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Judgment
S. Nainar Sundaram, J.—The second respondent was employed as a Head Cashier in the Nagercoil branch of the petitioner at the relevant
point of time. On 11th May, 1976, the petitioner issued a memo to the second respondent, which runs as follows :
We understand that you have been indulging in a series of monetary transactions with Shri P. Muthiah Managing Director of Messrs. Tamil Nadu
Bucket Industries, Pvt. Limited and that you were conducting a chit in the name of your wife and Mrs. Karpagavally Ammal, wife of Shri P.
Muthiah and a guarantor to our advance to the unit, was also a subscriber to the same. Arising out of this, you resorted to legal action against the
parties, one for eviction under the rent control Act and another for recovery of Rs. 30,200.
(2) Your reference is invited to the following aspects mentioned in the relative judgments received :
(i) The defendant has stated in the rent control petition that you were helping the party to obtain loans from banks and Government for his business
and getting remuneration for the services rendered and you were acting as legal advisor to him.
(ii) After detailing the various benami and bogus transactions, the judge has remarked that a cashier in a bank like P.W.2 ought not to be a party of
such a transaction.
(3) On a perusal of the copies of the judgments, we find that it has been established beyond doubt that you have entered into so many monetary
transactions with the two persons, though you were doing the chit business in the name of your wife only to circumvent the provisions of the service
rules and the Income Tax provisions.
(4) As the Head Cashier of the branch and being well acquainted with the party and having known that the party is not reliable, dishonest and a
litigant by nature and has once proceeded against Canara Bank on false charge you ought to have reported the matter to the Manager and
discouraged granting of the advance.
(5) Similarly, as the Head Cashier of the branch, if there was any adverse trend in the financial position of the borrowers of the branch, you ought
to have brought such developments to the notice of the Manager of the branch.
(6) You are, hence called upon to submit in writing to the undersigned within 15 days from the date of the memo, your explanation for the various
lapses pointed out. In case, we do not receive any reply from you within the stipulated period, it will be presumed that you have no explanation to
offer and the Bank will proceed to take such action against you as may be found proper and necessary.
(7) Meanwhile, please return the duplicate hereof duly signed and dated by you.
The second respondent replied on 10th June, 1976, repudiating the allegations in the said memo. The petitioner did not follow it up with any
enquiry, but passed an order on 17th March, 1977 terminating the services of the second respondent at close of business on the 31st March, 1977
in terms of paragraph 522 of the Sastri Award. Aggrieved by the said order of termination, the second respondent moved the first respondent
under S. 41(2) of the Tamil Nadu Shops and Establishments Act, 1947, hereinafter referred to as the Act, and the first respondent found a warrant
for setting aside the order of termination passed by the petitioner against the second respondent and passed orders accordingly. The present writ
petition is directed against the order of the first respondent dated 29-1-78/25-2-78.
Mr. S. Jayaraman, the learned counsel for the petitioner urges two grounds for invoking the writ jurisdiction of this Court to quash the said
order. The first ground is that the proceedings under S. 41 of the Act before the first respondent are incompetent because the petitioner has passed
the order of termination against the second respondent under paragraph 522(1) of the Sastri Award. His submission is not tenable because it
cannot be disputed that so far as the employment in question is concerned, the provisions of the Act are definitely attracted. The petitioner satisfies
the definition of an employer and the second respondent satisfies the definition of a person employed within the meaning of the Act and any
contract between the employer and the person employed cannot override the express provision of the Act, or, in particular, S. 41 thereof. The
learned counsel for the petitioner is not in a position to cite any direct authority that wherever there is a contract governing the relationship between
the employer and the person employed the provisions of the Act will have to be ignored and there is no necessity to adhere to and satisfy the
formalities laid down under S. 41 of the Act. Hence, I am not able to appreciate and accept the first contention of the learned counsel for the
petitioner.
The second ground urged by the learned counsel for the petitioner is that even otherwise the petitioner has dispensed with the services of the
second respondent for a reasonable cause and there has been strict compliance with the first limb of sub-s. (1) of S. 41 of the Act, in the sense the
second respondent has been paid more than a month''s wages in lieu of the notice contemplated. In the instant case, a memo was issued to the
second respondent on 11th May, 1976 and an explanation was obtained on 10th June, 1976. The order of termination dated 17th March, 1977
does not disclose as to whether the explanation was accepted or not and the factors which weighed with the petitioner to pass the order of
termination on the basis of the reasonable cause. If the termination is to be on the ground of reasonable cause, it is incumbent on the part of the
employer to disclose the reasonable cause in the order of termination and in the absence of a disclosure it is not possible for any Authority, and in
particular the Appellate Authority under S. 41(2) of the Act, to determine as to whether the grounds put forth by the employer can be stated to
constitute a reasonable cause and as to whether the order of termination has been passed bona fide. The necessity to disclose the reasonable cause
in the order to termination has stressed by a Bench of this Court in Tata Iron and Steel Co. Ltd., 1950 II L.L.J. 1043. Yet another ground which
definitely has compelled the first respondent to interfere, in the exercise of the powers under S. 41(2) of the Act is that the petitioner having chosen
to issue a memo containing all the charges and having called for an explanation from the second respondent ought to have in fairness proceeded
with the formality of an enquiry and must have come to a decision one way or the other on merits. Having chosen to frame charges, it will not be
stated to be a fair and bona fide action on the part of the petitioner to drop them and pass a bare order of termination merely referring to
paragraph 522 of the Sastri Award. As stated above, the order of termination does not disclose the reasonable cause for termination. A similar
situation was dealt with by Ramaprasada Rao, J., as he then was in Associated Corpn. of Industries v. Addl. Commissioner for W.C. 1972 I
L.L.J. 108 and the following observations of the learned Judge sums up the position, in my opinion succinctly :
No doubt, it is for the employer to decide for himself subjectively as to whether his employee''s services have to be terminated or not. Even such
subjective appraisal must depend upon cogent material which has to be placed before an independent tribunal like the Appellate Tribunal
constituted by the statute under S. 41(2) of the Act, who in the ultimate analysis should agree with the employer that there was such reasonable
cause for termination. On the other hand, if vituperative epithets are recorded in writing and communicated to him, and he in turn refutes such
allegations made against him and ultimately the employer decides to terminate his services on such accusations, it would be idle to contend that the
dispensation of the service of the employee in those circumstances was for a reasonable cause.
If the above principles are kept in mind, I find that no exception could be taken to the order passed by the first respondent in the instant case.
Accordingly, I find that the writ petition lacks merits and the same is dismissed, but there will be no order as to costs.