Tamil Nadu Newsprint and Paper Ltd. vs Rama Damodaran and Another

N.V. Balasubramanian, J.—This appeal is preferred against the order of the learned Judge made in W.P. No. 13017 of 1994 dated April

29, 1998. According to the appellant, namely, Tamil Nadu Newsprint and Paper Limited, the first respondent was an Assistant Officer in charge

of the Guest House of the appellant Company and certain charges were framed against him when he was working as a Supervisor of the Guest

House belonging to the appellant. The Enquiry Officer, in the enquiry, has found that the charge Nos. 1 and 2 were not proved, but however, held

that the charge Nos. 3 and 4 were proved. The disciplinary authority, after giving opportunity to the first respondent, accepted the findings of the

Enquiry Officer with reference to charge Nos. 3 and 4 and terminated the services of the first respondent, and the General Manager of the

appellant company, on appeal, confirmed the same. The first respondent filed an application u/s 2-A(2) of the Industrial Disputes Act, 1947

against the order of dismissal passed by the disciplinary authority which was confirmed by the appellate authority as illegal and unjustified. The

Labour Court held that the charge Nos. 3 and 4 were proved and the appellant was justified in terminating the services of the first respondent.

However, the Labour Court directed the appellant to pay a sum of Rs. 10,000/- as damages to the first respondent as he was working in the

appellant company from 1983 to 1987. The first respondent challenged the order of Labour Court in W.P. No. 13017 of 1994 on the file of this

Court and a learned Judge of this Court allowed the writ petition and it is against the order of learned Judge, the present appeal has been

preferred.

The brief facts necessary for the disposal of the writ appeal are that the first respondent was appointed as a Trainee Caretaker in the appellant

Guest House on April 18, 1983 and he was confirmed as Supervisor on April 18, 1984 and he was promoted as Assistant Officer with effect from

February 1, 1985. The first respondent was transferred from the Guest House to Wood Yard (production department) on December 18, 1986

and the first respondent challenged the order of transfer by filing a writ petition in W.P. No. 994 of 1987 on the file of this Court. On January 9,

1987, certain complaints were received against the first respondent and on the basis of the complaints, the first respondent was placed under

suspension pending enquiry on February 11, 1987. On February 22, 1987 a memo of charge was issued against the first respondent on the

following allegations:

(i) Received commission of Rs. 75/- every fortnight from Milk vendor.

(ii) Received 10% commission from Vegetable vendor on the value of Vegetables supplied by T.V. Somasundaram and allowed him to inflate bills.

(iii) Received commission of Rs. 2/- per bottle from M. Ramasamy who supplied beer to guests.

(iv) Collected wages due to contract worker S. Chandrasekaran and misappropriated more than 50% of his wages.

The first respondent gave his explanation to the charges on March 2, 1987 and a retired District Judge was appointed as an Enquiry Officer and he

held the enquiry. In so far as the first charge is concerned, though in his chief-examination the complainant has stated that he preferred the

Complaint, he has not corroborated the averments made in the complaint and he has also stated that it was not a voluntary statement. As far as

charge No. 2 is concerned, the complainant himself was not examined. Hence, Enquiry Officer held that the charge Nos. 1 and 2 were not proved

and the finding of the Enquiry Officer has become final.

In so far as the third charge is concerned, one Ramasamy was examined as M. W. 3 and in his statement before the Enquiry Officer he has

stated that he was running tourist taxies for the appellant company from the year 1983 and when driver was not available, he used to drive the

vehicle and the taxies would be parked at the guest house. He has stated that he gave the complaint on January 8, 1987. Further, he has stated that

he used to purchase 20 to 30 beer bottles from the liquor suppliers at Velyuthampalayam or Vellore or Karur and the first respondent would

obtain the beer bottles from him. He has stated that if the cost of a bottle was Rs. 18/-, the first respondent would inflate the bill to Rs. 20/- and

take the difference in the amount. He has also stated that the first respondent used to give him the value of the beer bottles and take the extra

money as aforesaid. He has also stated that he was supplying the liquor as aforementioned and after the year 1985, the first respondent used to go

in person and purchase the liquor. Since the beer bottles in large quantity were used to be purchased, the shopkeepers supplied the same at lower

rate by reducing Rs. 2/- per bottle which was taken by the first respondent. The only witness examined in support of the charge No. 3 is

Ramasamy. It is also relevant to mention here that M.W.3 has stated in his complaint that the second respondent used to ask him to buy and bring

beer bottles and he used to oblige. He has deposed that he was running a liquor shop on a partnership basis and got liquor bottles from that shop

and supplied them to the foreigners who were visiting the guest house. The Enquiry Officer believed the evidence of M.W.3 Ramasamy and found

that no motive was suggested to him to give false evidence and held that the charge No. 3 was proved.

As far as charge No. 4 is concerned, the appellant has examined two witnesses, M.W. 4 and M.W. 5. M.W. 4 is a labourer and M.W.5 is a

contractor who used to supply labourers to the appellant company. The Enquiry Officer noticed the evidence of the labourer M.W.4 and on the

basis of evidence of M.W.4, he held that the first respondent received wages at Rs. 10/- due to the persons employed by M.W.5 the contractor,

and he did not disburse the entire wages to the employees. He found that no motive was suggested to M. Ws.4 and 5 to give false evidence and

came to the conclusion that the charge-sheeted officer has not paid the entire wages due to the employees and hence, the charge No. 4 was

proved.

In so far as the charge Nos. 3 and 4 are concerned, the disciplinary authority has accepted the report of the Enquiry Officer and passed an

order of termination of services of the first respondent which was confirmed in appeal and then, the first respondent has preferred an application

before the Labour Court u/s 2-A(2) of the Industrial Disputes Act against the order of termination passed by the disciplinary authority and the

Labour Court confirmed the finding of the disciplinary authority. The order of Labour Court was challenged before the learned Judge of this Court

and the learned Judge set aside the award of the Labour Court and directed reinstatement of the first respondent into service. It is against the order

of learned Judge of this Court, the present appeal has been preferred.

The submission of Mr. Karthick, learned counsel for the appellant is that the learned Judge has not considered the matter in proper perspective

and the learned Judge has not even given any reason for setting aside the award of the Labour Court. He also submitted that the award of the

Labour Court is supported by proper material evidence and the order of the learned Judge is not sustainable. Though we find some force in the

submission of learned counsel for the appellant, considering that the matter is pending for the past ten years on the file of this Court as the award of

the Labour Court was passed as early as on January 28, 1994, we are not inclined to remit the matter to the learned Judge and we thought it fit to

go into the materials placed before us.

We have already observed that so far as the first two charges are concerned, the Enquiry Officer himself recorded a finding that the charges

were not proved and finding of the Enquiry Officer has become final.

As far as the charge No. 3 is concerned, it is with reference to the collection of Rs. 2/-per beer bottle from Ramasamy who has been examined

as M.W.3. We have noticed the evidence of Ramasamy M.W.3, and we find that there is absolutely no evidence to show that the first respondent

received a commission of Rs. 2/- per beer bottle from M.W.3. His evidence is only to the effect that if the price of the liquor bottle was Rs. 18/-

the first respondent would sell the bottle at Rs. 20/- to foreign visitors by inflating the price by two rupees and take the difference of Rs. 2/-. The

charge framed against the first respondent was that the first respondent received a commission of Rs. 2/- per bottle from Ramasamy, but there is

no evidence to the effect that Ramasamy was paying Rs. 2/- per bottle to the first respondent. On the other hand, the evidence of M. W. 3 is to

the effect that the difference of Rs. 2/- per bottle received from foreign visitors were taken by the first respondent. His evidence is that the first

respondent would take the extra money. A careful reading of the evidence of M.W.3 clearly shows that shopkeepers used to pay the difference

amount by inflating the price of beer bottle. There is no evidence to the effect that the shopkeepers were paying the difference amount directly to

the first respondent or the shopkeepers were first paying the same to Ramasamy (M.W. 3), who in turn, handed over the same to the first

respondent. His evidence is also to the effect that the first respondent used to take the difference from foreign visitors. But, no foreign visitor was

examined, nor any shopkeeper was examined. It is also relevant to notice that there is contradiction in his evidence with reference to the place from

which the beer bottles were purchased from his complaint. He has stated in his evidence that he used to purchase 20 to 30 beer bottles either from

Velayuthampalayam or Vellore or Karur, but his complaint was that he supplied the beer bottles and the first respondent received from him a

commission of Rs. 2/- per bottle. But, in his evidence on February 23, 1988 he did not give a reply to the question whether he was purchasing

beer bottles from some other shop, though he has stated that he was a partner in a brandy shop for which also he has not produced any evidence.

Even though the bottles were purchased from shopkeepers of different places, the appellant company did not examine anyone of the shopkeepers

or if the supply was made by the shopkeepers at Velayuthampalayam, the appellant company could have examined anyone of the shopkeepers at

Velayuthampalayam to show that he was supplying beer bottles to the guest house for being sold to the foreign visitors paying the difference to the

first respondent.

Even accepting the submission of Mr. Karthick, learned counsel for the appellant that the charge should be read in the manner that the first

respondent was receiving commission of Rs. 2/- per bottle on the purchase of every beer bottle, there is no evidence at all to show that the first

respondent was taking the difference amount. Moreover, the evidence of M.W.3 is wholly unreliable, because the incident took place in between

1983 and 1985 and he gave the complaint only in the year 1987 and there is no explanation from him for the delay. Moreover, M.W.3 is a

contractor running tourist taxies for the appellant company and he is a person personally interested in maintaining his good relationship with the

appellant company and he is also a person obliged to the appellant company. We find vital discrepancies in his evidence and it is highly artificial,

and it is also seen from his evidence that he has changed his version to suit his own convenience as he has stated in his cross-examination that he is

a partner in a liquor shop, but he has not produced any evidence in support of the same and had he been a partner of a liquor shop which supplied

beer bottles to the guest house, he would have been in a position to produce copies of bills under which the beer bottles were supplied to the guest

house.

The Enquiry Officer as well as the Labour Court proceeded on the basis that there is no reason for M. W. 3 to depose against the first

respondent, but both the Enquiry Officer and the Labour Court overlooked the material discrepancies found in the evidence which are fatal and

which would go to this root of the matter. The only reason given is that there is no reason to disbelieve the evidence of M.W.3. The Enquiry

Officer and the Labour Court overlooked the fact that M.W.3 has a stake in a contract with the appellant company to run taxies and his evidence

should have been examined with more caution, particularly when there is no oral or documentary evidence to prove the charge, and the charge was

also framed in such a manner that the first respondent was receiving commission from M.W.3.

Moreover, it is not a case of misappropriation of funds of the appellant company, but it has been alleged that the first respondent was acting in

the manner unbecoming of an officer of the company. We find force in the submission of Mr. N.G.R. Prasad, learned counsel for the first

respondent that the evidence of M. W. 3 has to be rejected as the complaint itself was given after a period of two years because the transactions

took place in between the years 1982 and 1985 and M. W. 3 is a contractor running tourist taxies for the appellant company. We also find that

necessary particulars have not been furnished in the charge and the purpose of framing charge is to inform the delinquent official about the case that

he has to meet and in the instant case, the charge was framed to the effect that the first respondent was receiving commission from Ramasamy and

the first respondent was required to meet only that charge and the charge cannot be construed or read otherwise than in the manner that was

framed or in the manner as suggested by the learned counsel for the appellant. We find that there is no evidence to substantiate the charge No. 3.

Even assuming that the charge is to be read that the first respondent received the inflated price for beer bottles from the foreign visitors and

misappropriated the difference amount, we find that the appellant company has not examined anyone of the shopkeepers, nor any foreigner and

there is variation between the evidence of the complainant and the contents of the complaint as the complainant has not stated anywhere that he

was present at the time when the money was paid to the first respondent by the foreign visitors and the first respondent was pocketing the

difference amount. We have already pointed out that even as to the place of purchase of beer bottles, there is contradiction in the evidence of

M.W.3 and his evidence clearly shows that he would go to any extent to make statements to buttress the case of the appellant company. As we

have already explained, except the solitary evidence of M.W.3, there is no other evidence, oral or documentary to prove that the first respondent

has misappropriated a sum of Rs. 2/- per bottle on the every purchase of beer bottle. It is interesting to note that the appellant has not even let in

any evidence as to the price at which the beer bottles were supplied by the shopkeepers, nor any evidence as to the amount of price paid by the

foreigners for the purchase of beer bottles. There is also no evidence to show that the first respondent has misappropriated the difference amount

and we therefore hold that there is absolutely no evidence either before the Enquiry Officer or before the Labour Court to come to the conclusion

that at every purchase of beer bottle the first respondent misappropriated a sum of Rs. 2/- per bottle as the sale of liquor and price at which the

liquor to be sold are all controlled by the provisions of the relevant Act and the Rules framed thereunder and beer bottles cannot be sold without

the issue of a bill by shopkeepers. The first respondent has also produced copies of bills for the purchase of liquor which clearly show that bills

were available, but, in spite of the same, the appellant has not produced the bills. We therefore hold that the Enquiry Officer and the Labour Court

were not correct in holding that the charge No. 3 was supported by evidence and we confirm the finding arrived at by the learned Judge that the

charge No. 3 was not proved as there is no material for the proof of the charge No. 3.

As far as the charge No. 4 is concerned, the charge relates to the collection of wages due to a contract worker and misappropriated more than

50% of the wages. The period of misappropriation is mentioned to be February 1, 1984 to September 30, 1985 and to prove the charge, the

contract worker Chandrasekaran was examined on the basis of the complaint given by him on January 9, 1987. He has deposed that his daily

wages was Rs. 10/- and he was getting Rs. 7/- per day and the first respondent used to pay the amount as and when need arose. He has also

stated that the first respondent deposited the money in his bank account. He admitted that he was having bank passbook and during the course of

cross-examination, he has produced the passbook which shows that he was operating the bank account. We are of the view, the fact that the

passbook was with M.W.4 Chandrasekaran makes his statement that money was deposited in his account by the first respondent and the first

respondent used to give the money when need arose as unacceptable. Moreover, the charge against the first respondent was that he

misappropriated more than 50% of wages. As Mr. N.G.R. Prasad, learned counsel rightly pointed out, in the light of the statement made by

M.W.4 in his cross-examination that that a sum of Rs. 6000/-was due to him, he would not have received a sum of Rs. 6000/- taking into account

the daily wages paid to him and there cannot be misappropriation of more than 50% of wages as claimed.

Further, the evidence of M.W.4 also bristles with contradictions as he has admitted in his cross-examination that there is no evidence of

payment of Rs. 10/- as daily wages, but, on the other hand, the first respondent has produced evidence, namely, the appointment order wherein it

is stated that his daily wages was Rs. 10/- which came into force only from April 1, 1985 which clearly shows that M.W.4 has given false evidence

that he was receiving Rs. 10/- per day from 1983. As already pointed out by us, there is no evidence at all to show that M.W.4 was receiving Rs

.10/- as daily wages and the figure of Rs. 6000/- said to be due to him is palpably false and goes against his own deposition.

It is relevant to refer to Section 21 of the Contract Labour (Regulation and Abolition) Act, 1970 which provides that it is the responsibility of

the Contractor to pay wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as

may be prescribed. Section 29 of the Contract Labour (Regulation and Abolition) Act provides that the principal employer and contractor shall

maintain such registers and records giving such particulars of contract labour employed, the nature or work performed by the contract labour, the

rates of wages paid to the contract labour and such other particulars in such form as may be prescribed. Hence, there is no statutory duty on the

part of the first respondent to pay wages to the contract labourers of the contractors, nor there is any evidence to show that he participated in the

disbursement of wages to the contract labourers of the contractors. That apart, the first respondent in his letter dated August 19, 1987 requested

for the supply of copy of Contract Labour Wages Disbursement Register for the period from February, 1984 to September, 1985, but the

appellant company by letter dated August 31, 1987 has stated that it did not maintain Contract Labour Wages Disbursement Register for the said

period. In our view, when neither the appellant company, nor the contractor has produced the relevant Register, in spite of the request made by the

first respondent to produce the records, the Enquiry Officer as well as the disciplinary authority should have drawn an adverse inference against the

appellant company. Moreover, the charge was that the first respondent was collecting wages and misappropriated 50% of the same, but the

evidence does not show that there was misappropriation of 50% of the wages as found in the charge. Moreover, the evidence of M.W. 5 is full of

contradiction wherein he has stated that himself and his Assistant would pay necessary wages in lumpsum to the first respondent till January, 1987

and he did not personally disburse wages to the workers. But in the cross-examination, he has stated that the salary to the contract workers was

paid to the first respondent not in the presence of anyone which contradicts his own statement that he himself and his Assistant would pay

necessary wages to the first respondent.

The Enquiry Officer overlooked all the contradictions in the evidence, but observed that the first respondent has not disbursed the entire

wages. The Enquiry Officer has also overlooked that the contractor has not produced the relevant Register and there are inherent contradictions in

the evidence of M.W.4 Chandrasekaran which make his evidence unreliable. The Enquiry Officer proceeded only on the basis of oral testimony of

M. W. 4 and came to the conclusion that the charge No. 4 was proved. Though in the departmental enquiry it is not necessary that the charge must

be proved beyond reasonable doubt as in criminal case and the standard of proof is not high as either in civil case or in criminal case and it would

depend upon the probabilities of the case, we are of the view that there must be some evidence to show that the charge framed against the first

respondent was proved. We find that there is absolutely no evidence to substantiate the charge No. 4. Hence, the view of the Enquiry Officer

which has been accepted by the disciplinary authority that charge Nos. 3 and 4 were proved is not sustainable.

The Labour Court has also committed a serious mistake in holding that the charge Nos. 3 and 4 were proved. It proceeded on the basis that

there was no need for M.Ws.3 to 5 to depose against the first respondent and hence, their statements should be accepted as true. The Labour

Court, in our view, failed to notice the inner-contradiction in their evidence. The Labour Court even failed to notice the relevant provisions of the

Contract Labour (Regulation and Abolition) Act and the relevant Rules framed thereunder. The Labour Court has committed a serious mistake in

holding that charge No. 2 was also proved when the Enquiry Officer himself had found that the charge Nos. 1 and 2 were not proved. If the

charge was that he had acted inconsistent with the fiduciary relationship of an officer of the company and he had acted unbecoming of an officer,

the imputation against the first respondent should be proved by evidence. We have already held that there is absolutely no evidence to substantiate

the charge Nos. 3 and 4 levelled against the first respondent and the finding of the Enquiry Officer which was confirmed by the disciplinary

authority and also by the Labour Court is not sustainable as the finding was arrived at without any evidence on record and their finding is perverse

in nature.

Though that would be sufficient to dispose of the appeal, learned counsel for the appellant brought to the attention of this Court the decision of

the Supreme Court in State of Haryana and Another Vs. Rattan Singh, and the decision of the Supreme Court in J.D. Jain Vs. Management of

State Bank of India and another, . The Supreme Court in Rattan Singh case (supra) has, no doubt, held that in departmental proceedings there is

no allergy to hearsay evidence provided it has a reasonable nexus and credibility. In J.D. Jain case (supra) the Supreme Court explained as to what

is meant by hearsay evidence. It is no doubt true that in departmental proceedings the charge need not be proved beyond reasonable doubt and

the mere proof of misconduct is sufficient, but, on the facts of the case we find that there is absolutely no evidence from M. Ws. 3 to 5 to show

that the first respondent collected commission of Rs. 2/- for the purchase of every bottle, nor there is any evidence to show that he

misappropriated the wages due to the contract workers. We are of the view, on the facts of the case, the decision of the Supreme Court in

Rajinder Kumar Kindra Vs. Delhi Administration through Secretary (Labour) and Others, would apply to the facts of the case which reads as

under at p. 524 of LLJ:

It is equally well-settled that where a quasi-judicial Tribunal or arbitrator records findings based on no legal evidence and the findings are

either his ipse dixit or based on conjectures and surmises, the enquiry suffers from the additional infirmity of non-application of mind and stands

vitiated. The Industrial Tribunal or the arbitrator or a quasi-judicial authority can reject not only such findings but also the conclusion based on no

legal evidence or if it is merely based on surmises and conjectures unrelated to evidence on the ground that they disclose total non-application of

mind.

The decision of the Supreme Court in Kuldeep Singh Vs. The Commissioner of Police and Others, wherein the Supreme Court has laid down

the law which is also relevant for the purpose of this case and which reads as under at p. 606 of LLJ:

The findings recorded in a domestic enquiry can be characterised as perverse if it is shown that such findings are not supported by any evidence

on record or are not based on the evidence adduced by the parties or no reasonable person could have come to those findings on the basis of that

evidence. This principle was laid down by this Court in State of Andhra Pradesh Vs. Sree Rama Rao, in which the question was whether the High

Court under Article 226 could interfere with the findings recorded at the departmental enquiry. This decision was followed in Central Bank of India

Ltd. Vs. Prakash Chand Jain, and Bharat Iron Works Vs. Bhagubhai Balubhai Patel and Others, . In Rajinder Kumar Kindra Vs. Delhi

Administration through Secretary (Labour) and Others, it was laid down that where the findings of misconduct are based on no legal evidence and

the conclusion is one to which no reasonable man could come, the findings can be rejected as perverse.

It was also laid down that where a quasi-judicial Tribunal records findings based on no legal evidence and the findings are its mere ipse dixit or

based on conjectures and surmises, the enquiry suffers from the additional infirmity of non-application of mind and stands vitiated.

The Supreme Court in Sher Bahadur Vs. Union of India (UOI) and Others, has held what is meant by sufficiency of evidence which is also

relevant for the purpose of this Court. The Supreme Court held as under at p. 849 of LLJ:

It may be observed that the expression, ''sufficiency of evidence'' postulates existence of some evidence which links the charged officer with the

misconduct alleged against him. Evidence, however voluminous it may be, which is neither relevant in a broad sense nor establishes any nexus

between the alleged misconduct and the charged officer, is no evidence in law. The mere fact that the enquiry officer has noted in his report, ""in

view of oral, documentary and circumstantial evidence as adduced in the enquiry"", would not in principle satisfy the rule of sufficiency of evidence

....

Though Mr. N.G.R. Prasad, learned counsel referred to certain other decisions in support of his submissions, we are not inclined to refer to

those decisions as we are following the decisions of the Supreme Court in the above-said cases. We therefore hold that the learned Judge was

correct in coming to the conclusion that the charge Nos. 3 and 4 were not proved and the finding of the Labour Court that the charges were

proved is perverse as there is no evidence to support its conclusion. The appeal is liable to be dismissed and the first respondent is liable to be

reinstated. We however find in C.M.P. No. 16129 of 1998 this Court directed the appellant to pay wages u/s 17-B of the Industrial Disputes Act

from the month of November, 1998 pending disposal of the appeal. It is stated that the appellant has been complying with the directions of this

Court. The first respondent was an Assistant Officer in the appellant company and though he is liable to be reinstated, we are of the view, the

interest of justice would be met by directing the appellant company to pay a lump sum amount of Rs. 7 lakhs (Rupees Seven lakhs only) in lieu of

all the back wages and other benefits due to him as the sum of Rs. 7 lakhs (Rupees Seven lakhs only) is a substantial amount and the first

respondent has been paid wages u/s 17-B of the Industrial Disputes Act pending disposal of the writ appeal. With the above modification in the

order of learned single Judge, the writ appeal stands dismissed. No costs.