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Judgment
A. Setharam Reddy, J.—By this W.P. M.P. No. 22641 of 1988, the order made by this court on 2-3-1988, allowing the writ petition is sought to be reviewed. The order is as under:
"The award made by the Labour Court by allowing the appeal preferred by the respondent-authorities is impugned in this Writ Petition. One of the three grounds raised in this Writ Petition, which is a question of law, is whether Rule 20(3) framed under the A.P. Shops and Establishments Act, has been observed in this case. The contention of the learned counsel for the petitioner is that the Rule mandates the authorities before imposing any punishment after enquiry, to take into consideration the conduct with reference to the 10 years service of the incumbent. In this case, as it becomes plain from the order of the first court and also the order of the second appellate court, that this question was duly raised on behalf of the petitioner, but the same was not adverted to. Even here none appears for the respondent to answer this. In the circumstances it must be held that Rule 20(3) has not been observed at all. Rule 20(3) reads as follows:
"In awarding punishment under this rule, the employer shall take into account the gravity of the misconduct, the previous record, if any, of the employee and other extenuating or aggravating circumstances that may exist:
Provided that no punishment shall be awarded based on the previous record and other circumstances that may exist unless the employee has been given an opportunity of making representation in respect of those charges".
Therefore, the very order made by the authority who imposed the punishment is illegal and contrary to the provision of Rules. Hence, not only the impugned order is quashed, but also the very order of termination from service from which arise the subsequent proceedings is also quashed as bad and illegal, as it is violative of Rule 20(3) of the Rules. The petitioner, however, need not be reinstated into service. What is directed is, that the authority concerned must re-consider the case of the petitioner on merits in the light of the material on record. After such consideration, if he deems it fit to impose punishment, then the provisions enacted in Rule 20(3) must also be taken into consideration. The authority shall do so within two months from the date of receipt of this order. No costs.
One of the counsel''s appearing for the respondent in the Writ Petition, by name G. Mathew has filed a verified petition stating that he is exclusively practising on the original side, that he did not have the occasion to notice the posting of the above case before the Court on 2-3-1988, that it is only on 4-3-88 he came to know from the other counsel on record that the case was disposed of in his absence as there was failure in the office in not noting the case in the cause list, that there was no deliberate abstention from appearance in the case and that it is only by inadvertence that he did not appear when the matter came up for final hearing, and prayed that the order dated 2-3-1988 passed in the above Writ Petition be reviewed.
Under these circumstances, after hearing the parties, the Review petition was admitted on 30-12-1988 and the entire case was argued once again.
In the earlier order made by this court allowing the Writ Petition it was mainly on the ground that the provisions enacted under Shops and Establishments Act, viz. Rule 20(3) of the Rules, was not observed and that therefore, the very order made by the authority who imposed the punishment was held to be illegal and contrary to the provisions and therefore, the impugned order was quashed, with further direction that the petitioner need not be reinstated into service, but the authority must reconsider the case of the petitioner on merits in the light of the material on record, including the observance of Rule 20(3), and that the said reconsideration must however be completed within two months from the date of receipt of this order, which was passed on 2-3-1988.
Before dealing with the contentions advanced, it may be stated that pursuant to the aforesaid order in the Writ Petition, notice thereof was given by the employer who is the authority within the meaning of the order and after due opportunity it was held that the charge has been brought home and therefore in the light of past record of service, the punishment of termination of service was imposed. As against that, an appeal within the meaning of Section 41(1) was also filed, which is pending.
This Writ Petition is filed for the issue of a writ in the nature of writ of certiorari, to quash the order passed by the 1st respondent in Second Appeal No. 3 of 82, dated 19-3-1984, while confirming the order passed by the employer holding the petitioner guilty of the charge, but modifying the punishment from dismissal to termination of service.
The contention in the main advanced on behalf of the petitioner is that the employer has failed to comply with the provisions made under Rule 20(3) of the rules framed under the Andhra Pradesh Shops and Establishment Act, which postulates consideration of the record of past service, before imposing the punishment and that therefore non-observance of the provisions would vitiate the entire proceedings and so, the impugned order as well. It is also contended that there is no evidence on record to come to the conclusion that the charge framed against the petitioner has been established and that therefore on that count also, the impugned order must be quashed.
In so far as the 1st contention is concerned, the provisions of Rule 20(3) be set out hereunder:
"In awarding punishment under this rule, the employer shall take into account the gravity of the misconduct, the previous record, if any, of the employee and other extenuating or aggravating circumstances that may exist:
Provided that no punishment shall be awarded based on the previous record and other circumstances that may exist unless the employee has been given an opportunity of making representation in respect of those charges".
The contention on behalf of the petitioner in short is that it is only competent for the employer who imposes the punishment to exercise its right to comply with the obligation laid down under Rule 20(3) and not to any authority under appeal or appeals as provided for under the Act and that therefore, the matter has to be remanded back to the employer for a de novo consideration.
Case law sought to be relied upon was Andhra Cement Co. Ltd., Secunderabad v. Mohd Ilyas and Anr. 1988 ALT 65 wherein a Division Bench of this Court held:
"Under Rule 20(3)- it is incumbent on the employer to take into account the gravity of the misconduct, the previous record, if any, of the employee and any other extenuating or aggravating circumstance that may exist. This provision is not a mere procedural requirement, it vests a valuable right in every employee governed by the Act, a statutory condition of service to have his previous record of service considered by the employer while deciding to award punishment for any proved misconduct.
In this case, as there has been non-compliance of mandatory statutory provisions by the employer before awarding punishment, rendering the order of discharge illegal, the second respondent rightly set aside the order of discharge passed by the petitioner".
M. Kuppuswamyv v. The Presiding Officer, 1st Additional Labour Court, Madras 1984 LIC 38, wherein the learned single Judge of the Madras High Court held:
"A domestic enquiry was held against the concerned workman on charges of misconduct. Thereafter, the workman was dismissed from service. The order of dismissal was passed, not solely on the basis of the charges proved at the enquiry, but also having regard to the past record relating to an earlier misconduct committed by the workman. The past record which was relied upon by the management, was not put to the workman before passing the order of dismissal.
Held, failure to put the workman on notice of the past record, which was relied upon in passing the order of dismissal, resulted in violation of the principles of natural justice. No doubt it was open to the Management to look into the past record of service. Nevertheless if it was going to be used against the workman he should have been afforded an opportunity to have a say in the matter. That had not been done in this case. It was no use saying that the past records related to the earlier misconduct concerning which certain punishments were awarded and therefore they were matters of record and were not required to be once again put to the workman. It was necessary to have put him on notice because it was the cumulative effect of that which led to the dismissal. But for the previous bad record, neither the Management nor the Labour Court would have inflicted the extreme punishment of dismissal. Notwithstanding the fact that the record was a recent one, if it was going to be used to the disadvantage of the workman, natural justice demanded that he be put on notice. In so far as the Management had failed to do so and the Labour Court had also taken into consideration the past record to conclude that the dismissal was fully justified, there was violation of the principles of natural justice".
B. Subbaiah v. The Andhra Pradesh Handloom Weavers'' Co-operative Society Ltd. v. Business Manager G. Suryam and Ors. 1977-II Andhra Weekly Reporter, page 110 wherein a Division Bench of this Court while dealing with Rule 20(3) held:
"The provisions of Sub-rule (3) of Rule 20 of the Andhra Pradesh Shops and Establishments Rules is not a mere statutory provision but is a statutory condition of service by which the employer is bound. The Labour Court in reference made u/s 10-A of the Industrial Disputes Act must consider whether the dismissal was justified. This duty cast upon the Labour Court necessarily presupposes that it should examine the validity of the order of dismissal or removal in the light of both the contractual conditions of service of the petitioner as well as in the light of the statutory protection granted to him. Sub-rule (3) of Rule 20 does not lay down a procedural requirement but confers upon an employee a valuable right. Since it is a right enjoyed by the employee, the dismissal or removal must stand the test of that right. If it is not able to satisfy the test laid down by Sub-rule (3) of Rule 20, the Labour Court is bound to come to the conclusion that the dismissal is unjustified"
Conversely, the case of the respondents is that impliedly the employer has considered all the factors including the past record of service as contemplated under Rule 20(3) and even if it is to be held that past record has not been adverted to though not admitted yet the same has been cured by the appellate authority, viz., the Labour Court, which has after taking into consideration of the record of past service of the petitioner, modified the punishment imposed by the employer, from dismissal to termination and that therefore, there was sufficient compliance of the provisions. Reliance was placed on Somrath Sahu v. The State of Orissa and Ors. 1969 S.C. Cases Vol. III page 38 wherein it was held:
"We shall, however, assume in favour of the appellant that the order of respondent No. 4 dated the 11th March, 1960 was illegal because no enquiry into the alleged misconduct was made before making that order. Even on that assumption we are of opinion that the appellant is not entitled to the grant of a writ under Article 226 of the Constitution. The reason is that the appellant preferred an appeal to the State Government against the order of respondent No. 4, under Rule 6(2) of the Orissa Welfare Officers (Recruitment and Conditions of Service) Rules 1961........
In these circumstances we are of opinion that the order of respondent No. 4 dated the 11th March, 1960 has merged in the appellate order of the State Government dated the 2nd January, 1962 and it is appellate decision alone which subsists and is operative in law and is capable of enforcement ............
In law, the position would be just the same even if the appellate decision merely confirms the decision of the Tribunal. As a result of the confirmation or affirmance of the decision of the Tribunal by the appellate authority the original decision merges in the appellate decision and it is the appellate decision alone which is subsisting and is operative and capable of enforcement.
Crompton Greaves Ltd. v. The Presiding Officer and Ors. 1975 Labour and Industrial Cases, Vol. 8, page 1301, wherein it was held by a single Judge of this Court.
"The authority which hears and decides appeals under the Act and the second appellate authority i.e. the Labour Court are competent to receive additional evidence and enquire into the question relating to the reasonableness or otherwise of the cause for termination of the services of an employee.
The appellate authority has been invested with the specific power to enquire into the matter in the manner prescribed therefore under Sub-section (2) of Section 41 while exercising its appellate powers. The very intendment of the Act being to have the dispute decided summarily without driving the parties to suits, the appellate authority is under an obligation to make the requisite enquiry in accordance with the rules and decide the point at issue rather than simply allow the appeal on the ground that the employer has not adduced any evidence in support of his plea that there was sufficient cause for the termination of the services of the employee.
The Labour Court is empowered by the Industrial Disputes Act to exercise the same powers as are vested in a Civil Court under the Civil Procedure Code, Rule 17 of Andhra Pradesh Industrial Disputes Rules, 1958 also empowers the Labour Court to accept, admit or call for evidence at any stage of the proceedings before it and in such manner as it may think fit. As the Labour Court constituted u/s 7 of the Industrial Disputes Act was already invested with the powers to receive evidence oral and documentary and to make enquiries to decide the points at issue, no specific provision for the same as in the case of the first appellate authority has been made under Sub-section (3)of Section 41 of the Act or the rules made there under.
The relevant statutory provisions in this behalf, viz., Sections 40(1), 41(1), 41(2) and 41(3) may also be taken note of:
Section 40(1):
"No employer shall without a reasonable cause and except for misconduct, terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee, at least one month''s notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for a period not less than five years gratuity amounting to fifteen days average wages for each year of continuous employment".
Section 41 :- Appointment of authority to hear and decide appeals arising out of termination of service.
1(a) The Government may, by notification, appoint for any area as may be specified therein, an authority to hear and decide appeals arising out of termination of service of employees u/s 40.
(b) Any employee whose service has been terminated may appeal to the authority concerned within such time and in such manner as may be prescribed.
(2) The authority may after inquiry in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case
(3) Against any decision of the authority under Sub-section (2), a second appeal shall lie to the Labour Court constituted u/s 7 of the Industrial Disputes Act, 1947, within thirty days from the date of communication of the decision and the decision of the Labour Court on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of the Court.
The order of the employer dated June 22, 1981, imposing the punishment on the petitioner reads:
"With reference to the enquiry held between 5th January, 1981 and 21st April, 1981 you have been adjudged guilty of the charges contained in the Company''s charge sheet dated 14th November, 1980 Considering the seriousness of the misconduct and also taking into account other relevant factors, it has been decided to dismiss you from the Company''s services with immediate effect".
The order made by the employer has been reversed by the 1st appellate authority viz., competent authority u/s 41(1), but on the Second Appeal, the Labour Court while allowing the appeal, held:
"So the guilt is proved against the appellate in the lower authority and if such persons are allowed to continue in the institution of this sort, it is very difficult for the management to get on with them in day to day affairs in the company. At the same time he worked in the company for a pretty long time without any blemish and so the management did not mention anything bad against him on any prior occasion. Taking into consideration all these aspects I hold that the order of the lower authority is set aside and the dismissal order passed by the management can be converted into one of termination"
So far as the order passed by the employer is concerned it is stated, considering the seriousness of the misconduct and also taking into account other relevant factors, it has been decided to dismiss the petitioner with immediate effect. Though the language employed is not quite happy, it is quite clear that at the time when evidence was let in, past record of service was made known to the petitioner and if he had to say anything, he should have certainly let in any evidence which he desires. Therefore, it must be inferred that keeping in view and with the knowledge of the past record of service only, the punishment was imposed by the employer. It is true that the past record of the petitioner was without any blemish. In view of the evidence brought on record with regard to the past record that was also taken into consideration, it was stated in the order that other relevant factors'' have been taken into consideration and that therefore, that was sufficient compliance under Rule 20(3) of the Rules. Even assuming for a moment, that the order of the employer has to be construed as not amounting to taking into consideration the past record of service without necessarily considering that aspect, yet the second appellate authority viz., the Labour Court has taken into consideration, explicitly stating that "the petitioner worked in the company for a pretty long time without any blemish" and so, modified the order of punishment into one of termination from dismissal. That in my view, cures the defect if any amounting to sufficient compliance of Rule 20(3) of the Rules.
The conclusion even gets support from B. Subbaiah v. The Andhra Hanaloom Weavers. Co-operative Society Ltd., represented by Business Manager G. Suryam and Ors. wherein the employer had not taken cognisance of Rule 20(3) while imposing the punishment and in that context it is stated:
"Since it is a right enjoyed by the employee, the dismissal or removal must stand the test of that right. If it is not able to satisfy the test laid down by Sub-rule (3) of Rule 20, the Labour Court is bound to come to the conclusion that the dismissal is unjustified"
In other words, if the original authority has not exercised his mind with reference to Rule 20(3), that can be rectified by the appellate authority, by virtue of the provisions enacted u/s 41(2) and (3) read with Rule 20(3), by exercising its mind with reference to imposition of punishment. The words used in Rule 20(3) have no particular magic when Sub-rule (1) states that ''no employer'' shall terminate the services of an employee u/s 40 unless an enquiry is held against the employee concerned in respect of any alleged misconduct in the manner set forth in Sub-rule (2). The word ''employer'' employed in this rule wherever it occurs is certainly and must be construed as extending to it the 1st and second appellate authority as well, as Sub-section (2) and Sub-section (3) of Section 41 are explicit in that behalf when it says that the authority may dismiss the appeal or direct reinstatement of the employee. So also, the same power is conferred on the 2nd appellate authority as well in the exercise of its rights and obligations as postulated in the statutory provisions including the rules. Similar are the rights and obligations to be exercised by the 1st appellate authority as well. Any conclusion to the contra would obliterate the effect of Section 40(1), thereby doing away with the very existence of the 1 st and 2nd appellate authority. Hence, viewed from any angle, I am not persuaded to accede to the submission of the learned counsel for the petitioner that it is not curable irregularity and it is only competent for the employer first authority to exercise its mind with regard to the provisions laid down under Rule 20(3) and the appellate authorities are incompetent to exercise the same in this behalf. Hence the contention is rejected.
The second contention is that there is no evidence whatsoever in the case to come to the conclusion of the guilt.
The charge in the main is-
"It is reported that you handed over to our lawyer only five files and not the 5 files listed above and you have also not handed over the court fee, filing fee, value of the Vakalat Stamp to the lawyer, pertaining to the five cases as listed above which you received from the company vide Debit Voucher No. 4637 dated 16/17-10-1978 amounting to Rs. 1130/-you have neither returned the 5 files nor Rs. 1130/-."
The contention of the petitioners is that he has handed over the entire files to one Venkatachalam whereas when a question was put to Venkatachalam when he came into the box whether the entire files were handed over to him or not by the petitioner, he denied the same. The further question that whether Mr. Venkatachalam has any evidence to show that the entire files were not handed over to him, he stated that he has no evidence. On this basis it is contended that it is a case of no evidence, and the findings arrived at by the authorities is erroneous. I apprehend it cannot be so. This aspect has been discussed at length by the authorities. It is not for this court to see whether evidence is properly appreciated or not in the exercise of jurisdiction under Article 226 of the Constitution of India unless it is highly perverse. Indeed it is impossible to come to the conclusion that it is a case of no evidence. It is needless to refer to the impugned order at length, as it would be adequate if the following observations are referred to:
"The lower authority instead of appreciating evidence properly has stated that because Sri K.G. Kannabiran was not examined as a witness to say through whom he received the files is a lacuna and so he stated that he gave benefit of doubt and allowed the appeal and ordered reinstatement of the appellant. There is no doubt in this matter regarding the delivery of the 5 files and the amount to Sri K.G. Kannabiran. It is clear that the 5 files and the amount was given to Sri K.G. Kannabiran by Sri N. Jameel. It is also clear by Ex. M.4 letter written by Sri K.G. Kannabiran. So the appellant in the lower authority, though admitted the entrustment of the files and the amount and he did not give any proper and valid answer as to what happened to the 5 files and Rs. 1130/- entrusted to him. So the act of the appellant in the lower authority i.e. Mr. N. Jameel is not justified and it amounts to misappropriation of the amount of Rs. 1130/-, and he also committed fraud by not delivering the files entrusted to him to Sri K.G. Kannabiran".
Hence the conclusion arrived at by the authorities concerned that out of ten files only five files were handed over to the counsel concerned and also a sum of Rs. 1130/- which was paid to him to be handed over to the counsel towards court fee was not handed over and in the absence of any evidence let in by the petitioner and on the basis of record, came to the conclusion, is right and that the guilt has been established and that therefore, this court cannot interfere with the conclusion arrived at by the authority.
Thus, the order made in W.P. No. 17118 of 1984 allowing the Writ Petition is set aside and Writ Petition is dismissed.
The Review W.P.M.P. No. 22641 of 1988 is accordingly allowed. No costs.