Proof by preponderance of probabilities What does this phrase convey in the context of a Disciplinary Proceeding? Precisely, this question has come up for consideration in this writ petition.
2. The 2nd respondent is a trade union and its members are employees working in the petitioner bank. From 04.04.1994 onwards one Mr.V.Naganathan [hereinafter referred to as "the employee"] was working as a Clerk-cum-Cashier in the petitioner bank. He is also a member of the 2nd respondent trade union. The petitioner bank on 12.12.1995 issued a charge memorandum to the employee alleging that he had demanded and accepted 10% of the loan amount as illegal gratification along with Field Officer - Sri N.Suruli Bommaiyan and the then Branch Manager - Sri O.Arumugam while disposing five small loans and seventeen charcoal loans to different borrowers during the period between December, 1993 and March, 1994. The employee denied the said charge by submitting a detailed explanation dated 23.01.1996. Not satisfied with the said explanation, the petitioner Bank ordered for an enquiry.
3. Before the enquiry officer one Mr.K.Balachandran, who held preliminary enquiry and recorded the statements of the loanees was examined as M.W.1 on the side of the management. The said statements of the loanees were also marked. But, the persons who gave such statements before Mr.K.Balachandran were not examined before the enquiry officer. However, relying on the said statements of the loanees and the evidence of Mr.K.Balachandran, the enquiry officer held that the charges were proved. A copy of the enquiry officer's report was furnished to the employee along with a show cause notice dated 16.10.1997. The employee submitted a further explanation dated 01.11.1997. Rejecting the said explanation, the petitioner Bank by order dated 19.05.1998 imposed a penalty of stoppage of three annual increments with cumulative effect. Challenging the said punishment, the employee preferred an appeal and the same was also rejected by the Board of Directors by proceedings dated 20.04.1999. It is against the said punishment, the 2nd respondent trade union raised an Industrial Dispute and the same was referred under
Section 10 of the Industrial Disputes Act, 1947 by the Central Government to the Central Government Industrial Tribunal-cum-Labour Court, Chennai in I.D.No.67 of 2000. The order of reference of the Central Government is to the following effect:-
"Whether the action of the Chairman, Pandyan Grama Bank, Virudhunagar in stopping three annual increments with cumulative effect to Shri V.Naganathan, Cashier of the Bank is legal and justified? If not, to what relief the concerned workman is entitled to?"
4. Before the Industrial Tribunal, a preliminary issue was raised that the enquiry was not held fairly and properly. The Industrial Tribunal held that the enquiry was held fairly and properly. Therefore, no fresh oral evidence was let in by either side and on the side of the workman as many as nine documents were exhibited and on the side of the management four documents were exhibited [all the documents had been exhibited earlier before the enquiry officer]. Having considered the above materials, the Industrial Tribunal held that the punishment imposed on the employee was unjustified and on that finding, the Industrial Tribunal set aside the order of punishment with a direction to the management to refund the sum deducted from the employee's pay and allowances, if any. Challenging the above award of the labour court, the petitioner bank is before this Court with this writ petition.
5. In this writ petition, it is mainly contended by the petitioner that the charge against the petitioner was duly proved by acceptable evidence, but the Industrial Tribunal has interfered with the findings of the enquiry officer without having proper appreciation of the materials available on record.
6. The learned counsel appearing for the petitioner would submit that the Industrial Tribunal has disagreed with the finding of the enquiry officer mainly on the ground that the loanees from whom illegal gratification was demanded and accepted had not been examined before the enquiry officer. He would further submit that the said conclusion arrived at by the Industrial Tribunal is not at all sustainable under law inasmuch as the statements recorded by Mr.K.Balachandran during preliminary enquiry from the loanees are substantive evidences upon which reliance ought to have been made by the Industrial Tribunal to come to an irresistible conclusion that the employee is guilty under charge. He would further submit that the evidence of Mr.K.Balachandran cannot be stated as hearsay. He would add that the evidence of Mr.K.Balachandran is as substantive as any other substantive evidence and, therefore, the Industrial Tribunal ought to have relied on the same to hold the employee guilty of the charge. The learned counsel would further add that the employee did not examine himself either before the enquiry officer or before the Industrial Tribunal out of which an adverse inference should have been drawn by the Industrial Tribunal against the employee. In order to substantiate the above contentions, the learned counsel has relied on two judgements of the Hon'ble Supreme Court about which I would make reference in the course of this order.
7. Per contra, the learned counsel appearing for the 2nd respondent would submit that the statements said to have been recorded from the loanees behind the back of the employee cannot be treated as substantive evidence at all to prove the allegations made therein. He would further submit that the evidence of Mr.K.Balachandran is hit by hearsay rule and, therefore, the same cannot be treated as substantive evidence. He would further submit that since there is no acceptable evidence at all to prove the charge levelled against the employee , there was no occasion for him to get into the box to give any evidence in respect of the allegations made against him. He would add that even applying the test of preponderance of probabilities, the charge levelled against the employee had not been proved. Thus, according to the learned counsel appearing for the 2nd respondent, the award of the Industrial Tribunal does not require any interference at the hands of this Court. In order to substantiate the above contentions, the learned counsel appearing for the 2nd respondent would also rely on few judgements of the Hon'ble Supreme Court about which also I would make reference at the appropriate stages of this order.
8. Let me, at the out set, recapitulate the broad principles propounded by the Hon'ble Supreme Court in respect of the nature and standard of proof required in disciplinary proceedings. It is well settled that in a disciplinary proceeding, the standard of proof of the charges levelled against the delinquent is not proof beyond doubt. Proof beyond all reasonable doubts is a concept alien to the disciplinary proceedings. The charges could be established by applying the test of preponderance of probabilities. The concept of preponderance of probability does not mean that charges could be held to have been proved on mere surmises or conjunctures or speculations. Surmises, conjunctures or speculations can never take the place of proof at all. Proof by means of preponderance of probability denotes the standard which lies somewhere below the standard of proving criminal charge beyond reasonable doubt and slightly different from the standard of proof of any fact in any civil case applying the technical rules of the Evidence Act. In this regard, useful reference may be had to the judgement of the Hon'ble Supreme Court in Maharashtra State Board of Secondary and Higher Secondary Education v. K.S.Gandhi and others, 1991 (2) SCC 716 wherein the Hon'ble Supreme Court in para 37 has held as follows:-
37. .....In our considered view inference from the evidence and circumstances must be carefully distinguished from conjectures or speculation. The mind is prone to take pleasure to adapt circumstances to one another and even in straining them a little to force them to form parts of one connected whole. There must be evidence direct or circumstantial to deduce necessary inference in proof of the facts in issue. There can be no inferences unless there are objective facts, direct or circumstantial from which to infer the other fact which it is sought to establish. In some cases the other facts can be inferred, as much practical as is practical, as if they had been actually observed. In other cases the inferences do not go beyond reasonable probability. If there are no positive proved facts, oral, documentary or circumstantial from which the inferences can be made the method of inference fails and what is left is mere speculation on conjecture. Therefore, when an inference of proof that a fact in dispute has been held established there must be some material facts or circumstances on record from which such an inference could be drawn. The standard of proof is not proof beyond reasonable doubt "but" the preponderance of probabilities tending to draw an inference that the fact must be more probable. Standard of proof cannot be put in a straight Jacket formula. No mathematical formula could be laid on degree of proof. The probative value could be gauged from facts and circumstances in a given case. The standard of proof is the same both in civil cases and domestic enquiries."
9. As held in the above case, the technical rules of Evidence Act are not applicable to the disciplinary proceedings. But, at the same time, the basic principles of Evidence Act cannot be altogether brushed aside. They are very much applicable to the disciplinary proceedings. There can be no second opinion that even hearsay evidence is admissible in disciplinary proceeding but it cannot be disputed that such hearsay evidence can never take the place of substantive evidence. At the most, such hearsay evidence may either be a corroborative piece of evidence or may be one of the circumstances to form the basis for the probable conclusion. A statement recorded from a person during preliminary enquiry is surely admissible in evidence before the enquiry officer during the disciplinary proceeding unlike the same is not admitted in criminal cases. If the maker of the said statement is also examined before the enquiry officer, surely, the statement made by him earlier and accepted as evidence during the enquiry before the enquiry officer can be used to strengthen / corroborate the evidence of the maker of the said statement. If the maker of the statement himself is not examined and only the statement said to have been recorded from him alone is marked in evidence, such statement can never be treated as substantive evidence to prove the contents / allegations made in the said statement.
10. A person who recorded such a statement during preliminary enquiry is competent to speak about the said statement before the enquiry officer. The said statement can surely be marked through him. But, mere marking of the said statement alone will not prove the contents of the said statement. Here, it cannot be confused as though I am applying the technical rules of Evidence Act relating to the proof of the contents of the said statement. It needs to be correctly understood that as per the basic principles of the Evidence Act which are applicable to disciplinary proceedings, the evidence of a person who recorded the statement during preliminary enquiry [Mr.K.Balchandran in this case] is surely hearsay in respect of the contents of the statement made by the maker of the statement [loanee]. This evidence is admissible though it is hearsay. But, what all that I state is that his evidence is not substantive to prove the contents of the statement recorded by him.
11. Now, coming to the judgement of the Hon'ble Supreme Court in Central Bank of India v. Prakash Chand Jain, AIR 1969 SC 983 [relied on by the 2nd respondent] wherein the Hon'ble Supreme court in para 8 & 11 has reiterated the law as follows:-
"8. ......Those statements made by Nand Kishore to Vazifdar could not, however, become substantive evidence to prove the correctness of these elements forming part of the charge. It is in this connection that importance attaches to the views expressed by this Court in the cases cited above where it was pointed out that a finding of a domestic tribunal may be perverse if it is not supported by any legal evidence. It is true that , in numerous cases, it has been held that domestic tribunals, like an Enquiry Officer, are not bound by the technical rules about evidence contained in the Indian Evidence Act; but it has nowhere been laid down that even substantive rules, which would form part of principles of natural justice, also can be ignored by the domestic tribunals. The principle that a fact sought to be proved must be supported by statements made in the presence of the person against whom the enquiry is held and that statements made behind the back of the person charged are not to be treated as substantive evidence, is one of the basic principles which cannot be ignored on the mere ground that domestic tribunals are not bound by the technical rules of procedure contained in the Evidence Act. In fact, learned counsel for the appellant Bank was unable to point out any case at all where it may have been held by this Court or by any other Court that a domestic tribunal will be justified in recording its findings on the basis of hearsay evidence without having any direct or circumstantial evidence in support of those findings."
.. .. .. .. ..
"11. ......... These views expressed by this Court, in our opinion, bring out what was meant when this Court held that findings recorded by an Enquiry Officer must be supported by legal evidence. The evidence as indicated in these cases, should consist of statements made in the presence of the workman charged. An exception was envisaged where the previous statement could be used after giving copies of that statement well in advance to the workman charged, but with the further qualification that that previous statement must be affirmed as truthful in a general way when the witness is actually examined in the presence of the workman." [Emphasis supplied]
12. At this Juncture it may be useful to refer to yet another judgement of the Hon'ble Supreme Court in Union of India v. Gyan Chand Chattar , [2009] 12 SCC 78 wherein the Hon'ble Supreme Court in para 20 & 21 has held as follows:-
"20. So far as Charge 6 i.e. asking for 1% commission for making the payment of pay allowances is concerned, the learned Single Judge has appreciated the evidence of all the witnesses examined in this regard and came to the conclusion that not a single person had deposed before the enquiry officer that the respondent employee had asked any person to pay 1% commission for making payment of their allowances. It was based on hearsay statements. All the witnesses stated that this could be the motive / reason for not making the payment.
"5. ....... Reliance was placed, as earlier stated, on the non-compliance with the departmental instruction that statements of passengers should be recorded by inspectors. These are instructions of prudence, not rules that bind or vitiate in the violation. In this case, the Inspector tried to get the statements but the passengers declined, the psychology of the latter in such circumstances being understandable, although may not be approved. We cannot hold that merely because statements of passengers were not recorded the order that followed was invalid.........."
15. Relying on the above, the learned counsel for the petitioner would point out that in that case, the passengers did not come forward to give any statement. The passengers were neither examined during enquiry also. But, however, relying on the person who heard the statement and the other persons in whose presence the statements were made by the passengers, the Hon'ble Supreme Court has held that the charges were proved. Though this argument, at the first blush, may appear to be reasonable, a deep look into the same would expose the hollowness of the said argument. On facts, in that case, a Checking Inspector of a Transport Corporation Bus, checked the passengers when they were alighting the bus. Some passengers did not possess travel tickets. He could not record the statements of those persons. Thereafter, during enquiry, the Checking Inspector was examined. He also deposed about the oral statements of the passengers. In those circumstances, the Hon'ble Supreme court held that the evidence of the Checking Inspector is substantive. If one assimilates the facts of the case thoroughly, it would leave no doubt in his mind to reach the conclusion that the evidence of the Checking Inspector had been treated as substantive because he was an eye-witness to the fact that three passengers were alighting from the bus and on checking they were found not possessing the travel tickets. In that case, the oral statements of passengers spoken to by the checking inspector was not treated as substantive evidence, but only as a circumstance to strengthen the substantive evidence of the Checking Inspector. A close reading of the entire judgement of the Hon'ble Supreme Court would go to reveal that the Hon'ble Supreme Court never said that the oral statements of the passengers made to the Checking Inspector were substantive in nature. Therefore, the facts of the said case are clearly distinguishable and, as a matter of fact, the principles stated in the said case are also very much applicable to the facts of the present case. In the instant case, Mr.K.Balachandran was not an eye-witness in respect of the allegations contained in the statement recorded from the loanee. Therefore, his evidence cannot be substantive in respect of the allegations made in the statement of the loanee. To put it differently, he is not a competent witness to speak about the demand and acceptance of the alleged commission by the employee. Absolutely, I find no conflict between this judgement and the other two judgements referred to above. A conjoint reading of all the three judgements of the Hon'ble Supreme Court would make it abundantly clear that the statement recorded from the loanee in the absence of the employee is not substantive evidence and if only the maker of the statement is examined before the enquiry officer and subjected to cross examination, the said oral evidence will be substantive.
16. The Rattan Singh's case referred to above came to be considered by the Hon'ble Supreme Court again in Cholan Roadways Limited v. G.Thirugnanasambandam, 2005 (2) LLN 663 wherein the Hon'ble Supreme Court held that the principles of res ipsa liquitur" is very much applicable to disciplinary proceedings. In para 34 of the judgement, the Hon'ble Supreme Court has held as follows:-
"34. In this case, further more, the misdirection in law committed by the Industrial Tribunal was apparent insofar as it did not apply the principle of res ipsa loquitur which was relevant for the purpose of this case and, thus, failed to take into consideration a relevant factor and furthermore took into consideration an irrelevant fact not germane for determining the issue, namely, the passengers of the bus were mandatorily required to be examined. The Industrial Tribunal further failed to apply the correct standard of proof in relation to a domestic enquiry, which is "preponderance of probability" and applied the standard of proof required for a criminal trial. A case for judicial review was, thus, clearly made out."
17. A close reading of the above judgement would go to show that the principles stated therein do not in any manner come to the help of the petitioner. As held by the Hon'ble Supreme Court, though strict rule of the Evidence Act cannot be made applicable and that finding can be arrived at on the basis of the circumstances, it cannot be forgotten that such conclusions cannot be arrived at on the basis of mere surmises or speculations. In this regard we may have a glance through Rattan Singh's case cited supra, wherein the Hon'ble Supreme Court in para 4 has held as follows:-
"4. 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. It is true that departmental authorities and administrative tribunals must be careful in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Indian Evidence Act. For this proposition it is not necessary to cite decisions nor text books, although we have been taken through case law and other authorities by counsel on both sides. The essence of a judicial approach is objectivity, exclusion of extraneous materials or considerations and observance of rules of natural justice. Of course, fair play is the basis and if perversity or arbitrariness, bias or surrender of independence of judgement vitiate the conclusions reached, such finding, even though of a domestic tribunal, cannot be held good."
18. Keeping in mind all the broad principles hitherto discussed, if the facts of the instant case are analysed, I find that the enquiry officer had treated the statement of the loanee as substantive evidence to hold that the employee demanded illegal gratification from the loanee and received the same, which is obviously not in accordance with law. That is the reason why, the Industrial Tribunal disagreed with the findings of the enquiry officer and held that the same are perverse inasmuch as it was based on no evidence. Thus, the Industrial Tribunal was right in setting aside the order of punishment.
19. The learned counsel appearing for the petitioner would point out that in respect of the same allegations, a similar charge memorandum was issued against the then Manager of the Bank. In the enquiry held against the Manager, the loanee was not examined but Mr.K.Balachandran alone was examined. There also, relying on the statement of the loanee, the enquiry officer held that the charge of demand of illegal gratification and acceptance was proved and ultimately, the Manager was dismissed from service based on the said finding of the enquiry officer. The same was challenged in W.P.No.19708 of 1999 before this Court. A learned single Judge of this Court , by order dated 04.12.2009 dismissed the writ petition thereby declining to interfere with the order of punishment.
20. Relying on the said judgement, the learned counsel for the petitioner would submit that the facts of the present case are also similar and, therefore, the order of punishment should not have been interfered with by the Industrial Tribunal. With great respect, I am unable to subscribe to the said view taken by the learned Judge in the judgement in W.P.No.19708 of 1999. The principles stated in the judgements of the Hon'ble Supreme Court which I have relied on in the previous paragraphs were not brought to the notice of the learned Judge of this Court. Further, before the learned Judge, the question whether the statement of a person can be treated as substantive evidence to prove the allegations made in the statement without examining him before the enquiry officer was not at all canvassed and so the learned Judge had no occasion to examine the same. When the Hon'ble Supreme Court has clearly held that the statements recorded in the absence of the employee cannot be treated as substantive evidence, I am bound by the said law laid down by the Hon'ble Supreme Court and, therefore, I am unable to follow the judgement of the learned single Judge.
21. In view of all the above, I hold that the Industrial Tribunal was right in interfering with the order of punishment and I do not find any infirmity in the award of the Industrial Tribunal warranting interference at the hands of this Court.
22. In the result, the writ petition fails and the same is accordingly dismissed. No costs.
Index : yes 18..08..2010 Internet : yes kmk To 1.The Presiding Officer, Central Government Industrial Tribunal- cum-Labour Court, I - Floor, Haddows Road, Shasthri Bhawan, Chennai 600 006. ...0... S.NAGAMUTHU. J., kmk W.P.No.9814 of 2001 18..08..2010