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Case Number

Writ Petition No. 942 of 1989

Attorney(S)

Sri R.J Kochar.
Sri Vikram Pai and Sri D.Y Rane.

Judges

B.N Srikrishna, J.

Acts

provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred
PAYMENT OF GRATUITY ACT

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The petitioner was employed by the Maharashtra State Road Transport Corporation (MSRTC) as a bus conductor from 25 April 1968. On 27 March 1985, while working on a bus plying from Hanumantpada to Sakri, an inspection revealed multiple irregularities including:

a passenger who had paid full fare was issued a used ticket of a previous trip;
two and a half passengers were issued used tickets (two tickets of Rs. 1.20) though full fares applied;
another passenger was issued a used ticket after paying full fare;
an unexplained cash excess of Rs. 11.30 in the conductor's money bag;
the money bag contained several used tickets (various denominations) punched with entry and exit stage numbers;
the way-bill had not been properly filled up and the petitioner initially refused to give an explanation; and
generally, improper filling of the way-bill and incorrect punching of tickets.

On 1 May 1985 the petitioner was charged with misconduct. A domestic enquiry was conducted by an enquiry officer-cum-competent authority, who found the petitioner guilty; noting that the petitioner had, on two earlier occasions, indulged in identical misconduct. The competent authority dismissed the petitioner from service by order dated 25 January 1986.

The petitioner complained to the Labour Court, Dhule, under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (item (1) of Schedule IV read with s.28). By order dated 20 April 1988 the Labour Court held the domestic enquiry to be fair but found the punishment shockingly disproportionate and an unfair labour practice, directing reinstatement with fresh service "without continuity of service and back-wages."

Both parties filed revisions in the Industrial Court, Nasik (Revision Application (ULP) Nos. 106 and 125 of 1988). The Industrial Court, by its joint order dated 7 October 1988, set aside the Labour Court's order, dismissed the petitioner's revision, allowed the employer's revision and dismissed the petitioner's complaint. The petitioner moved this Court by a writ petition under Arts. 226 and 227 of the Constitution challenging the Industrial Court's order.

Legal Issues Presented

Whether the domestic enquiry was conducted contrary to the principles of natural justice;
Whether the findings of the enquiry officer were perverse in that even if the facts in the chargesheet were proved they did not constitute misconduct within the meaning of the relevant standing orders;
Whether the punishment of dismissal was shockingly disproportionate and amounted to an unfair labour practice.

Arguments of the Parties

Petitioner's Arguments (as presented in the opinion)

The domestic enquiry violated principles of natural justice.
Even if the charged facts were true, they did not amount to misconduct under the relevant standing orders; the enquiry officer's findings were perverse.
The punishment of dismissal was shockingly disproportionate to the alleged misconduct.

The opinion does not contain a detailed account of the first respondent's (employer's) specific legal arguments in the same itemized manner as the petitioner's contentions.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
State of Haryana v. Rattan Singh, [1977 — II L.L.N 50] (Supreme Court)	The Supreme Court observed that in a domestic enquiry strict and sophisticated rules of evidence under the Evidence Act may not apply; materials that are logically probative for a prudent mind are permissible. The Court considered that use of passenger statements not corroborated by calling the passengers for cross-examination does not automatically vitiate a domestic enquiry.	The present Court relied on this authority to reject the petitioner's contention that using contemporaneous passenger statements at the enquiry without calling the passengers for cross-examination amounted to breach of natural justice. The Court held that the statements were recorded in the petitioner's presence and bore his endorsement/signature, and therefore their use did not per se vitiate the enquiry.

Court's Reasoning and Analysis

The Court reviewed the domestic enquiry and the enquiry report to examine the petitioner's grievance on natural justice and other grounds. The Court proceeded in a sequential manner addressing each principal contention:

On the natural justice point, the Court found that:
- The petitioner received the chargesheet and was given an opportunity to reply;
- He attended the enquiry, heard the witnesses called by the employer, and was given an opportunity to cross-examine them;
- He was permitted to lead evidence in his defence and to answer questions put by the enquiry officer;
- Statements of passengers were contemporaneous, recorded in the presence of the petitioner, and bore endorsements by him; therefore the contention that they were recorded "behind his back" was rejected;
- Relying on State of Haryana v. Rattan Singh, the Court held that strict Evidence Act rules need not apply in a domestic enquiry and that use of passenger statements without calling them for cross-examination did not automatically amount to breach of natural justice.
The Court also examined the so-called "cross-examination" of the petitioner and found the questions posed were clarificatory rather than indicative of bias on the part of the enquiry officer.
On perversity of findings (whether proved facts constituted misconduct), the Court concluded:
- The petitioner was found in flagrante reissuing used tickets; contemporaneous passenger statements and the presence of used tickets in his money bag supported this;
- The petitioner's explanation for the presence of used tickets was described as fanciful and unsatisfactory;
- The Court held that the proved facts fell within the misconduct alleged in the chargesheet; therefore the contention of perversity failed.
On proportionality of punishment and unfair labour practice:
- The Court analysed the Labour Court's approach to punishment under item (1), Schedule IV, of the Act, particularly clause (g) which could justify interference if dismissal was shockingly disproportionate;
- The Court stressed that clause (g) requires proof that the misconduct was minor or technical, that dismissal was given without regard to the nature of the misconduct or the employee's past record, and that a cumulative assessment of these factors shows the punishment to be shockingly disproportionate;
- The Court found no such circumstances on the record; it found the Labour Court's reasoning on issues concerning punishment to be perfunctory and to have over-emphasised length of service while disregarding the employee's past record for identical misconduct;
- The Industrial Court had, by contrast, taken into account not only length of service but also the serious nature of the misconduct and previous identical misconduct; the High Court concluded that the Industrial Court was justified in setting aside the Labour Court's order and allowing the employer's revision.
On remedies and ancillary relief, the Court noted a submission about gratuity: because the dismissal was for misconduct involving dishonesty connected with the employer's business or property, the petitioner might be denied gratuity under the Payment of Gratuity Act. Although the Court declined to disturb the Industrial Court's order, it recommended to the employer to show "some mercy" and consider paying earned gratuity for the period of service.

Holding and Implications

Holding: DISMISSED — The writ petition was dismissed. The Court found no merit in the petition and discharged the rule with no order as to costs.

Implications:

The Industrial Court's order setting aside the Labour Court's reinstatement direction and dismissing the petitioner's complaint remains undisturbed by this writ petition.
The direct effect is that the petitioner's dismissal from service stands; the Court did not interfere with the punishment imposed by the employer as upheld by the Industrial Court.
The Court made a non-binding recommendation to the employer to consider paying the petitioner's earned gratuity despite the dismissal for misconduct; the opinion did not impose a legal order requiring payment of gratuity.
The opinion did not purport to lay down any new legal precedent; it applied existing principles (including the cited Supreme Court authority) to the facts of the matter and found no grounds for interference in writ jurisdiction.

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Pandurang Kashinath Wani v. Divisional Controller, Maharashtra State Road Transport Corporation, Dhule, And Others

1. This writ petition under Arts. 226 and 227 of the Constitution of India is directed against an order of the Industrial Court, Nasik, dated 7 October, 1988, made in a joint order in Revision Application (ULP) No. 106 of 1988 and Revision Application (ULP) No. 125 of 1988, under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as the Act).

2. The first respondent is the Divisional Controller, Maharashtra State Road Transport Corporation, Dhule, and the second respondent is the Maharashtra State Road Transport Corporation which does the business of transport of passengers by its buses. The petitioner was employed in the service of the second respondent as bus conductor from 25 April, 1968. On 27 March, 1985 the petitioner was working as conductor on a bus of the first respondent plying from Hanumantpada to Sakri. When the inspector checked the passengers for their tickets and also the way-bill ticket tray and the cash in the money bag of the conductor, the following irregularities were noticed:

(1) one passenger who was travelling from Kakarpada to Shirsole had paid his full fare, but had been issued a used ticket of the previous trip;

(2) two and half passengers travelling from Sawarpada to Jamzira were found issued two tickets of Rs. 1.20, though the tickets were used tickets from the previous trip;

(3) one passenger from Hanumantapada to Shirsole was issued a used ticket after collecting the full fare from him;

(4) an amount of Rs. 11.30 was found to be unexplained cash excess in the money bag;

(5) inspection of the money bag also disclosed that it contained one ticket of 90 paise, live tickets of Rs. 1.50 one ticket of Rs. 1.80, three tickets of Rs. 5.60 and one ticket of Rs. 1.20 all of which were used tickets which had been punched with an appropriate entry and exit stage numbers;

(6) the way bill had not been properly filled up and when the explanation was sought from the petitioner, he refused to give an explanation; and

(7) the way-bill had not been properly filled up and the punching of tickets was also wrong.

Finding that the petitioner's explanation for these irregularities was unsatisfactory, the petitioner was charged with misconducts under the applicable service regulations vide chargesheet, dated 1 May, 1985. The petitioner gave a reply to the said chargesheet and contended that he was not guilty of the misconducts alleged against him. A detailed enquiry was held by the enquiry officer-cum-competent authority who found the petitioner guilty of the charges alleged against him. Though the petitioner was in service for 18 years, it had been noticed that on two similar occasions he had indulged in an identical misconduct of reissuing used tickets and pocketing the money. Considering all circumstances, the competent authority of the first respondent decided to dismiss the petitioner from service and the petitioner was dismissed from service by an order, dated 25 January, 1986.

3. The petitioner challenged his dismissal before the Labour Court, Dhule, by his complaint (ULP) No. 42 of 1986, under the provisions of item (1) of Sch. IV, read with S. 28 of the Act. By its order, dated 20 April, 1988, the Labour Court, Dhule, rejected the case of the petitioner about the invalidity of the domestic enquiry conducted by the first respondent and held that the domestic enquiry conducted by the first respondent was fair, legal and consonant with the principles of natural justice and that the findings arrived at by the inquiry officer were not perverse. The Labour Court, however, held that the punishment awarded to the petitioner was shockingly disproportionate and, therefore, amounted to an unfair labour practice. Consequently the Labour Court directed reinstatement of the petitioner by giving him fresh service without continuity of service and back-wages. Being aggrieved by the order of the Labour Court both the petitioner and the first respondent moved the Industrial court by Revision Application (ULP) No. 106 of 1988 and Revision Application (ULP) No. 125 of 1988, respectively, under S. 44 of the Act. By the impugned order, the Industrial Court, Nasik, set aside the order of the Labour Court as being unjustified and contrary to law, dismissed the revision application of the petitioner, allowed the revision application of the first respondent and dismissed the complaint of the petitioner. Being aggrieved by the said order, the petitioner is before this Court by the present writ petition.

4. Sri Kochar, learned advocate appearing for the petitioner, raised three contentions:

(1) That the domestic enquiry was contrary to the principles of natural justice and that the Labour Court and Industrial Court erred in not accepting the said contention;

(2) that the findings of the inquiry officer-cum-competent authority were perverse in that even if all facts alleged in the chargesheet were proved they do not constitute misconducts within the meaning of the relevant standing orders and, lastly

(3) the punishment was shockingly disproportionate.

5. Though it is normally not the function of this Court in writ jurisdiction to reappreciate the evidence in view of the fact that the Labour Court's finding on the first issue as to the legality and validity of the domestic enquiry was somewhat terse, not indicating the facts which were considered, I permitted Sri Kochar to lake me through the proceedings of the domestic enquiry so that the grievance could he examined. Even after meticulously scanning the inquiry report on record. I am unable to accept the contention made. The petitioner was given an opportunity to reply to the chargesheet. He was present at the inquiry where the witnesses of the first respondent were examined in his presence and he was given an opportunity to cross-examine them. He was also permitted to lead his evidence in his support and are required to answers such questions which the inquiry officer put. Prima facie, I see nothing in the inquiry which could have been considered contrary to the principles of natural justice. Sri Kochar made two points. He urged that some of the statements of the passengers recorded contemporaneously were used as evidence at the inquiry without actually producing the passengers affirming the said statements for cross-examination. This, according to him, was breach of the principle of natural, justice. I am unable to agree. Each statement of the passenger clearly showed that the statement itself was recorded in the presence of the petitioner who made an endorsement at the footing of each statement and also put his signature. I am unable to accept the contention that the statements were taken behind the back of the petitioner. It is doubtless true that the passengers were not called at the domestic inquiry and permitted to be cross-examined. But that is hardly a circumstance warranting an inference of breach of natural justice. The Supreme Court in State of Haryana v. Rattan Singh, [1977 — II L.L.N 50], has pointed out that in a domestic enquiry that strict and sophisticated rules of evidence under the Evidence Act may not apply and all materials which are logically probative for a prudent mind are permissible. The Supreme Court specifically considered an identical question in that case of a Transport Authority in Haryana. In that case a bus conductor of the transport undertaking had been chargesheeted for not collecting due fares from certain passengers. On the basis of statements of the passengers which were used at the inquiry without actually examining the passengers. The Supreme Court declined to hold that the said circumstances by itself amounts to a breach of principles of natural justice and pointed out that it could not be said that merely because statements of passengers were not recorded by the Inspector of the Flying Squad, the order that followed was invalid. I am, therefore, unable to accept the contention of Sri Kochar that as the passengers whose statements were recorded were not examined at the inquiry it would per se vitiate the inquiry. Sri Kochar urged faintly that as the petitioner had been cross-examined in the enquiry, the inquiry was bad. With the assistance of Sri Kochar, I have scanned the questions that were put to him at the inquiry in the so called cross-examination and I am not satisfied that they would indicate any bias on the part of the inquiry officer to prove the guilt of the delinquent employee or that they demonstrate prejudice. In my view, the questions are clarificatory in nature and indicate to attempt on the part of the inquiry officer to explore the true circumstances. This contention also must fail.

6. Next, Sri Kochar urged that the inquiry officer's finding are perverse inasmuch as the facts alleged against the petitioner, even if held to be proved, did not constitute misconduct. This, in my view, is a two-fold argument. The circumstances were that the conductor was found in flagrante delictu having reissued used tickets to the passengers, the statements of passengers clearly affirm this and the evidence on record clearly bears this out. The petitioner was also found with sufficient stock of used tickets in his money bag, for which the explanation he gave, to say the least, was fanciful and unsatisfactory. In my view, the facts proved against the petitioner at the inquiry would sufficiently fall within the head of misconduct alleged against him by the chargesheet. The argument of perversity of finding must, therefore, fail.

7. The only argument which seems to have been seriously canvassed before the Labour Court was, that the punishment was grossly disproportionate to the misconduct. Here, I find that the Labour Court has slightly misdirected itself. The only situation under item (1), Sch. IV of the Act which could have empowered the Labour Court to hold that there was unfair labour practice and interfere with the punishment meted out to the petitioner was the one contemplated under Cl. (g). In order to make out a misconduct under Cl. (g), it would have to be shown that the misconduct proved against the delinquent was of a minor or technical character, that the order of dismissal had been passed without having regard to the nature of that particular misconduct or past record of the employee and it is only upon a cumulative assessment of all these factors that the Labour Court can say that the order is shockingly disproportionate punishment so as to amount to an unfair labour practice under Cl. (g) of item (1) of Sch. IV of the Act. In the instant case, I do not find any such circumstances held proven even by the Labour Court. The reasoning as to the findings on issues (4) to (7) made by the Labour Court were perfunctory and amounted to total disregard to the past record of the employee, over emphasising the length of service of the employee to the utter exclusion of the bad past record. This, in my view, was clearly misdirection in law by the Labour Court curable by the Industrial Court under S. 44 of the Act. The Industrial Court has rightly pointed out that the order of punishment had taken notice not only of the length of service of the petitioner, but also of the serious nature of the misconduct and the previous record of the petitioner for identical misconduct. The Industrial Court, in my view, was, therefore, fully justified in setting aside the order made by the Labour Court and in allowing the revision application of the first respondent. I find that there is no scope for interference with the order made by the Industrial Court.

8. I am informed by Sri Kochar that because the petitioner had been dismissed from service for an act of misconduct involving dishonesty in connection with the employer's business or property, if is likely that the entire amount of gratuity payable to him under the provisions of Payment of Gratuity Act may be refused and, if it is done, it would be extremely harsh upon the petitioner-employee. Though I am not inclined to disturb the order of the Industrial Court, I would recommended to the first respondent to show some mercy to the petitioner and find a way to paying him at least his earned gratuity for a period of his service.

9. In the result, I find no merit in the petition. The order of the Industrial Court does not call for any interference in writ jurisdiction. The writ petition fails and is hereby dismissed. Rule is discharged with no order as to costs.

Pandurang Kashinath ... v. Divisional Controlle...