It is contended by respondent by placing reliance on
the judgment of the Supreme Court in the matter of P. T. Thomas Vs.
Thomas Job reported in AIR 2005 Supreme Court 3575 that judicial
review of the decision arrived at Lok Nyayalaya is not permissible on the
ground as raised in the writ petition. The Supreme Court, referring to the
decision in the matter of Board of Trustees of the Port of Visakhapatnam Vs.
Presiding Officer, Permanent, Lok AdalatcumSecretary,
District Legal
Services Authority, Visakhapatnam
and another reported in 2000(5) ALT
577, as observed that “The award is enforceable as a decree and it is final.
In all fours, the endeavour is only to see that the disputes are narrowed
down and make the final settlement so that the parties are not again driven
to further litigation or any dispute. Though the award of Lok Adalat is not
a result of a contest on merits just as a regular suit by a Court on a regular
trial, however, it is as equal and on par with a decree on compromise and
will have the same binding effect and conclusive just as the decree passed
on the compromises cannot be challenged in a regular appeal, the award of
the Lok Adalat being akin to the same, cannot be challenged by any regular
remedies available under law including invoking Article 226 of the
Constitution of India challenging the correctness of the award on any
ground. Judicial review cannot be invoked in such awards especially on the
grounds as raised in this writ petition.”
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
WRIT PETITION NO. 4835 OF 2013
Jalna District Central Cooperative
Bank Ltd.
VERSUS
Umesh s/o Nanasaheb Kawade
CORAM : R. M. BORDE &
A. M. BADAR, JJ.
PRONOUNCED ON : 2nd MAY, 2014.
Citation;2014(4) MHLJ 807
1. Heard.
2. Rule. Rule made returnable forthwith. With the consent of the
parties, petition is taken up for final disposal at admission stage.
3. Petitioner – Jalna District Central Cooperative
Bank Ltd., has
presented instant petition seeking quashment of the award dated
08.11.2009 passed by the Lok Nyayalaya thereby settling dispute between
the bank and respondent and directing disposal of complaint ULP No.
13/2009 presented by respondent – employee, in terms of compromise
decree.
4. Respondent was initially appointed as clerk with the petitioner –
bank in the year 1978 and later on he was promoted as Banking Officer
GradeII
and thereafter as Banking Officer GradeI.
At the relevant time in
the year 2008, respondent was posted as Branch Manager at Market Yard
branch, Jalna. On receipt of complaint, it was noticed by the petitioner –
bank that respondent in collusion with some other employees of the bank
has illegally withdrawn amount from the accounts of few customers. The
amount was stated to have been deposited in the account of the customers
under the scheme floated by the Government for providing aid to weaker
section. Respondent was placed under suspension and an enquiry was
conducted at the instance of the independent enquiry officer. Respondent
was served with chargesheet
on 24.01.2009 and after holding due enquiry,
Enquiry Officer submitted his report to the General Manager on
04.03.2009. On receipt of enquiry report, the bank took decision of
dismissing respondent from services. Order of dismissal issued by the
bank was challenged by respondent by tendering complaint bearing ULP
No. 13/2009 to the Labour Court, Jalna. In the meanwhile, since the bank
was facing economic hardship and it was revealed that the affairs of the
bank were not carried out in proper manner, the Commission of Cooperation
passed an order directing appointment of Board of
Administrators. Composition of Board was later on changed and one Shri
S. S. Kshirsagar was entrusted with the charge of administration of
petitioner – bank. It is stated that resolution came to be passed in the
general body meeting convened by the Board on 11.08.2009 for holding reenquiry
in respect of allegations levelled against respondent through the
Government officer. Accordingly, the President of the Administrative Board
appointed Assistant Registrar, Cooperative
Societies, Bhokardan as
Enquiry Officer and directed to submit the report. Assistant Registrar, Cooperative
Societies, Bhokardan, submitted his report on 14.10.2009
recommending imposition of lesser punishment. The District Deputy
Registrar, Jalna, issued a letter to the President of the Administrative Board
of which he himself was the President thereby recommending reinstatement
of respondent and directing imposition of punishment of
stoppage of one increment. Resolution came to be passed in the meeting of
Administrative Board resolving to reinstate
respondent and imposition of
lesser punishment i.e. stoppage of one increment and disentitling
the
respondent to claim backwages. Complaint ULP No. 13/2009 presented by
respondent was placed before Lok Nyayalaya on 08.11.2009 and in view of
resolution adopted by the Administrative Board on 13.10.2009, order in
terms of settlement came to be passed by the Lok Nyayalaya thereby
disposing of complaint ULP No. 13/2009.
5. According to petitioner, reinstatement
of respondent in service in
pursuance to settlement before Lok Nyayalaya is a fraudulent act by
respondent in collusion with Administrative Board. It is the contention of
petitioner that as a result of various complaints received from the members
relating to maladministration
by Three Member Administrative Board,
direction was issued for conducting special audit and accordingly, one Shri
R. T. Shelke, Special Auditor Group – I, Cooperative
Societies, was
appointed as Enquiry Officer. Enquiry Officer has commented upon the
decision of the Administrative Board of settling the matter with respondent
and directing his reinstatement.
It is observed in the report that the fact
of initiation of criminal prosecution against respondent for committing misappropriation
of funds was not brought to the notice of the general body
and a decision was taken for taking lenient view against respondent. The
District Deputy Registrar, on receipt of report directed that the matter be
placed before the general body of the society for taking appropriate decision
in the matter in the light of the report by the Special Auditor. General Body
Meeting of the society was held on 13.08.2011 wherein it was resolved to
authorise Chairman of the Managing Board of the bank to take appropriate
decision in respect of course to be adopted against respondent in the light
of the report of the Special Auditor. The Managing Committee of the bank
thereupon resolved on 28.09.2011 to dismiss respondent and other
employees from service. Order of dismissal in pursuance to the decision
by the Managing Committee was served on respondent on 30.09.2011.
Respondent challenged the order of dismissal issued by petitioner – bank in
complaint ULP No. 14/2011 presented to the Labour Court. Penalty of
dismissal from services imposed against respondent was without holding
any enquiry and, according to the employee, it amounts to double jeopardy.
Complaint presented by respondent was contested by the bank contending
that compromise arrived at Lok Nyayalaya was fraudulent. It is alleged that
respondent – employee in collusion with Board of Administrator has
colluded in settling the dispute before Lok Nyayalaya. Labour Court,
however, after observing the procedure prescribed in that behalf, by
judgment dated 29.06.2012 allowed the complaint and directed re
instatement of respondent – employee with continuity and backwages with
effect from 30.09.2011. Order passed by the Labour Court was subjected to
challenge in Revision ULP No. 42/2012 presented by petitioner – bank.
Revision application was partly allowed. The order passed by the Labour
Court directing reinstatement
of respondent with continuity in service is
maintained, however, it is declared that respondent – employee shall be
entitled to 50% of the backwages from 30.09.2011 till the date of his reinstatement.
Order passed by the Revisional Court was subject matter of
challenge before the learned Single Judge of this Court at the instance of
employer – bank as well as the employee. Learned Single Judge directed
dismissal of the petition presented by employer however, petition presented
by employee came to be allowed and the order refusing to grant 50%
backwages came to be set aside thereby holding the employee entitled to
receive full backwages. Order passed by the learned Single Judge is
subject matter of challenge in Letters Patent Appeal presented by employer
– bank separately. In the instant petition, however, challenge is raised by
the employer to the award passed in the Lok Nyayalaya on 08.11.2009
thereby settling the dispute raised in complaint ULP No. 13/2009 and the
resolution no. 18 passed in the meeting dated 30.10.2009.
6. It is the contention of petitioner – bank that respondent is charged
with misappropriation
of funds which is a serious issue and further that
he is being prosecuted for committing misappropriation
of funds of the
bank in criminal case lodged against him. It is contended that respondent
in collusion with Administrative Committee headed by Shri Kshirsagar was
instrumental in recording decision in the form of resolution no. 18 to reinstate
respondent. It is contended that it was the duty of the
Administrative Committee to point out to the general body that the
allegations levelled against respondent are of serious nature and that he is
being prosecuted in criminal case. Withholding of material information
from general body, according to petitioner, is fraudulent act by the members
of the Administrative Committee in collusion with respondent. In
pursuance to the decision of the general body the Chairman of the
Administrative Committee directed appointment of Assistant Registrar, Cooperative
societies, to conduct reenquiry
and submit the report. It is
contended that when there was earlier enquiry which was concluded there
was no reason for the Administrator to direct fresh enquiry. On receipt of
the report of the Enquiry Officer the Chairman of the Administrative
Committee in his capacity of District Deputy Registrar, recommended reinstatement
of respondent. Resolution came to be passed on 30.10.2009 in
the meeting of Administrative Committee headed by District Deputy
Registrar to enter into settlement with respondent. It was resolved to
reduce the punishment of dismissal from service and direct stoppage of one
yearly increment. It was resolved that the employee shall not be paid
backwages during suspension period till reinstatement.
It was resolved to
reinstate
the employee with continuity in service subject to condition that
the employee shall withdraw the complaint lodged against bank. In
pursuance to the resolution adopted in the meeting of the general body, the
matter was placed before Lok Nyayalaya and settlement was arrived at.
Respondent – employee has been reinstated
in service in pursuance to the
order issued in Lok Nyayalaya thereby disposing of complaint in terms of
the settlement. Respondent agreed for penalty of stoppage of one increment
and also agreed not to claim bakcwages during the period of suspension till
the date of reinstatement.
7. Although petitioner contends that the matter was again scrutinized
by the Special Auditor who has recommended appropriate action in the
year 2011, nothing has transpired till the year 2014. Respondent has been
reinstated
in employment on 09.11.2009. The Managing Committee of the
bank in view of authorisation issued by the general body proceeded to
direct dismissal of respondent and other employees without holding any
enquiry. As stated above, the decision taken by the bank in respect of
dismissal of employees was subject matter of challenge in complaint ULP
No. 14/2011 which has been dismissed and challenge to the said order has
been turned down by the Revisional Court as well as this Court. While
opposing complaint ULP No. 14/2011 it was canvassed by the bank that
the decision before Lok Nyayalaya of settling the matter and reinstating
respondent – employee is fraudulent and is a result of collusion between
respondent and the Administrator. However, bank though raised
contention in respect of fraud and collusion, failed to adduce any evidence
in that regard before the Labour Court. It is observed by the Labour Court
while deciding the matter that since the dispute pending before the Labour
Court in the shape of complaint ULP no. 13/2009 was settled before Lok
Nyayalaya and the order of dismissal came to be set aside by the act of the
parties, earlier enquiry report which was the basis of order of termination
also shall be deemed to be set aside. It was not open for the Board of
Directors to consider earlier report of enquiry and direct termination of
services of employee. The order directing reinstatement
of employees and
setting aside order passed by the bank on 30.09.2011 has attained finality
since the petition presented by bank has been dismissed by learned Single
Judge. It is to be taken note of that once the employee has undergone
punishment for the alleged misconduct,
he cannot be again punished for
the same cause. In the instant matter, as per the decision of the Lok
Nyayalaya, lighter punishment of stoppage of one increment was imposed,
respondent – employee was held disentitled
to claim backwages from the
date of issuance of order of suspension till the date of his reinstatement.
The employee accepted the punishment and has undergone the same. He
has been reinstated
in the year 2009, however, it was not open for the
bank to punish the employee for the same cause again. Imposition of
punishment at latter point by petitioner amounted to double jeopardy
which cannot be permitted.
8. So far as allegations of fraud made by petitioner in the petition are
concerned, it is a matter of detailed investigation. Petitioner – bank failed
to substantiate the allegations of fraud although such contentions were
raised before the Labour Court. In the instant matter also, merely on the
basis of pleadings, it cannot be inferred that respondent is guilty of
committing fraud in collusion with the Board of Administrators. Reference
can be made to the Judgment of the Apex Court in the matter of Bhaurao
Dagdu Paralkar Vs. State of Maharashtra and others reported in (2005) 7
Supreme Court Cases 605. The Apex Court in paragraph nos. 9 to 16 of
the judgment has observed thus :
“9. By “fraud” is meant an intention to deceive;
whether it is from any expectation of advantage to
the party himself or from ill will towards the other is
immaterial. The expression “fraud” involves two
elements, deceit and injury to the person deceived.
Injury is something other than economic loss, that
is, deprivation of property, whether movable or
immovable or of money and it will include any harm
whatever caused to any person in body, mind,
reputation or such others. In short, it is a noneconomic
or nonpecuniary
loss. A benefit or
advantage to the deceiver, will almost always cause
loss or detriment to the deceived. Even in those rare
cases where there is a benefit or advantage to the
deceiver, but no corresponding loss to the deceived,
the second condition is satisfied. [ See Vimla (Dr.) v.
Delhi Admn. and Indian Bank v. Satyam Fibres
(India) (P) Ltd.]
10. A “fraud” is an act of deliberate deception with
the design of securing something by taking unfair
advantage of another. It is a deception in order to
gain by another’s loss. It is a cheating intended to
get an advantage. (See S. P. Chengalvaraya Naidu v.
Jagannath.)
11. “Fraud” as is well known vitiates every solemn
act. Fraud and justice never dwell together. Fraud
is a conduct either by letters or words, which
induces the other person or authority to take a
definite determinative stand as a response to the
conduct of the former either by words or letters. It is
also well settled that misrepresentation itself
amounts to fraud. Indeed, innocent
misrepresentation may also give reason to claim
relief against fraud. A fraudulent misrepresentation
is called deceit and consists in leading a man into
damage by wilfully or recklessly causing him to
believe and act on falsehood. It is a fraud in law if a
party makes representations, which he knows to be
false, and injury ensues therefrom although the
motive from which the representations proceeded
may not have been bad. An act of fraud on court is
always viewed seriously. A collusion or conspiracy
with a view to deprive the rights of others in relation
to a property would render the transaction void ab
initio. Fraud and deception are synonymous.
Although in a given case a deception may not
amount to fraud, fraud is anathema to all equitable
principles and any affair tainted with fraud cannot
be perpetuated or saved by the application of any
equitable doctrine including res judicata. (See Ram
Chandra Singh v. Savitri Devi.)
12. In Shrisht Dhawan v. Shaw Bros., it was
observed as follows : (SCC p. 553, para 20)
“Fraud” and collusion vitiate even the most
solemn proceedings in any civilised system of
jurisprudence. It is a concept descriptive of human
conduct. Michael Lelvi likens a fraudster to Milton’s
sorcerer, Camus, who exulted in his ability to, “wing
me into the easyhearted
man and trap him into
snares”. It has been defined as an act of trickery or
deceit. In Webster’s Third New International
Dictionary “fraud” in equity has been defined as an
act oromission to act or concealment by which one
person obtains an advantage against conscience over
another or which equity or public policy forbids as
being prejudicial to another. In Black’s Law
Dictionary, “fraud” is defined as an intentional
perversion of truth for the purpose of inducting
another in reliance upon it to part false
representation of a matter of fact whether by words
or by conduct, by false or misleading allegations, or
by concealment of that which should have been
disclosed, which deceives and is intended to deceive
another so that he shall act upon it to his legal
injury. In Concise Oxford Dictionary, it has been
defined as criminal deception,use of false
representation to gain unjust advantage; dishonest
artifice or trick. According to Halsbury’s Laws of
England, a representation is deemed to have been
false, and therefore a misrepresentation, if it was at
the material date false in substance and in fact.
Section 17 of the Contract Act, 1872 defines “fraud”
as an act committed by a party to a contract with
intent to deceive another. From the dictionary
meaning or even otherwise fraud arises out of the
deliberate active role of the representatator about a
fact, which he knows to be untrue yet he succeeds in
misleading the representee by making him believe it
to be true. The representation to become fraudulent
must be of fact with knowledge that in was false. In
a leading English case i.e. Derry v. Peek what
constitutes “fraud” was described thus : (All ER p.
22 BC)
“Fraud is proved when it is shown that a false
representation has been made (i) knowingly, or
(ii) without belief in its truth, or (iii) recklessly,
careless whether it be true or false.”
But “fraud” in public law is not the same as “fraud”
in private law. Nor can the ingredients, which
establish “fraud” in commercial transaction, be of
assistance in determining fraud in administrative
law. It has been aptly observed by Lord Bridge in
Khawaja v. Secy. of State for Home Deptt. that it is
dangerous to introduce maxims of common law as to
the effect of fraud while determining fraud in relation
of statutory law. “Fraud” in relation to the statute
must be a colourable transaction to evade the
provisions of a statute.
“ ‘If a statute has been passed for some
one particular purpose, a court of law will not
countenance any attempt which may be made to
extend the operation of the Act to something else
which is quite foreign to its object and beyond its
scope.’ Present day concept of fraud on statute has
veered round abuse of power or mala fide exercise of
power. It may arise due to overstepping the limits of
power or defeating the provision of statute by
adopting subterfuge or the power may be exercised
for extraneous or irrelevant considerations. The
colour of fraud in public law or administrative law,
as it is developing, is assuming different shades. It
arises from a deception committed by disclosure of
incorrect fact knowingly and deliberately to invoke
exercise of power and procure an order from an
authority or tribunal. It must result in exercise of
jurisdiction which otherwise would not have been
exercised. That is misrepresentation must be in
relation to the conditions provided in a section on
existence or nonexistence
of which power can be
exercised. But nondisclosure
of a fact not required
by a statute to be disclosed may not amount to
fraud. Even in commercial transactions nondisclosure
of every fact does not vitiate the
agreement. ‘In a contract every person must look for
himself and ensure that he acquires the information
necessary to avoid bad bargain.’ In public law the
duty is not to deceive.” (See Shrisht Dhawan v. Shaw
Bros. SCC p. 554, para 20.)
13. This aspect of the matter has been considered
recently by this Court in Roshan Deen v. Preeti Lal,
Ram Preeti Yadav v. U.P. Board of High School and
Intermediate Education, Ram Chandra Singh case
and Ashok Leyland Ltd. v. State of T.N.
14. Suppression of a material document would
also amount to a fraud on the court. (See
Gowrishkanar v. Joshi Amba Shankar Family Trust
and S.P. Chengalvaraya Naiu case.)
15. “Fraud” is a conduct either by letter or words,
which induces the other person or authority to take
a definite determinative stand as a response to the
conduct of the former either by words or letter.
Although negligence is not fraud but it can be
evidence on fraud; as observed in Ram Preeti Yadav
case.
16. In Lazarus Estates Ltd. v. Beasley Lord
Denning observed at QB pp. 712 and 713; (All ER p.
345 C)
“No judgment of a court, no order of a
minister, can be allowed to stand if it has been
obtained by fraud. Fraud unravels everything.”
In the same judgment Lord Parker, L.J. observed
that fraud vitiates all transactions known to the law
of however high a degree of solemnity. (p. 722)
These aspects were recently highlighted in State of
A.P. v. T. Suryachandra Rao.
9. Placing reliance on the judgment in the matter of T. Vijendradas and
another Vs. M. Subramanian and others reported in 2008(1) All M.R. 446,
petitioner contends that judgment, decree or order obtained by playing
fraud on the Court is a nullity, non est in the eye of law. Such a judgment,
decree or order by the first Court or by the final Court has to be treated as
nullity by every Court, superior or inferior. It can be challenged in any
Court, at any time, in appeal, revision, writ or even in collateral
proceedings. In the instant matter, it cannot be said that petitioner has
established fraud at the instant of somebody on the Court. However what
is alleged is that there is collusion between respondent and the Board of
Administrators and they together persuaded the Court to settle the matter.
Placing reliance on the judgment in the matter of A. V. Papayya Sastry and
others Vs. Government of A.P. and others reported in AIR 2007 Supreme
Court 1546 it is contended that judgment, decree or order obtained by
fraud is to be treated as nullity, whether by the Court of first instance or by
the final Court. And it has to be treated as non est by every Court,
superior or inferior. It is contended by respondent by placing reliance on
the judgment of the Supreme Court in the matter of P. T. Thomas Vs.
Thomas Job reported in AIR 2005 Supreme Court 3575 that judicial
review of the decision arrived at Lok Nyayalaya is not permissible on the
ground as raised in the writ petition. The Supreme Court, referring to the
decision in the matter of Board of Trustees of the Port of Visakhapatnam Vs.
Presiding Officer, Permanent, Lok AdalatcumSecretary,
District Legal
Services Authority, Visakhapatnam
and another reported in 2000(5) ALT
577, as observed that “The award is enforceable as a decree and it is final.
In all fours, the endeavour is only to see that the disputes are narrowed
down and make the final settlement so that the parties are not again driven
to further litigation or any dispute. Though the award of Lok Adalat is not
a result of a contest on merits just as a regular suit by a Court on a regular
trial, however, it is as equal and on par with a decree on compromise and
will have the same binding effect and conclusive just as the decree passed
on the compromises cannot be challenged in a regular appeal, the award of
the Lok Adalat being akin to the same, cannot be challenged by any regular
remedies available under law including invoking Article 226 of the
Constitution of India challenging the correctness of the award on any
ground. Judicial review cannot be invoked in such awards especially on the
grounds as raised in this writ petition.” In order to contend that the order
of dismissal issued on second occasion by the petitioner – bank amounts to
double jeopardy, reliance is placed on judgment of the Division Bench of
this Court in the matter of Shrinivasan Ranganathan vs. AIR India Ltd.
Bombay and another reported in 2010(4) Mh.L.J. 325. It is contended that
on issuance of order of dismissal on the first occasion, respondentemployee
approached Labour Court by presenting complaint and the
complaint presented by respondent was settled in view of resolution no. 18
adopted by the Board. Punishment of dismissal from service has been
reduced to stoppage of one increment and respondents were held disentitled
to claim bakcwages during the period of suspension. Once lesser
punishment is imposed and respondent is reinstated
in employment, it is
not open for the petitionerbank
to impose harsher punishment once again
for the same cause or on the same allegations and it would amount to
double jeopardy.
10. It is to be taken note of that respondent herein is reinstated
in
employment in the year 2009 whereas instant petition challenging the
decision in respect of disposal of complaint in view of settlement before Lok
Nyayalaya on 18.11.2009 is subjected to challenge in the petition presented
in the year 2013. In the meanwhile, respondent – employee has retired on
attaining age of super annuation. At this belated stage and for the reasons
recorded above, petition does not deserve consideration. Petition is devoid
of substance hence stands rejected. Rule discharged.
11. Pending civil application, if any, does not survive and stands
disposed of.
( A. M. BADAR ) ( R. M. BORDE )
the judgment of the Supreme Court in the matter of P. T. Thomas Vs.
Thomas Job reported in AIR 2005 Supreme Court 3575 that judicial
review of the decision arrived at Lok Nyayalaya is not permissible on the
ground as raised in the writ petition. The Supreme Court, referring to the
decision in the matter of Board of Trustees of the Port of Visakhapatnam Vs.
Presiding Officer, Permanent, Lok AdalatcumSecretary,
District Legal
Services Authority, Visakhapatnam
and another reported in 2000(5) ALT
577, as observed that “The award is enforceable as a decree and it is final.
In all fours, the endeavour is only to see that the disputes are narrowed
down and make the final settlement so that the parties are not again driven
to further litigation or any dispute. Though the award of Lok Adalat is not
a result of a contest on merits just as a regular suit by a Court on a regular
trial, however, it is as equal and on par with a decree on compromise and
will have the same binding effect and conclusive just as the decree passed
on the compromises cannot be challenged in a regular appeal, the award of
the Lok Adalat being akin to the same, cannot be challenged by any regular
remedies available under law including invoking Article 226 of the
Constitution of India challenging the correctness of the award on any
ground. Judicial review cannot be invoked in such awards especially on the
grounds as raised in this writ petition.”
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
WRIT PETITION NO. 4835 OF 2013
Jalna District Central Cooperative
Bank Ltd.
VERSUS
Umesh s/o Nanasaheb Kawade
CORAM : R. M. BORDE &
A. M. BADAR, JJ.
PRONOUNCED ON : 2nd MAY, 2014.
Citation;2014(4) MHLJ 807
1. Heard.
2. Rule. Rule made returnable forthwith. With the consent of the
parties, petition is taken up for final disposal at admission stage.
3. Petitioner – Jalna District Central Cooperative
Bank Ltd., has
presented instant petition seeking quashment of the award dated
08.11.2009 passed by the Lok Nyayalaya thereby settling dispute between
the bank and respondent and directing disposal of complaint ULP No.
13/2009 presented by respondent – employee, in terms of compromise
decree.
4. Respondent was initially appointed as clerk with the petitioner –
bank in the year 1978 and later on he was promoted as Banking Officer
GradeII
and thereafter as Banking Officer GradeI.
At the relevant time in
the year 2008, respondent was posted as Branch Manager at Market Yard
branch, Jalna. On receipt of complaint, it was noticed by the petitioner –
bank that respondent in collusion with some other employees of the bank
has illegally withdrawn amount from the accounts of few customers. The
amount was stated to have been deposited in the account of the customers
under the scheme floated by the Government for providing aid to weaker
section. Respondent was placed under suspension and an enquiry was
conducted at the instance of the independent enquiry officer. Respondent
was served with chargesheet
on 24.01.2009 and after holding due enquiry,
Enquiry Officer submitted his report to the General Manager on
04.03.2009. On receipt of enquiry report, the bank took decision of
dismissing respondent from services. Order of dismissal issued by the
bank was challenged by respondent by tendering complaint bearing ULP
No. 13/2009 to the Labour Court, Jalna. In the meanwhile, since the bank
was facing economic hardship and it was revealed that the affairs of the
bank were not carried out in proper manner, the Commission of Cooperation
passed an order directing appointment of Board of
Administrators. Composition of Board was later on changed and one Shri
S. S. Kshirsagar was entrusted with the charge of administration of
petitioner – bank. It is stated that resolution came to be passed in the
general body meeting convened by the Board on 11.08.2009 for holding reenquiry
in respect of allegations levelled against respondent through the
Government officer. Accordingly, the President of the Administrative Board
appointed Assistant Registrar, Cooperative
Societies, Bhokardan as
Enquiry Officer and directed to submit the report. Assistant Registrar, Cooperative
Societies, Bhokardan, submitted his report on 14.10.2009
recommending imposition of lesser punishment. The District Deputy
Registrar, Jalna, issued a letter to the President of the Administrative Board
of which he himself was the President thereby recommending reinstatement
of respondent and directing imposition of punishment of
stoppage of one increment. Resolution came to be passed in the meeting of
Administrative Board resolving to reinstate
respondent and imposition of
lesser punishment i.e. stoppage of one increment and disentitling
the
respondent to claim backwages. Complaint ULP No. 13/2009 presented by
respondent was placed before Lok Nyayalaya on 08.11.2009 and in view of
resolution adopted by the Administrative Board on 13.10.2009, order in
terms of settlement came to be passed by the Lok Nyayalaya thereby
disposing of complaint ULP No. 13/2009.
5. According to petitioner, reinstatement
of respondent in service in
pursuance to settlement before Lok Nyayalaya is a fraudulent act by
respondent in collusion with Administrative Board. It is the contention of
petitioner that as a result of various complaints received from the members
relating to maladministration
by Three Member Administrative Board,
direction was issued for conducting special audit and accordingly, one Shri
R. T. Shelke, Special Auditor Group – I, Cooperative
Societies, was
appointed as Enquiry Officer. Enquiry Officer has commented upon the
decision of the Administrative Board of settling the matter with respondent
and directing his reinstatement.
It is observed in the report that the fact
of initiation of criminal prosecution against respondent for committing misappropriation
of funds was not brought to the notice of the general body
and a decision was taken for taking lenient view against respondent. The
District Deputy Registrar, on receipt of report directed that the matter be
placed before the general body of the society for taking appropriate decision
in the matter in the light of the report by the Special Auditor. General Body
Meeting of the society was held on 13.08.2011 wherein it was resolved to
authorise Chairman of the Managing Board of the bank to take appropriate
decision in respect of course to be adopted against respondent in the light
of the report of the Special Auditor. The Managing Committee of the bank
thereupon resolved on 28.09.2011 to dismiss respondent and other
employees from service. Order of dismissal in pursuance to the decision
by the Managing Committee was served on respondent on 30.09.2011.
Respondent challenged the order of dismissal issued by petitioner – bank in
complaint ULP No. 14/2011 presented to the Labour Court. Penalty of
dismissal from services imposed against respondent was without holding
any enquiry and, according to the employee, it amounts to double jeopardy.
Complaint presented by respondent was contested by the bank contending
that compromise arrived at Lok Nyayalaya was fraudulent. It is alleged that
respondent – employee in collusion with Board of Administrator has
colluded in settling the dispute before Lok Nyayalaya. Labour Court,
however, after observing the procedure prescribed in that behalf, by
judgment dated 29.06.2012 allowed the complaint and directed re
instatement of respondent – employee with continuity and backwages with
effect from 30.09.2011. Order passed by the Labour Court was subjected to
challenge in Revision ULP No. 42/2012 presented by petitioner – bank.
Revision application was partly allowed. The order passed by the Labour
Court directing reinstatement
of respondent with continuity in service is
maintained, however, it is declared that respondent – employee shall be
entitled to 50% of the backwages from 30.09.2011 till the date of his reinstatement.
Order passed by the Revisional Court was subject matter of
challenge before the learned Single Judge of this Court at the instance of
employer – bank as well as the employee. Learned Single Judge directed
dismissal of the petition presented by employer however, petition presented
by employee came to be allowed and the order refusing to grant 50%
backwages came to be set aside thereby holding the employee entitled to
receive full backwages. Order passed by the learned Single Judge is
subject matter of challenge in Letters Patent Appeal presented by employer
– bank separately. In the instant petition, however, challenge is raised by
the employer to the award passed in the Lok Nyayalaya on 08.11.2009
thereby settling the dispute raised in complaint ULP No. 13/2009 and the
resolution no. 18 passed in the meeting dated 30.10.2009.
6. It is the contention of petitioner – bank that respondent is charged
with misappropriation
of funds which is a serious issue and further that
he is being prosecuted for committing misappropriation
of funds of the
bank in criminal case lodged against him. It is contended that respondent
in collusion with Administrative Committee headed by Shri Kshirsagar was
instrumental in recording decision in the form of resolution no. 18 to reinstate
respondent. It is contended that it was the duty of the
Administrative Committee to point out to the general body that the
allegations levelled against respondent are of serious nature and that he is
being prosecuted in criminal case. Withholding of material information
from general body, according to petitioner, is fraudulent act by the members
of the Administrative Committee in collusion with respondent. In
pursuance to the decision of the general body the Chairman of the
Administrative Committee directed appointment of Assistant Registrar, Cooperative
societies, to conduct reenquiry
and submit the report. It is
contended that when there was earlier enquiry which was concluded there
was no reason for the Administrator to direct fresh enquiry. On receipt of
the report of the Enquiry Officer the Chairman of the Administrative
Committee in his capacity of District Deputy Registrar, recommended reinstatement
of respondent. Resolution came to be passed on 30.10.2009 in
the meeting of Administrative Committee headed by District Deputy
Registrar to enter into settlement with respondent. It was resolved to
reduce the punishment of dismissal from service and direct stoppage of one
yearly increment. It was resolved that the employee shall not be paid
backwages during suspension period till reinstatement.
It was resolved to
reinstate
the employee with continuity in service subject to condition that
the employee shall withdraw the complaint lodged against bank. In
pursuance to the resolution adopted in the meeting of the general body, the
matter was placed before Lok Nyayalaya and settlement was arrived at.
Respondent – employee has been reinstated
in service in pursuance to the
order issued in Lok Nyayalaya thereby disposing of complaint in terms of
the settlement. Respondent agreed for penalty of stoppage of one increment
and also agreed not to claim bakcwages during the period of suspension till
the date of reinstatement.
7. Although petitioner contends that the matter was again scrutinized
by the Special Auditor who has recommended appropriate action in the
year 2011, nothing has transpired till the year 2014. Respondent has been
reinstated
in employment on 09.11.2009. The Managing Committee of the
bank in view of authorisation issued by the general body proceeded to
direct dismissal of respondent and other employees without holding any
enquiry. As stated above, the decision taken by the bank in respect of
dismissal of employees was subject matter of challenge in complaint ULP
No. 14/2011 which has been dismissed and challenge to the said order has
been turned down by the Revisional Court as well as this Court. While
opposing complaint ULP No. 14/2011 it was canvassed by the bank that
the decision before Lok Nyayalaya of settling the matter and reinstating
respondent – employee is fraudulent and is a result of collusion between
respondent and the Administrator. However, bank though raised
contention in respect of fraud and collusion, failed to adduce any evidence
in that regard before the Labour Court. It is observed by the Labour Court
while deciding the matter that since the dispute pending before the Labour
Court in the shape of complaint ULP no. 13/2009 was settled before Lok
Nyayalaya and the order of dismissal came to be set aside by the act of the
parties, earlier enquiry report which was the basis of order of termination
also shall be deemed to be set aside. It was not open for the Board of
Directors to consider earlier report of enquiry and direct termination of
services of employee. The order directing reinstatement
of employees and
setting aside order passed by the bank on 30.09.2011 has attained finality
since the petition presented by bank has been dismissed by learned Single
Judge. It is to be taken note of that once the employee has undergone
punishment for the alleged misconduct,
he cannot be again punished for
the same cause. In the instant matter, as per the decision of the Lok
Nyayalaya, lighter punishment of stoppage of one increment was imposed,
respondent – employee was held disentitled
to claim backwages from the
date of issuance of order of suspension till the date of his reinstatement.
The employee accepted the punishment and has undergone the same. He
has been reinstated
in the year 2009, however, it was not open for the
bank to punish the employee for the same cause again. Imposition of
punishment at latter point by petitioner amounted to double jeopardy
which cannot be permitted.
8. So far as allegations of fraud made by petitioner in the petition are
concerned, it is a matter of detailed investigation. Petitioner – bank failed
to substantiate the allegations of fraud although such contentions were
raised before the Labour Court. In the instant matter also, merely on the
basis of pleadings, it cannot be inferred that respondent is guilty of
committing fraud in collusion with the Board of Administrators. Reference
can be made to the Judgment of the Apex Court in the matter of Bhaurao
Dagdu Paralkar Vs. State of Maharashtra and others reported in (2005) 7
Supreme Court Cases 605. The Apex Court in paragraph nos. 9 to 16 of
the judgment has observed thus :
“9. By “fraud” is meant an intention to deceive;
whether it is from any expectation of advantage to
the party himself or from ill will towards the other is
immaterial. The expression “fraud” involves two
elements, deceit and injury to the person deceived.
Injury is something other than economic loss, that
is, deprivation of property, whether movable or
immovable or of money and it will include any harm
whatever caused to any person in body, mind,
reputation or such others. In short, it is a noneconomic
or nonpecuniary
loss. A benefit or
advantage to the deceiver, will almost always cause
loss or detriment to the deceived. Even in those rare
cases where there is a benefit or advantage to the
deceiver, but no corresponding loss to the deceived,
the second condition is satisfied. [ See Vimla (Dr.) v.
Delhi Admn. and Indian Bank v. Satyam Fibres
(India) (P) Ltd.]
10. A “fraud” is an act of deliberate deception with
the design of securing something by taking unfair
advantage of another. It is a deception in order to
gain by another’s loss. It is a cheating intended to
get an advantage. (See S. P. Chengalvaraya Naidu v.
Jagannath.)
11. “Fraud” as is well known vitiates every solemn
act. Fraud and justice never dwell together. Fraud
is a conduct either by letters or words, which
induces the other person or authority to take a
definite determinative stand as a response to the
conduct of the former either by words or letters. It is
also well settled that misrepresentation itself
amounts to fraud. Indeed, innocent
misrepresentation may also give reason to claim
relief against fraud. A fraudulent misrepresentation
is called deceit and consists in leading a man into
damage by wilfully or recklessly causing him to
believe and act on falsehood. It is a fraud in law if a
party makes representations, which he knows to be
false, and injury ensues therefrom although the
motive from which the representations proceeded
may not have been bad. An act of fraud on court is
always viewed seriously. A collusion or conspiracy
with a view to deprive the rights of others in relation
to a property would render the transaction void ab
initio. Fraud and deception are synonymous.
Although in a given case a deception may not
amount to fraud, fraud is anathema to all equitable
principles and any affair tainted with fraud cannot
be perpetuated or saved by the application of any
equitable doctrine including res judicata. (See Ram
Chandra Singh v. Savitri Devi.)
12. In Shrisht Dhawan v. Shaw Bros., it was
observed as follows : (SCC p. 553, para 20)
“Fraud” and collusion vitiate even the most
solemn proceedings in any civilised system of
jurisprudence. It is a concept descriptive of human
conduct. Michael Lelvi likens a fraudster to Milton’s
sorcerer, Camus, who exulted in his ability to, “wing
me into the easyhearted
man and trap him into
snares”. It has been defined as an act of trickery or
deceit. In Webster’s Third New International
Dictionary “fraud” in equity has been defined as an
act oromission to act or concealment by which one
person obtains an advantage against conscience over
another or which equity or public policy forbids as
being prejudicial to another. In Black’s Law
Dictionary, “fraud” is defined as an intentional
perversion of truth for the purpose of inducting
another in reliance upon it to part false
representation of a matter of fact whether by words
or by conduct, by false or misleading allegations, or
by concealment of that which should have been
disclosed, which deceives and is intended to deceive
another so that he shall act upon it to his legal
injury. In Concise Oxford Dictionary, it has been
defined as criminal deception,use of false
representation to gain unjust advantage; dishonest
artifice or trick. According to Halsbury’s Laws of
England, a representation is deemed to have been
false, and therefore a misrepresentation, if it was at
the material date false in substance and in fact.
Section 17 of the Contract Act, 1872 defines “fraud”
as an act committed by a party to a contract with
intent to deceive another. From the dictionary
meaning or even otherwise fraud arises out of the
deliberate active role of the representatator about a
fact, which he knows to be untrue yet he succeeds in
misleading the representee by making him believe it
to be true. The representation to become fraudulent
must be of fact with knowledge that in was false. In
a leading English case i.e. Derry v. Peek what
constitutes “fraud” was described thus : (All ER p.
22 BC)
“Fraud is proved when it is shown that a false
representation has been made (i) knowingly, or
(ii) without belief in its truth, or (iii) recklessly,
careless whether it be true or false.”
But “fraud” in public law is not the same as “fraud”
in private law. Nor can the ingredients, which
establish “fraud” in commercial transaction, be of
assistance in determining fraud in administrative
law. It has been aptly observed by Lord Bridge in
Khawaja v. Secy. of State for Home Deptt. that it is
dangerous to introduce maxims of common law as to
the effect of fraud while determining fraud in relation
of statutory law. “Fraud” in relation to the statute
must be a colourable transaction to evade the
provisions of a statute.
“ ‘If a statute has been passed for some
one particular purpose, a court of law will not
countenance any attempt which may be made to
extend the operation of the Act to something else
which is quite foreign to its object and beyond its
scope.’ Present day concept of fraud on statute has
veered round abuse of power or mala fide exercise of
power. It may arise due to overstepping the limits of
power or defeating the provision of statute by
adopting subterfuge or the power may be exercised
for extraneous or irrelevant considerations. The
colour of fraud in public law or administrative law,
as it is developing, is assuming different shades. It
arises from a deception committed by disclosure of
incorrect fact knowingly and deliberately to invoke
exercise of power and procure an order from an
authority or tribunal. It must result in exercise of
jurisdiction which otherwise would not have been
exercised. That is misrepresentation must be in
relation to the conditions provided in a section on
existence or nonexistence
of which power can be
exercised. But nondisclosure
of a fact not required
by a statute to be disclosed may not amount to
fraud. Even in commercial transactions nondisclosure
of every fact does not vitiate the
agreement. ‘In a contract every person must look for
himself and ensure that he acquires the information
necessary to avoid bad bargain.’ In public law the
duty is not to deceive.” (See Shrisht Dhawan v. Shaw
Bros. SCC p. 554, para 20.)
13. This aspect of the matter has been considered
recently by this Court in Roshan Deen v. Preeti Lal,
Ram Preeti Yadav v. U.P. Board of High School and
Intermediate Education, Ram Chandra Singh case
and Ashok Leyland Ltd. v. State of T.N.
14. Suppression of a material document would
also amount to a fraud on the court. (See
Gowrishkanar v. Joshi Amba Shankar Family Trust
and S.P. Chengalvaraya Naiu case.)
15. “Fraud” is a conduct either by letter or words,
which induces the other person or authority to take
a definite determinative stand as a response to the
conduct of the former either by words or letter.
Although negligence is not fraud but it can be
evidence on fraud; as observed in Ram Preeti Yadav
case.
16. In Lazarus Estates Ltd. v. Beasley Lord
Denning observed at QB pp. 712 and 713; (All ER p.
345 C)
“No judgment of a court, no order of a
minister, can be allowed to stand if it has been
obtained by fraud. Fraud unravels everything.”
In the same judgment Lord Parker, L.J. observed
that fraud vitiates all transactions known to the law
of however high a degree of solemnity. (p. 722)
These aspects were recently highlighted in State of
A.P. v. T. Suryachandra Rao.
9. Placing reliance on the judgment in the matter of T. Vijendradas and
another Vs. M. Subramanian and others reported in 2008(1) All M.R. 446,
petitioner contends that judgment, decree or order obtained by playing
fraud on the Court is a nullity, non est in the eye of law. Such a judgment,
decree or order by the first Court or by the final Court has to be treated as
nullity by every Court, superior or inferior. It can be challenged in any
Court, at any time, in appeal, revision, writ or even in collateral
proceedings. In the instant matter, it cannot be said that petitioner has
established fraud at the instant of somebody on the Court. However what
is alleged is that there is collusion between respondent and the Board of
Administrators and they together persuaded the Court to settle the matter.
Placing reliance on the judgment in the matter of A. V. Papayya Sastry and
others Vs. Government of A.P. and others reported in AIR 2007 Supreme
Court 1546 it is contended that judgment, decree or order obtained by
fraud is to be treated as nullity, whether by the Court of first instance or by
the final Court. And it has to be treated as non est by every Court,
superior or inferior. It is contended by respondent by placing reliance on
the judgment of the Supreme Court in the matter of P. T. Thomas Vs.
Thomas Job reported in AIR 2005 Supreme Court 3575 that judicial
review of the decision arrived at Lok Nyayalaya is not permissible on the
ground as raised in the writ petition. The Supreme Court, referring to the
decision in the matter of Board of Trustees of the Port of Visakhapatnam Vs.
Presiding Officer, Permanent, Lok AdalatcumSecretary,
District Legal
Services Authority, Visakhapatnam
and another reported in 2000(5) ALT
577, as observed that “The award is enforceable as a decree and it is final.
In all fours, the endeavour is only to see that the disputes are narrowed
down and make the final settlement so that the parties are not again driven
to further litigation or any dispute. Though the award of Lok Adalat is not
a result of a contest on merits just as a regular suit by a Court on a regular
trial, however, it is as equal and on par with a decree on compromise and
will have the same binding effect and conclusive just as the decree passed
on the compromises cannot be challenged in a regular appeal, the award of
the Lok Adalat being akin to the same, cannot be challenged by any regular
remedies available under law including invoking Article 226 of the
Constitution of India challenging the correctness of the award on any
ground. Judicial review cannot be invoked in such awards especially on the
grounds as raised in this writ petition.” In order to contend that the order
of dismissal issued on second occasion by the petitioner – bank amounts to
double jeopardy, reliance is placed on judgment of the Division Bench of
this Court in the matter of Shrinivasan Ranganathan vs. AIR India Ltd.
Bombay and another reported in 2010(4) Mh.L.J. 325. It is contended that
on issuance of order of dismissal on the first occasion, respondentemployee
approached Labour Court by presenting complaint and the
complaint presented by respondent was settled in view of resolution no. 18
adopted by the Board. Punishment of dismissal from service has been
reduced to stoppage of one increment and respondents were held disentitled
to claim bakcwages during the period of suspension. Once lesser
punishment is imposed and respondent is reinstated
in employment, it is
not open for the petitionerbank
to impose harsher punishment once again
for the same cause or on the same allegations and it would amount to
double jeopardy.
10. It is to be taken note of that respondent herein is reinstated
in
employment in the year 2009 whereas instant petition challenging the
decision in respect of disposal of complaint in view of settlement before Lok
Nyayalaya on 18.11.2009 is subjected to challenge in the petition presented
in the year 2013. In the meanwhile, respondent – employee has retired on
attaining age of super annuation. At this belated stage and for the reasons
recorded above, petition does not deserve consideration. Petition is devoid
of substance hence stands rejected. Rule discharged.
11. Pending civil application, if any, does not survive and stands
disposed of.
( A. M. BADAR ) ( R. M. BORDE )
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