Back
2019 Supreme(Del) 734
IN THE HIGH COURT OF DELHI AT NEW DELHI
J.R. Midha, J.
STATE BANK OF TRAVANCORE - Appellant
Vs.
PREM SINGH - Respondent
Writ Petition (Civil) No. 11160 of 2004; Civil Miscellaneous Application No. 32904 of 2017, 42326 of 2018
Decided On : 10-04-2019
Buddy A Ranganadhan, Adv., Stuti, Adv., R.K. Sharma, Adv., Raj Birbal, Adv., Raavi Birbal, Adv.
Loss of confidence in an employee, based on objective facts, can justify termination without reinstatement. The bonafide opinion formed by the employer about the suitability of the employee is final and not subject to review by the industrial adjudication.
Headnote:
Loss of Confidence - Industrial Dispute - M/s Francis Klein & Co. Pvt. Ltd. v. The Workmen, (1971) AIR SC 2414; Anil Kumar Chakaborty v. M/s Saraswatipur Tea Company Limited, (1982) AIR SC 1062; Workmen of Bharat Fritz Werner (P) Ltd. v. Bharat Fritz Werner (P) Ltd., (1990) AIR SC 1054; A.K. Dass v. National Fed. of Coop. Sugar Factories Ltd., (1994) Supp2 SCC 520; Sudhir Vishnu Panwalkar v. Bank of India, (1997) 6 SCC 271; Divisional Controller, Karnataka State Road Transport Corporation v. M.G. Vittal, (2012) 1 SCC 442; State Bank of Bikaner v. Nemi Chand Nalwaya, (2011) 4 SCC 584; Sindhu Education Society v. Kacharu Jairam Khobragade, (1995) 1 LLJ 451 Bom; Sanjiv Kumar Mahapatra v. A.L. Alaspurkar, (2003) 1 AllMR 534; All India Institute of Medical Sciences v. O.P. Chauhan, (2007) LLR 435 (Del HC); National Institute of Mental Health v. Sri G. Suggappa, W.P. No.66/2013 decided by Karnataka High Court on 19th December, 2013; Torrent Power Ltd. v. Chelabhai Nathabhai Luhar,MANU/GJ/0871/2017 - The court discussed the legal principles related to loss of confidence in an employee and its impact on reinstatement. The court emphasized that loss of confidence cannot be subjective and must be based on objective facts, leading to a definite inference of apprehension in the mind of the management regarding the trustworthiness or reliability of the employee. The court also highlighted that the bonafide opinion formed by the employer about the suitability of the employee for the job assigned to him, even if erroneous, is final and not subject to review by the industrial adjudication. The judgment concluded that the respondent was not entitled to reinstatement due to loss of confidence, and awarded fair compensation in lieu of reinstatement.
Fact of the Case:
The respondent, a peon at the petitioner bank, was terminated for making unauthorized withdrawals from a customer's account. The Industrial Tribunal directed the respondent's reinstatement with 50% back wages, which the petitioner challenged.
Finding of the Court:
The court found that the petitioner lost confidence in the respondent due to the unauthorized withdrawals, and the decision to terminate the respondent was bonafide. The court set aside the reinstatement but awarded fair compensation in lieu of reinstatement.
Issues: The main issue was whether the respondent was entitled to reinstatement after the termination by the petitioner.
Ratio Decidendi: The court held that loss of confidence in an employee, based on objective facts, can justify termination without reinstatement. The bonafide opinion formed by the employer about the suitability of the employee is final and not subject to review by the industrial adjudication.
Final Decision: The court set aside the reinstatement of the respondent but awarded fair compensation in lieu of reinstatement.
J. R. Midha, J.
The petitioner has challenged the award of the Industrial Tribunal whereby the Labour Court has awarded reinstatement with 50% back wages to the respondent.
2. The respondent was appointed as a peon with the petitioner bank on 17th January, 1985 and his service was confirmed on 31st July, 1985. The respondent made nine withdrawals totalling Rs.6,750/- from the savings bank account No.2160 of Ms. Rina Mandal between 26th April, 1990 and 05th August, 1991. The account holder filed a complaint to the bank that she had not made the aforesaid withdrawals from her account whereupon the bank manager questioned the respondent and other bank employees. During the questioning, the respondent admitted having made unauthorized withdrawals and gave a confession letter to the Branch Manager. The respondent also admitted having destroyed the relevant documents. According to the bank, the conversation in the manager's room was recorded. The petitioner terminated the services of respondent on 26th October, 1993 whereupon the respondent raised an industrial dispute.
3. The respondent denied the charge of misappropriation. According to the respondent, the confession letter was obtained under threat and coercion. The Industrial Tribunal accepted the respondent's defence and directed the reinstatement of the respondent with 50% back wages.
4. Learned counsel for the petitioner submits that the termination of the respondent is legal and valid. It is submitted that the respondent was guilty of a criminal offence of cheating and criminal misappropriation and no case for reinstatement was made out. Without prejudice, it is submitted that this is a clear case of loss of confidence on account of the respondent indulging in criminal acts and the reinstatement cannot be granted in such cases. Reliance is placed on M/s Francis Klein & Co. Pvt. Ltd. v. The Workmen, (1971) AIR SC 2414 ; Anil Kumar Chakaborty v. M/s Saraswatipur Tea Company Limited, (1982) AIR SC 1062 ; Workmen of Bharat Fritz Werner (P) Ltd. v. Bharat Fritz Werner (P) Ltd., (1990) AIR SC 1054 ; A.K. Dass v. National Fed. of Coop. Sugar Factories Ltd., (1994) Supp2 SCC 520 ; Sudhir Vishnu Panwalkar v. Bank of India, (1997) 6 SCC 271 ; Divisional Controller, Karnataka State Road Transport Corporation v. M.G. Vittal, (2012) 1 SCC 442 ; State Bank of Bikaner v. Nemi Chand Nalwaya, (2011) 4 SCC 584 ; Sindhu Education Society v. Kacharu Jairam Khobragade, (1995) 1 LLJ 451 Bom; Sanjiv Kumar Mahapatra v. A.L. Alaspurkar, (2003) 1 AllMR 534 ; All India Institute of Medical Sciences v. O.P. Chauhan, (2007) LLR 435 (Del HC); National Institute of Mental Health v. Sri G. Suggappa, W.P. No.66/2013 decided by Karnataka High Court on 19th December, 2013 and Torrent Power Ltd. v. Chelabhai Nathabhai Luhar,MANU/GJ/0871/2017.
5. Mr. Raj Birbal, Senior Advocate and Ms. Raavi Birbal, Advocate assisting this Court as amicus curiae submit that reinstatement cannot be directed in a case of loss of confidence. Reliance is placed on O. P. Bhandari v. Indian Tourism Development Corp. Ltd., (1986) 4 SCC 337 ; Bharat Fritz Werner (P) Ltd., (Supra); K. C. Sharma v. Delhi Stock Exchange, (2005) 4 SCC 337; Kailash Singh v. The Managing Committee, Mayo College, Ajmer,MANU/SC/0926/2018 ; State Bank of India v. J.R. Sharma,2002 SCC OnLine (Del) 973; On-Dot Couriers and Cargo Ltd. v. Anand Singh Rawat,2009 SCC OnLine (Del) 3382 ; Lancer s Convent Senior Secondary School v. Jai Prakash, SCC OnLine (Del) 7763 ; Johnson And Johnson Ltd. v. Gajendra Singh Rawat, (2016) 233 DLT 388 , M.G. Vittal Rao, (Supra); Air India Corporation v. V.A. Rebellow, (1972) AIR SC 1343, Chandu Lal v. Management of M/s Pan American World Airways Inc., (1985) 2 SCC 727 and Abheyraj Jaswal v. Godrej Boyce Manufacturing,2011 SCC OnLine (Del) 3301.
6. Learned counsel for the respondent submits that the reinstatement of the respondent by the learned Industrial Tribunal is valid. After some hearing, learned counsel for the respondent, o
