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2020 Supreme(SC) 919
SUPREME COURT OF INDIA
D.Y. Chandrachud, Indu Malhotra, K.M. Joseph, JJ.
Keonjhar Central Cooperative Bank - Appellant
Versus
Sri Sanatan Barik & Ors. - Respondents
Civil Appeal No 3115 of 2020 (Arising out of SLP (C) No 4658 of 2020)
Decided On : 09-09-2020
Mr. Venkita Subramoniam, Adv., Mr. Haraprasad Sahu, Adv., Mr. Pranaya Kumar Mohapatra, Adv, for the Appellant; Mr. Ashok Panigrahi, AOR Mr. Nabab Singh, Adv, for the Respondent
Points of Law : Direction of High Court to grant back wages quantified at 50% requires modification - Finding of negligence against the respondent was the basis of the disciplinary penalty.
Headnote:
Industrial Disputes Act, 1947 - Section 2 - Odisha Cooperative Societies Act 1962 - Section 67 B – Misconduct - Dismissal from service - Recovery of loss - Appeal arises from a judgment and order of a Division Bench of High Court of affirming in a Letters Patent Appeal judgment of Single judge - Respondent was employed on as an Accountant with Branch of appellant which is a cooperative bank - Enquiry Officer found that first charge of misconduct was not proved - However charge of negligence was held to be established - Following a notice to show cause disciplinary authority imposed the punishment of dismissal from service on - Order of dismissal was challenged before Managing Committee of bank.
Finding Of the Court :
Finding of negligence against respondent was basis of disciplinary penalty - Managing Committee decided to give him fresh employment - This does not obliterate finding against him in disciplinary enquiry - While Court have held that bank is bound by resolution of its Managing Committee to engage first respondent as a fresh employee award of back wages would be excessive and arbitrary - Some component of back wages would need to be awarded because implementation of resolution remained unresolved for nine years - Respondent justifiably needs to be compensated for this - Quantum of back wages is of case quantified at a lump sum amount of order of Single Judge directing payment back wages shall accordingly stand set aside and substituted by a direction in above terms.
Result : Appeal is partly Allowed
JUDGMENT
1. Leave granted.
2. The appeal arises from a judgment and order of a Division Bench of the High Court of Orissa dated 4 September 2019 affirming, in a Letters Patent Appeal, the judgment of the Single judge dated 8 March 2017.
3. The first respondent was employed on 16 August 2004 as an Accountant with the Anandpur Branch of the appellant, which is a cooperative bank. A disciplinary enquiry was convened against him on two charges of misconduct, which are extracted below:
"Charge No.1
As Accountant of the Branch you are the custodian of term deposit receipt books. Due to your negligence the peon Sri Susanta Kumar Rana could get scope to theft (sic) the receipt and 'issued to depositors fraudulently. Further you have allowed to Sri S.K.Rana, Peon to work as Cashier and Ledger Assistant at the time of Passing Officer for which Sri Rana could embezzle the depositors account and bank has sustained loss and looses its image.
Charge No.2
As per the Special Audit Report, you have allowed mis-credit following nos. of deposits accounts for which bank made loss of Rs.27,486.00 as per list enclosed."
4. The Enquiry Officer found that the first charge of misconduct was not proved. However, the charge of negligence was held to be established. Following a notice to show cause the disciplinary authority imposed the punishment of dismissal from service on 18 June 2009. The order of dismissal was challenged before the Managing Committee of the bank. On 24 May 2011, the Managing Committee passed a resolution by which it decided to grant fresh employment to the first respondent and to certain other employees of the bank against whom disciplinary action had been pursued on similar grounds. Besides this, a 'surcharge proceeding' had been initiated for recovery of the loss which had been caused to the bank. Pending the conclusion of the surcharge proceeding, the Managing Committee by its above resolution dated 24 May 2011 required the deposit of the entire amount of the loss, which was estimated at Rs 12,30,252, together with interest at the rate of 12 per cent per annum. The resolution of the Managing Committee was on the basis of an audit report.
5. Shortly after the resolution of the Managing Committee, the surcharge proceeding was decided by an order dated 24 August 2011. It appears that the order passed in the surcharge proceedings quantified the liability on the basis of a Special Audit. The Assistant Auditor General, Cooperative Societies issued the following directions in the surcharge proceeding:
"ORDER
In view of the above discussions the Bank is entitled to receive its loss from the persons found guilty. Shri D. Prusty, ex-Branch Manager, Sri S. Barik, ex-Accountant Sri Basant Pati, ex-Cashier, Sri Bidhan Dash, ex-Ledger Clerk and Sri S. K. Rana, ex-peon of Anandpur Branch of the Keonjhar Central Cooperative Bank Ltd. are jointly and severally liable for the loss caused to the Bank. They are directed to make good the loss to the tune of Rs.12,30,252.00 (Rupees Twelve Lakhs Thirty Thousand Two Hundred Fifty-Two) to the Bank with interest @ 12% p.a. till the date of full and final payment. This order shall be complied with within a period of three months failing which the Bank is at liberty to recover its dues in accordance with law.
Processing fee of Rs.3000.00 is levied upon the delinquents @ Rs.500.00 each delinquents. They are directed to deposit the amount in the Govt. Treasury in Proper Head of Account and Submit Original Treasury Challan to the under signed for further action at his end."
6. The first respondent had instituted a writ petition [1] before the High Court of Orissa against the order of dismissal, when the recourse taken to the remedy before the Managing Committee was pending. The writ petition was disposed of on 21 March 2012 with a direction to the Registrar of Cooperative Societies to examine and consider the representation of the first respondent and to pass an order within two months.
[1] Writ Petition (C) N
