CW/610/1989 of DHARMENDRA KATARIA Vs GNR SUGAR MILLS LTD on 22 December 2006

JUDGMENT

(1) Dharmendra Kataria vs. Ganganagar Sugar Mills Ltd., Sri Ganganagar.(D.B.Civil Special Appeal No.74/96)

(1) Dharmendra Kataria vs. Ganganagar Sugar Mills Ltd., Sri Ganganagar.(D.B.Civil Writ Petition No.610/89)

Date of Judgment :- 22nd December, 2006.HON'BLE THE CHIEF JUSTICE SHRI S.N. JHAHON'BLE JUSTICE SHRI MOHAMMAD RAFIQ

Mr. M.Mridul, Senior Advocate for the appellant.Mr. Manish Shishodia, Advocate for the respondent.Mr. Vijay Agarwal, Advocate for the respondent.

-'BY THE COURT :(PER HONBLE MR.MOHAMMAD RAFIQ,J)

Aforementioned special appeal and the writ petitionhave been filed at the instance of one common appellant/petitioner(hereinafter referred to as the appellant) who was removed fromservice by the respondent Ganganagar Sugar Mills Ltd., SriGanganagar (for short “the respondent”)vide order dated21/26.09.1981. The special appeal has been filed against thejudgment dated 27[th] November, 1995 by which the writ petition ofthe respondent against the order passed by the Prescribed Authority u/s 28-A of the Rajasthan Shops and Commercial EstablishmentsAct, 1958(for short “the Act of 1958”) declaring removal of theappellant as illegal and directing his reinstatement was allowed. Theappellant has also additionally filed the aforesaid writ petition byway of abundant caution challenging the order of his removal dated21/26.9.1981 directly before this Court under Article 226 of theConstitution of India. Though the issues raised in the appeal and thewrit petition are different but the questions of law as also thefoundational facts giving rise to them are common and thereforeboth the matters were taken up together for hearing and are beingdisposed of by this common judgment.

Factual matrix of the case is that the appellant wasappointed with the respondent as a general clerk in their AccountsSection vide order dated 18[th] August, 1973. He was posted asIncharge, Liquor shop, Station Road, Jaipur. Besides the appellant,two salesmen, two helpers and one Chowkidar and one person fromvigilance cell were also posted there. The appellant, two salesmenand their helpers and Chowkidar were responsible for the salescounter. Appellant's duty was confined to checking the liquor bottlesreceived from the distillery and entering details thereof in therecords. He used to also supervise the shop and count total money received at the end of the day and deposit the same with thecashier on the following day. In the day time however the saleproceeds would remain in the charge of the salesman on duty. Thethen Incharge of the Vigilance Department of the respondent ShriS.N.Bhargava checked the shop at Jaipur on various dates includingon 10.12.1978 when he found the cash short by Rs.92.66 paisa. Heagain checked the shop on 8.1.1979 and found the quality strengthof the three half bottles and two quarter bottles of liquor reducedfrom 54.4 to 54.8 on account of mixing of the water. The shop wasfurther checked on 7.2.1979 and this time again on testing onebottle of “Keshar Kisturi”(liquor) its strength was found 35.2 insteadof 5 U.P. Again when the checking was made on 14.2.1979, onebottle was found of lesser standard as its strength was 65.2 insteadof 45 U.P. Checking was again made on 21[st] April, 1979 when threehalf bottles were found to be adulterated with water and theirstrength varied between 60.6 and 60.9 in stead of 45 U.P. Checkingwas again made on 26[th] April, 1979 and this time again shortage ofRs.458.58 was detected. According to the appellant, when the shopwas checked on 10.12.1978, he was not present at the shopbecause he had gone for lunch. But his signature was obtained onthe inspection memo when he returned from lunch. During thechecking made on 26[th] April, 1979, shortage of Rs.458.38 paisa was

detected. A memorandum to that effect was prepared in which itwas recorded that besides the appellant, one Ashok Harjani was alsopresent and that the incharge of the shop informed that thecurrency notes of Rs.300/- were sent for being replaced to the bank.The appellant was served with the charge sheet on 1[st] June, 1979and was also placed under suspension. He submitted his reply to thecharge sheet on 11[th] June, 1979. He was served with another chargesheet on 2[nd] June, 1980. One Shri U.N. Mathur was appointed asenquiry officer to conduct the inquiry. While the managementexamined three witnesses in support of their case namely S/ShriK.N.Aswa, M.L.Dabi and Roop Dan, the appellant examined himselfand one Shri Ramchandra. The enquiry officer submitted his reportsometime in the month of July, 1981. A show cause notice wasissued to the appellant on 3/11[th] August, 1981 proposing penalty ofremoval and requiring him to submit his defence. The DisciplinaryAuthority finally vide order dated 26[th] September, 1981 imposed thepenalty of removal upon the appellant.

The appellant initially approached the PrescribedAuthority u/s 28-A of the Act. A preliminary objection was taken bythe respondent with regard to the maintainability of the saidapplication before the Prescribed Authority . When this was not accepted, the respondent filed a writ petition before this Court beingS.B.Civil Writ Petition No. 1411/82 which was allowed on 6[th] August,1982 and a direction was issued to the authority to decide thequestion of jurisdiction first soon after taking evidence of both theparties. However, the respondent did not adduce any evidence evenafter remand and the Prescribed Autyhority rejected its preliminaryobjection vide its order dated 2[nd] May, 1983. The PrescribedAuthority allowed the application vide its order dated 30.6.1984 anddirected reinstatement of the appellant with full back wages. Therespondent then challenged the aforesaid order of the PrescribedAuthority in S.B.Civil Writ Petition No. 2066/84 on the ground thatno opportunity to lead evidence was granted to them. The writpetition was allowed on that premise and the matter was remandedback to the Presiding Authority with opportunity being granted tothe respondent to lead evidence. The respondent thereafterexamined as many as 5 witnesses and the evidence of therespondent was then closed. Against this order, the respondent filedS.B.Civil Writ Petition No. 2933/87 before this Court complainingthat the evidence was wrongly closed. This time however their writpetition was dismissed by judgment dated 10.12.1987. TheAuthority by its order dated 17.2.1988 allowed the application of theappellant which order was challenged in S.B.Civil Writ Petition No.

1709/88. It was this writ petition which was eventually allowed videjudgment dated 27.11.1995 against which the present specialappeal has been filed.

The writ petition of the appellant was allowed by the learned Single Judge on the premise that the respondent being agovernment company was exempt from the purview of the saidenactment by virtue of Section 3 of the Act of 1958. In taking sucha view, the learned Single Judge based his judgment on thepronouncement made by the Hon'ble Supreme Court in C.V. Ramanetc. vs. Management of Bank of India, 1988 S.C. 1369 wherein theirLordships while interpreting analogous provisions from another Stateheld that a government company would be exempt from the purviewof the Act. Additionally however the learned Single Judge also heldthat the provisions of the Act of 1958 are not applicable to the caseswhere the employees concerned are governed by the provisions ofthe Factories Act, 1948 and since the respondent was covered bythe Factories Act, the provisions of the Act of 1958 would not applyto it. It is in this background that the appeal and the writ petitionhave been filed.

We have heard Mr.M.Mridul, learned Senior Advocate

Ratio decidendi

We have heard Mr.M.Mridul, learned Senior Advocate for the appellant and Mr. Manish Shishodia and Mr. Vijay Agarwallearned counsel for the respondents and perused the record.

Mr.M.Mridul, learned Senior Advocate for the appellantargued that the learned Single Judge has erred in law in holding thatthe retail shop of the Ganganagar Sugar Mills Ltd. where appellantwas working would be exempt from the purview of the Act of 1958.In holding so, the learned Single Judge has misconstrued theprovisions of Section 3 as also Sections 2(3) and 2(17) of the Act of1958 defining the “commercial establishment” and the “shop”respectively. According to him, the learned Single Judge has wronglyapplied the ratio of the judgment of the Hon'ble Supreme Court inC.V. Raman (supra). He submit that basic question was whether“shop”as defined u/s 2(17) of the Act of 1958 stands exempted fromthe Act whereas the entire question has been examined by thelearned Single Judge from the point of view whether a “commercialestablishment” would be exempt from the purview of the said Act.The fact however is that “commercial establishment” is separatelydefined in Section 2(3) of the Act which carries a different meaningthan the definition of “shop” as given in Section 2(17) of the Act.Moreover the provisions of the Tamilnadu Shop and EstablishmentAct which were under consideration before their Lordships in

C.V.Raman supra were entirely different than the aforesaidprovisions under the Act of 1958. So far as Section 2(7) isconcerned, it only defines “establishment” and all that it provides isthat establishment includes “commercial establishment”. Howeverthe word “shop” stands separately defined in Section 2(17) of theAct which stands independently by itself. A perusal of the definitionof “shop” would reveal that later part of it also speaks of a“commercial establishment or a shop attached to a factory wherethe persons employed in the shop are allowed the benefits providedfor workers under the Factories Act, 1948”. Mr. M.Mrdiul, learnedSenior Advocate argued that the very fact that before the word“commercial establishment”, word “a” has been used, makes itabundantly clear that not all the commercial establishments standexcluded from the purview of Section 2(17) of the Act. If thatextended meaning were to be given to the definition of “shop”, theAct and the provisions contained therein would become totally non-operative altogether. Exclusion has been made only of such“commercial establishment” or a “shop” which is attached to afactory and where the persons employed in the shop are allowedbenefits provided for the workers under the Factories Act . In furtherdeveloping his argument, Mr. Mridul referred to Section 3 of the Actwhich contains the provisions relating to exemption . According to him, clause (a) and (b) of sub-section (1) of Section 3 of the Actrefers to establishment or administrative service in which personsemployed are mainly engaged in office work and offices of thegovernment and of Reserve Bank of India. Clause (c ) of sub-section(1) of Section 3 refers to only those establishments whichare in respect of 'the “treatment or the care of the infirm, or thementally unfit”. Exemption is therefore not available to all thegovernment ventures of commercial establishment but only tolimited one. He argued that Section 3 supra is the only provisionrelating to exemption. In the case of administrative serviceshowever persons engaged are mostly required to work in office ofthe Central Government or any State Government or local uathoritiesreferred to in clauses (a) and (b) of Section 3(1) of the Act. Clause( c ) of Section 3(1) refers to word “establishment”. The learnedSingle Judge therefore committed an error in holding that the orderpassed by the Prescribed Authority under the Act of 1958 waswithout jurisdiction.

Facts

While referring to the findings arrived at in para 12 ofthe impugned judgment, Mr. Marudhar Mridul argued that thelearned Single Judge was not correct when he held that theprovisions of the Act would not be applicable to the cases where the employees concerned are governed by the Factories Act, 1948 andfurther that it was undisputed that the respondent mill was coveredby the provisions of the Factories Act, 1948. This finding waspalpably wrong because the pleadings in the writ petition out ofwhich the present appeal arise would go to show that the maincontention of the respondent mill was that it being an undertakingof the Rajasthan Government , it was a State within the meaning ofArticle 12 of the Constitution of India and therefore was exemptfrom the operation of the Act. It was nowhere pleaded that the shopat Jaipur was attached to the factory of the respondent mill. Allthat was pleaded was that the respondent mill was not governed bythe Act of 1958 since it was a factory governed by the Factories Actwhich have all been exempted from the operation of the Actbecause workers employed there are entitled to get all benefitsunder the Industrial Laws and further that since there are certifiedstanding orders governing their service conditions, the appellantshould have approached the Industrial Tribunal/Labour Court forredressal of his grievances and not the Prescribed Authority underthe Act. Mr. Mridual, leaned Senior Advocate therefore argued thatthis plea is far from being a contention that the shop was attachedto the factory and therefore the benefits under the Factories Actwould be available to the appellant herein. It was argued that last para of Section 2(17) defining “shop” require two conditions to befulfilled. Firstly that the shop should be attached to a “commercialestablishment” and secondly that the workman should be getting thebenefits of the Factories Act. A look at the standing orders whichhave been placed on record at Annexure 2 makes it manifest thatreference to Factories Act is limited to shifts of hours and work forvarious categories of workmen. The very fact that reference toFactories Act has been made in the standing orders, goes to showthat the Factories Act does not ipso facto apply to the appellantherein. Had it been so, there was no reason why standing ordersshould have at all been made. Moreover, no such objection wasraised before the Prescribed Authority under the Act of 1958 andobviously therefore no evidence on that point was adduced.

Mr.M.Mridual, learned Senior Advocate has made reference to the affidavit filed by the appellant wherein it wasasserted that the appellant was not being extended benefitsavailable to a worker u/ss. 42, 43, 45, 46 , 47, 49, 52, 54, 55, 59,75, 78 and 79 of the Factories Act. While relying on Annexure R/2filed alongwith the reply to the writ petition no. 610/89, the learnedcounsel argued that the appellant was made to work from 9 to 12hours which was against the provisions of the Factories Act. On the question of implication of the word “attachment” used in Section 2(17) which defines “shop”, the learned counsel argued that theword “attachment” might have many meanings but it has to be readin the context of the law under examination. What is physicallyhundred miles away cannot be considered to be attached to the factory. Besides, nature of activities carried out in the shop areentirely different than what was being done in the factories. Mr.Mridual has referred to the Corpus Secondum Vol.VII p.168 as tothe meaning of the word “attachment” which is reproduced asunder:-

“Attachment: In a popular sense, it has been defined asmeaning close adherence or affection; fidelity; regard;and passion or affection that binds a person. It hasbeen said that it it a stronger word than “welldisposed”, and, in particular connection, implies depthof conviction. Used in a mechanical sense, it has beendefined as meaning something attached; some adjunctattached to an instrument, machine, or other object. Astechnically used, signifying a seizure of property andbringing it into the custody of the Court, the word isdefined and the subject matter fully treated in the titleAttachment, and in Garnishment.

Attachment of privilege. In English Law, a process bywhich a man, by virtue of his privilege, calls another tolitigate in that court to which he himself belongs, andwho has the privilege to answer there.

Attachment of the forest. One of the three courtsformerly held in forests. The highest court was called“justice in eyre's seat;” the middle, “the swainmote:'and the lowest, the “attachment.”

He therefore argued that the judgment of the learnedSingle Judge having been passed on the basis of misconstruction ofthe provisions of the Act and misapplication of the ratio of theSupreme Court judgment in C.V.Raman supra is liable to be setaside and the appellant is entitled to reinstatement.

Arguing on writ petition no. 610/89 in which challengehas been posed to the validity of the order dated 21/26.9.1981, Mr.M.Mridul, learned counsel for the appellant submitted that occasionto go into the merits of that petition would arise only if the appealfails. On the merits however he argued that the evidence that hascome on record indicates that the shop in question was functioningat Jaipur. Apart from the fact that besides the appellant, largenumber of other persons were also working in the shop and theappellant was working in only supervisory capacity. He had to go outof the shop for long durations. Money used to come in the shape ofnotes and coins and was being received by the salesman. Shortageof amount of money on certain dates as referred to in the chargesheet cannot be linked to the appellant alone . It would be taking avery hyper technical view of the matter if one were to say that sincehe was overall incharge of the shop and therefore all that hashappened would be attributable to him alone. It was argued that

ground realities of the life cannot be ignored in the scenario in thatwhere large number of persons were working and that too for longperiods, responsibility of all that transpired in the shop even in theabsence of the appellant cannot be completely fastened on him.While referring to the nature of the charges, Mr. Mridul argued thatapart from the shortage of the money on certain dates such asRs.92.66 10.12.1978, Rs.458 on 26.4.1979, the other charges arethat when the bottles of the liquor were subjected to test, liquorcontained therein was found of lesser strength than the prescribedstandard. In regard to these charges also, Mr. Mridul argued thatwhen the presence of several employees is proved from the recordof the case, the charges cannot be said to have been proved againstthe appellant alone merely because they could not be provedagainst some other persons. To bring home the charges against theappellant, the respondents were required to prove that it was hewho all the time sold the liquor and received the money. The fact ofthe matter however is that sales were always effected by a salesmanwho used to collect the money and at the end of the day, pass it onto the incharge. If there was any handling of the cash of the saleson the mixing of water in the bottles in the course of the day,responsibility of all this was of the salesman and without there beingany proof of the fact that the appellant had charged lesser amount or had adulterated the liquor, the charges against him could not betaken to have been proved.

As regard the statement of Mr.M.L.Dabi, it has been argued that very same person has given the statement before thePrescribed Authority that he had opened seals of the bottles andthen examined its strength. In that statement, he nowhere statedthat seals were tempered with in any manner. His later versiontherefore could not be accepted. It has not been proved by anyevidence whatsoever that bottles were opened in the shop by theappellant or by someone else at his instance or with his connivanceor with his knowledge. It has also not been proved that somethingwas mixed therewith in the shop. It has also not been proved thatstrength of the liquor was lesser than prescribed which could havebeen ascertained only by chemical examination of the liquor whichadmittedly has not been done. While the case of the respondent wasthat it was Shri S.N.Bhargava who conducted the checking andfound that water was mixed in the liquor thereby reducing itsstrength but the respondents have not examined the said Mr.S.N.Bhargava as a witness in the inquiry. Therefore adverseinference should be drawn against them. Even, the “fards” whichwere prepared do not contain signatures of Shri S.N. Bhargava.

The inquiry was conducted in violation of Section 4(3) of the Rulesof 1957. Neither any list of witnesses nor list of documents weresupplied to the appellant. The disciplinary authority in passing theorder has not applied its mind to go through the record of theinquiry inasmuch as the order is also not speaking one. In this order,the disciplinary authority has not considered the arguments/pointsraised by the appellant in reply to show cause notice including onthe question of the quantum of punishment. It has therefore beenargued that the order of penalty even on merits of the case is liableto be set aside.

Both the appeal and the writ petition have beencontested by the respondent mill in which they have beenrepresented by different Advocates.

Mr.Mansih Shishodia, learned counsel for therespondent mill in appeal no. 741996 argued that the Act of 1958was enacted with a view to consolidating and amending the lawrelating to regulation of conditions of work and employment in shopsand commercial establishments. While Section 2(3) defines the term“commercial establishment”, Section 2(17) defines the term “shop”.Section 3 of the Act provides for exemption to certain category of

establishments from the operation of the Act of 1958 including tothe offices of or under any State Government. Respondent no. 1namely Ganganagar Sugar Mills Ltd. being a government companywithin the meaning of Section 456 of the Companies Act, is ownedby the State of Rajasthan inasmuch as 97% of its total capital whichrepresents almost its total share holding is owned by thegovernment and Directors on its Board of Directors are alsoappointed by the Government of Rajasthan. The Managing Directorof the respondent company is a senior I.A.S. officer while itsExecutive Director is a senior R.A.S. officer. Both of them holds theiroffice at the pleasure of the government which exercise a deep andpervasive control over the functioning of the company.It was arguedthat the respondent company has various units for manufacturing ofsugar and liquor and it also has a glass factory. Sale of liquor istransacted through various government shops wherein shopmanager and shop keepers are directly appointed by the company.They are therefore government servants and not private individuals.While referring to the judgment of the Hon'ble Supreme Court inC.V.Raman supra, Mr. Manish Shishodia argued that words “office ofor under the government” have been elaborately considered by theirLordships. In the facts of that case, while examining somewhatsimilar controversy, their Lordships held the office of Bank of India was a government company and establishment under the CentralGovernment and was, therefore exempted from the operation ofthe Tamilnadu Shops and Establishment Act. Reference was alsomade to a Division Bench judgment of this Court in Rajasthan StateIndustrial Development and Investment Corporation Ltd., Jaipur &two ors. vs. The Authority under the Rajasthan Shops andCommercial Establishment Act, 1958 & Anr., 1992(1) R.L.W. p.249in which this Court while following the ratio of the judgment inC.V.Raman supra, held that RIICO being a government companywas exempt from the operation of the Act of 1958. In the aforesaidcase, the facts were also similar. An employee of RIICO was workingin one of its shop and his services were terminated. He preferred anapplication u/s 28-A of the Act of 1958 before the PrescribedAuthority. In those facts, it was held by this Court that theprovisions of the Act of 1958 by virtue of exemption clausecontained in Section 3 thereof would not apply to the said case. Itwas argued that the word “offices” contained in Section 3 is includedin the definition “shop” itself as provided in Section 2(17) supra.However the word “offices” has not been separately defined in theAct and therefore the exemption clause contained in Section 3 shallapply to the respondent company as a whole. Any otherinterpretation, according to Mr. Manish Shishodia, would lead to

absurd consequences in that while the registered office of thecompany at Jaipur shall not be amenable to the Act of 1958 and itsshops again at Jaipur would attract the provisions of the Act of 1958and what is more, its factory would be exempted. Section 3 of theAct of 1958 contemplates an exemption for the entire company andnot just a part of it. It has been argued that while interpretingprovisions of a particular enactment, effort has to be made forharmonious construction of various provisions of such enactmentand in doing so, entire Act has to be seen. Interpretation cannot beassigned to a single word in a particular provision of the Act inisolation of the entire text of that provision including otherprovisions in the Act. Such provision cannot be interpreted out ofcontext while being oblivious of the object sought to be achieved bythe Act. The respondent company has submitted to all governmentcontrols with regard to statutory compliances i.e. provisions of theBoiler's Act, the Factory's Act, the Payment of Wages Act and theIndustrial Disputes Act were binding on it. It was argued thatlegislature could not have thought of providing additional controlover the government company by enacting yet another Act in a fieldwhich was already occupied by various other enactments. Hetherefore argued that the judgment passed by the learned SingleJudge is perfectly legal and the appeal preferred against them is liable to be rejected.

Mr. Vijay Agarwal representing the respondent companyin writ petition no.610/89 argued that the order of penalty passedby the disciplinary authority was based on the findings of inquiryofficer. The inquiry officer has found the charges proved against thepetitioner and charges were serious and grave in nature. Thepetitioner was posted as incharge of the shop and had theresponsibility to keep a check on the sales, prevent adulteration etc.and deposit sales proceeds, empty bottles, gunny bags etc..Reference has been made to the duty chart of the shop incharge,contained in the order dated 25.11.1978( Annex. R/2). While it hasbeen admitted that the shop remained open for 13-14 hours , thecontention of the respondent is that the petitioner's duty hours wereconfined to just 8 hours and it was within those hours when he wasrequired to daily check/supervise and keep vigilance on the stock ,sale, account and safety of the liquor. It has been submitted thatliquor bottles used to be received duly sealed from the distillery andwere to be sold in same condition. If there was mixing of somewater or adulteration with the liquor contained in the bottles therebyreducing its strength, the petitioner cannot escape his responsibilitybecause, after all, he was incharge of the shop. It is submitted that

the bottles were skilfully tampered with. When Shri S.N.Bhargavaand other members of the vigilance cell checked the liquor shopfrom time to time, every time they found irregularities andtherefore the said Shri S.N. Bhargava had very poor opinionregarding the working of the appellant. In fact Mr. S.N.Bhargavahad given in writing to the Manager of the respondent mill on23.4.1979 regarding this but when no action was taken against him,the appellant felt encouraged and persisted in indulging himself withthe mal practices. Reference has also been made to the letter dated23.4.1979 in which Mr. S.N. Bhargava has suggested for placing theappellant under suspension in view of the gravity of the chargesagainst him. As regards the shortage of Rs.92.66, it has beenargued that Mr. M.L. Dabi checked the liquor shop near the railwaystation on 10.12.1978 in presence of the appellant and found a sumof Rs.92.66 short in the cash box. He therefore prepared a “fard”which bears the signature of the appellant also. On 8.1.1979, threeand half bottles and two quarter bottles of country made liquorwere found to be having lesser strength. When account of theshop was checked by Mr. M.L.Dabi, he found many otherdiscrepancies and prepared “fard” on which also signature of theappellant was obtained. When Mr. M.L. Dabi checked the shop againon 14.2.1979 he found one bottle containing sub-standard liquor.

This time also the checking was done in presence of the appellantand he signed the inspection report also. When the appellant wasasked to explain his conduct, he failed to give any satisfactoryexplanation but he had no explanation because he himself wasresponsible for the adulteration of the liquor by adding water. In factwhen the appellant was incharge of the shop and if he had anydoubt or belief that others were making adulteration, he shouldhave brought this to the notice of the higher authorities. He didnothing and therefore it was clear that he was responsible for themixing of the water. Thereafter when again on 26.4.1979 checkingwas made by Mr.M.L. Dabi alongwith one Roopdan, shortage ofRs.458.38 was found in cash. When 'fard” of this was prepared,signature of the petitioner was also obtained.

One Shri U.N.Mathur, retired District Judge was appointed as inquiry officer and subsequently Mr. M. L.Dabi, Dy.S.P.was appointed as departmental representative. Adulteration wasmade by removing the seals and putting them back. It was done insuch a way that the seals may not appear to have been removed orrefitted. In fact the appellant himself has earlier stated it was ShriMatadin, salesman who mixed water into bottles but the fact that hedid not report this to any superior authority clearly indicates that he

himself was responsible for the mixing of the water. Most of the timeShri M.L.Dabi checked the shop and found sub-standard quality ofliquor in presence of the appellant and the appellant had putsignature on inspection report also. It was denied that standard ofthe liquor could be proved only by report of the chemical examiner.It was submitted that Shri S.N.Bhargava was head of the factory'svigilance cell and when Shri M.L.Dabi, who was his assistant hasbeen examined, no prejudice was caused to the appellant by merereason of the fact that Mr. S.N. Bhargava was not examined as awitness. Evidence of Mr. M.L.Dabi and further co-related evidenceswere sufficient enough to substantiate the finding of guilt againstthe appellant. Lastly, it was argued that when the appellant hadchosen to avail of the remedy before the Prescribed Authority u/s28-A of the Act, he could not be allowed to avail the remedy of writpetition filed belatedly on 13.1.1989 to challenge the order ofremoval dated 21/26[th] September, 1981 after enormous delay ofeight years. It was submitted that the appellant ought to have firstapproached the Labour Court/Industrial Tribunal under theprovisions of the Industrial Disputes Act, 1947. The writ petition inany case is not a proper remedy because several disputed questionsof facts are involved which cannot be appropriately gone into andadjudicated upon in this extra ordinary remedy and only Labour Court/Industrial Tribunal would have the mechanism of doing sowhere evidence can be recorded. It was therefore argued that thewrit petition be dismissed.

In order to appreciate the controversy raised herein, it would be only befitting to reproduce the relevant provisionscontaining definition of the word “commercial establishment” and“shop” as also the provisions relating to exemption contained inSection 3 of the Act of 1958 which are as under :- Section 2(3)-”Commercial establishment” means acommercial or trading or banking or insuranceestablishment, an establishment or administrativeservice in which the persons employed are mainlyengaged in office work, a hotel, a restaurant, boardingor eating houses, cafe or any other refereshment house,a theatre or any other place of public amusement orentertainment and includes every such establishment asthe State Government may, by notification in the OfficialGazette, declare to be a commercial establishment forthe purposes of this Act.”

Section 2(17)-“Shop” means any premises where anytrade or business is carried on or where services arerendered to customers, and includes offices, store-rooms, godowns or ware-houses, whether in the samepremises or otherwise, used in connection with suchtrade or business but does not include a commercialestablishment or a shop attached to a factory where thepersons employed in the shop are allowed the benefitprovided for workers under the Factories Act, 1948.”

Section 3-“Exemptions.-(1) Nothing in the Act shall apply to- (a) offices or or under the Central or any State Government or local authorities; (b) offices of the Reserve Bank of India; (c ) establishment for the treatment or the care of theinfirm, or the mentally unfit; (d)persons whose work is inherently intermittent such astravellers or caretakers;

(e) fairs or bazars for sale of work for charitable or otherpurposes from which no private profit is derived; and(f) libraries at which the business of lending books orperiodicals is not carried on for purposes for gain otherthan that of making profit for charitable, philanthropie,religious or educational objects.

(2) The State Government may, by notification in theOfficial Gazette, exempt either permanently or for anyspecified period any establishment or class ofestablishments or person or class of persons, to which orto whom this Act applies, from all or any of its provisions,subject to such conditions as the State Government maydeem fit.”

What is to be examined is whether a different interpretation can be given to Section 3 of the Act of 1958. Thereare two Division Bench judgments of this Court in the case of RIICO,supra and another judgment in Anajanical Joseph vs. State ofRajasthan(D.B.Civil Writ Petition No.1260/89) decided at JaipurBench on 25[th] September, 1989 wherein similar question with regardto service dispute of the employees of RIICO and Vijaya Bank, anationalised bank, respectively, was examined and it was held thatthose establishments would be exempt from the purview of the Actof 1958. We would not have in the ordinary course ventured toexamine this issue in greater details but for some of the arguments raised by Mr. M.Mridul which we find were not raised and therefore not decided in those cases especially in the context of thecomparison between the language employed by the legislature inSection 3 of the Act of 1958 vis-a-vis the analogous provision in Tamilnadu Shops and Establishment Act. Section 4(1)(c) of the said Act was what which came up for consideration before the Hon'ble Supreme Court in C.V.Raman, supra. The said provision in so far asrelevant to the controversy involved herein has been reproduced in para 6 of the said judgment, relevant part of which for the facility ofreference is extracted hereunder:

“6...................................................Sub-section(1)of Section 4 starts with the words “Nothing contained inthis Act shall apply to-”. Thereafter it contains clauses(a) to (f) which describe the persons and establishmentwho are exempted from the operation of the Act.Clauses © and (f) read as here under:- “(c) establishments under the Central and StateGovernments, local authorities the Reserve Bank ofIndia, a railway administration operating any railway asdefined in Cl.(20) of Art.366 of the Constitution andcantonment authorities; (f) establishments which, not being factories within the meaning of the Factories Act, 1948, are in respect ofmatters dealt with in this Act, governed by a separatelaw for the time being in force in the State.”

What was under examination before the Hon'ble Supreme Court in that case was whether the State Bank of Indiaand the nationalised banks can be said to be establishments under the Central Government as contemplated by clause ( c) aforesaid.Their Lordships in para 7 of the judgment while examining theimport and meaning of the word “under” with the help of variousdictionaries noted that the word “under” may be used in Statutes inits literal sense as indicating the condition of inferiority orsubservience or as meaning subject to or in conformity with,denoting curtailment or restriction of, but nevertheless agreement orcongruity with, something else to which it is made applicable.

Their Lordships further took note of the preamble of theState Bank of India Act, 1955 as also the various provisionscontained in the said Act. Their Lordships also considered theprovisions of the Banking Companies(Acquisition and Transfer ofUndertakings) Act, 1970 and thereupon observed in para 9 of thejudgment as under :- “9............xxx...............xxxx...............xxxxxx.............The general superintendence, direction andmanagement of the affairs and business of acorresponding new bank are to vest in a Board ofDirectors and it is the Central Government which inconsultation with the Reserve Bank has been given thepower under sub-sec.(3) to constitute the first Board ofDirectors consisting of not more than seven persons tobe appointed by the Central Government. The proviso tothe said sub-section authorises the Central Governmentif it is of opinion that it is necessary in the interests ofthe corresponding new bank so to do to remove a person froim the membership of the first Board ofDirectors and appoint any other person in his place. Theproviso to sub-sec.(5) to S.7 contemplates that theCentral Government may if the Chairman of an existingbank declines to become or to continue the function asa Custodian of the corresponding new bank or it is ofopinion that it is necessary in the interests ofcorresponding new bank, so to do, appoint any otherpe3rson as the Custodian of a corresponding new bankand the Custodian so appointed shall receive suchemoluments as the Central Government may specify inthis behalf. According to sub-sec.(6) thereof theCustodian is to hold office during the pleasure of theCentral Government. S.8 on the other handcontemplates that every corresponding new bank shallin the discharge of its functions be guided by suchdirections in regard to matters of policy involving publicinterest as the Central Government may afterconsultation with the Governor of the Reserve Bankgive. Sub-sec.(1) of S.9 of this Act confers power on theCentral Government to make a scheme for carrying outthe provisions of this Act after consultation with theReserve Bank.”

In latter part of the aforesaid para 9 of the judgment, the Hon'ble Supreme Court also noted that every correspondingbank has to make a report to the Central Government upon theentire balance sheet and accounts and further the said bank has tofurnish the Central Government its annual balance sheet, profit andloss account and the auditor's report and a report by its Board ofDirectors and activities of the bank. Having thus considered thescheme of the aforesaid two enactments, the Hon'ble SupremeCourt concluded that a conspectus of these provisions with themeanings of the term “under” referred to above leaves no manner of doubt that the State Bank of India and the nationalised banks areclearly establishments under the Central Government. What wouldbe the meaning of the word “under” in contra-distinction to the word“of”, the Hon'ble Supreme Court in para 11 of the said judgmentheld as under :-

“It is obvious that the word “under” cannot be taken tohave the same meaning as word “of” which may bringin the notion of ownership. Had that been the intentionof the Legislature we find no cogent reason as to whythe word “of” was not used in place of the word “under”in the relevant sub-section. Indeed the concept of“under” can be relevant only when there are twoentities one of which may be under the other. Adepartment of the Government strictly speaking is apart of the Government and can only loosely be termedas under the Government. Consequently the mere factthat the State Bank of India and the nationalised banksare different entities as corporate bodies for certainpurposes cannot by itself be a circumstance from whichit may be deduced that they cannot be establishmentunder the Central Government.”

As to some of the earlier judgments on which reliance was placed by the High Court of Madras on the question of “state”as envisaged in Article 12 of the Constitution, their Lordships heldthat “it cannot be gainsaid that the salient principles which havebeen laid down in those cases with regard to the authorities havinga corporate structure and exercising autonomy in certain sphereswill certainly be useful for determining as to whether the State Bankof India and the nationalised banks are establishments under the Central Government” and further held that “even though the StateBank of India and the nationalised banks may not be owned as suchby the Central Government and its employees may not be theemployees of the Central Government they certainly will fall withinthe purview of the expression “under the Central Government”, inview of the existence of deep and pervasive control of the CentralGovernment over these banks”.

Notwithstanding the difference in the pattern of draftsmanship between the exemption provision contained inSection 3 of the Act of 1958 and Section 4(1)(c) of the TamilnaduShops and Establishments Act, the meaning that they convey wouldremain the same and therefore result into similar interpretation aswe shall explain hereinafter.

While Section 3 of the Act of 1958 provides that “nothing in this Act shall apply to offices of or under the Central orany State Government or local authorities, Section 4(1)(c) of theTamilnadu Shops and Establishments Act similarly provides thatnothing contained in the said Act shall apply to the establishmentsunder the Central and State Government, local authorities etc. Whilecomplete text of Section 4 of the Tamilnadu Shops and Establishments Act has not been reproduced in aforesaid judgmentof the Supreme Court and therefore not available for our perusalbut it appears that in earlier clauses (a) and (b), offices of theCentral or the State Governments or the local authorities wereseparately exempted whereas in clause (a) of Section 3(1) of theAct of 1958, such two clauses have been combined into one by useof both the phraseologies namely “of” and “under” in one singleclause (a) rather than covering them separately in two clauses.

On the facts of the case, there should be no doubt that the State of Rajasthan has got all pervasive control over therespondent mill inasmuch as it owns 97% of its share holding andtherefore possesses exclusive power to nominate the members ofits Board of Directors and appoint its Managing Director andExecutive Director. In fact, the officer of the Indian AdministrativeService is appointed as Managing Director of the respondent mill bythe State Government and that of the Rajasthan AdministrativeService as its Executive Director.

The Division Bench of this Court in Anjanical Joseph,

supra on consideration of clauses (a) and (b) of Section 3(1) as alsothe definition clauses of the words “commercial establishment” and “shop” held as under :- “The question that arises for consideration havingregard to the aforesaid definitions is as to whether theword `offices' used in Sec.3(1)(a) and (b) signifycommercial establishment or shop or not or whetheroffices can be said to be establishment or not. Havingregard to the definition of the expression `commercialestablishment' and `shop' it is abundantly clear that theexpression `offices' is an expression which will include`commercial establishment' as well as `shops' and assuch it would be establishment within the meaning ofClause (7) of Sec.2. Thus the absence of expression`establishment' from clause (a) and (b) of sub-sec.(1)of Sec.3 would be of no consequence, in view of thedefinition of the expressions `commercialestablishment' and `shop' in clause (3) and (17) ofSec.2 of the Act. The expression `offices' used in clause(a) and (b) of sub-sec.(1) of Sec.3 thus would covercommercial establishment as well as shops. In view ofthe decision in C.V.Raman Vs. Management of Bank ofIndia(supra), this controversy is set at rest that theState Bank of India and nationalised banks areestablishments under the Shops and CommercialEstablishments Acts of the various states and as suchare exempted from the provisions of the said Acts.”

This judgment was reiterated in another Division Bench judgment in RIICO, supra in para 10 of which it was held asunder :- “In the present case as well, the argument is that theRSIDI Corporation was a body, although incorporatedunder the Act but because of the control of the StateGovernment in matters of administration, by supplyingall funds and other methods, it was covered by theexemption clause under S.3(1) of the Act.”

In the light of the aforesaid discussion, especially in view of what has been discussed above with reference to thejudgment of the Hon'ble Supreme Court in C.V.Raman supra, wehave to see whether “shop” owned and run by the respondent millwould not be covered by the provisions contained in Section 3(1)(a)of the Act of 1958. The argument of Mr. M.Mridul, learned counselfor the appellant is that “commercial establishment” has beenseparately defined in Section 2(7) of the Act and carries a differentmeaning than the word “shop” as defined in Section 2(17), whichstands independently by itself. According to him, the definition of“shop” in its latter part speaks of a “commercial establishment” or a“shop” attached to factory where the person employed in the shopare allowed the benefits provided for workers under the FactoriesAct. Mr. M. Mridul would like us to hold that since the word“commercial establishment” as used in Section 2(3) has beenpreceded by the word “a”, it does not mean that all and everycommercial establishment would be excluded from the purview ofthe Act of 1958.

Section 2(17) has defined “shop” to mean any premiseswhere any trade or business is carried out and /or where servicesare rendered to customers and includes offices, store-rooms,

godowns or warehouses whether in the same premises or otherwise,used in connection with such trade or business. In latter part of thedefinition however exclusion has been made of the “commercialestablishment” and the “shop” which are attached to a factorywhere the persons employed in the shop are allowed the benefitprovided for the workers under the Factories Act. “Commercialestablishment” has been separately defined in Section 2(3) to meana commercial or trade or banking or insurance establishment, anestablishment or administrative service in which the personsemployed are mainly engaged in office work etc. and includes everysuch establishment as the State Government may, by notification inthe Official Gazette, declare to be a commercial establishment forthe purposes of the Act. There can be no manner of doubt that shopin question run by the respondent mill is a shop wherefrom trade orbusiness is carried on and at the same time it would also be a“commercial establishment”. Even if the phraseology “commercialestablishment” is preceded by the word “a” in the definition clauseof “shop” contained in Section 2(17) for the purpose of the Act of1958, it would nonetheless be a “commercial establishment” as hasbeen separately defined in Section 2(3) of the Act. The corequestion that needs to be answered therefore is whether the “shop”in question considering either a “commercial establishment” or a “shop” attached to a factory or independently as a shop by itself,would qualify the provision of exemption contained in Section 3(1)(a) where the words used are “offices of or under the Central orunder the State Government”. The definition of the word “shop” asgiven in Section 2(17) is an inclusive definition which defines theword “shop” to mean where any trade or business is carried on orwhere services are rendered to customers and includes offices, storerooms, godowns or warehouses, whether in the same premises orotherwise, used in connection with such trade or business, but atthe same time, excluding “commercial establishment” or a “shop”attached to a factory where the persons employed in the shop areallowed the benefits provided for workers under the Factories Act,1948. The latter part of the definition has made exclusion of“commercial establishment” or “shop” attached to a factory wherethe persons employed therein are allowed the benefits provided forworkers under the Factories Act and that exclusion appears to havebeen purposely made so that such workers are not deprived of morefavourable benefits available to them under the Factories Act. Whattherefore becomes evident is that even if the shop in question is nottaken as a “commercial establishment” or a “shop” attached to afactory run by the respondent mill, it would nonetheless be a shopcovered by the earlier part of the definition clause which defines a

shop to mean “where any trade or business is carried on or whereservices are rendered to customers and includes offices, store-rooms, godowns or ware-houses, whether in the same premises orotherwise, used in connection with trade or business.” A criticalanalysis of this definition clause would thus show that a shop runfrom any premises would also include offices used in connectionwith such trade or business whether situated in the same premisesor otherwise. Although, it is trite law that an exemption clause inany provision of an enactment has to be construed strictly but at thesame time, it is also settled proposition of law that while interpretingprovisions of an enactment, regard must be had not only to theother provisions contained in the enactment but also to the objectand the purpose which the Act seeks to achieve. In doing so, thecourts have to harmonise various provisions of the enactment insuch a way so as to make the Act workable consistent with themischief it seeks to suppress and the object it intends to achieve.

Analyzing the well known principle of the harmoniousconstruction, the Hon'ble Supreme Court in British Airways Plc. vs.Union of India & Ors., (2002)2 S.C.C. p.95 observed in para 8 asunder :- “8. While interpreting a statute the court should try tosustain its validity and give such meaning to the provisions which advance the object sought to beachieved by the enactment. The court cannot approachthe enactment with a view to pick holes or to search fordefects of drafting which make its working impossible. Itis a cardinal principle of construction of a statute thateffort should be made in construing the differentprovisions so that each provision will have its play andin the event of any conflict a harmonious constructionshould be given. The well-known principle ofharmonious construction is that effect should be givento all the provisions and for that any provision of thestatute should be construed with reference to the otherprovisions so as to make it workable. A particularprovision cannot be picked up and interpreted to defeatanother provision made in that behalf under the statute.It is the duty of the court to make such construction ofa statute which shall suppress the mischief and advancethe remedy. While interpreting a statute the courts arerequired to keep in mind the consequences which arelikely to flow upon the intended interpretation.”

Their Lordships of the Hon'ble Supreme Court in Unionof India vs. Elphinstone Spinning and Weaving Co.Ltd. and Ors.,(2001) 4 S.C.C. p.139 in para 17 of the judgment observed asunder:- “17.......xxxx........xxxxx..................xxxx...........xxxx.....When the question arises as to the meaning of a certainprovision in a statute it is not only legitimate but properto read that provision in its context. The context meansthe statute as a whole, the previous state of law, otherstatutes in pari materia, the general scope of the statuteand the mischief that it was intended to remedy.”

In State of Gujarat vs. Salimbhai Abdulgaffar Shaikh,(2003) 8 S.C.C.p.50 while interpreting the provisions of thePrevention of Terrorism Act, 2002 their Lordships of the Hon'ble Supreme Court had the following observations to make in regard tothe principle of interpretation of statute:- “12..........xxxxxx..................xxxxxx It is a well-settledprinciple that the intention of the legislature must befound by reading the statute as a whole. Every clause ofa statute should be construed with reference to thecontext and other clauses of the Act, so as, as far aspossible, to make a consistent enactment of the wholestatute. It is also the duty of the court to find out thetrue intention of the legislature and to ascertain thepurpose of the statute and give full meaning to thesame. The different provisions in the statute should notbe interpreted in the abstract but should be construedkeeping in mind the whole enactment and the dominantpurpose that it may express.........xxxxxx.........xxxxxx...”

Similarly, the Constitutional Bench of the Hon'ble Supreme Court in the Gujarat Assembly Election Matter, (2002) 8S.C.C. p.237 observed that in providing the key to the meaning ofany word or expression the context in which it is said hassignificance. The words used in the statute cannot be read inisolation and have to take their colour and content from the contextin which they are used. It would be profitable to quote in extensopara 136 of the said judgment as under :- “136. In providing key to the meaning of any word orexpression the context in which it is said hassignificance. Colour and content emanating from contextmay permit sense being preferred to mere meaningdepending on what is sought to be achieved and what issought to be prevented by the legislative schemesurrounding the expression. It is a settled principle thatin interpreting the statute the words used thereincannot be read in isolation. Their colour and content are derived from their context and, therefore, every word ina statute must be examined in its context by the word“context”. It means in its widest sense as including notonly other enacting provisions of the same statute butits preamble, the existing state of the law, otherstatutes in para materia and the mischief which thestatute intended to remedy. While making suchinterpretation the roots of the past, the foliage of thepresent and the seeds of the future cannot be lost sightof. Judicial interpretation should not be imprisoned inverbalism and words lose their thrust when read invacuo. Context would quite often provide the key to themeaning of the word and the sense it should carry. Itssetting would give colour to it and provide a cue to theintention of the Legislature in using it. A word is not acrystal, transparent and unchanged; it is the skin ofliving thought and may vary greately in colour andcontent according to the circumstances and the time inwhich the same is used as was observed by Holmes,J.In Towne v. Eisner (245 US 418, 425).”

The courts have to make a contextual interpretation ofthe provisions in a given enactment especially the one relating toexemption. What therefore appears from Section 3(1)(a) of the Actis that when the legislature intended to exclude the offices under theState Government from the purview of the Act of 1958, the office ofthe respondent mill was therefore entitled to exemption from thepurview of the Act of 1958 and such offices whether or not situatedin the same premises wherefrom the shop in question was beingrun nonetheless were offices used in connection with such trade orbusiness which was carried on from the shop in question. This wasso because trade and the business was the activity which was

carried on from the shop where services were rendered to thecustomers as envisaged in Section 2(17) of the Act of 1958. If theargument of the appellant in the present case were to be upheld, itwould result into absurd consequences in that while the offices ofthe respondent mill would be exempt from the purview of the Act of1958, but the shop run by it would not be exempt and therefore forone part of its establishment, the Act of 1958 would apply and forthe other part, it would not. An interpretation which leads to suchabsurd consequence and incongruous results should always beavoided especially when it would result into frustrating the veryobject of providing exemption clause contained in Section 3 of theAct of 1958.

The Hon'ble Supreme Court in Bhatia International vs.Bulk Trading S.A. & Anr., (2002)4 S.C.C. p.105 while interpreting theprovisions of Arbitration and Conciliation Act, 1996 held that wherethere is scope of two possible constructions, a reasonable andcommon sense approach deserves to be adopted rather thanpreferring a construction that would lead to absurd results. TheirLordships in para 15 of the judgment observed as under:- “15...................xxxxx.........xxxxxxx.........xxxxxx...........If a statutory provision is open to more than oneinterpretation then the court has to choose thatinterpretation which represents the true intention of the

legislature. This task often is not an easy one andseveral difficulties arise on account of variety ofreasons, but all the same, it must be borne in mind thatit is impossible even for the most imaginative legislatureto forestall exhaustively situations and circumstancesthat may emerge after enacting a statute where itsapplication may be called for. It is in such a situationthe court's duty to expound arises with a caution thatthe court should not try to legislate. While examining aparticular provision of a statute to find out whether thejurisdiction of a court is ousted or not, the principle ofuniversal application is that ordinarily the jurisdictionmay not be ousted unless the very statutory provisionexplicitly indicates or even by inferential conclusion thecourt arrives at the same when such a conclusion is theonly conclusion. Notwithstanding the conventionalprinciple that the duty of Judges is to expound and notto legislate, the courts have taken the view that thejudicial art of interpretation and appraisal is imbued withcreativity and realism and since interpretation alwaysimplied a degree of discretion and choice, the courtswould adopt, particularly in areas such as, constitutionaladjudication dealing with social and defuse rights.Courts are therefore, held as “finishers, refiners andpolishers of legislation which comes to them in a staterequiring varying degrees of further processing”(seeCorocraft Ltd. v. Pan American Airways, All ER at p.1071D, WLR at p.732, State of Haryana v. SampuranSingh,AIR at p.1957). If a language used is capable ofbearing more than one construction, in selecting thetrue meaning, regard must be had to the consequences,resulting from adopting the alternative constructions. Aconstruction that results in hardship, seriousinconvenience, injustice, absurdity or anomaly or whichleads to inconsistency or uncertainty and friction in thesystem which the statute purports to regulate has to berejected and preference should be given to thatconstruction which avoids such results.”

Similarly, the Hon'ble Supreme Court in ShashikantSingh vs. Tarkeshwar Singh & Anr, (2002)5 S.C.C. p.738 while elaborating upon the same principle of the law relating tointerpretation of statutes observed in para 12 of the said judgmentas under:- “12. ........................xxxxx................xxxxx..................The construction to be placed on a provision like thishas to commend to justice and reason. It has to be areasonable construction to promote the ends of justice.The words “could be tried together with the accused” inSection 319(1) cannot be said to be capable of only oneconstruction. If it was so, approach to be adopted wouldbe different since the intention of Parliament is to berespected despite the consequences of interpretation.There is, however, a scope for two possibleconstructions. That being the position, a reasonable andcommon sense approach deserves to be adopted andpreferred rather than a construction that would lead toabsurd results of Respondent 1 escaping the trialdespite passing of an order against him on the court'ssatisfaction under Section 319(1) and despite the factthat the proceedings against him have to commenceafresh.............................”

In the light of discussion that we have made with regard

Conclusion

In the light of discussion that we have made with regard to interpretation of Section 3 of the Act, the impugned judgment ofthe learned Single Judge in our view does not suffer from any legalinfirmity. The appeal therefore deserves to be dismissed.

Adverting now to the writ petition, we must observethat in the ordinary course, the writ petition filed in the year 1989

challenging the validity of the order of removal passed way back on21/26[th] September, 1981 would have been liable to be rejected onthe ground of delay and latches but in the peculiar facts of the case,we find that the appellant has been non-suited in the remedy beforethe Prescribed Authority under the Act of 1958. What is more, thematter was twice remanded by this Court at the instance of therespondents and when the respondents approached this Court yetagain on third occasion, this third writ petition was dismissed. ThePrescribed Authority by its order dated 17.2.1988 then allowed theapplication of the appellant giving rise to the writ petition in whichthe principal argument of the respondent was with regard to non-maintainability of the application before the . It was by taking cluefrom this objection that the appellant filed the present writ petitionby way of abundant caution so that if the writ petition of therespondents succeeded on the objection of maintainability, he couldseek his remedy in the writ petition.

Chief argument of Mr. M. Mridul , learned SeniorAdvocate in assailing the validity of the order dated 21/26.9.1981 isthat there were large number of persons working in the shop andthat appellant was working in that shop in only supervisory capacity.

He had to go out of the shop for long durations. Sale proceeds werereceived by the salesman and therefore shortage of the money oncertain dates when the checking was made by the vigilance cannotbe attributed to the appellant alone. Mr. M.Mridul argued that evenif liquor in certain bottles subjected to test check was found to be oflesser strength, this charge also cannot be taken to have beenproved against the appellant alone just because it could not beproved against same other employee. Essence of the argument isthat the charges against the appellant have not been provedpointedly by direct evidence that it was he who pocketed the moneyfound short and further that it was he who opened the bottles andadulterated the same by mixing water therewith. Apart from this,the other argument that has been made is that the appellant wasnot allowed to produce Matadin and inspect cash book of the shop.We have also gone through the memorandum of writ petition andwhat we find from perusal thereof is that most of the argumentsraised in assailing the validity of the termination order pertain tosufficiency and adequacy of the evidence. It is argued that ShriS.N.Bhargava who made checking of the shop was also notproduced in evidence which has prejudiced the case of theappellant. Even if what has been argued is accepted that theappellant merely had the supervisory duty still the fact remains that

he was incharge of the shop and on record we find that when on asmany as seven occasions, the checking was done by the vigilanceparty, the liquor was found to have been adulterated by mixingwater therewith on four occasions namely on 8.1.1979, 7.2.1979,12.4.1979 and 31.4.1979 whereas cash was found short on at leasttwo occasions namely on 10.12.1978 and 26.4.1979. The inquiry inthe present case was conducted by one Shri U.N. Mathur, a retiredjudicial officer, who has conducted the disciplinary proceedings in animpartial and independent manner so much so that when therespondents failed to produce Shri S.N. Bhargava, Incharge ofVigilance Cell as a witness, charge no. 2 against the appellant wasfound not proved. The 'fard' Ex.P/3 was prepared when the checkingwas made on 10.12.1978 regarding cash shortage of Rs.92.66 andthe signature of the appellant was also taken on it. Similarly, 'fards'Exs.P/4, P/6, P/7 and P/8 prepared to record reduction in thestrength caused as a result of mixing of water with liquor alsocontained the signature of the appellant. The explanation given bythe appellant with regard to the shortage of the cash was thatcurrency notes were sent to the bank for collection has not beenfound to be acceptable by the enquiry officer and/or disciplinaryauthority. As regards non-production of Matadin, no efforts areshown to have been made by the appellant to produce him as a witness although the case of the respondent was that he beingmerely a daily wage employee was removed after the incident ofadulteration with the liquor surfaced. A perusal of Annexure R/2dated 25.11.1978 clearly show as to what duties the appellant wasrequired to perform. This order was issued in regard to the dutychart of the Incharge of the shops of the country made liquor run bythe respondents. This required them to remain present from 9 a.m.to 11 a.m. in the morning and to deposit the cash received duringthat period between 11 a.m. to 12 noon and furnish the statementof sale and thereafter again remain present from 6 p.m. to 10 p.m.in the night. It also directed that the incharge of the shops wouldensure that there were no empty bottles and half bottles in the shopand if during investigation any such empty bottles were found, itshall be assumed that such empty bottles were misused for thepurpose of mixing water with the liquor. This clearly show that mal-practice of the mixing water with the liquor was rampant and wasfully known to the management.

It is trite law that this Court in exercise of its powers ofjudicial review can interfere in a disciplinary matter only when itfinds that the findings recorded by the enquiry officer and/ordisciplinary authority are based on no evidence and there are no materials to support the conclusions so arrived at or if the material on the basis with such conclusion has been reached was such thatno reasonable or prudent man on that basis could have arrived atsuch conclusion.The Hon'ble Supreme Court in Govt. of A.P. &Ors. vs. Mohd. Nasrullah Khan, (2006) 2 SCC p.373 whileconsidering the very same question observed in para 11 as under :- “11. By now it is a well-established principle of law thatthe High Court exercising power of judicial review underArticle 226 of the Constitution does not act as anappellate authority. Its jurisdiction is circumscribed andconfined to correct errors of law or procedural error, ifany, resulting in manifest miscarriage of justice orviolation of principles of natural justice. Judicial reviewis not akin to adjudication on merit by reappreciatingthe evidence as an appellate authority.”

Their Lordships of the Hon'ble Supreme Court in Indian Oil Corporation Ltd. & Anr. vs. Ashok Kumar Arora, (1997) 3 S.C.C.

p.72 while considering the scope of interference by the High Court in cases relating to departmental enquiries observed in para 20 asunder:-

“20. At the outset, it needs to be mentioned that theHigh Court in such cases of departmental enquiries andthe findings recorded therein does not exercise thepowers of appellate court/authority. The jurisdiction ofthe High Court in such cases is very limited for instancewhere it is found that the domestic enquiry is vitiatedbecause of non-observance of principles of naturaljustice, denial of reasonable opportunity; findings arebased on no evidence, and/or the punishment is totally disproportionate to the proved misconduct of anemployee. There is a catena of judgments of this Courtwhich had settled the law on this topic and it is notnecessary to refer to all these decisions. Suffice it torefer to a few decisions of this Court on this topic viz.State of A.P. vs. S.Sree Rama Rao, (1964) 3 SCR 25,State of A.P. vs. Chitra Venkata Rao, (1975) 2 SCC 557,Corpn. Of the City of Nagpur v. Ramchandra, (1981) 2SCC 714 and Nelson Motis v. Union of India, (1992) 4SCC 711.”

The very same view was reiterated by their Lordships in Principal Secretary, Govt. of A.P. & Anr. vs. M.Adinarayana, (2004)12 SCC p.579 in para 24 and 25 as under:- “24. The order of the Administrative Tribunal interferingwith the well-considered order of TDP is unwarranted.APAT cannot sit as a court of appeal over a decisionbased on the finding of the enquiry authority indisciplinary proceedings. Where there is some relevantmaterial which the disciplinary authority has acceptedand which material reasonably supported the conclusionreached by the disciplinary authority, it is not thefunction of APAT to review the same and reach adifferent conclusion. So, it is well settled that if thefindings recorded by the tribunals or of the disciplinaryauthorities, are found to be perverse, which are notbased on the legal evidence, then the AdministrativeTribunal or the court is empowered to treat such flaw asa legal flaw and quash the impugned action. In theinstant case, the fact-finding authority has based itsfindings on legally permissible substantive evidence.And, therefore, such a finding on fact based onsubstantive evidence is not permissible to be interferedwith.

25. In our opinion, the Administrative Tribunal cannotignore the findings of the disciplinary authority or thetribunals. The truth or otherwise of the charge is amatter for the disciplinary authority to go into. Theignore the findings of the disciplinary authority or thetribunals. The truth or otherwise of the charge is amatter for the disciplinary authority to go into. The

Analysis

finding of the court or tribunal under judicial reviewwhich, in our opinion, cannot extend to the re-examination of all evidence to decide the correctness ofthe charge. In our view, the Administrative Tribunalcannot sit as a court of appeal over a decision based onfinding of the enquiry authority in disciplinaryproceedings. This Court, time and again, categoricallystated that Court should not interfere with the quantumof punishment where there is some relevant materialwhich the disciplinary authority has accepted and whichmaterial has reasonable support, the conclusion reachedby the Disciplinary Tribunal, it is not the function of theAdministrative Tribunal to review the same and reach adifferent finding than that of the disciplinary authority.”

In our considered view, this Court cannot in exercise ofits power of judicial review under Article 226 of the Constitution ofIndia interfere with the order of disciplinary authority, when on thefacts of the present case, it is found that there was ample evidenceon which finding recorded by the Inquiry Officer and upheld by thedisciplinary authority can be based. This Court in exercise of itspower of judicial review under Article 226 of the Constitution cannotre-evaluate such evidence and supporting material to testcorrectness of the findings so recorded as if it were a remedy ofappeal. The charges against the appellant were proved bysubstantive evidence and the evidence on record reasonably supportthe conclusion reached by the disciplinary authority. The impugnedorder of removal therefore does not suffer from any illegality.

Aditya/-

In view of what has been discussed above, the specialappeal and the writ petition are both dismissed. In the facts of thecase, we leave the parties to bear their own costs.

(MOHAMMAD RAFIQ),J. (S.N.JHA),C.J.