A COMPREHNSIVE ARTICLE ON DISCIPLINARY PROCEEDINGS AND ALLIED MATTERS

SOME REFLECTIONS IN INDUSTRIAL AND SERVICE JURISPRUDENCE : MISCONDUCT BY A WORKMAN, INITIATION OF DEPARTMENTAL ENQUIRY AND ITS CONTOURS, APPLICABILITY OF LAW OF EVIDENCE TO DOMESTIC ENQUIRY AND ELGAL PERSPECTIVE : AN APEX JUDICIAL DICTUM

AJAYA KUMAR SAMANTARAY,DEPUTY DIRECTOR GENERAL,LABOUR WELFARE (HQRS),MINISTRY OF LABOUR AND EMPLOYMENT,NEW DELHI : 11 00 11

PRELUDE : In this case the judgment and  order dated 20th January 2021 passed by the Hon’ble High Court of Allahabad was challenged in the appeal at the instance of the employer whereby the order dated 22nd October 2008 passed by the Industrial Tribunal was not interfered with. The Tribunal directed that the respondent (workman/delinquent)  be reinstated in service with 50% of the salary  for the period when he was not in employment.The issues involved in this case are :

(1) Whether strict rule of evidence is applicable to departmental/disciplinary proceedings ?

(2) Whether in case of non issuance of bus tickets to the passengers, is it obligatory on the part if the employer to examine the passengers  ?

THE CASE-LAW : 

UTTAR PRADESH STATE ROAD TRANSPORT CORPORATION vrs.GAJADHAR NATH[2021 Legal Eagle 879 = 2021-latest-caselaw-650-sc = LL 2021 SC 650]

DoJ : 8 DECEMBER 2021

FACTUAL MATRIX OF THE CASE :

      One, Shri Gajadhar Nath was working as a Conductor in Uttar Pradesh State Road Transport Corporation. Due to certain acts of omissions and commissions he was removed from the services on 14th December 2001.He raised and industrial dispute which was referred to the Industrial Tribunal. On 5th May 2008, the Tribunal returned a preliminary finding that the domestic inquiry conducted into the charges levelled against the workman in question was not fair and proper. Therefore, the employer led evidence by examining Sheshmani Mishra, an Assistant Traffic Inspector who had conducted inspection of the vehicle on 12th November 1998. The said witness supported the report submitted by him to the Assistant Regional Manager as Ex.P/10. He deposed that he checked the bus at Katra when the bus was coming from Banda to Allahabad.

All the 17 passengers in the bus had stated that they had given the money but the conductor did not issue even a single ticket. Thus, the Inspector concluded that all the passengers were without ticket. He also deposed that when he tried to record the statement of the passengers, the conductor misbehaved with him and used unruly words which he could not state even before the Court. In the cross-examination, he deposed that his report was dated 13th November 1998 and that such report does not bear the signature of driver or the conductor. Further, no statement of any of the passengers was filed.

       The  Tribunal considering the said statement, set aside the order of removal inter alia holding that the Inspector should have recorded the statements of passengers who have been found travelling without ticket and if they had shown reluctance in recording their statements, at least their oral statements, names and addresses must have been submitted. The Tribunal also returned a finding that the Inspector was not proved to have inspected the bus on 12th November 1998. It was also observed that if the conductor had misbehaved with the Inspector, why an FIR was not recorded in the concerned police station. On these grounds, the learned Tribunal set aside the order of removal.

WRIT PETITION TO THE HIGH COURT :

      Aggrieved by the order of the Tribunal, the employer moved the Hon’ble High Court of Allahabad by filing a  Writ Petition bearing  No. 51777 of 2009. I reproduce the judgment of the Hon’ble High Court verbatim for the information of the esteemed readers as follows :

“By means of the present petition, the petitioner has sought following relief(s):-

I. "to issue a writ, order or direction in the nature of certiorari quashing the impugned order dt. 22.10.2008 by means of which the order of termination of the services of the respondent no.2 as conductor in the department of petitioner has been quashed and further order has been passed to pay him 50% of the salary for the period wherein the respondent no.2 was not in employment, during the pendency of the present writ petition, so that justice may be done.

II. Certiorari quashing the recovery proceedings initiated in pursuance of the impugned order dt. 22.10.2008 passed by the respondent no.1 during the pendency of the present writ petition, so that justice may be done.

III. Issue any other writ, order or direction which this Hon'ble Court may deem fit and proper in the present fact and circumstances of the case.

IV. Award cost of the petition."

Contentions are manifold and it has been claimed that in this case, the court below did not consider properly the weight of evidence on record and passed order in conjectural manner against the principles of natural justice and in the teeth of law laid down by this Court. The service of the respondent no.2 was properly terminated by the petitioner on account of his mis-conduct, which was noticed during inspection by the Inspecting Authority Shesh Mani Mishra. Respondent no.2 was found to have been indulged in mis-conduct in not issuing proper tickets to the passengers, who were found travelling inside the bus at the time of inspection.

The Industrial Tribunal failed to appreciate law and the facts as was apparent in the case of respondent no.2 that he misconducted as conductor, while he was in the employment of the petitioner. The piece of evidence was sufficient for the Industrial Tribunal to have acted properly on it but it erred in law and passed arbitrary order, which is not sustainable in the eye of law. Apart from that, learned counsel also pressed the various grounds agitated in support of his claim all the 20 grounds, which he urged in his writ petition.

Respondent no.2 (Gajadhar Nath) appeared in person and has refuted the aforesaid argument by stating that no such inspection as has been claimed was found to have been ever made by the concerned Inspecting Authority, Sheshmani Mishra on 12.11.1998.

This matter was referred for adjudication before the aforesaid Industrial Tribunal Pratham of Allahabad, vide Reference No.568 CP 52/2004 (Sankhya) dated 3.6.2006 treating the same as industrial dispute between the parties with point for determination that whether termination of service of Sri Gajadhar Nath son of Ram Gareeb on 14.12.2001 was proper and valid if not what relief the employee Gajadhar Nath is entitled to receive ?

After the matter was referred, then the reference was taken by the aforesaid Industrial Tribunal, Allahabad and was numbered as Case No. 63 of 2006 and both the sides were issued notices to set up their respective claims.

Pursuant thereto, both the sides appeared before the Tribunal and filed their respective pleadings, which have been taken on record ?

Brief facts as discernible from record appear to be that the respondent no.2 was appointed as conductor on 15.7.1989 by the petitioner corporation and he was working at Zero Road Depo, Allahabad and he rendered flawless service as conductor. However, his services were terminated on 14.12.2001 on account of charge that he was carrying in his bus passengers without ticket. Further, it is discernible that on 12.11.1998, respondent no.2 was conductor of Bus No.UP 77A/2503 (Anubandhit) on Banda-Allahabad route. Shesh Mani Mishra, Assistant Traffic Inspector, Zero Road got the bus stopped at place Katra around 04:00 p.m. and inspected the bus, whereupon he found in all 17 passengers travelling in the bus and who were without ticket. During inspection, it transpired that all the passengers had given money to the conductor but no ticket was issued to them. When route-sheet was asked by the aforesaid inspector, the same was not given to him, instead abusive language was used, thus humiliating him in the presence of passengers and because of this, the aforesaid inspector could not record statement of the passengers. The inspector submitted his report to the office of the petitioner on 13.11.1998, on account of which, respondent no.2 was suspended with immediate effect.

Consequently, departmental inquiry took place and respondent no.2 was charged with allegation of misconduct on 21.12.1998. The respondent no.2 was given full opportunity to set up his defence, whereupon he submitted his reply to the charge. Therefore, after following entire procedure, the inquiry was concluded and charge was found proved against the respondent no.2 On account of aforesaid, notice was issued to the respondent no.2 for hearing on point of quantum of sentence and his services were terminated on 14.12.2001.

Consequently, the matter fructified as reference to the Industrial Tribunal as above.

Both the sides adduced their testimony and produced their documents, which have been elaborated and taken note of by the industrial tribunal and the same need not be referred here for the sake of repetition.

Bare perusal of the order impugned and the record itself is reflective of fact that not an iota of evidence exist indicating fact that any inspection, whatsoever, was ever made on 12.11.1998 by the Assistant Inspector (Sheshmani Mishra). He did not appear before the inquiring authority so as to prove the factum of any inspection being made by him. Moreover, assuming it to be that any inspection took place on 12.11.1998, even then not a single statement of any passenger has been recorded by the concerned inspector as was legally required to be noted by him. The illusive ground taken by the inspector concerned that the statement could not be taken on account of filthy and abusive language used by the respondent no.2 and utter humiliation of inspecting authority was done in the presence of the passengers, due to which he was unable to take statement of any passenger cannot be expected to be reasonable explanation of a situation speaking against the situation itself. Further, the inspector has not noted down any memorandum of any statement given by one or two passenger as oral statement. Thus, it is noticeable that the legal requirement has not been properly completed by the inspector. The requirement was mandatory for proving and establishing the fact of any inspection being made by the inspector on 12.11.1998 and this legal lacuna was well discussed by the Industrial Tribunal and its adjudication of the industrial dispute and other ancillary matters have also been dealt with fairly.

Consequently, no infirmity is perceptible in the order impugned dated 22.10.2008 passed by the Industrial Tribunal (Pratham), Uttar Pradesh, Allahabad and no interference is required to be made by this Court.

Accordingly, this petition lacks merit and the same is dismissed.”

SPECIAL LEAVE PETITION TO THE SUPREME COURT :

      Having felt aggrieved by the judgment and order of the High Court, the employer moved the Hon’ble Supreme Court by filing a Special Leave Petition bearing No. 12369 of 2021 which on grant of special leave became Civil Appeal No.7536 of 2021.

THE ADJUDICATION :

       On taking up the case for adjudication, the Hon’ble Apex Court stated referred to  the scope of an adjudicator under the Industrial Disputes Act, 19474 and stated that the domestic inquiry conducted can be permitted to be disputed before the Tribunal in terms of Section 11A of the Act. In this context, the following decisions were referred to :

(i) Workmen of M/s Firestone Tyre and Rubber Co. of India (P.) Ltd. vrs. Management and Others, AIR 1976 SC 1775 : In this case it has been held that in terms of Section 11A of the Act, if a domestic inquiry has been held and finding of misconduct is recorded, the authorities under the Act have full power and jurisdiction to reappraise the evidence and to satisfy themselves whether the evidence justifies the finding of misconduct. But where the inquiry is found to be defective, the employer can lead evidence to prove misconduct before the authority. The Hon’ble Apex  Court held as under:

"32. From those decisions, the following principles broadly emerge :-

(1) The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a Tribunal, the latter has power to see if action of the employer is justified.

(2) Before imposing the punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions of the Standing Orders, if applicable, and principles of natural justice. The enquiry should not be an empty formality.

(3) When a proper enquiry has been held by an employer, and the finding of misconduct is plausible conclusion flowing from the evidence, adduced at the said enquiry, the Tribunal has no jurisdiction to sit in judgment over the decision of the employer as an appellate body. The interference with the decision of the employer will be justified only when the findings arrived at in the enquiry are perverse or the management is guilty of victimisation, unfair labour practice or mala fide.

(4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.

(5) The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on the same footing as no enquiry.

(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective.

(7) It has never been recognised that the Tribunal should straightway, without anything more, direct reinstatement of a dismissed or discharged employee once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.

(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power to refuse. The giving of an opportunity to an employer to adduce evidence for the first time before the Tribunal is in the interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged misconduct.

(9) Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except in cases where the punishment is so harsh as to suggest victimisation.

(10) In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid compensation is, as held by this Court in The Management of Panitole Tea Estate v. The Workmen, 1971-1 SCC 742 within the judicial decision of a Labour Court or Tribunal."

6. The question as to whether the employer is required to seek liberty to prove misconduct in the written statement or could lead evidence at a later stage was considered by a Constitution Bench of this Court in a judgment reported as

(ii) Karnataka State Road Transport Corporation vrs. Smt. Lakshmidevamma and Another , 2001 (3) Scale 600 : In this case  the Hon’ble Apex Court had an occasion to  examine a conflict, if any, between two judgments reported Shambhu Nath Goyal vrs. Bank of Baroda and Others , [1984] 1 SCR  85 and Rajendra Jha vrs. Presiding Officer, Labour Court, Bokaro Steel City, District Dhanbad and Another, AIR 1984 SC 1696. The majority opinion of the Court noticed that the right of a management to lead evidence before the Labour Court or the Industrial Tribunal in justification of its decision under consideration by such Tribunal or Court is not a statutory right. This is actually a procedure laid down by the Hon’ble Apex Court to avoid delay and multiplicity of proceedings in the disposal of disputes between the management and the workman.It was held as follows :

"17. Keeping in mind the object of providing an opportunity to the management to adduce evidence before the Tribunal/Labour Court, we are of the opinion that the directions issued by this court in Shambhu Nath Goyal's case need not be varied, being just and fair. There can be no complaint from the management side for this procedure because this opportunity of leading evidence is being sought by the management only as an alternative plea and not as an admission of illegality in its domestic inquiry. At the same time, it is also of advantage to the workmen inasmuch as they will be 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. This procedure also eliminates the likely delay in permitting the management to make belated application whereby the proceedings before the Labour Court/Tribunal could get prolonged. In our opinion, the procedure laid down in Shambhu Nath Goyal's case is just and fair.

18. There is one other reason why we should accept the procedure laid down by this Court in Shambhu Nath Goyal's case. It is to be noted that this judgment was delivered on 27th of September, 1983. It has taken note of almost all the earlier judgments of this Court and has laid down the procedure for exercising the right of leading evidence by the management which we have held is neither oppressive nor contrary to the object and scheme of the Act. This judgment having held the field for nearly 18 years, in our opinion, the doctrine of stare decisis require us to approve the said judgment to see that a long-standing decision is not unsettled without strong cause."

NON APPLICABILITY OF STRICT RULES OF EVIDENCE TO DOMESTIC ENQUIRY :

      On merits of the instant case, keeping in view the principles of law, the counsel for the appellants-employer contended that the Indian Evidence Act, 1872  applies to all judicial proceedings in or before any Court. Since the domestic inquiry is not by a Court, therefore, strict rules of the Evidence Act are not applicable to such domestic inquiry. The Counsel placed reliance on a judgement of  a learned Three Judges Bench of the Hon’ble Apex Court in the case of State of Haryana and Another vrs. Rattan Singh, AIR 1977 SC 1512, wherein in respect of a conductor who was found to have not issued tickets, the Hon’ble Apex  Court held as under:

"4. 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. It is true that departmental authorities and Administrative Tribunals must be careful in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Indian Evidence Act. For this proposition it is not necessary to cite decisions nor text books, although we have been taken through case-law and other authorities by counsel on both sides.

The essence of a judicial approach is objectivity, exclusion of extraneous materials or considerations and observance of rules of natural justice. Of course, fairplay is the basis and if perversity or arbitrariness, bias or surrender of independence of judgment vitiate the conclusions reached, such finding, even though of a domestic tribunal, cannot be held good. However, the courts below misdirected themselves, perhaps, in insisting that passengers who had come in and gone out should be chased and brought before the tribunal before a valid finding could be recorded. The 'residuum' rule to which counsel for the respondent referred, based upon certain passages from American Jurisprudence does not go to that extent nor does the passage from Halsbury insist on such rigid requirement.

The simple point is, was there some evidence or was there no evidence - not in the sense of the technical rules governing regular court proceedings but in a fair commonsense way as men of understanding and worldly wisdom will accept. Viewed in this way, sufficiency of evidence in proof of the finding by a domestic tribunal is beyond scrutiny. Absence of any evidence in support of a finding is certainly available for the court to look into because it amounts to an error of law apparent on the record. We find, in this case, that the evidence of Chamanlal, Inspector of the Flying Squad, is some evidence which has relevance to the charge levelled against the respondent. Therefore, we are unable to hold that the order is invalid on that ground."

REFERENCE TO TWO MORE JUDGMENTS :

      The above apart, the Hon’ble Apex Court referred to the following decisions as follows  :

 (i) U.P. State Road Transport Corporation vrs. Suresh Chand Sharma11, 2010 (126) FLR 157 : In this case the Hon’ble  Court set aside the order of the High Court wherein the writ petition was allowed holding that the passengers without tickets have not been examined and cash with the employee was not checked. The Hon’ble Apex  Court relied upon the judgment of its own in Rattan Singh (supra) and found that the punishment of dismissal from service was not disproportionate to the proved delinquency of the employee.

(ii) U.P. State Road Transport Corporation through M.D. and Others. vrs. Rajendra Prasad, 2019 SCC OnLine All 5152 : This is a judgment delivered by a learned Division Bench of of the Hon’ble High Court of Allahabad  which was binding on  the learned Single Judge of the High Court .In this case, the learned Divison Bench allowed the appeal of the employer wherein the Tribunal returned a finding that 16 passengers who were without tickets at the time of inspection were not examined. Therefore, the punishment order was set aside being in contravention of the principles of natural justice. The Division Bench of the High Court held as under:

"24. In view of the above, we find no substance in the argument raised by the learned counsel for the claimant/respondent to the effect that the passengers were required to be examined during enquiry and accordingly, we hold that the finding with regard to examination of passengers given by the Tribunal is perverse being contrary to the Law and being so is unsustainable. It is also for the reason that the enquiry officer after examining the witnesses including claimant/respondent held that the charge levelled against the claimant/respondent found proved.

xx xx xx

37. Further, in the present case, claimant/respondent- Rajendra Prasad is a conductor of the bus and he was entrusted with the duty to collect the ticket from the passengers travelling in the bus and deposit the same with the Corporation however in the present case, from the material on record, the position which emerges out is to the effect that he collected the fair from 16 passengers/persons but did not deposit the same."

ARGUMENT ON BEHALF OF THE RESPONDENT :

      The counsel for the respondent-workman argued as follows :

(i) that the statement of the Inspector does not inspire confidence as he had not recorded the names and addresses of the passengers.

(ii) that it is not the case of the workman that the passengers were required to be examined but at least there should have been some evidence that there were passengers who were found travelling without any ticket.

 (iii) that since the basic evidence is not available on record, the finding of the Tribunal cannot be said to be illegal or unwarranted which was rightly not interfered with by the High Court.

ON THE AWARD OF THE TRIBUNAL AND JUDGMENT OF THE HIGH COURT :

      The Hon’ble Apex Court  found that the order of the Tribunal and that of the High Court are clearly erroneous and not sustainable in law. The representative of the employer had not been cross-examined on the question that he had not inspected the bus on 12th November 1998. He had deposed that when he tried to record the statements of the passengers, the conductor misbehaved with him and used unruly words. Even that part of the statement has not been disputed in the cross-examination. Therefore, the fact that the Inspector was not able to record the names and addresses of the passengers cannot be said to be unjustified. Since the passengers are low-fare paying passengers, they might have been hesitant to get involved in the issues of any action against the conductor.

The Inspector had found that 17 passengers were not issued tickets and such statement of the Inspector has also not been disputed in the cross-examination. The Tribunal or the High Court could not reject the evidence led by the employer in respect of misconduct of the workman before the adjudicator. Still further non lodging of FIR cannot be the circumstance against the witness examined by the employer.

THE CONSLUSION :

      The Hon’ble Apex Court stated that initiation of criminal proceedings against an employee or not initiating the proceedings has no bearing to prove misconduct in departmental proceedings. Therefore, it was found by the Hon’ble Apex Court that the order of removal from service cannot be said to be unfair and unjust in any manner which would warrant an interference at the hands of the Tribunal and the High Court. The three reasons recorded by the Tribunal are absolutely perverse and not supported by any evidence, stated the Hon’le Apex Court. The Tribunal , according to the Hon’ble Apex Court, had misapplied the basic principles of law and the High Court had thereafter wrongly confirmed the order.

THE VERDICT :

12. Consequently,

1.The appeal filed by the Corporation was allowed.

2.The orders of the High Court and of the Tribunal were set aside.

3.The order of punishment dated 14th December 2001 was restored.