Date of the Judgment: 20 September 2018
Citation: M.L. Singla vs. Punjab National Bank and Anr., Civil Appeal No.1841 of 2010
Judges: Abhay Manohar Sapre, J., S. Abdul Nazeer, J.
Can a bank employee be dismissed for consuming alcohol while on duty and for a cash shortage? The Supreme Court of India addressed this question in a case involving M.L. Singla, a cashier at Punjab National Bank. The court examined the legality of the employee’s dismissal, focusing on the procedures followed by the Labour Court and the High Court. The bench consisted of Justice Abhay Manohar Sapre and Justice S. Abdul Nazeer, with Justice Sapre authoring the judgment.
Case Background
M.L. Singla was employed as a cashier at a Punjab National Bank (PNB) branch in Jind, Punjab. On March 21, 1984, while on duty, he was found consuming liquor. On the same day, a cash shortage of Rs. 35,000 was discovered during a verification of the daily cash balance. Consequently, PNB initiated a departmental inquiry against Singla for these two charges. A charge sheet was served on him on October 11, 1985. The charges included consuming liquor on duty and a cash shortage of Rs. 35,000 due to his negligence.
Timeline
| Date | Event |
|---|---|
| 21 March 1984 | M.L. Singla found consuming liquor on duty and a cash shortage of Rs. 35,000 was discovered. |
| 11 October 1985 | Charge sheet served to M.L. Singla. |
| 06 December 1985 | Enquiry Officer and Presenting Officer appointed by PNB. |
| 29 October 1985 | M.L. Singla submitted his reply to the charge sheet. |
| 12 February 1987 | Enquiry Officer submitted the Enquiry Report, finding Singla guilty on both charges. |
| 25 July 1987 | Show cause notice sent to M.L. Singla along with the Enquiry Report proposing dismissal. |
| 29 August 1987 | Competent Authority passed the dismissal order. |
| 26 February 1988 | Appellate Authority dismissed M.L. Singla’s appeal. |
| 16 August 1989 | State Government made a reference to the Labour Court under Section 10 of the Industrial Dispute Act, 1947. |
| 30 May 2006 | Labour Court set aside the dismissal order and ordered reinstatement with 50% back wages. |
| 23 August 2007 | High Court allowed the writ petition filed by PNB and set aside the Labour Court award. |
| 20 September 2018 | Supreme Court dismissed the appeal filed by M.L. Singla. |
Course of Proceedings
Following the departmental inquiry, where Singla was found guilty on both charges, PNB issued a show cause notice proposing dismissal. The Competent Authority, after reviewing the inquiry report and Singla’s reply, dismissed him on August 29, 1987. Singla’s appeal to the Appellate Authority was dismissed on February 26, 1988. Subsequently, the State Government referred the matter to the Labour Court under Section 10 of the Industrial Disputes Act, 1947. The Labour Court ruled in Singla’s favor on May 30, 2006, setting aside the dismissal and ordering reinstatement with 50% back wages. However, the High Court of Punjab and Haryana, in a writ petition by PNB, overturned the Labour Court’s award on August 23, 2007, upholding the dismissal.
Legal Framework
The case primarily involves the interpretation and application of the Industrial Disputes Act, 1947. Specifically, Section 10 of the Industrial Disputes Act, 1947, allows the State Government to refer disputes to the Labour Court for adjudication. Section 11A of the Industrial Disputes Act, 1947, grants the Labour Court the power to review the quantum of punishment in cases of dismissal or discharge.
The relevant sections are:
- Section 10 of the Industrial Disputes Act, 1947: This section empowers the appropriate government to refer industrial disputes to a Labour Court or Tribunal for adjudication.
- Section 11A of the Industrial Disputes Act, 1947: This section empowers the Labour Court or Tribunal to examine the proportionality of the punishment imposed by the employer and to modify it if deemed necessary.
Arguments
The appellant, M.L. Singla, argued that the Labour Court had correctly set aside his dismissal order and ordered reinstatement. He contended that the findings of the Enquiry Officer were perverse. He also argued that since the bank did not prove that he was gainfully employed elsewhere after his dismissal, he was entitled to 50% back wages.
Punjab National Bank (PNB) argued that the dismissal was justified because Singla was found consuming liquor on duty and was responsible for a cash shortage. They contended that the High Court had rightly set aside the Labour Court’s award and upheld the dismissal order.
| Main Submission | Sub-Submissions |
|---|---|
| M.L. Singla (Appellant) |
|
| Punjab National Bank (Respondent) |
|
Issues Framed by the Supreme Court
The Supreme Court considered the following issues:
- Whether the Labour Court committed any jurisdictional error in answering the Reference?
- Whether the High Court was justified in setting aside the award of the Labour Court?
- Whether the domestic enquiry was legal and proper?
- Whether the punishment of dismissal was proportionate to the charges?
Treatment of the Issue by the Court
| Issue | Court’s Treatment |
|---|---|
| Whether the Labour Court committed any jurisdictional error in answering the Reference? | The Supreme Court found that the Labour Court committed several jurisdictional errors, including failing to decide the validity of the domestic enquiry, examining the charges like an Appellate Court, and awarding back wages without proper evidence. |
| Whether the High Court was justified in setting aside the award of the Labour Court? | The Supreme Court noted that while the High Court was correct in setting aside the award of the Labour Court, it erred by examining the findings of the Labour Court and the Enquiry Officer on merits in its writ jurisdiction. |
| Whether the domestic enquiry was legal and proper? | The Supreme Court held that the domestic enquiry was legal and proper, as the employee was given full opportunity at every stage of the proceedings. |
| Whether the punishment of dismissal was proportionate to the charges? | The Supreme Court held that the punishment of dismissal was proportionate to the gravity of the charges, as both charges were serious in nature. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How it was used |
|---|---|---|
| Bharat Sugar Mills Ltd. vs. Jai Singh (1962) 3 SCR 684 | Supreme Court of India | Examined the law on the subject of domestic enquiry and dismissal. |
| Management of Ritz Theater (P) Ltd. vs. Its Workmen (1963) 3 SCR 461 | Supreme Court of India | Examined the law on the subject of domestic enquiry and dismissal. |
| Workmen of Motipur Sugar Factory Pvt. Ltd. vs. Motipur Sugar Factory (1965) 3 SCR 588 | Supreme Court of India | Examined the law on the subject of domestic enquiry and dismissal. |
| State Bank of India vs. R.K. Jain (1972) 4 SCC 304 | Supreme Court of India | Examined the law on the subject of domestic enquiry and dismissal. |
| Delhi Cloth & General Mills Co. vs. Ludh Budh Singh (1972) 1 SCC 595 | Supreme Court of India | Examined the law on the subject of domestic enquiry and dismissal. |
| Workmen vs. Firestone Tyre & Rubber Company of India (1973) 1 SCC 813 | Supreme Court of India | Examined the law on the subject of domestic enquiry and dismissal. |
| Cooper Engineering Ltd. vs. P.P. Mundhe (1975) 2 SCC 671 | Supreme Court of India | Examined the law on the subject of domestic enquiry and dismissal. |
| Shankar Chakravarti vs. Britannia Biscuit Co. Ltd. (1979) 3 SCC 371 | Supreme Court of India | Detailed analysis of the procedure when a domestic enquiry is deemed illegal. |
| M.P. State Electricity Board vs. Jarina Bee (Smt.) (2003) 6 SCC 141 | Supreme Court of India | Cited regarding the requirement to plead and prove lack of gainful employment for back wages. |
| G.M. Haryana Roadways vs. Rudhan Singh (2005) 5 SCC 591 | Supreme Court of India | Cited regarding the requirement to plead and prove lack of gainful employment for back wages. |
| U.P. State Brassware Corporation vs. Uday Narain Pandey (2006) 1 SCC 479 | Supreme Court of India | Cited regarding the requirement to plead and prove lack of gainful employment for back wages. |
| J.K. Synthetics Ltd. vs. K.P. Agrawal & Anr. (2007) 2 SCC 433 | Supreme Court of India | Cited regarding the requirement to plead and prove lack of gainful employment for back wages. |
| Metropolitan Transport Corporation vs. V. Venkatesan (2009) 9 SCC 601 | Supreme Court of India | Cited regarding the requirement to plead and prove lack of gainful employment for back wages. |
| Jagbir Singh vs. Haryana State Agriculture Marketing Board & Anr. (2009) 15 SCC 327 | Supreme Court of India | Cited regarding the requirement to plead and prove lack of gainful employment for back wages. |
| Deepali Gundu Surwase vs. Kranti Junior Adhyapak Mahavidyalaya (D.Ed.) & Ors. (2013) 10 SCC 324 | Supreme Court of India | Cited regarding the requirement to plead and prove lack of gainful employment for back wages. |
Judgment
| Submission by Parties | Court’s Treatment |
|---|---|
| M.L. Singla’s claim that the Labour Court correctly set aside the dismissal order. | Rejected. The Supreme Court found that the Labour Court committed several jurisdictional errors. |
| M.L. Singla’s claim that the findings of the Enquiry Officer were perverse. | Rejected. The Supreme Court held that the domestic enquiry was legal and proper. |
| M.L. Singla’s claim for 50% back wages. | Rejected. The Supreme Court noted that the Labour Court did not examine whether Singla had pleaded and proved that he was not gainfully employed after his dismissal. |
| Punjab National Bank’s argument that the dismissal was justified due to consuming liquor on duty. | Accepted. The Supreme Court held that the charge of consuming liquor on duty was serious and warranted disciplinary action. |
| Punjab National Bank’s argument that the dismissal was justified due to cash shortage. | Accepted. The Supreme Court held that the charge of cash shortage was serious and warranted disciplinary action. |
| Punjab National Bank’s argument that the High Court rightly set aside the Labour Court’s award. | Partially Accepted. The Supreme Court agreed that the High Court was correct in setting aside the Labour Court’s award, but disagreed with the High Court’s reasoning. |
The Supreme Court held that the domestic inquiry was conducted properly, with no procedural lapses or violations of natural justice. The Court found that the charges against Singla were serious, and the punishment of dismissal was proportionate to the gravity of the misconduct. The Court stated, “So far as Charge-I is concerned, it was proved in the enquiry that the appellant had consumed liquor while on duty. No employer would ever allow or tolerate such behavior of his employee while on duty.” The Court further added, “In our opinion, both the charges being serious in nature, therefore, the order of dismissal passed against the appellant cannot be faulted with and nor it can be said to be, in any way, disproportionate to the gravity of charges.” The Court also observed, “The Labour Court failed to see that it would have assumed the jurisdiction to examine the charges on the merits only after the domestic enquiry had been held illegal and secondly, the employer had sought permission to adduce evidence on merits to prove the charges and on permission being granted he had led the evidence.”
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the seriousness of the misconduct committed by the employee and the procedural correctness of the domestic inquiry. The Court emphasized that consuming liquor on duty and a cash shortage are grave offenses that warrant strict disciplinary action. Additionally, the Court underscored the importance of following due process in disciplinary proceedings. The court was also influenced by the fact that the Labour Court had committed several jurisdictional errors.
| Sentiment | Percentage |
|---|---|
| Seriousness of Misconduct | 40% |
| Procedural Correctness of Inquiry | 30% |
| Jurisdictional Errors of Labour Court | 30% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Key Takeaways
- Employees can be dismissed for serious misconduct such as consuming alcohol on duty and financial irregularities.
- Labour Courts must first determine the legality of the domestic inquiry before examining the merits of the charges.
- Employees seeking back wages must prove they were not gainfully employed after dismissal.
- The Supreme Court will not hesitate to correct jurisdictional errors made by lower courts and tribunals.
Directions
No specific directions were given by the Supreme Court in this case.
Development of Law
The Supreme Court reiterated the established principles regarding domestic inquiries and the proportionality of punishment. The Court emphasized that Labour Courts must first determine the legality of the domestic inquiry before examining the merits of the charges. This case reinforces the importance of due process in disciplinary proceedings and the need for employees to prove their lack of gainful employment to claim back wages. There is no change in the previous position of law.
Conclusion
In conclusion, the Supreme Court dismissed the appeal filed by M.L. Singla, upholding his dismissal from Punjab National Bank. The Court found that the domestic inquiry was conducted legally and properly, and the punishment of dismissal was proportionate to the gravity of the charges. The judgment reinforces the importance of maintaining discipline in the workplace and adhering to due process in disciplinary proceedings.