THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY and THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM
WRIT APPEAL No.889 of 2006
% 09.12.2014
Between:
# M/s. Empiai Pharmaceuticals Pvt. Ltd. Versus $ The State of Andhra Pradesh and others.
... APPELLANT ...RESPONDENTS < Gist:
> Head Note:
! COUNSEL FOR THE APPELLANT :- Sri Sivaraju Srinivas ^COUNSEL FOR RESPONDENTS :- Sri P.Madhusudana Reddy ? Cases Referred:
1. (1997) 4 Supreme Court Cases 741 THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM WRIT APPEAL No. 889 of 2006
JUDGMENT: (per the Hon’ble Sri Justice L.Narasimha Reddy)
This writ appeal is filed against the order, dated 13.04.2006, passed by the learned Single Judge of this Court in W.P.No.12835 of 2005, which, in turn, was filed by the appellant itself.
Respondent No.3 was employed as a Medical Representative by the appellant on 01.10.1987. Through a letter, dated 25.10.2000, the appellant terminated the services of respondent No.3 by issuing advance notice of one month. It was mentioned that respondent No.3 was not evincing proper interest in discharging the duties.
Respondent No.3 filed Case No.SC/2/2003 under Section 48 of the Andhra Pradesh Shops and Establishments Act, 1988 (for short ‘the Act’) before respondent No.2. That was disposed of on 18.11.2003 directing that there was no unlawful dismissal of the employee and it is not the case for setting aside the order of termination and directing reinstatement. However, on humanitarian grounds, compensation, in the form of back wages for two years was awarded.
The appellant filed an appeal before respondent No.1 under Section 38 (3) of the Act challenging the said order. Through its order, dated 21.02.2005, respondent No.1 took the view that the termination of services of respondent No.3 was contrary to law. However, on the ground that the appellant lost confidence in respondent No.3, the relief in the form of back wages for the period from the date of termination to the date of order and compensation of Rs.80,000/- was granted. Challenging the said order, the appellant filed the writ petition. The learned Single Judge dismissed the writ petition through the order under appeal. Hence, this appeal.
Sri Sivaraju Srinivas, learned counsel for the appellant, submits that the dismissal of respondent No.3 was only on the ground that he was not evincing interest and no act of misconduct, as defined under Rule 19 of the Andhra Pradesh Shops & Establishments Rules, 1990 (for short ‘the Rules) was attributed. He contends that respondent No.2 recorded a specific finding to the effect that no act of misconduct was attributed and respondent No.1 also did not take any different view, in this behalf. He submits that even while observing that the reason for termination from service is vague and general, respondent No.1 took the view that domestic enquiry ought to have been conducted. Learned counsel further submits that the relief granted by respondent No.1 cannot be sustained in law.
Sri P.Madhusudana Reddy, learned counsel for respondent No.3, on the other hand, submits that though it was mentioned in the order of termination that it is on account of lack of proper interest on the part of his client, in the evidence it has been clearly mentioned that the termination was on account of habitual absence from duties. He contends that the reasons mentioned in the order of termination and those pleaded during the course of evidence clearly disclose that the termination was by way of punishment and it could not have been done without conducting enquiry as required under Rule 20 of the Rules read with Section 48 of the Act.
Respondent No.3 joined the appellant organization in the year 1987. 13 years thereafter, his services were terminated. Though the order of termination is not made part of the record, the reason for termination is extracted in the order passed by respondent No.2. It reads as under:
“The appellant proposed to terminate the services of respondent No.3 in view of total lack of interest shown by him in the work. “ Beyond that, no specific act or omission was attributed. The order was challenged before respondent No.2. Obviously because no domestic enquiry was conducted before the order of termination was passed, respondent No.2 permitted the parties to lead evidence. For this purpose, reliance was placed upon the judgment of this Court in United Planters Association of Southern
[1]
India Vs. K.G.Sangameswaran . On behalf of the appellant,
A.W.1 was examined and Exs.A1 to A17 were filed. Respondent No.3 deposed as R.W.1 and he filed Exs.B1 to B84. The net result is that the lapse, if any, on account of non-conducting of domestic enquiry stood supplemented. Respondent No.2 recorded a specific finding to the effect that the termination of the services of respondent No.3 is bona fide, since there is a reasonable cause for termination. It is only on humanitarian grounds, that some compensation was awarded. Relevant paragraph reads as under:
“This authority opines that in this case the appellant is not fit for re-instatement. But considering the humanitarian factors involved in this case, the opposite party is directed to pay the applicant (two) 2 years basic wage/pay as compensation without re-instatement. This compensation should be calculated on the basic wage/pay last drawn by the applicant.”
The appellant challenged the said order before respondent No.1. It is important to note that respondent No.1 devoted much of his discussion to the legality of the very recording of evidence at the stage of the first appeal, before respondent No.2. He made an observation to the effect that no case was made out to lead evidence before respondent No.2. When the parties to the dispute did not object to the recording of evidence before respondent No.2, it was not open, much less competent for respondent No.1 to find fault with the procedure adopted by respondent No.2.
Be that as it may, respondent No.1 could have set aside the order of termination, if only he found that (a) the termination was on the basis of an act of misconduct attributed to respondent No.3 and (b) conducting of an enquiry in such cases is essential under Rule 20 of the Rules read with Section 48 of the Act.
It is necessary to take note of the relevant provisions of law in this context. Section 47 (2) of the Act, which is relevant here, reads as under:
“The services of an employee shall not be terminated by the employer when such employee made a complaint to the Inspector regarding the denial of any benefit accruing to him under any labour welfare enactment applicable to the establishment and during the pendency of such complaint before the Inspector. The services of an employee shall not also be terminated for misconduct except for such acts or omission and in such manner as may be prescribed.”
From a perusal of the same, it becomes clear that if the services of an employee are proposed to be terminated for the acts of misconduct, it can be done only after the prescribed procedure is followed. Rules 19 and 20 of the Rules are relevant in this behalf. They read as under:
Rule 19: Acts and Omissions constituting misconduct:-
(1) The following acts and omissions shall be treated as misconduct on the part of the employees:-
(a) willful insubordination or disobedience of instructions whether alone or in combination with others or any lawful and reasonable order of a superior;
(b) striking work or inciting others to strike work in contravention of the provisions of the Industrial Disputes Act, 1947;
(c) damage, theft, fraud or dishonesty in connection with the employer’s business or property;
(d) habitual absence without leave, or absence without leave for more than five consecutive days or overstaying the sanctioned leave without sufficient grounds or proper or satisfactory explanation;
(e) engaging trade within the premises of the establishment;
(f) unprovoked misbehaviour with customers, drunkenness, riotous, disorderly or indecent behaviour in the premises of the establishment;
(g) habitual neglect of work, or habitual negligence, disclosing any information in regard to the business/process of the establishment to any unauthorized person which may be prejudicial to the interest of the establishment;
(h) gambling within the premises of the establishment;
(i) conviction by any Court of Law for any criminal offence involving moral turpitude.
(2) Every employer shall display or cause to be displayed at or near the main entrance or at any conspicuous place of the establishment a copy of the list of acts and omissions specified under sub-rule(1) above in English and Telugu. If the establishment consists of several departments, such lists shall be displayed in each department.
Rule 20: Procedure for terminating the services of an employee:-
(1) No employer shall terminate the services of an employee unless an enquiry is held against the employee concerned in respect of any alleged misconduct in the manner set forth in sub-rule (2).
(2) An employee against whom an enquiry has to be held he shall be given a charge-sheet clearly setting forth the circumstances appearing against him and requiring explanation. He shall be given an opportunity to answer the charge and shall also be permitted to produce witnesses in his defence and cross-examine any witness on whose evidence the charge rests. Act concise summary of the evidence led on either side and the employee’s plea shall be recorded and signature of the parties obtained.
(3) In awarding punishment under this rule, the employer shall take into account the gravity of the misconduct, the previous record, if any of the employee and any other extenuating or aggravating circumstances that may exist:
Provided that no punishment shall be awarded based on the previous record and other circumstances that may exist unless the employee has been given an opportunity of making representation in respect of those charges.”
While Rule 19 enumerates the acts of misconduct, which, if attributed to an employee, warrant conducting of domestic enquiry, Rule 20 prescribes the procedure to be followed in this behalf.
There would have been scope for finding fault with the order of termination, dated 01.10.1987, if only it was established that (a) an act of misconduct falling within the scope of Rule 19 of the Rules was attributed and (b) the enquiry contemplated under Rule 20 of the Rules was not conducted. It has already been mentioned that respondent No.2 held that the order of termination was not based on any acts of misconduct. In his detailed order, respondent No.1 also did not make any mention that any act of misconduct, or indiscipline, referable to Rule 19 of the Rules was attributed to respondent No.3. On the other hand, his finding in this behalf is that the allegation levelled against the appellant- employee was vague and not specific. He proceed to observe, “While terminating the services of the employee, the management also failed to take into consideration the past record of the employee. It is noticed that the employee worked for a long time and the management also appreciated his services during his period of service. It appears that the management bore grudge against the employee as alleged by him and he had filed Minimum Wages Case against the management when it decided to get rid of him.”
We find it difficult to cull out anything from this, to fit the case into Rules 19 and 20 of the Rules. The learned Single Judge, however, did not take these aspects into account and allowed the writ petition.
It is brought to our notice that respondent No.3 has received a sum of Rs.46,000/- representing two years minimum wages awarded by the first appellate authority and a sum of Rs.40,000/- representing 50% of the compensation awarded by respondent No.1 in compliance with the interim order passed by this Court. It is stated that there was inordinate delay in making a sum of Rs.46,000/- available. Taking these aspects into account, we direct the appellant to pay a sum of Rs.10,000/- (Rupees ten thousand only) representing interest for delayed payment.
Therefore, we allow the writ appeal and set aside the order passed in W.P.No.12835 of 2005. We, accordingly, allow the writ petition, set aside the order, dated 18.11.2003, passed by respondent No.2, but with the direction as to payment of Rs.10,000/-(Rupees ten thousand only). There shall be no order as to costs.
The miscellaneous petitions, if any, filed in this appeal shall also stand disposed of.
L.NARASIMHA REDDY,J CHALLA KODANDA RAM,J Dt:09.12.2014 Note: L.R. copy to be marked. kdl
[1] (1997) 4 Supreme Court Cases 741