel for the petitioners that in this case, the relief of reinstatement was a consequence of imposition of lesser punishment and not because of any illegality found in the order of dismissal. Under such circumstances, neither back wages nor continuity of service nor consequential benefits of such reinstatement could have been granted by respondent no.1.

20. Learned counsel for the petitioners has placed reliance upon the following judgments to buttress his arguments:

(1) Uttarakhand Transport Corporation and others vs. Sukhveer Singh (2018) 1 SCC 231;

(2) U.P. State Road Transport Corporation vs. Suresh Chand Sharma (2010) 6 SCC 555;

(3) Deewan Singh vs. Life Insurance Corporation of India and others, (2015) 2 SCC 341;

(4) Chief Executive Officer Krishna District Cooperative Central Bank Ltd. vs. K. Hanumantha Rao and another, (2017) 2 SCC 528;

(5) J.K. Synthetics Ltd. vs. K.P. Agarwal and another, (2007) 2 SCC 433.

21. On the other hand, Sri Amit Bose, who has appeared for the respondents, has pointed out that respondent no.2 had been dismissed from service in 1999 and since 1999 till the date of the Award in 2016, he has suffered enough and repeatedly approached this Court and the Labour Court and has been fighting for his cause for such a long time and, therefore, the Labour Court directed payment of 50% of back wages along with reinstatement and consequential benefits thereof.

22. It has been submitted by Sri Amit Bose that Section 11-A of the Central Industrial Disputes Act was added by way of amendment to the Act on a recommendation of the Industrial Labour Organization in 1971. The U.P. Act was thereafter amended in 1978 and Section 6(2-A) was added giving power to the Labour Court to enquire into the charges levelled against the workman in a disciplinary enquiry on the basis of the evidence led by the employer and the workman before the Labour Court. The two sections being parimateria, the law as laid down by the Supreme Court with regard to powers of the Labour Court under Section 11-A of the Act would also apply to disputes being considered by the Labour Court under the U.P. Act.

23. Learned counsel for respondent no.2 has argued for some time also on the merits of the charges and the validity of the domestic enquiry saying that despite opportunity being prayed for to lead evidence, the workman was denied the same and the oral enquiry was conducted in a hurry by the enquiry officer under the pressure of the officials of the Sugar Mill. It has been submitted that after the show cause notice was published in the news paper on 26.11.1999 the respondent no.2 had replied to the show cause notice and had sent his explanation through registered post on 9.12.1999. However, the same was not considered at all by the employer while passing the order dated 4.12.1999.

24. However, Sri Amit Bose has very fairly conceded that even after holding that the domestic enquiry was vitiated for not following the principles of natural justice while deciding the preliminary issue, the Labour Court had given opportunity to the employer and the workman to lead evidence. In the evidence led including documents like correspondence relating to purchase and supply of cane, it was found that there was loss of sugar cane and consequent monetary loss. Besides, in the reply to the show cause notice, respondent no.2 had admitted that there was loss caused but had pleaded that it was caused because of inexperience of the workman, recovery could be made from his future dues. The respondent no.1, therefore, found the admission of the workman as enough proof of loss being caused to the employer.

25. Sri Amit Bose has relied upon several judgments of the Supreme Court including Constitution Bench decision in Karnataka State Road Transport Corporation vs. Lakshmidevamma (Smt.) and another, (2001) 5 SCC 433. The judgments being relied upon by Sri Amit Bose with regard to the powers of the Labour Court under Section 11-A of the Central Act or Section 6(2-A) of the U.P. Act, are as follows:

(1) Delhi Cloth and General Mills Co. vs. Ludh Budh Singh (1972) 1 SCC 595;

(2) State Bank of India vs. R.K. Jain (1972) 4 SCC 304;

(3) Workmen of M/s. Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. Vs. Management (1973) 1 SCC 813;

(4) East India Hotels vs. Their workmen (1974) 3 SCC 712;

(5) Cooper Engineering Ltd. vs. P.P. Mundhe (1975) 2 SCC 661;

(6) Shankar Chakravarti vs. Britania Biscuit Co. Ltd. (1979) 3 SCC 371;

(7) Bharat Forge Co. Ltd. vs. A.B. Zodge (1996) 4 SCC 374;

(8) United Planters Association of Southern India vs. K.G. Sangameswaran (1997) 4 SCC 741;

(9) Neeta Kaplish vs. Presiding Officer, Labour Court (1999) 1 SCC 517;

(10) Karnataka State Road Transport Corporation vs. Lakshmidevamma (2001) 5 SCC 433;

(11) Amrit Vanaspati co. Ltd. vs. Khem Chand (2006) 6 SCC 325;

(12) Usha Breco Mazdoor Sangh vs. Management (2008) 5 SCC 554;

(13) Mavji C. Lakum vs. Central Bank of India (2008) 12 SCC 726;

(14) Raghubir Singh vs. General Manager, Haryana Roadways (2014) 10 SCC 301;

(15) Kurukshetra University vs. Prithvi Singh (2018) 4 SCC 483;

(16) M.L. Single vs. Punjab National Bank, 2018 SCC Online SC 1585.

26. Having perused the judgments of the Supreme Court as cited before me, this Court is of the considered opinion that there cannot be any dispute regarding the powers of the Labour Court to interfere in the punishment imposed on the workman as a consequence of domestic enquiry. The dispute is with regard to the manner of exercise of such powers by the Labour Court.

27. In the Constitution Bench decision of Karnataka State Road Transport Corporation (supra), the Supreme Court has held that after the Labour Court holds that the enquiry was vitiated, it could give opportunity to the Management to lead evidence in justification of its decision under consideration by such Tribunal or Court, on permission being sought in this regard. This power has been given to the Court to avoid unnecessary delay and multiplicity of proceedings in disposal of dispute between the workman and employer. It held that the right of the employer to adduce additional evidence in a proceeding before the Labour Court or Industrial Tribunal in a dispute questioning the legality of the order terminating the service must be availed of by the employer by making a request at the time when it files its statement of claim or written statement. The opportunity of leading evidence is sought by the Management only as an alternative plea and not as an admission of illegality in its domestic enquiry. The workmen are also put to notice of the fact that the Management is likely to adduce fresh evidence. Hence, they can keep their rebuttal or other evidence ready.

28. In this case, there is no dispute that while filing written statement by the employer, it had also asked for opportunity to lead evidence in case domestic enquiry was found vitiated. The said opportunity was given by the Tribunal and evidence was led and respondent no.1 found admission of the workman with regard to the loss caused to the Mill being sufficient for imposition of punishment. However, it has interfered in the punishment, observing that it was caused due to negligence and carelessness and not due to malfeasance.

29. In the case of Amrit Vanaspati (supra), the Supreme Court interfered in the order of the High Court, directing reinstatement and payment of back wages, where Labour Court had held that the charges stood proved and had upheld the order of dismissal. The Supreme Court observed that the High Court had erred in exercising its power under Writ Jurisdiction to deal with aspects like whether the quantum of punishment meted out by the Management to a workman for a particular misconduct was sufficient or not.

30. In the case of Usha Breco Mazdoor Sangh (supra), the Supreme Court interfered in an order passed by the Labour Court where it had found on evidence that the employer's punishment order was not perverse, but had yet interfered in the Management's decision holding that no charge was established against the workman. It was observed that unless the Labour Court finds that there was lack of bona fides or victimization or unfair labour practice on the part of the Management, the Labour Court should not interfere in the order passed by the Management. It observed that "it is one thing to say that the finding of an enquiry officer is perverse or betrays the well-known doctrine of proportionality but it is another thing to say that only because two views are possible, the Labour Court shall interfere therewith. In other words, it is one thing to say that on the basis of the materials on record, the Labour Court comes to a conclusion that a verdict of guilt has been arrived at by the enquiry officer where the materials suggested otherwise but it is another thing to say that such a verdict was also a possible view."

31. The decision of the Labour Court should not be based on mere hypothesis. It cannot overturn a Management decision on mere ipse dixit. Its jurisdiction under Section 11-A although is a wide one, it must be exercised judiciously. Judicial discretion cannot be exercised either whimsically or capriciously. It was also observed that in a departmental proceedings, standard of proof is not that misconduct must be proved beyond all reasonable doubt but standard of proof is as to whether the test of preponderance of probabilities has been met.

With regard to Section 11-A and Section 6(2-A), the legal principles are not in issue nor there is any dispute with regard to the power exercised by the Labour Court. The question is that of its application.

32. Learned counsel for the petitioner has placed reliance upon the case of Davalsab Husainsab Mulla vs. North West Karnataka Road Transport Corporation (2013) 10 SCC 185. Para-12 of the said judgment is being quoted hereinbelow:

"12. As far as the discretionary power of the Labour Court under Section 11-A of the Act is concerned, the exercise of such power will always have to be made judicially and judiciously. Under the said provision, wide powers have been vested with the Labour Court to set aside the punishment of discharge or dismissal and in its place award any lesser punishment. Therefore, high amount of care and caution should be exercised by the Labour Court while invoking the said discretionary jurisdiction for replacing the punishment of discharge or dismissal. Such exercise of discretion will have to depend upon the facts and circumstances of each case. Before exercising the said discretion, the Labour Court has to necessarily reach a finding that the order of discharge or dismissal was not justified. A reading of Section 11-A of the Act makes it clear that before reaching the said conclusion, the Labour Court should express its satisfaction for holding so. It has to be remembered that the question of exercise of the said discretion will depend upon the conclusion as regards the proof of misconduct as held proved by the management and only if it finds that the discharge or dismissal was not justified. Therefore, the satisfaction to be arrived at by the Labour Court while exercising its discretionary jurisdiction under Section 11-A of the Act must be based on sound reasoning and cannot be arrived at in a casual fashion, inasmuch as, on the one hand the interference with the capital punishment imposed on the workman would deprive him and his family members of the source of livelihood, while on the other hand the employer having provided the opportunity of employment to the workman concerned would be equally entitled to be ensured that the employee concerned maintains utmost discipline in the establishment and duly complies with the rules and regulations applicable to the establishment. In that sense, since the relationship as between both is reciprocal in equal proportion, when the employer had chosen to exercise its power of discharge and dismissal for stated reasons and proven misconduct, the interference with such order of punishment cannot be made in a casual manner or for any flimsy reasons."

(emphasis supplied)

33. The Supreme Court in the aforesaid judgment, quoted a decision of the Madras High Court in the case of Royal Printing Works v. Industrial Tribunal [(1959) 2 LLJ 619 (Mad), where the Writ Court had observed that "there are certain passages in the order of the tribunal which as I understand them suggest that carelessness on the part of an employee in relation to his work would not justify serious punishment. With this view I definitely disagree. Carelessness can often be productive of more harm than deliberate wickedness or malevolence. I shall not refer to the classic example of the sentry who sleeps at his post and allows the enemy to slip through. There are more familiar instances. A compositor who carelessly places a plus sign instead of a minus sign in a question paper may cause numerous examinees to fail. A compounder in a hospital or chemists' shop who makes up the mixtures or other medicines carelessly may cause quite a few deaths. The man at an airport who does not carefully filter the petrol poured into a plane may cause it to crash. The railway employee who does not set the point carefully may cause a head-on collision. Misplaced sympathy can be of great evil. Carelessness and indifference to duty are not the high roads to individual or national prosperity."

34. It has been argued by the learned counsel for the petitioners that a Weighment Clerk is an agent of the Mill at the Cane Purchase Centre. He should be a man of undoubtable integrity. Not only he be meticulous in weighing the cane, he should be careful of maintaining the record of such purchase and should also be careful in supplying the cane so purchased to the Mill gate without loss being caused to the Sugar Mill. In the case of respondent no.2, he had purchased the cane but his explanation for loss being caused was that some farmers had fraudulently not supplied the purchased cane. The names of the farmers were not given during the enquiry. No written complaint/information was sent to the Mill that such fraudulent practice had been resorted to by the cane farmers immediately on being relieved of the charge on 4.1.1999. It was only when charge sheet was issued a reply was submitted five months thereafter taking the ground of fraudulent practice adopted by the cane farmers.

35. The Supreme Court in the case of U.P. State Road Transport Corporation (supra), had upheld the findings of the Labour Court that the Conductor after collecting money from the passengers had not issued tickets to them. There was a clear intention of misappropriation of money received from passengers. In such a case, there was a loss of confidence of the employer and the employee concerned. The High Court was not right in interfering with the order of the Labour Court upholding the order of dismissal. The High Court observed that when punishment is to be interfered with, reasons have to be given. Paras-20 to 23 of the said judgment are being quoted hereinbelow:

"20. Therefore, the law on the issue can be summarised to the effect that, while deciding the case, court is under an obligation to record reasons, however brief the same may be, as it is a requirement of principles of natural justice. Non-observance of the said principle would vitiate the judicial order. Thus, in view of the above, the judgment and order of the High Court impugned herein is liable to be set aside.

21. We do not find any force in the submissions made by Dr. J.N. Dubey, learned Senior Counsel for the employee that for embezzlement of such a petty amount, punishment of dismissal could not be justified for the reason that it is not the amount embezzled by a delinquent employee but the mens rea to misappropriate the public money.

22. In Municipal Committee, Bahadurgarh v. Krishnan Behari [(1996) 2 SCC 714 : 1996 SCC (L&S) 539 : AIR 1996 SC 1249] this Court held as under: (SCC p. 715, para 4) "4. ... In a case of such nature--indeed, in cases involving corruption--there cannot be any other punishment than dismissal. Any sympathy shown in such cases is totally uncalled for and opposed to public interest. The amount misappropriated may be small or large; it is the act of misappropriation that is relevant."

Similar view has been reiterated by this Court in Ruston & Hornsby (I) Ltd. v. T.B. Kadam [(1976) 3 SCC 71 : 1976 SCC (L&S) 381 : AIR 1975 SC 2025] , U.P. SRTC v. Basudeo Chaudhary [(1997) 11 SCC 370 : 1998 SCC (L&S) 155] , Janatha Bazar (South Kanara Central Coop. Wholesale Stores Ltd.) v. Sahakari Noukarara Sangha [(2000) 7 SCC 517 : 2000 SCC (L&S) 962] , Karnataka SRTC v. B.S. Hullikatti [(2001) 2 SCC 574 : 2001 SCC (L&S) 469 : AIR 2001 SC 930] and Rajasthan SRTC v. Ghanshyam Sharma [(2002) 10 SCC 330 : 2003 SCC (L&S) 714] .

23. In NEKRTC v. H. Amaresh [(2006) 6 SCC 187 : 2006 SCC (L&S) 1290 : AIR 2006 SC 2730] and U.P. SRTC v. Vinod Kumar [(2008) 1 SCC 115 : (2008) 1 SCC (L&S) 1] this Court held that the punishment should always be proportionate to the gravity of the misconduct. However, in a case of corruption/misappropriation, the only punishment is dismissal."

36. In Karnataka SRTC vs. A.T. Mane (2005) 3 SCC 254, the Supreme Court in Para-12 observed as under:

"12. Coming to the question of quantum of punishment, one should bear in mind the fact that it is not the amount of money misappropriated that becomes a primary factor for awarding punishment; on the contrary, it is the loss of confidence which is the primary factor to be taken into consideration. In our opinion, when a person is found guilty of misappropriating the corporation's funds, there is nothing wrong in the corporation losing confidence or faith in such a person and awarding a punishment of dismissal."

(emphasis supplied)

37. In Niranjan Hemchandra Sashittal vs. State of Maharashtra (2013) 4 SCC 642, the Supreme Court in Para-25 observed as under:

"25. ... In the present day scenario, corruption has been treated to have the potentiality of corroding the marrows of the economy. There are cases where the amount is small, and in certain cases, it is extremely high. The gravity of the offence in such a case, in our considered opinion, is not to be adjudged on the bedrock of the quantum of bribe. An attitude to abuse the official position to extend favour in lieu of benefit is a crime against the collective and an anathema to the basic tenets of democracy, for it erodes the faith of the people in the system. It creates an incurable concavity in the rule of law."

38. In Chief Executive Officer, Krishna District Cooperative Central Bank Ltd. (supra), the Supreme Court has observed that negligence and carelessness in performance of duty led to misappropriation of funds of the Society. Finding the employee as not fit to be continued as supervisor, it observed on the basis of judgment rendered in Kendriya Vidyalaya Sangthan vs. J. Hussain (2013) 10 SCC 106 that the court while undertaking judicial review of the matt

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er is not supposed to substitute its own opinion on reappraisal of facts. (See UT of Dadra & Nagar Haveli v. Gulabhia M. Lad [UT of Dadra & Nagar Haveli v. Gulabhia M. Lad, (2010) 5 SCC 775 : (2010) 2 SCC (L&S) 101] .) In exercise of power of judicial review, however, the court can interfere with the punishment imposed when it is found to be totally irrational or is outrageous and in defiance of logic. This limited scope of judicial review is permissible and interference is available only when the punishment is shockingly disproportionate, suggesting lack of good faith. Otherwise, merely the opinion of the court lesser punishment would have been more appropriate, cannot be a ground to interfere with the discretion of the departmental authorities. When the punishment is found to be outrageously disproportionate to the nature of charge, principle of proportionality comes into play. It is, however, to be borne in mind that this principle would be attracted, which is in tune with the doctrine of Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] rule of reasonableness, only when in the facts and circumstances of the case, penalty imposed is so disproportionate to the nature of charge that it shocks the conscience of the court and the court is forced to believe that it is totally unreasonable and arbitrary. 39. The question of the choice and quantum of punishment is within the jurisdiction of the employer. The Court should interfere in the penalty awarded only in such a case where it is found that the penalty awarded by the employer is shockingly disproportionate. 40. This Court is in agreement with the submissions made by the learned counsel for the petitioners. The Labour Court could certainly have interfered in the punishment under Section 6(2-A) of the U.P. Act but the parameters for exercise of such discretion have been clearly laid down by the Supreme Court in its several decisions where it has observed that the interference should be minimal where there is an admitted loss to the employer and there is loss of confidence also in the employee. 41. Since this Court had directed reinstatement of respondent no.2 as an interim measure and payment of salary to him from month to month and respondent no.2 had continued in service till his retirement, this Court does not wish to interfere in the direction for reinstatement. However, it finds the Award passed by the Labour Court to be completely vitiated in so far as it directs reinstatement with consequential benefits and payment of 50% back wages. The Labour Court has further permitted recovery of loss of Rs.61,107.97 from the dues of the employee as was offered by the employee to the Mill. If such recovery has been made from the dues of the employee, the same shall not be returned by the Mill as the punishment order suffers from no infirmity. The salary drawn by respondent no.2 during the period of his reinstatement on account of interim order of this Court shall not be recovered from him as he has worked during the said period. However, consequential benefits Viz. Continuity in service etc. arising out of the Labour Court award shall not be admissible to respondent no.2. 42. The Award of the Labour Court in so far as it directs reinstatement having not been interfered with, the observations made hereinabove would be treated as modifying the Award to the extent as aforesaid. 43. The writ petition stands partly allowed to this extent.
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