LexJANATHA BAZAR (SOUTH KANARA CENTRAL CO-OPERATIVE WHOLE SALE STORES LTD.) versus SECRETARY, SAHAKARI NOUKARARA SANGHA
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.. - JANA THA BAZAR (SOUTH KANARA CENTRAL CO-OPERATIVE WHOLE SALE STORES LTD.) v. SECRETARY,SAHAKARINOUKARARASANGHA SEPTEMBER 21,2000 [M.B. SHAH AND D.P: MOHAPATRA, JJ.] Labour Laws: Industrial Disputes Act, 1947: Section 11-A. A B c Breach of trust/loss of confidence-Minor penalty-Awarding a/- Discretion under S.11-A-Exercise of-By Labour Court-Management dismissed workmen on charges of breach of trust and misappropriation-- Labour court found the charges established-But in exercise of its discretion under S.11-A reinstated the workmen with 25% back wages in view of their D p'ast good record-High Court confirmed the award-Validity-Held, A proved act of misappropriation should not be taken lightly-- Misappropriation cannot be rewarded by reinstatement with full or part of back wages-Jn case of proved misappropriation, there is no question of considering past record-Labour court cannot substitute penalty imposed by employer in such E cases-Hence, High Court materially erred in confirming the award of the Labour Court~ervice Law. The appellant-Co-operative Society charged four of its employees with breach of trust and misappropriation of goods. After holding an enquiry the management dismissed all the four employees. Thereafter, the respondent- F employees' Union raised an industrial dispute and the Government made a reference to the Labour Court under Section IO of the Industrial Disputes Act, 1947. The Labour Court held that the charges against the employees were proved. However, the Labour Court in exercise of its discretionary power G under Section 11-A of the Act ordered their reinstatement with 25% back wages in view of their past good record. The High Court confirmed the award passed by the Labour Court. Hence this appeal. The following question arose before this Court 367 H 368 SUPREME COURT REPORTS [2000) SUPP. 3 S.C.R. A Whether the High Court was justified in confirming the order passed by the Labour Court reinstating the respondent-workmen with 25% back wages in spite of a specific finding of fact that the charges of breach of trust and misappropriation of goods for the vafoe given in the said charges had been clearly established? B Allowing the appeals, this Court HELD: 1. It would be an unjustified direction to reinstate an employee against whom charge of misappropriation is established. A proved act of misappropriation cannot be taken lightly even though a number of such C misappropriation cases rem·ain undisclosed and such employees or others amass wealth by such means. In any case, misappropriation cannot be rewarded or legalised by reinstatement in service with full or part of back wages. [369-D) 2. The Labour Court materially erred in setting aside the order passed D by the Management removing the workmen from the service and reinstating them with 25% back wages. Once an act of misappropriation is proved, may be for a small or large amount, there is no question ofsbowing uncalled for sympathy and reinstating the employees in service. [370-D) Municipal Committee, Bahadurgarh v. Krishnan Behari, [1996)2 SCC E 714; UP. State Road Transport Corporation v. Basudev Chaudhary, [1997)11 SCC 370 and Punjab Dairy Development Corporation Ltd. v. Kala Singh, [1997)6 sec 159, relied on. . 3.1. In a case of proven misappropriation, there is no question of considering past record. It is the discretion of the employer to consider the F same in an appropriate case, but the Labour Court cannot substitute the penalty imposed by the employer in such cases. [371-G] G 3.2. The High Court materially erred in confirming the directions given by the Labour Court in reinstating the respondents-workmen with 25% back wages. [371-E) CIVIL APPEL LA TE JURISDICTION : Civil Appeal No. 5224- 5225 of 2000 From the Judgment and Order dated 18.9.98 of the Karnataka High Court in W.A. No. 8795/96 and 1954of1997. H S. Ganesh, Rajan Narain, Ms. Padmini Kumari, Ms. Keerthi Narashimhan - .. - JANATHA BAZAR v. SECRETARY, SAHKARI NOUKARARA SANGHA [SHAH, J.] 369 for the Appellants. A K. Subba Rao, Girish Ananthamurthy and P.P. Singh for the Respondents .. The Judgment of the Court was delivered by SHAH, J. Leave granted. B Heard learned counsel for the parties exhaustively. The question involved in these appeals is-Whether High Court was justified in confirming the order passed by the Labour Court reinstating the respondents-workmen with 25% back wages inspite
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