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PETITIONER:

J. D. JAIN

Vs.

RESPONDENT:

THE MANAGEMENT OF STATE BANK OF INDIA & ANR.

DATE OF JUDGMENT17/12/1981

BENCH:

ISLAM, BAHARUL (J)

BENCH:

ISLAM, BAHARUL (J)

TULZAPURKAR, V.D.

VARADARAJAN, A. (J)

CITATION:

1982 AIR 673 1982 SCR (2) 227

1982 SCC (1) 143 1981 SCALE (3)1884

ACT:

Constitution of India 1950 Art. 226-Award of Industrial

Tribunal-Jurisdiction of High Court-interference-When

arises.

Industrial Disputes Act 1947 S. 11 A-Complaint-

Depositor against bank employee-Debit authority alteration

of-Withdrawal of excess money-Confession by employee to

officer of alteration and withdrawal-Holding of domestic

enquiry-Non examination of depositor-Charge of fraud and

misappropriation proved-Employee discharged from service-

Dispute raised-Issue referred to Tribunal-Tribunal holding

depositor (complainant) not examined-Evidence against

employee 'hearsay'-Directing reinstatement-High Court in

writ petition setting aside of tribunal-High Court Whether

correct in interfering with award-Award whether vitiated by

misconception of law.

Labour Law-Domestic enquiry-Guilt whether to be

established beyond reasonable doubt-Proof of misconduct

alone-Whether sufficient,

Words & Phrases 'hearsay'-Meaning of

HEADNOTE:

The Appellant was working as a Cashier in a Bank. A

depositor who had a Savings Bank Account with the Bank came

to the Bank to receive his Pass Book. On receipt of his Pass

Book from the Counter Clerk he complained to the ledger

keeper that, on a certain date he had withdrawn only Rs. 500

but a debit entry of Rs, 1,500 had been shown in the Pass

Book. The Ledger keeper took the depositor to the Supervisor

and The Agent and his complaint was recorded. When the

documents pertaining to the withdrawal were examined it was

found that the depositor had given a letter of authority to

the appellant authorising withdrawal from his account. The

letter of authority showed that it was for withdrawal of Rs.

1500 though there appeared to be some interpolation

suggesting that the figure of Rs. 500 had been altered lo

the figure of Rs. 1500.

A memorandum of charge was served on the appellant by

the Management respondent No. I and a disciplinary enquiry

was held. The Enquiry Officer submitted his report and his

findings were that the appellant had fraudulently altered

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the amount in the letter of authority given by the

depositor, withdrew Rs. 1500 from the depositor's account

and paid Rs. 500 only to the depositor and

228

misappropriated Rs. 1500. In pursuance of the enquiry the

appellant was discharged from service.

The appellant having raised an industrial dispute the

matter was referred to the Industrial Tribunal. Before the

Tribunal the appellant denied the charges and pleaded that

as the depositor was not examined in the disciplinary

enquiry there was no legal evidence before the Enquiry

officer for finding that he was guilty. Before the Tribunal

the Management examined no witnesses but produced documents

and relied on them. The Tribunal held that on the evidence

before it the appellant could not be held guilty as in the

absence of the evidence of the depositor, the evidence

recorded was 'hearsay' and directed reinstatement to the

appellant with full back wages.

The respondent moved the High Court under Article 226

and 227 which held that the charge against the appellant had

been established and quashed the award of the Tribunal.

In the appeal to this Court it was contended on behalf

of the appellant: (1) that the Tribunal exercised its powers

under Section 11 A of the Industrial Disputes Act and the

High Court exercising powers under Article 226/227 had no

jurisdiction to interfere with the award; (2) the Tribunal

rightly refused to rely on the evidence which was hearsay;

the depositor not having been examined, and (3) the High

Court committed an error in not considering the receipt

executed by the depositor showing payment of Rs. 1000 to the

depositor.

Dismissing the appeal,

^

HELD: The award of the Tribunal is vitiated by

misconception of the law involved. It erred in holding that

as Kansal (depositor) was not examined, fraud and

misappropriation on the part of appellant cannot be held to

be proved and in failing to appreciate the confession made

by the appellant to the higher officer that he had altered

the amount in figures and words in his own hand. [236 G]

1. In an application for a writ of certiorari under

Article 226 for quashing the award of an Industrial Tribunal

the jurisdiction of the High Court is limited. It can quash

the award when the Tribunal has committed an error of law

apparent on the face of the record or when the finding of

facts of the Tribunal is perverse. [233 B]

In the instant case, three kinds of proceedings against

the delinquent were possible: (i) departmental proceedings

and action, (ii) Criminal prosecution for the alleged

misappropriation of the amount, and (iii) civil proceedings

for recovery of the amount alleged to be misappropriated.

The respondent adopted the first course and instituted the

domestic enquiry. In such an enquiry guilt need not be

established beyond reasonable doubt; proof of misconduct may

be sufficient. [234 G-235 A]

State of Haryana & Anr. v. Rattan Singh A.I.R. 1977

S.C. 1512, referred to

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2. The word 'hearsay' is used in various senses.

Sometimes it means whatever a person declares on information

given by someone else. [235 E]

In the instant case, the Tribunal after having made a

detailed reference to the evidence of the witnesses found

that a complaint was made by Kansal and that the appellant

confessed that he had altered the debit authority, but held

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That as Kansal was not examined, this was not direct

evidence but was of the nature of 'hearsay' evidence, with

regard to the fact whether the appellant manipulated the

documents, withdrew the excess amount and misappropriated

it, there is no direct evidence of any of the witnesses

except the appellant's confession. The evidence on which

reliance has been taken by the respondent is the confession

and circumstantial evidence. The evidence of Kansal would

have been primary and material. if the fact in issue were

whether Kansal authorised the appellant to make the

alterations in the authority letter. But Kansal's complaint

was to the contrary. No rule of law enjoins that a complaint

has to be in writing as insisted by the Tribunal. For the

purpose of a departmental enquiry, complaint substantiated

by circumstantial evidence is enough. What the respondent

sought to establish in the domestic enquiry was that Kansal

had made a verbal complaint with regard to the withdrawal of

excess money by the appellant. On the factum of complaint of

Kansal the evidence of these four witnessess is direct as

the complaint is said to have been made by Kansal in their

presence and hearing. It is not therefore 'hearsay'. The

respondent has succeeded in proving that a complaint was

made by Kansal on the evidence of these four witnesses. [236

A-E]

Subramaniam v Public Prosecutor [1956]1 W.L.R. 965,

referred to

3. The receipt executed by Kansal showing payment by

the appellant of Rs. 1000 to the former is destructive of

the appellant's defence and on the contrary proves the

respondent's case. [236 H-237A]

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 495 of

1979.

Appeal by special leave from the judgment and order

dated the 18th October, 1978 of the Delhi High Court in

Civil Writ Petition No. 1292 of 1975.

R.R. Garg, U.R. Lalit and Randhir Jain for the

Appellant.

M.C. Bhandare, S.A. Shroff, S.S. Shroff and Miss C.K

Sachurita for Respondent No. 1.

The Judgment of the Court was delivered by

BAHARUL ISLAM J. This appeal by special leave is by the

appellant, J.D. Jain. who was a workman and whose services

have been terminated by the management of the State Bank of

India (hereinafter called the respondent).

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2. The material facts are these.

The appellant was working as a cashier in the Meerut

City Branch of the State Bank of India. On June 21, 1971,

one Dishan Prakash Kansal ('Kansal' for short) who had a

Savings Bank account with the said branch of the State Bank

came to the Bank to receive 3 his Pass Book. On receipt of

the Pass Book from the counter clerk, Kansal complained to

Wadhera who was the Ledger-keeper, that on February 8, 1971,

he had withdrawn only Rs. 500 but a debit entry of Rs. 1,500

had been shown in the Pass Book. Wadhera thereupon took

Kansal to the the Supervisor, R.P. Gupta, before whom Kansal

repeated his complaint. Necessary documents pertaining to

the said withdrawal were then examined and it was found that

Kansal had given a 'letter of authority' (which expression

means, we are told, the withdrawal application form) to the

appellant on February 8, 1971 authorising him to withdraw

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the amount from his account. The letter of authority showed

that it was for withdrawal of Rs. 1,500 though there

appeared to be some interpolation suggesting that the figure

of Rs. 500 had been altered to the figure of Rs. 1,500. The

matter was then brought to the notice of M. Ramzan, the

Agent of the State Bank, before whom also Kansal is said to

have repeated his complaint.

3. Eventually on September 18, 1972, a memorandum of

charges was served on the appellant by the respondent

stating, inter alia that in the letter of authority, the

appellant altered in his own handwriting with different ink

the amount of Rs. 500 to Rs. 1,500 and thus received Rs.

1,000 in excess, passing only Rs. 500 to the pass-book

holder, and that he subsequently, on June 24, 1971,

deposited Rs 250 in the account of Kansal to liquidate a

part or the amount misappropriated by him. The appellant

replied to the charges. He denied the allegations. Thereupon

the respondent appointed one Rajendra Prasad as an Enquiry

officer and a formal disciplinary enquiry was held against

the appellant. The Enquiry Officer submitted his report to

the respondent on February 13, 1973. The findings of the

Enquiry officer were that The appellant had fraudulently

altered the amount in the letter of authority given to him

by Kansal, withdrew Rs. 1,500 from Kansal's account and paid

Rs. 500 only to Kansal and misappropriated Rs. 1000. The

disciplinary authority on receipt of the report of the

Enquiry officer passed the following order (material portion

only):-

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"2. Although, the charges against you are of a

serious nature which would, in normal course, warrant

your dismissal from the service of the Bank, yet

keeping in view your past record, I am inclined to take

a lenient view in the matter. Upon consideration of the

matter, I have tentatively come to the decision that

your misconduct be condoned and you be merely

discharged of in terms of paragraphs 521 (5) (e) of the

Sastry Award read with para graph 18.28 of the Desai

Award and paragraph 1.1 of the Agreement dated the 31st

March 1967 entered into between the Bank and the State

Bank of India Staff Federation. Before, however, I take

a final decision in the matter I would like to give you

a hearing as to why the proposed punishment should not

be imposed upon you. To enable you to do so, I enclose

copies of the proceedings of the enquiry and findings

of the Enquiry officer.

3. You may ask for a hearing or if you so prefer

show cause in writing within one week of receipt by you

thereof. If you fail therein, I will conclude that you

have no cause to show in this behalf."

The appellant then submitted a representation to Shri

V.B. Chadha, the Regional Manager of the State Bank of India

on June 15, 1973. Shri Chadha after perusing the

representation of the appellant and hearing him in person,

recommended that the proposed punishment should not be

imposed upon the appellant, on the grounds that Kansal had

not been examined as a witness and that there had been no

written complaint against the appellant. The respondent,

however, did not accept the recommendation, and, by its

memorandum of December 7, 1973, discharged the appellant

from service with effect from the close of the business on

December 22, 1973.

4. The appellant then having raised an industrial

dispute, the Central Government, by its order dated January

17, 1975, referred the following issue to the Central

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Government Industrial Tribunal at Delhi for adjudication:

"Is the management of State Bank of India

justified in discharging from service Shri J.D. Jain,

Cashier of Meerut Branch, with effect from 22nd

December, 1973? If not to what relief is he entitled ?"

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5. Before the Tribunal, the appellant denied the

charges, He inter alia, pleaded that as Kansal was not

examined in the enquiry, there was no legal evidence before

the inquiry officer for a finding that he was guilty.

The Tribunal framed the following two issues:-

"1. Whether a proper and valid domestic enquiry was

held by the Bank and its effect ?

2. Is the management of State Bank of India justified

in discharging from service Shri J.D. Jain,

Cashier of Meerut Branch with effect from 22nd

December, 1973 ? If not to what relief is he

entitled ?"

Before the Tribunal, the Management examined no

witnesses but produced certain documents and relied on them.

The appellant also did not adduce any evidence.

On a perusal of the evidence recorded by the Enquiry

officer, the Tribunal held that on the evidence before it,

the appellant could not be held guilty as, according to it,

in the absence of the evidence of Kansal, the evidence

recorded was hearsay, with the result that it directed

reinstatement of the appellant with full back wages from

22nd December, 1973. The respondent moved the High Court

under Article 226 and 227 of the Constitution of India for

quashing the award of the Tribunal. The High Court held that

the charges against the appellant had been established and

quashed the award of the Tribunal. It is against this

judgment of the High Court that the present appeal by

special leave is directed.

6. Mr. R.K. Garg, learned counsel appearing for the

appellant makes three submissions before us:-

(1) That the Tribunal exercised its powers under

Section 11 A of the Industrial Disputes Act and

the High , Court, exercising powers under Article

2261227 of the Constitution, had no jurisdiction

to interfere with the award of the Tribunal;

(2) The Tribunal in the perspective of the broad

contours of the case rightly refused to rely on

the evidence which was hearsay? Kansal not having

been examined;

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(3) Assuming the evidence could be relied on, the High

Court committed error in not considering the

receipt executed by Kansal showing payment of Rs.

1000 to Kansal and its judgment is vitiated.

7. In an application for a Writ of Certiorari under

Article 226 of the Constitution for quashing an award of an

Industrial Tribunal, the jurisdiction of the High Court is

limited. It can quash the award, inter alia, when the

Tribunal has committed an error of law apparent on the face

of the record or when the finding of facts of the Tribunal

is perverse. In the case before us, according to the

Tribunal, as Kansal was not examined, the evidence before it

was hearsay and as such on the basis thereof the appellant

could not be legally found guilty.

8. Before the Enquiry officer, the respondent

examined the following witnesses:

Gupta (Witness 1), Wadhera, the Ledger Keeper

(Witness 2), Mahesh Chander who was incharge of Savings

Bank account on 8.2.1971 (Witness 3), M. Ramzan, Agent

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of the Bank (Witness 4), Sarkar (Witness 5), and

Bhardwaj (Witness 6).

Bhardwaj was a leader of the employees' union of the

respondent. He did not support the case of the respondent.

The other witnesses supported the case of the respondent.

Witnesses Nos. 1, 2, 4 and 5 depose that a verbal complaint

was made by Kansal in their presence to the effect that he

had authorised the appellant to withdraw Rs. 500 which sum

was paid to him, but the entries showed that Kansal had

withdrawn Rs. 1,500. Witnesses Vadhera, Ramzan and Sarkar

also deposed that the appellant had confessed before them

that he had made the alterations in the figure and in words

of the sum. The Tribunal after having made detailed

references to the evidence of the above witnesses in fact

found, "All that this evidence thus, proves is that a

complaint was made by Shri Kansal and that the workmen

confessed that he had altered the debit authority. (emphasis

added). Curiously, however, it held, "This evidence, by no

means prove that the workman altered the debit authority to

defraud or that he actually defrauded or that he mis.

appropriated the amount of Rs. 1,000 after paying Rs. 500

only to Mr. Kansal from the amount of Rs. 1,500 withdrawn

from the bank by him as it was not direct evidence but was

in the nature of

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hearsay evidence since it was learnt through the medium of a

third person and that person was not available." It further

held, "There can be no hesitation, therefore, that the

enquiry officer relied on hearsay evidence in arriving at

his findings and it vitiated the enquiry." It went on, "All

this could be enough for raising a suspicion only. In order

to be called 'proved' it needed evidence which was not

there." It further observed, "But the question was whether

it was done without the consent or knowledge of Mr. Kansal.

There was no evidence on the record to prove it. The only

person who could speak about it was Mr. Kansal. He did not

appear before the inquiry officer, therefore, there was no

direct evidence that the change that was admittedly made by

the workman in the debit authority was without Mr. Kansal's

consent or knowledge or that it was designed to defraud "

(emphasis added)

The positive findings of the Tribunal are:

(i) Kansal made the complaint as alleged by the

management.

(ii) The appellant confessed that he had made the

alterations charged with, as alleged by the

management,

(iii) By implication it has also found that Rs. 1,000 in

excess of the original amount of Rs. 500 was

received by the appellant as a result of the

alternations. But it has held that as Kansal was

not examined, fraud and misappropriation on the

part of the appellant cannot be held to be proved,

as the evidence was 'hearsay'.

9. The learned Tribunal, it appears, was obvious of

the fact that it was examining the evidence in a domestic

enquiry, and not the evidence in a criminal prosecution

entailing conviction and sentence.

In a case like the one before us, three kinds of

proceedings against the delinquent are possible .

(i) departmental proceedings and action,

(ii) original prosecution for forgery and

misappropriation,

(iii) civil proceedings for, recovery of the amount

alleged to be misappropriated.

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235

The respondent herein adopted course (i) and instituted

the domestic enquiry in which the principle applied by the

Tribunal is not applicable; in such an enquiry guilt need

not be established beyond reasonable doubt, proof of

misconduct may be sufficient.

The learned Tribunal has committed another error in

holding that the finding of the domestic enquiry was based

on "hearsay" evidence. The law is well-settled that the

strict rules of evidence are not applicable in a domestic

enquiry.

This Court in the case of State of Haryana & Anr. v.

Rattan Singh held:

"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."

10. The next question is, is the evidence in the

domestic enquiry really hearsay, as held by the Tribunal ?

The word 'hearsay' is used in various senses. Some

times it means whatever a person is heard to say; some times

it means whatever a person declares on information given by

someone else. (See Stephen on Law of Evidence).

The Privy Council it the case of Subramaniam v/s.

Public Prosecutor, observed: "Evidence of a statement made

to a witness who is not himself called as a witness may or

may not be hearsay. It is hearsay and inadmissible when the

object of the evidence is to establish the truth of that is

contained in the statement. lt is not hearsay and is

admissible when it is proposed to establish by the evidence,

not the truth of the statement but the fact that it was

made. The fact that it was made quite apart from its truth,

is frequently relevant in considering the mental state and

conduct thereafter of the witness or some other persons in

whose presence these statements are made."

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11. In the instant case, the alleged misconduct of the

appellant was that he forged documents, withdrew Rs. 1,500.

1,000 in excess of the amount he was authorised to do and

misappropriated the excess amount of Rs. 1,000. With regard

to the fact whether the appellant manipulated the documents,

withdrew excess amount and misappropriated it, there is, of

course, no direct evidence of any eye witness except the

appellant's 'confession' referred to above. The evidence on

which reliance has been taken by the respondent is the

confession and circumstantial evidence, namely, the

authority letter containing the admitted interpolations by

the appellant in his own handwriting in different ink, and

the addition of the digit "I" before 500. The evidence of

Kansal would have been primary and material, if the fact in

issue were whether Kansal authorised the appellant to make

the alterations in the authority letter. But Kansal's

complaint was to the contrary. For the purpose of a

departmental enquiry complaint certainly not frivolous, but

substantiated by circumstantial evidence, is enough. What

the respondent sought to establish in the domestic enquiry

was that Kansal had made a verbal complaint with regard to

1) the withdrawal of excess money by the appellant in

presence of the four witnesses, namely, Wadhera, Gupta,

Ramzan and Sarkar, aforesaid, against his advice. On the

complaint of Kansal, the evidence of these four witnesses is

direct as the complaint is said to have been made by Kansal

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in their presence and hearing; it is therefore, not hearsay.

As the respondent has succeeded in proving that a come

plaint was made by Kansal on the evidence of the above-named

four witnesses, the respondent has succeeded. No rule of law

enjoins that complaint has to be in writing as insisted by

the Tribunal.

12. The learned Tribunal has committed yet another

grevious error, in failing to appreciate the confessions

made by the appellant "in the presence of witnesses and to

the higher officer who appeared as witness" (as found by

itself) namely, Wadhera, Ramzan, Gupta and Sarkar,

aforesaid. The confessions of the appellant before the said

witnesses were to the effect that he had altered the amount

in figure and words in his own hand.

The award of the Tribunal, therefore, has been vitiated

by misconception of the law involved in the case.

13. The last submission of Mr. Garg that the judgment

of the High Court had been vitiated as it had not taken into

consideration the receipt executed by Kansal showing payment

by the appellant of Rs. 1000 to the former is destructive of

the appellant's defence. In

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Our opinion, this payment on the contrary, proves the

respondent's case and destroys the appellant's defence which

was that he had withdrawn Rs. 1,500 as advised by Kansal and

paid the full amount to Kansal.

14. In our opinion the High Court was fully in its

jurisdiction in quashing the award of the Tribunal. This

appeal has no merit and is dismissed. We, however, leave the

parties to bear their own costs.

N.V.K. Appeal dismissed.

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