Holding

The order terminating the appellant’s services was wholly unsustainable; he is entitled to reinstatement with continuity of service and award of half back wages.

Summary

The appellant, a clerk‑cum‑cashier of Ambala Central Co‑operative Bank, was suspended and later terminated after a customer alleged a bogus cheque. No charge‑sheet or notice to show cause was served, and the internal enquiry did not find him guilty. The Industrial Tribunal upheld the termination despite the lack of evidence and breach of natural justice, reasoning that strict evidentiary rules did not apply to domestic enquiries. On appeal, the Supreme Court held that the termination violated the principles of natural justice, that the tribunal could not refuse jurisdiction because the appellant had not pursued an internal appeal, and that the appellant was entitled to reinstatement with continuity of service and partial back wages. The Court ordered his reinstatement, awarded half back wages from the date of termination and full wages thereafter, and granted costs.

Issues considered

Whether termination of service without a charge‑sheet, notice, and opportunity to be heard violates the principles of natural justice.
Whether the appellant’s failure to appeal to the bank’s Board of Management bars him from raising an industrial dispute before the tribunal.
Whether an industrial tribunal may decline jurisdiction on the ground that an alternative remedy exists.
Whether the evidence presented justified the termination of the appellant’s services.
What relief, if any, is appropriate for the appellant (reinstatement, back wages, costs).

Legislation cited

Industrial Disputes Act, 1947

Subjects

natural justicetermination of serviceindustrial disputedue processreinstatementback wagestribunal jurisdictiondomestic enquiry

Judgment

158

JAIBHAGWAN
A
V.

THE MANAGEMENT OF THE AMBALA CENTRAL
COOPERATIVE BANK LIMITED.AND ANOTHER
8 September 29, 1983

(D. A. DESAI, 0. CHJNNAPPA REDDY AND A. VARADARAJAN, JJ.J
Industrial Dis]iutes Act, 1947-Domestic enquiry-No charge sh1et or show

c ·cause notice for termination of services issued-No indication of guilt of employel!
in the report-Services terminated-Enquiry-Whether violates principles of
natural justice-Failure to appeal to higher a1Uhority, whether bars tribunal's
jurisdiction.

There was a complaint from an account holder, of the respondent bank
D that his accpunt was wrongly debited with a big sum of money even though he
had never issued a.cheque for that sum. The appellant, a clerk-cum-cashier,
was appareD.tJy suspected to be responsible for tl~e presentation of the cheque. ·
The bank lodged a complaint with the police but the ippellant. was .eventually,
discharged. In the meanwhile. the bank placed him under suspension. An
Cnquiry as to the genuineness of the customer's ·complaint was ordered. The .
appellant was advised to be present at the enquiry but no charge-sheet was
E ever served oflhim. In his rePort. the enquiry officer stated that •'there liea
the possibility that the complaint_ of the applicant may .be genuine.'' But there
was no indication in the report that the appellant had anything to do with
the presentation of the cheque. Yet, on basis of this report the appellant's
services were terminated: Thereafter the appellant raisCd an industriaJ dispute.
The Industrial Tribunal, I-ejecting the appellant's contention that principles. of

F services.
.
natural justice had not been observed uphClci theorder of termination of his

In the workman's appeal to this Court it was contended on behalf of
the respondent that the appetlan.t ought to have pursued the reriiedy of appeal·
ing to the B'oard of Management against the order -of termination and ·his
failure to do so disentitJed him from raising any industrial dispute.
G
Allowing the appeal,

HELD : ,The order terminating the services of the appellant was wholly
unsustainabJe. The appellant is entitled to be reinstated with continuity of
service from the date of termination of his services. There Was total nen-
H app!ication of the mind by the Trib.unal. [161 G; 164 D; 162 HJ

There was a total breach of the princip1~s of natural justice: the appellant
wa~ never asked tq al'.!swer an>' chars;e;
there w~s no enquiry a~ainst h~.p:i; no
JAi BllAGWAN V. AMBALA COOP. BANK 159

notice was issued to him to show cause why his services should not be termi-
nated and even the order terminating his services fa'iled to mention any reason. A
The Bank should have led necessary evidence to prove the charge against the
appellant. None of the three witnesses examined ,by the Bank could either prove
that the cheque was a forgery or that it had been presented by the appellant.
The enquiry was not directed against the 3.ppellant but was held with a view
to find out whether there was any truth in the customer's complaint. The
enquiry officer did D.qt say that the appellant was guilty or had anything to do
with the presentation of the bogus cheque. T!J,e complainant, who would have B
been the most crucial Witne~s, was not examined. [161 F; H; 162 A; C-El

Notwithstanding all this, by a curious process of reasoning the Indus-
trial Tribunal upheld the order of termination, dismissing the appellant's
contention that principles of natural justice had not been observed. The
Tribunal's observation that strict rules of evidence were not applicable to
domestic enquiries and that "not too much legalism was expected in such
c
matters from the enquiry officer" was far from correct. In short, the Tribunal,
without applying its mind to the facts of the case and without bothering to·
peruse the records, gave a findings that the termination of his services was
justified. The Tribunal's findings ~nd conclusion we're therefore worthless.
[162 B-G; H; 163 B-C]
D
Raising an industrial dispute is a well-recognised and legitimate mode
of redress available to a workman, which has achieved statutory recognition
under the Act and there is no reason why a statute-recognised mode of redress
should be d~nied to a workman because of the existence or availability of
another remedy. Nor has an industrial tribunal, to whiqh a dispute had been
referred for adjudication, the power to refuse to adjudicate upon it and E
surrender its jurisdiction to some other authority. While the Government may
exercise its discretion to iefer or not to refer a dispute for adjudication, once
a dispute is referred.to it, the Tribunal has no discretion to decide whether to
adjudicate or not. The Tribunal has to resolve the dispute. The Tribunal
[ cannot avoid it on the ground that the workman bad failed to pursue some
other remedy. [163 G-H; 164 A-BJ
F
The attempt to connect the order terminating tl).e appellant's services
-with his absence from the bank On two days was an attempt made for the first
time before this Court. It cannot be allowed to be raised now. The letter
dated 17th September, 1974 addreysed to the appellant had nothing to do with
the presentation of the cheque or withdrawal of money, but related to his
'
absence from duty on two days in August 1974 and bis signature said to have G
been found in the attendance register on those days. [164 B-C; 163 A-BJ

The workman bas awarded half #back wages from the date Of termination
of service to the date of judgment and full wages thereafter to the date of
reinstatement on the ground that he raised the dispute after a considerable
delay witpout doing anything in the meanwhile. [164 EJ H
CIVIL t\PPELLAW JUR[SDICT!ON : Civil. Appeal No. 5274 (NL)
of 1~83.
160 '
SUPREME COURT REPORTS (1984j l S.C.R.

Appeal by Special leave from the Judgment and Order dated
A the 4th March, 1982 of the Industrial Tribunal Haryai:ta at
'Faridabad in Refererice·No. 79/80 published in Haryana Govt.
Gazette dated the 6th June, 1982.

AND
B Civil Appeal No. 5275 _of 1983 ·
''
Appeal by Special leave from the Judgment and Order dated
· the 16th day of August, 1982 of the Punjab and Haryana High ~
Court in Writ Petition No.-3475 of 1983.
c
---·
Ms. Chantler Malhotra & Mrs. Indra Sawhney for the Appellant ,._
in both the Appeals. ·

K. B. Rohtagi for the Respondent in both the appeals.
D
The Judgiµent of the'Cotirt was delivered by

CHINNAPPA REDDY, 'J. Shri Phulel Singh had a savings
account with the Naraingarh branch of the Ambala Central Co·
E operative Bank Limited. A cheque for Rs. 4200 purporting to have
been signed by :lhri Phulel Singh, drawn on the Ambala Central
Co-operative Bank was presented through the Punjab & Sind Bank
Limited, Dhulkot and the proceeds were duly remitted to the fatter
bank. The account. of Shri Phulel Singh was debited with that
amount. Later when Shri Phulel Singh presented his pass book,
..
' appropriate entries were made. Shri Phulel Singh objected to the
entry relating to. th~ debit of Rs. 4200. He ,alleged that he had
never issued the cheque for Rs. 4200 said· to have been issued by
him. A complaint was also lodged -with the police. The present
·' · appellant, who was clerk·cum·cashier of the Naraingarh Branch of
the bank, and who was apparently suspected in connection with the
presentation of the' bogus cheque, was interrogated by the police and
his statement was also recorded. A First Information Report was
registered against him, but the case ended in· discharge. In the
meanwhile, the Managing Committee of the bank placed the
ii. appellant under suspension. Shri Hans Raj, an Assistant Manager
was appointed to enquire into the matter. in order to ascertain the
genuineness of the complaint made by the customer. The appellant
was advised to be present at the Naraingarh branch of the ban)I Oll
]Al BHAGWAN v. AMBALA COOP. DANK (Chinnappa Reddy, J.) 161

July 29, 1974 in connection with the enquiry. No chargesheet was
ever issued to the appellant. The statement of the appellant was A
however re9orded by the enquiry officer on July 29, 1974 along with
the statements of several other persons. Th~ enquiry officer sub-
t mitted his report on August 21, 1974. The find;ng of the enquiry
officer may be extracted here. It was as follows : ...
B
"As a result of enquiry and on the basis of the
points given in the report, there lies the possibility that
the complaint of the applicant may be genuine."

The enquiry officer thus indicated that there might be truth in the
complaint of the customer that a bogus cheque was presented and c
his account debited with the amount. There was, however, no
indication in the report that the appellant, Jai Bhagwan was guilty
or had anything to do with the presentation of the bogus cheque.
Thereafter, on January 31, 1975, the appellant was informed that
his services. had been terminated ·with immediate effect. No reason D-
was mentioned in the order terminating the services of the appellant.
We have no information nor was his learned counsel in a position
to tell us as to any immediate steps taken by the appellant to ques-
tion the order of termination of his services. But he did ultimately
raise an industrial dispute and by an order dated December 15,
1980 the Governor of Haryana referred ·the following dispute for E
adjudication to the Industrial Tribunal, Haryana at Faridabad :

- "Whether the termination of services of Shri Jai
Bhagwan was jnstified and in order ? If not, to what
relief is he entitled ?" F
Even from the brief narration of facts, it is obvious that
there was a total breach of the Principles of natural justice. The
appellant was never asked to answer any charges, there was no
enqniry ogainst him, no notice was issued to him ·to show cause
why his services should not be terminated and even the order G
terminating his services failed to mention any reason. The order
terminating the services of the appellant was wholly unsustainable.
If, therefore, the bank wanted to sustain the order terminating the
services of the·appellant, it· was up to the bank t<fil:ad necessary
. evidence to prove such charges as it desired. to establish against the
H
appellant. The bank made an effort by adducing th~ evidence of
.three witness MW-I? the Establishµient O!ficer, MW-)11 Assistant
\

162 SUPREME COURT REPORTS (1984) 1 s.C.l!.,

Manager, Karna! and MW-III, the Enquiry Officer, none of whom
A could either prove that the cheque was a forgery or that it bad been
presented by the appellant. Shri Phulel Singh, who would have
been the most crucial witness, was not examined.. Th th'e absence
of the evidence of Shri Phulel Singh, no case could possibly be said
to have been made out against the appellant. Yet by a very curious
B process of reasoning, the Industrial Tribunal upheld the order qf
termination of the appellant's services. He dismissed the contention
that principles of natural justice bad not been observed with the
observation that strict rules of evidence were not applicable to
domestic enquiries and "not too .much legalism was expected in
such matters from the enquiry Officer." We are unable to under-
c .stand· what the Industrial Tribunal meant. · There was not ·the
slightest semblance·of observance of the principles Of natural justice.
The enquiry m11de by the enquiry officer was not directed against
the appellant, but was held with a view to find out whether there
was any truth in the complaint of the customer that somebody had
D presented a bogus cheque and drawn Rs. 4200 from his account.
The report of the enquiry officer also contained no finding against
the appellant. At no time was the appellant informed of any charges
against him or his explanation sought. Commenting on the report
of the enquiry officer, the Industrial Tribunal stated : · ·

E "I have gone through the documents produced by
the management and found that the enquiry officer took
great pain in finding out the facts of th~ case as was
evident from his r~port Ex. M-8 which was dated 21st
August, 1974. The report gives minute details and is
..
' logical. The enquiry officer reached the . conclusion by
going through the records of the bank and also of the
drawee branch of- Punjab & Sind Bank, Dhulkot and
.ascertaining the person in whose account the sum of
Rs. 4200 was deposited and also the connection of
Shri Jai Bhagwan conc~rned workman with that person.
G I am convinced by reading the enquiry report that the
concerned workman was involved into withdrawal and,
therefore, he was found guilty by the Enquiry Officer."

This shows a total non-application of the mind by the Industrial
H
Tribunal since the appellant was never found guilty by the enquiry
officer. ·The Industrial Tribunal also stated. that a final s.how cause
P.Qtice hal) be<;n issue\) to the wor~an on September 17, 1974 in
JAi BHAGWAN v. AMBALA COOP. BANK (Chinnappa Reddy, J.) 163

which the findings of the enquiry officer were briefly given. This is
another indication that the Industrial Tribunal never applied !\is A
mind to the issues before him. The letter dated September 17,
1974 had nothing whatever to do with the presentation of the cheque
or the withdrawal of the money. It was concerned with the
absence of the appellant from duty on August 13 and 14, 1974 and
the signatures said. to have been found in the attendance register B
against the dates August 13 and 14, 1974. Thus, the Industrial
Tribunal, apparently without applying his mind to the facts of the
ca.se and without bothering even to peruse the records, gave a
finding that the termination of the services of the wo.rkman were·
justified and in order. .We are constrained to reject the findings
and the conclusion of the Industrial Tribunal as entireiy worthless. c
The appellant filed a writ petition in the High Court of Punjab &
Haryana, but the writ petition was unfortunately summarily rejected.
The workman has filed these two appeals under Art. 136 of the
Constitution, one against the decision of the Industrial Tribunal
and the other against the summary dismissal of the writ petition
by the High Court. Both the appeals have to be allowed in the D
circumstances mentioned by us.

Shri Rohatgi, learned counsel for the Respondent-Bank, was
unable to contend that there was even a remote compliance with E

- the principles of natural justice. He was also unable to urge that
the Industrial Tribunal had truly applied bis mind to the case. He,
however, argued that the appellant had a remedy against 'the order
of termination of services by way of an appeal to the Board of
Management and that his failure to pursue that remedy barred him ·
from raising any Industrial dispute. He also attempted to connect F
the order of termination of services with the absence of the work-
man from the bank on August 13 and 14, 1974, on" days when his
signature was found in the attendance register.' We see no subs-
tance in either of the submissions. ·Raising an industrial dispute is
a well recognised and legitimate mode of redress available to a G
workman, which has achieved statutory recognition under the
Industrial Disputes Act and we fail to·see why the statute-recognised
mode of redress should be denied to a workman because of the ,.
exis.tence or availability of another remedy. Nor are we able. to
understand how an Iildustrial Tribunal to whom a dispute has been ll
referred for adjudication can refuse to adjudicate upon it and
surrender jurisdiction which it· undoubtedly has to some other
;i11t)Jority. Wi\ile the Government may exercise their discretion in.
164 SUPREME COURT REPORTS (1984) ! s.c.R.

deciding whether to refer or not to refer a dispute for adjudication,
A the Tribunal to whom the dispute has been referred has no discre·
tion to decide whether to adjudicate or not. Once a referen'ce has
been properly made to an Industrial Tribunal, the dispute has to be
duly resolved by the Industrial Tribunal. Resolution of the dispute
cannot be avoided by the Tribunal on the ground that the workman
'had failed to pursue some other r~medy. The attempt of Shri _
~Rohatgi to connect the order terminating the appellant's ·services
with.his absence from the bank on ,August 13 and 14, 1974 ,is an
attempt made before us for the first time. At no earlier stage was '>
the order of termination of services sought to be sustained on the
basis of the absence of the workman from the bank on August 13
c and 14, 1974. It cannot be done now.· -

· The appellant is, therefore, entitled to be reinstated in service
• with ·continuity of Service from the date on which his services were
terminated. Having regard to the circumstance ·that the workman
raised an Industrial dispute after considerable' delay without doing
anything in the meanwhile. to question . the termination of his
services, we do.-not think that we will be justified in awarding full
back wages. We think that award of half the back wages from the
date of termination of service until to day and full wages from this
day until reinstatement will meet the ends of justice. The appellant
E will be entitled to his costs which we quantified at Rs. 5,000.'

P.B.R. Appeal allowed.
-

'