# Bangalore Woollen, Cotton and Silk Mills Company Ltd v. Dasappa

- **Citation:** [1969] 1 S.C.R. 735
- **Court:** Supreme Court of India
- **Decided:** 1968-08-20
- **Case number:** Civil Appeal No. 498 of 1966
- **Bench:** V. Bhargava, C. A. Vaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bangalore-woollen-cotton-and-silk-mills-company-ltd-v-dasappa-4478
- **Pages:** 15

## Headnote

Industrial Disputes Act, 1947 (14 of 1947), s. 33(2) (b)-Powers of
Industrial Tribunal Under section-Interference with findings of domestic
enquiry justified when 'findings· ar.e perverse-Tests of perversity-Hearsay evidence not legal evidence even in domestic enquiries.
The respondent was an employee of the appeUant. After a domestic
enquiry in respect of alleged misconduct he was dismissed. As an industrial dispute was pending an application was made to the
Industrial
Tribunal under s. 33(2) (b) of the Industrial Disputes Act, 1947.
The
Tribunal held that though the enquiry was fair, the findings
of the
Enquiry Officer welre perverse and therefore it did not give its approval ,
to the order of dismissal.
By special leave the appellant came to
this
Court, contending _that since the enquiry was held to be fair the Tribunal
had no jurisdiction to interfere with the findings of fact arrived at by the
Enquiry Officer.
HELD : (i) Earlier decisions of this Court make it clear that when
an Industrial Tribunal is asked to give its approval to an order of dismissal under s, 33(2) (b) of the Act, it can disregard the findings given
by the, Enquiry Officer only if the :findings are perverse. The findings are
petverse when either they are not based on legal evidence or they are
such as no reasonable person could have arrived at on the basis of material before the domestic tribunal. [739 G-740 CJ
Bangalore Woollen, Cotton and Silk Mills Company Ltd. v. Dasappa
(B) (Binny Mills
Labour Union) & 0'9. [1960] II L.L.J.
39, Lord
Krishna Textile Mills v. Its Workmen, f1961] 3 S.C.R.
204,
Stat~ of
Andhra Pradesh v. S. Sree Rama Rao, [1964] 3 S.C.R. 25, applied.
(ii) A domestic tribunal though not bound by the' technical rules
about evidence contained in the Indian Evidenee Act cannot ignore substantive rules which would form part of principles of natural justice. 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 such basic principles which
a domestic tribunal cannot disregard.
The previous statement of a witness
is not substantive evidence unless affirmed as truthful by the witness when
actually examined in the presence of the workman charged.
A finding
by the
domestic tribunal
based not on
substantive evidence but
on
hearsay, is perverse, because hearsay is not legal evidence. [743 C-E; 745
G-HJ
Khardah Co. Ltd. v. Their Workmen, [1964] 3 S.C.R. 506, State of
Mysore v. S. S. Makapur, [1963] 2 S.C.R. 943 and M/s. Kesoram Cotton
Mills Ltd. v. Gangadhar, [1964] 2 S.C.R. 809, relied on.
H
(iii) In the present case the findings of the Enquiry Officer were
rightly held by the Industrial Tribunal to be perverse as they were not
basqp on legal evidence and were not justified by the material
before
him. [749 C-El
736
SUPREME COURT REPORTS
[1969] I S.C.R.

## Text

_Characters 0–39,331 of 40,641. This is a partial read: ask again with offset=39331 for what follows._

. 735
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CENTRAL BANK OF INDIA LTD., NEW DELHI
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V.
SHRI PRAKASH CHAND JAIN
August 20, 1968
[V. BHARGAVA AND C. A. VAIDIALINGAM, JJ.]
Industrial Disputes Act, 1947 (14 of 1947), s. 33(2) (b)-Powers of
Industrial Tribunal Under section-Interference with findings of domestic
enquiry justified when 'findings· ar.e perverse-Tests of perversity-Hearsay evidence not legal evidence even in domestic enquiries.
The respondent was an employee of the appeUant. After a domestic
enquiry in respect of alleged misconduct he was dismissed. As an industrial dispute was pending an application was made to the
Industrial
Tribunal under s. 33(2) (b) of the Industrial Disputes Act, 1947.
The
Tribunal held that though the enquiry was fair, the findings
of the
Enquiry Officer welre perverse and therefore it did not give its approval ,
to the order of dismissal.
By special leave the appellant came to
this
Court, contending _that since the enquiry was held to be fair the Tribunal
had no jurisdiction to interfere with the findings of fact arrived at by the
Enquiry Officer.
HELD : (i) Earlier decisions of this Court make it clear that when
an Industrial Tribunal is asked to give its approval to an order of dismissal under s, 33(2) (b) of the Act, it can disregard the findings given
by the, Enquiry Officer only if the :findings are perverse. The findings are
petverse when either they are not based on legal evidence or they are
such as no reasonable person could have arrived at on the basis of material before the domestic tribunal. [739 G-740 CJ
Bangalore Woollen, Cotton and Silk Mills Company Ltd. v. Dasappa
(B) (Binny Mills
Labour Union) & 0'9. [1960] II L.L.J.
39, Lord
Krishna Textile Mills v. Its Workmen, f1961] 3 S.C.R.
204,
Stat~ of
Andhra Pradesh v. S. Sree Rama Rao, [1964] 3 S.C.R. 25, applied.
(ii) A domestic tribunal though not bound by the' technical rules
about evidence contained in the Indian Evidenee Act cannot ignore substantive rules which would form part of principles of natural justice. 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 such basic principles which
a domestic tribunal cannot disregard.
The previous statement of a witness
is not substantive evidence unless affirmed as truthful by the witness when
actually examined in the presence of the workman charged.
A finding
by the
domestic tribunal
based not on
substantive evidence but
on
hearsay, is perverse, because hearsay is not legal evidence. [743 C-E; 745
G-HJ
Khardah Co. Ltd. v. Their Workmen, [1964] 3 S.C.R. 506, State of
Mysore v. S. S. Makapur, [1963] 2 S.C.R. 943 and M/s. Kesoram Cotton
Mills Ltd. v. Gangadhar, [1964] 2 S.C.R. 809, relied on.
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(iii) In the present case the findings of the Enquiry Officer were
rightly held by the Industrial Tribunal to be perverse as they were not
basqp on legal evidence and were not justified by the material
before
him. [749 C-El
736
SUPREME COURT REPORTS
[1969] I S.C.R.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 498 of
1966.
Appeal by special leave from the order dated July 10, 1964
of the Industrial Tribunal Delhi in O.P. No. 79 of 1962.
Bishan Narain, P. C. Bharrari, J. B. Dadachanji and C. L.
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Chopra, for the appellant.
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H. R. Gokha/e, Janardan Sharma and T. R. Bluisin, for the
respondent.
The Judgment of the Court was delivered by
Bhargava, J. The Central Bank of India Ltd., New Delhi,
has filed this appeal, by special leave, challenging an order of
the Industrial Tribunal, Delhi, refusing to accord approval to an
order of dismissal of the respondent, Prakash Chand Jain. under
section 33(2)(b) of the Industrial Disputes Act (hereinafter referred to as "the Act"). A charge-sheet, containing two charges,
was serve<l on the respondent on 21st July, 1961 in order to
initiate fonually an enquiry for the purpose of taking disciplinary
action against him. The two charges framed were as follows :-
"!. On 14-1-1960, a sum of
Rs. 30,400/- was
paid to Mr. P. C. Jain by the Assistant Cashier Mr.
Nand Kishore out of the cheque No. 43004 dated
14-1-60 drawn by Messrs Moo! Chand
Hari Kishan
for Rs. 63,000/-. Taking this money Mr. P. C. Jain
on the same day i.e. 14-1-1960 left for Muzaffarnagar
in company of some persons to retire the
following
bills drawn by M/s. Gupta Iron Industries :-
. Naya Bazar LBC 3
drawn on Puran Chand
Rs. 5,100/-
Naya Bazar LBC 5
drawn on Hiralal Shyarn
Rs. 4,950/-
Thus it was within the knowledge of Shri P. C. Jain
that the bills of Messrs
Gupta Iron Industries were
drawn on bogus finns and that those were retired by
the drawer's representative who accompanies Mr. P. C.
Jain to
Muxaffarnagar.
Instead of reporting such
serious rnatters to higher authorities, Mr. P. C. Jain
claims that he had never visited Muzaffamagar.
2. ·Mr. P. C. Jain encashed on 25-2-60 cheque
No. 400506 for Rs. 46,000/- from the United Bank of
India Ltd., Chandni Chowk and brought cash to Naya
Bazar after 11.30 a.m. i.e. after the time for presenting
of the clear41g cheques at the State Bank of India. To •
cover the misdeeds of Mr. Shiv Kumar Shanna the then
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CENTRAL BANK v. PRAKASH CHAND (Bhargava, J.)
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Sub-Agent of Naya Bazar Office, Mr. P. C. ~ain Treasurer's representative stated in his
explanation dated
16-2-1961 that cash was received at the office at about
11 a.m. i.ec before the clearing time.
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The above acts of Mr. Jain were prejudicial to the
interests of the Bank as defined in paragraph 521-4(J)
of the Sastry Award and amount to gross misconduct.
The inquiry will be held on 12-8-1961 at Chandni
Chowk Branch at 10.30 a.m. by Mr. P. B. Tipnis,
Chief Agent, Agra."
Subsequently, an enquiry was held by Mr. Tipnis, one of the
senior Officers of the Bank. The Enquiry Officer, after recording evidence tendeted on behalf of the Bank as well as the
evidence given by the respondent, recorded his findings holding
that both the charges were proved against the respondent and,
'.on
1tha~ basis, came to the view that the actions of the respondent were prejudicial to the interests of the Bank and
amounted to gross misconduct, so that he proposed to award the
punishment of dismissal from the Bank's service. The respondenc
was given a week's time to show cause against this proposed
punishment and, thereafter, an order was made dismissing the
respondent with effect from 18th July, 1962 and a month's wages
were paid to him in accordance with the provision contained in
s. 33(2) (b) of the Act. Since an industrial clispute was pending
before the Industrial Tribunal, Delhi,
an application under
s. 33 (2 )(b) of the Act was made requesting the Tribunal to
accord approval to this order of dismissal. The Tribunal, when
dealing with this application, held that the enquiry, which had
been held by the Enquiry Officer, was fair and was not vitiated
by any irregularity or unfairness, but refused to accord approval
on the ground that the findings accorded by the Enquiry Officer
were perverse and were not based on evidence inasmuch as most
of the findings were the result of mere conjecture on behalf of
the Enquiry Officer. It is this order of the Tribunal that has been
challenged in this appeal.
Learned counsel appearing for the appellant Bank urged that
the Tribunal, in refusing to accord approval and in disregarding
the findings recorded by the Enquiry Officer, exceeded its jurisdiction conferred bys. 33(2)(b) of the Act. It was further
urged that, when the Tribunal found that the enquiry was fair,
the Tribunal had no juriscliction to go info the question whether
the findings of fact recorded by the Enquiry Officer were correct
and could not sit in judgment over those finclings like a Court of
Appeal. The Tribunal should have accepted those finclings and
only examined whether a prima facie case was made out for
acco~ding an approval. If the Tribunal had proceeded in accord-
7 38
SUPREME COURT REPORTS
[1969] I S.C.R.
au~e with this principle, there would have been no justification
for the Tribunal to refuse to approve the order of dismissal.
The jurisdiction and functions of a Tribunal under s. 33 (2)
\b) of the Act were explained by this Court in Bangalore
Woollen, Cotton and Silk Mills Company Ltd. v. Dasappa
(B)
(Binny Mills l,abour Union)
and Others('), where it was
held :-
"The settled position in law therefore is that permission should be refused if the tribunal is
satisfied
that the management's action is not bona fide or that
the principles of natural justice have been violated or
that the materials on the basis of which the management
came to a certain conclusion- could
not
justify any
reasonable person in coming to such a conclusion. In
most cases it will happen where the materials arc such
that no reasonable person could have come to the conclusion as regards the workman's mis-conduct that the
management has not acted bona fide.
A finding that
the management has acted bona fide will ordinarily not
be reached if the materials are such that a reasonable
man could not have come to the conclusion which the
management has reached.
In every case, therefore, it
would be proper for the tribunal to address itself to
the question, after ascertaining that the principles of
natural justice have not been violated, whether the
materials on which the management has reached a conclusion adverse to the workman, a reasonable person
could reach such a conclusion."
The point was again considered by this Court in the case of
f,ord Krishna Textile Mills v. Its Workmen(') and it was held:-
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"In view of the limited nature and extent of the
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enquiry permissible under s. 33 (2 )(b) all that the
authority can do in dealing with an employer's application is to consider whether a prima facie case for according approval is made out by him or not. If before
dismissing an employee the employer has held a proper domestic enquiry and has proceeded to pass the imG
pugncd order as a result of the said enquiry, all that the
authority can do is to enquire whether the conditions
prescribed bys. 33(2)(b) and the proviso arc satisfied
or not.
Do the standing orders justify the order of
dismissal ? Has an enquiry been held as required by the
standing order? Have the wages for the month been
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paid as required by the proviso ?; and, has an application been made as prescribed by the proviso ?"
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(!) [•%0] II L.I J. 19.
(2)
[1961) l S.CR. 204.
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CENTRAL BANK V. PRAKASH CHAND (Bhargava, J.)
739
The Court then proceeded to consider whether the Tribunal in
that case had acted rightly, and noted that one had merely to
read the order to be satisfied that the Tribunal had exceeded its
jurisdiction in attempting to enquire if the conclusions of f,act
recorded in the enquiry were justified on the merits. The Tribunal did not hold that the enquiry was defective or the requirements of natural justice had not been satisfied in any manner. The
Court then indicated that the Tribunal had proceeded to examine
the evidence, referred to some discrepancies in the statements
made by witnesses and had come to the conclusion that the domestic enquiry should not have recorded the conclusion that the
charges had been proved against the workmen in question. It
was then held that, in making these comments against the findings
of the enquiry, the Tribunal clearly lost sight of the limitations
statutorily placed upon its power and authority in holding the enquiry under s. 33(2) (b). The Court then indicated the principle
applicable by saying :
"It is well known that the question about the adequacy of evidence or its sufficiency or satisfactory
character can be raised in a court of facts and may fall
to be considered by an appellate court which is entitled
. to consider facts; but these considerations are irrelevant
where the jurisdiction of the court is limited as under
s. 33(2) (b). It is conceivable that even in holding an
enquiry under s. 33(2) (b) if the authority is satisfied
that the finding recorded at the domestic enquiry is perverse in the sense that it is not justified by any legal
evidence whatever, only in such a case it may be entitled to consider whether approval should be accorded to
the employer or not; but it is essential to bear in mind
the difference between a finding which is not supported
by any legal evidence and a finding which may appear
to be not supported by sufficient or adequate or satisfactory evidence."
These decisions make it clear that, when an Industrial Tribunal is asked to give its approval to an order of dismissal under s.
33 (2) (b) of the Act, it can disregard the finclings given by the
Enquiry Officer only if the findings are perverse. The test of
perversity that is indicated ju these cases is that the findings may
not be supported by any legal evidence at all.
This principle
was further affirmed in a different context in State of Andhra
Pradesh v. S. Sree Rama Rao,('), where this Court had to consider whether a High Court, in a proceeding for a writ nnder Art.
226 of the Constitntion, could interfere with the findings recorded by departmental authority in disciplinary proceeclings taken
agaiJ1it a Government se:vant. The Court held :-
(!) [1964] 3 S.C.R. 25.
740
SUPREME COURT REPORTS.
[1969] I S.C.R.
"But the departmental authorities are, if the enquiry
A
is otherwise properly held, the sole judges of facts and
if there be some legal evidence on which their findings
can be based, the adequacy or reliability of that evidence is not a matter which can be permitted to be canvassed before the High Court in a proceeding for a writ
under Art, 226 of the Constitution."
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In this connection, reference was also made to some cases
where this Court has held that a finding by a domestic tribunal
like an Enquiry Officer can be held to be perverse in those cases
also where the finding arrived at by the domestic tribunal is one
at which no reasonable person could have arrived on the material
before the tribunal. Thus, there are two cases where the findings
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of a domestic tribunal like the Enquiry Officer dealing with disciplinary proceedings against a workman can be interfered with,
and these two are cases in which the findings arc not based on
legal evidence or are such as no reasonable person could have
arrived at on the basis of the material before the Tribunal. In
each of these cases, the finilings are frcatod as perverse. It is in
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the light of these principles that we have to sec whether the Industrial Tribunal, Delhi, in the present case, was justified in refusing to accord approval to the order of dismissal which was
passed on thci basis of the evidence recorded by the Enquiry
Officer, Mr. Tipnis.
We have already reproduced above the charges that were
framed against the respondent and we proceed to examine how
far the Tribunal was correct in holding that the Enquiry Officer's
findings on these charges were without legal evidence and were
based merely on conjecture. The first charge consisted of the
following elements :-
( i) that on 14-1-1960, a sum of 30,400 was paid
to the respondent by the Assistant Cashier Nand
Kishorc out of the amount payable on a cheque
drawn bv M/s. Moo! Chand Hari Kishan for
Rs. 63.000;
(ii) that the respondent left the same day for
Muzaffarnagar;
(iii) that he left for Muzaffarnagar in company of
some persons to retire the bills drawn by M/s.
Gupta Iron Industries;
(iv) that these bills of M/s. Gupta Iron Industries
had been drawn on bogus firms;
(v) that these bills were retired by the drawer's representative who accompanied the respondent.
to M uzaffarnagar;
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CENTRAL BANK v. PRAKASH CHAND (Bhargava, J.)
741 •
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(vi) that the respondent failed to report these serious
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matters to higher authorities; and
(vii) that the respondent, instead, wrongly claimed
that he had never visited Muzaffarnagar.
The Tribunal in. its Order has held that on all these elements
the findings recorded by the Enquiry Officer were perverse, because they were based on hearsay evidence and on conjecture.
Learned counsel appearing for the Bank took us through the entire evidence recorded by the Enquiry Officer in order to canvass
his argument that these findings recorded by the Enquiry Officer
were based on the material before him. We have found that, on
two of these points, there was material before the Enquiry Officer
which could be held to be legal evidence and, consequently, we
have to hold that, on those two points, the Tribunal was incorrect
in recording its view that the findings of the Enquiry Officer were
defective and could be disregarded by the Tribunal. These two
are elements Nos. (ii) and (vii). The finding that the respondent left for Muzaffarnagar on 14-1-1960 was based on the inferences drawn by the Enquiry Officer from the records of the
Branch of the Bank in which the respondent was working on that
day.
The facts found by the Enquiry Officer were that, in the
cash receipt book of that date, there were only four entries in the
handwriting of the respondent that he made no payments on that
day; that, though he was in charge of the entire C3Jih department,
he had no knowledge that cash of Rs. 1 lac was, brought from the
Chandni Chowk Office of the Bank three times during that day;
that the Godown Keeper had also verified several vernacular signatures when it was the respondent's duty only to verify them;
and that the cash account of that day was closed by the Godown
Keeper instead of the respondent who should have done so if he
was in the Bank until the closure of the work on,.that day. These
circumstances were brought to the notice of the Enquiry Officer
from the records of the Bank by Management's witness,
J.J.
Daver.
In our opinion, the Tribunal was incorrect in holding
that the Enquiry Officer was acting on mere conjecture when, on
the basis of these circumstances, he drew the inference that the
respondent had left his work in the Naya Bazar Branch of the
Bank on 14-1-1960 after working there for a short time only.
Further, the Enquiry Officer in his report mentioned that three
witnesses, S. C. L. Chawla, Officer Incharge of the Muzaffarnagar
Office of the Bank, Inder Sain Jain, Cashier in the Muzaffarnagar
Office, and Nihalchand Jain, who was a Clerk in the Muzaffarnagar Office, had stated that they had seen the respondent at
Muzaffarnagar Office on 14-1-1960, and relied on their evidence
to. hold that the respondent did go to Muzaffarnagar on that day
leaving his work in th\' N aya Bazar Office of the Bank at Delhi.
The Tribunal criticised the evidence of the1e three witnesses and
742
SUPREME COURT REPORTS
[1969 J ! s.c.R.
came to the view that the Enquiry Officer was not justified in believing these witnesse' and in holding on the basis of their evidence that the respondent was in MuzaJiarnagar on that day. It
is clear that, in adopting this course, the Tribunal ellcccded its
powers. It was not for the Tribunal to sit in judgment over the
view taken by the Enquiry Oflicer about the value to be anaciled
to the evidence of these witnesses, even though the Tribunal
thought that these witnesses were unreliable because of circumstances found by the Tribunal in their evidence.
What the Tribunal at this stage did was to interfere with the finding of fact
recorded by the Enquiry Officer by making a fresh assessment of
the value to be attached to the evidence of these witnesses which
was not the function of the Tribunal when dealing with an application under s. 33(2)(b) of the Act. In these two respects, we
find that the Tribunal fell into an error.
,/ However, we find that, on the other ingredients of the first
charge, the Tribunal was justified in arriving at the conclusion
that the findings recorded by the Enquiry Officer were perverse.
The Tribunal gave the reason that these findings were based on
hearsay evidence. This view taken by the Tribunal appears to be
fully justified. 111e first and the third clements of the charge relating to payment of the sum of Rs. 30.400 to the respondent by
Nand Kishore, and of the respondent leaving for Muzaffarnagar
in the company of some persons in order to retire the bills drawn
by M/s. Gupta Iron Industries, were sought to be proved before
the Enquiry Officer by the evidence of the Internal Auditor, N.
N. Vazifdar, but the latter could not give any direct evidence, as
he wa' not present at the time when money was paid to the respondent or when the respondent left for Muzaffarnagar. He purported to prove these elements of the charge by deposing that a
statement was made to him by .Kand KLshore to the effect that
Nand Kishore had paid Rs. 30,400 to the respondent and that,
thereafter, the respondent left for Muzaffarnagar in the company
of two persons.
The Enquiry Officer accepted this evidence of
Vazifdar, but ignored the fact that Vazifdar's evidence was not
direct evidence in re,pect of the elements of the charge sought to
be proved, and that Vazifdar was only trying to prove a p~evious
statement of Nand Kishore which, as rightly held by the Tnbunal,
would amount to hearsay evidence.
Nand Kishorc himself was
al.'o examined as a witness, but, in his evidence, which was admLssible ~Ls substantive evidence. he made no statement that this
sum of Rs. 30.400 was paid by him to the respondent or that the
respondent left for Muzaffarnagar in the company of sOI?e persons to retire the bills drawn by M/s. Gupta Iron Industnes.
In
fact, .Kand Kishore even went further and denied that he had
made any statement to Vazifdar as stated by yazifdar .. '.he En.;
quiry Officer was, of course, entitled to form his own opm1on anu
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CENTRAL BANK v. PRAKASH CHAND (Bhargava, J.)
743
to believe Vazifdar in preference to Nand Kishore; but, on this
basis, the only finding that the domestic tribunal could record was
that N and Kishore' s statement given before him was incorrect and
that Nand Kishore had made statements to V azifdar as deposed
by Vazifdar. Those statements made by Nand Kishore to
Vazifdar could not, however, become substantive evidence to
prove the correctne"Ss of these elements forming part of the charge.
~t is in this connection that importance attaches to the views ex-
. pressed 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
mnst 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.
·
In the case of Khardah Co. Ltd. v. Their Workmen('), this
aspect was noted by this Court as follows :-
"Normally, evidence on which the charges are
sought to be proved must be led at such an enquiry in
the presence of the workman himself. It is true that in
the case of departmental enquiries held against public
servants, this Court has observed in the State of Mysore
v. S. S. Makapur( 2 ) that if the deposition of a witness
has been recorded by the enquiry officer in the absence
of the public servant and a copy thereof is given to him,
and an opportunity is given to him to cross-examine the
witness after he affirms in a general way the truth of his
statement already recorded, that would conform fo the
requirements of natural justice; but as has been emphasised by this Court in M/s. Kesoram Cotton Mills Ltd.
v. Gangadhar( 3 ) these observations must be applied
CJl [1964] 3 S.C.R. 506 at pp. 512-13.
(2) [1963] 2 S.C.R. 943.
(3) [1964] 2 S.C.R. 809.
• 744
SUPREME COURT REPORTS
(1969) I S.C.R.
with caution to enquiries held by domestic Tribunals
against the industrial employees.
In such enquiries, it
is desirable that all witnesses on whose testimony the
management relics in support of its charge against the
workman should be examined in his presence. Recording evidence in the prese.nce of the workman concerned.
serves a very important purpose.
The witness knows
that he giving evidence against a particular individual
who is present before him, and therefore, he is cautious
in making his statement.
Besides, when evidence is
recorded in the presence of the accused person, there is
no room for persuading the witness to make convenient
statements, and it is always easier for an accused person to cross-examine the witness if his evidence is recorded in his presence. Therefore, we would discourage
the idea of recording statements of witnesses ex parte
and then producing the witnesses before th.e employee
concerned for cross-examination after serving him with
such previously recorded statements, even though the
witnesses concerned make a general statement on the
latter occasion that their statements already recorded
correctly represent what they stated."
In the case of M/s. Kesoram Cotton Mills Ltd. v. Gan[iadhar
and Others( 1 ) referred to in the quotation above. it was held :-
"Even ·so, the purpose of rules of natural justice is
to safeguard the position of the person against whom an
inquiry is being conducted so that he is able to meet the
charge laid against him properly. Therefore. the nature
of the inquiry and the status of the person against whom
the inquiry is being held will have some bearing on
what should be the minimum requirements of the rules
of natural justice. Where. for example. lawyers are
permitted before a tribunal holding an inquiry and the
party against whom the inquiry is being held is represented by a lawyer, it may be possible to say that a
mere reading of the material to be used in the inquiry
may sometimes be sufficient [sec New Prakash Transport Co. v. New Suwarna Transport Co. (')] but where
in a domestic inquiry in an industrial matter lawyers
are not permitted, somethin!! more than a mere reading
of statements to be used will have to he required in
order to safeguard the interest of the industrial worker.
Further. we can take judicial notice of the fact that
many of our industrial workers arc illiterate and sometimes even the. representatives of labour union may not
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(!) {1964] 2 S.C.R. 809.
(2)
[19571 S.C.R. 98.
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CENTRAL BANK v. PRAKASH CHAND (Bhargava, J.)
74S
be present to defend them. In such a case, to read
over a prepared statement in a few minutes and then
ask the workmen to cross-examine would make a
mockery of the opportunity that the rules of natural
justice require that the workmen should have to defend
themselves. It seems to us, therefore, that when one is
dealing with domestic inquiries in industrial matters,
the proper course for the management is to examine the
witnesses from the beginning to the end in the presence
of the workman at the enquiry itself. Oral examination
always takes much longer than a mere reading of a, prepared statement of the same length and bring home the
evidence more clearly to the person against whom the
inquiry is being held.
Generally speaking,
therefore,.
we should expect a domestic inquiry by the management to be of this kind." ·
Proceeding further, the Court held :-.
"The minimum that we shall expect where witnesses are not examined from the very beginning at the inquiry in the presence of the person charged, is that the
person charged should be given a copy of the statements made by the witnesses which are to be used at
the inquiry well in advance before the inquiry begins
and when we say that the copy of the statements should
be given well in advance, we mean that it should be
given at least two days before the inquiry is to begin.
If this is not done and yet the witnesses are not
examined-in-chief fully at the inquiry, we do not think
that it can be said that principles of natural justice
which provide that the person charged should have an
adequate opportunity of defending himself are complied with in the case of a domestic inquiry in an industrial matter."
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 1'\'ay when the
witness is actually examined in the presence of the workman.
Applying this principle to the present case, it is clear that the
previous statement made by Nand Kishore to Vazifdar could not
• be taken as substantive evidence against the respondent, because
746
SUPREME COURT REPORTS
(1969] I S.C.R
Nand Kishore did not affirm the truth of that statement when he
appeared as a witness and, on the other hand, denied having
made that statement altogether.
Even though his denial may be
false, that fact would not convert his previous statement into substantive evidence to prove the charge against the respondent when
that statement was given to Vazifdar in the absence of the respondent and its truth is not aflirmed by him at the time of his
examination by the Enquiry Olliccr.
This statement of Nand
Kishore made to Vazifdar being ignored, it is clear that no other
material was available to the Enquiry Officer on the basis of
which he could have held that the swn of Rs. 30,400 was paid to
the respondent by !\and Kishore and that Nand Kishore, thereafter left for Muzaffamagar in the company of some persons with
that mont:y.
The fourth element of the charge was that the bills of M/s.
Gupta Iron Industries were drawn on bogus finns. We think tbat
the Tribunal is quite correct in its comment that the Enquiry
Officer, in holding that the bills were drawn on bogus firms, proceeded to do so without any evidence altogether.
In
fact,
the
Enquiry Officer has not referred to any material which was available to him before accepting the allegation against the respondent
that the bills had been drawn on bogus finns. Even in the course
of his submissions before us, learned counsel for the Bank was
unable to point out any evidence which would support this part
of the charge.
"The onlv evidence to which learned counsel could
refer was the statement. of Nihal Chand Jain who said that intimations of the bills were sent to the parties mentioned in the bills
by post, but were received
back unserved. Those intimations
were not produced before the Enquiry Officer and there is
no
mention of the reason why the postal authorities returned those
intimations. The mere return of the intimations could not possibly lead to the inference that the parties. to whom they were
addressed, were bogus. It is quite likely that their addresses were
incomplete. so that the postal authorities were
unahle to
trace
them.
Clearly. in these circumstances. the finding on this point
recorded by the Enquiry Officer was without any evidence or
material.
The same remarks apply with regard to the element of the
charge to the effect that the bills were retired hy the drawer's representative who accompanied the respondent to MuzafTarnagar.
The Enquiry Officer again does not mention any witness who may
have stated that the bills were retired by the drawer's representative or that that representative had accompanied the respondent.
The only evidence on this point. to which our attention was
drawn, was that of T.C. Jain who purported to prove a previous
statement of lndcr Sain Jain made to him.
According to T. C. •
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CENTRAL BANK V. PRAKASH CHAND (Bhargava, J.)
747
Jain, Inder Sain Jain had come to him and told him that Praka.>h
Chand Jain had come with the representative of the drawer to
retire the bills, This evidence of T. C. Jain was rightly not relied
upon or referred to by the Enquiry Officer, because Inder Sain
Jain, when he appeared as a witness before him, did not state
that he had made any such statements to T. C. Jain and, in his
examination, he excluded the possibility of his having made that
statement.
According to Inder Sain Jain's statement before the
Enquiry Officer, the respondent only accosted him once and bid
him "Jai Ram Ji Ki". He had no other talk with him. He also
stated that •this happened about two hours after the bills had been
retired.
Consequently, according to Inder Sain .Jain's statement
before the Enquiry Officer, t)le respondent was not present when
the bills were retired and there was no question of the respondent
accompanying the drawer's representative for retiring the bills.
Inder Sain Jain also did not state that the bills were retired by the
rer,resentative of the drawer.
Thus, on this point also, there is
no legal evidence on which a finding conld have been recorded
against the respondent.
So far as 'the suth element of the charge is concerned, that
becomes totally immaterial when it is found that the Enquiry
Officer's findings that the bills were drawn on bogus firms and that
they were retired by the drawer's representative accoi;npanying the
respondent are held to have been given without any legal evidence.
If the bills are not proved to have been drawn on bogus firms
and to have been retired by the drawer's representative wi'th the
aid of the respondent, there was nothing that the respondent was
required to convey to higher authorities.
So far as the second charge is concerned, we find that, similarly, the principal findings given by the Enquiry Officer are not
supported by any legal evidence.
The substance of the charge
was that the respondent encashed the cheque for Rs. 46,000
from the United Bank of India Ltd. and brought the cash after
11.30 a.m., but wrongly stated that he had brought the cash to the
Naya Bazar Office
of the
Central Bank before
11 a.m.
The
significance
of
the
time
was
emphasised
by
the
Enquiry Officer because, according to him, 11 a.m.
was
the
clearing time of another cheque of Rs. 15,000 which had been
marked as "good for payment" by the then Sub-Agent, Shiv
Kumar Sharma and the respondent had to show that cash in respect of the other cheque of Rs. 46,000 had been brought · to
the Bank at Naya Bazar for deposit in the account of the Drawer
of that cheque of Rs. 15 ,000 so as to justify the endorsement
made by the Sub-Agent that it was 'good for payment'.
We
examined the whole record and we are unable to find any evidence
• at all in support of the fact accepted by the Enquiry Officer that
the clearing time was 11 a.m.
On the contrary, the only evi-
748
St;PREME COURT REPORTS
[1969] I S.CR.
dence on this point, which was that of Management's witness
J. J. Daver, was to the effect that the clearing time was 11.30 a.m.
Ignoring this evidence altogether, the Enquiry Officer proceeded
to record his findings against the respondent on the basis that the
clearing time was 11 a.m. without at all referring to any evidence
in support of this fact.
The second significant point was as to
the time by which the respondent brought the cash in respect of
the cheque of Rs. 46,000/- from the United Bank of India Ltd.,
Chandni Chowk, to his own Central Bank Branch in :>laya Bazar.
No one gave any direct evidence as to the time when the respondent brought the money. The Enquiry Officer has proceeded to
hold that the money could not have been brought before 11 a.m.
because there is an endorsement on that cheque of Rs. 46,000/-
which, according to the Enquiry Officer. shows that that cheque
was presented for encashment at the United Bank of India Ltd.,
Chandni Chowk, at
11.15 a.m. This endorsement was also
examined by us as it appeared on the photo-stat copy of the
cheque.
The endorsement consists of a
number
37
bcnaath
which is noted lhc time 11.15 a.m. with a line drawn between
them.
From this endorsement alone, the Enquiry Officer
proceeded to infer that this cheque was presented for encashment at
11.15 a.m., even though no evidence at all was given by anyone
working in the United Bank of India Ltd .. Chandni Chowk, to
prove that this endorsement of time of 11.15 a.m. represented
the time of presentation of the cheque at that Bank.
ln
fact,
the Enquiry Officer has not made reference to any evidence at all
when holding that this cheque was presented for
payment at
I I a.m. at the counter of the United Bank of India. Learned
counsel for the Bank, however, referred us to the evidence of
J. J. Daver on this point.
Daver in this case was discharging a
dual function as a witness and as the prosecutor of the case again.st
the respondent for the Bank. In his evidence, Davcr stated that
this endorsement represented the time when the token was issued
to the person encashing the cheque.
Later, while prosecuting the
case against the respondent on behalf of the Banlc, Daver urged
before the Enquiry Officer that this endorsement of 11.15 a.m.
represented the time of presentation of the cheque and this was
noted by the Enquiry Officer in his proceedings.
Obviously. the
time of presentation of the cheque and the time of issue of the
token in respect of it would not be identical.
In fact, there can
be a lapse of an appreciable interval between the two. Jn spite <?f
this fact, the Enquiry Officer seems to have proceeded on the basis
of what was urged before him by J. J. Davcr while acting as prosecutor. and what was stated in that capadty was not evidence at
all.
The evidence given by Daver was different and that was not
relied upon by the Enquiry Officer.
On the face of it, the proper
evidence, by which it could have been proved that the cheque was •
either presented at 11.15 a.m. or that the token in respect of it
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CENTRAL BANK v. PRAKASH CHAND (Bhargava, !.)
749
was issued at 11.15 a.m., could have been obtained if the Bank
had cared to examine the person in charge of encashing the cheque
at the United Bank of India, Chandni Chowk. Daver was not
present when the cheque was presented and he has not explained
on what basis he stated in his evidence that this endorsement
represented the time when the token was issued. It is clear that,
on this charge also on the two crucial points of the time, viz., the
clearing time of the cheque of Rs. 15,000/- as well as the time
when the second cheque of Rs.