2005 PLP 286 (PLC)

The Muslim Commercial Bank has filed L.A. No.35 of 2004 against the judgment and order of the Presiding Officer Labour Court Malakand at Saidu Sharif, Swat dated 9-10-2004 by which the Court accepted the grievance petition filed by the respondent Shamsul Aulia, Ex Officer Grade III Muslim Commercial Bank (MCB) Bisham, District Shangla and set aside the order of dismissal from service dated 14-9-1998 and reinstated him with full back-benefits. Shamsul Aulia had filed cross-objection No.38 of 2004 questioning the finding of the Labour Court that the inquiry was held in accordance with the law. In the cross-objection however no further relief has been claimed.

2. The action against Shamsul Aulia, (hereinafter referred to as the respondent) arose from a case of misappropriation of a total of Rs.11,82,300 encashed from the Bisham Branch of MCB through 31 cheques from January, 1997 to October, 1998. The main charge was against the Manager of the Bank Attaullah who was directly charged for misappropriation of the amount whereas the respondent being a cashier of the Bank was alleged to have been aware of the embezzlement and had concealed the fact from the management of the Bank and than he made payments in violation of the Bank staff rules and thus was guilty of misconduct.

3. Separate inquiries were held against Attaullah and the respondent. Both of them were found guilty who served grievance notices on the employer and eventually filed separate grievance petitions before the Labour Court at Swat. The petitions were dismissed on the ground that both the employees, being officers of the Bank, did not fall within the definition of workman. On appeal, the Chairman Labour Appellate Tribunal N.-W.F.P. remanded the cases to the Labour Court for determining the question of maintainability after recording evidence. The petitions were once again dismissed on 30-1-2001. The two employees again filed appeals and this time the Chairman Labour Appellate Tribunal N.-W.F.P. held the employees to be workmen and remanded the cases to the Labour Court for deciding the grievance petitions on merits, it seems Attaullah did not press his case further and admittedly he has deposited the entire misappropriated amount. The present respondent pursued his grievance petition and consequently was reinstated by the impugned order.

4. Qazi. Muhammad Anwar, Advocate, appeared for MCB and Mr. Ijaz Anwar, Advocate, represented the respondent. The learned counsel for the Bank submitted that though there is no allegation of misappropriation by the respondent, he had facilitated the misappropriation by his failure to obtain on the cheque the signature of the person who presented the cheque before making payment in violation of the Bank's instruction. Further that the respondent being a local was acquainted with the clients, yet made payments without verifying the identity of the person presenting the cheque. The learned counsel referred to the relevant provisions in the Operations Manual of MCB which incorporates, inter alia, the procedure that is to be followed by the payments of cheques. The learned counsel further contended that the finding of the Inquiry Officer on the question of fact regarding misconduct by the respondent cannot be interfered with by the Labour Court unless such finding was perverse or illegal or the inquiry proceedings were defective. In support of this contention the learned counsel relied upon Raja Javed Akhtar v. Executive Vice-President UBL (1998 SCMR 212) and Muhammad Shamim v. Pakistan Tobacco Company (1975 SCMR 46). 4-A. In response to the above contentions the learned counsel representing the respondent argued that there was no allegation of misappropriation against the respondent. That the Manager of the Bank, Attaullah had accepted his sole responsibility for misappropriating the amount in question. That there is no positive evidence that the respondent was aware that the amounts were being fraudulently misappropriated through the cheques. The learned counsel cited the case of Allied Bank of Pakistan v. M. Zaheerul Hassan (1990 PLC 238) for the proposition that mere failure to follow the rules would not per se amount to misconduct. As regards the scope of the jurisdiction of the Labour Court to examine the factual aspect of the case the learned counsel relied upon a judgment of the Hon'ble Supreme Court in the case of Cresent Jute Products Ltd. v. Muhammad Yaqub etc. (PLD 1978 SC 207).

5. It is not the bank's case that the respondent has misappropriated the amount or that Attaullah, the Manager, had misappropriated the amount with the connivance of the respondent. In fact. separate inquires against the respondent and Attaullah were held. Whereas Attaullah as charged for misappropriation, the allegations against the respondent in the charge-sheet were that having knowledge of the misappropriation he failed to inform the management and that he had violated the bank staff rules. As stated earlier Attaullah had already made good the loss to the bank and had abandoned his legal remedy against the Bank. The only serious allegation against the respondent is that he had violated the Bank's instructions regarding obtaining signature from the presenter of the cheque before making payments. Such requirement is mentioned in clause (v) of para 1.18.03 on page 116 in Chapter 18 of the operations manual of MCB, The provision reads as under: "(V) The cheque then will be delivered to the Cashier for payment, who would make the payment after surrender of token and obtaining signature of the presenter. This signature obtained must be tallied with the presenter's signature already obtained at the time of issuance of token."

6. The above provision does require the cashier to obtain the signature of the presenter of the cheque before making payment for the purpose of tallying the signature of the presenter obtained when the cheque was first presented for the issuance of token for payment. The respondent in his statement before the Inquiry Officer stated that he did not obtain the signature of the presenter of the cheque at the time of making payment as already there were two signatures affixed on the cheque. According to the judgment in the case of Allied Bank of Pakistan v. Muhammad Zaheerul Hassan, ibid, violation of a rule would not by itself amount to misconduct, however it is to be seen as to whether the violation of the above instruction by the respondent facilitated mis appropriation of the amount by Attaullah.

7. The Inquiry Officer found the respondent responsible for facilitating the misappropriation on the ground that he was a local, and, besides him, there were only two other officers serving in the Branch. That, therefore, it was not possible that the respondent should not have been aware of the encashment of as many as 31 cheques fraudulently. The learned counsel for the Bank also referred to the cross-examination of the respondent before the Inquiry Officer where he was specifically asked that he had arranged a meeting between one of the account holders Jamroz Khan, from whose account some of the said cheques had been encashed, with the auditors who were probing into the misappropriation. The learned counsel had, therefore, contended that the said account holder was personally known to the respondent. In response to the said question the respondent stated that he did not remember whether he had made payments to the said person or to some one else. He however, categorically responded to another question that he had not made payments to the Manager Attaullah on any of the cheques. He further clarified that since there were already two signatures on the cheques, he did not deem it necessary to obtain a 3rd signature. The 31 cheques in question had been drawn for different amounts on 7 PLS accounts. The respondent was neither asked in cross-examination before the Inquiry Officer, nor while testifying before the Labour Court as to whether he had known any of the account-holders personally. There was even no suggestion made to that effect. None of the account-holders was produced either before the Inquiry Officer or before the Labour Court in order to testify that the respondents were personally acquainted with them. The Bank has also not clarified as to whether the presenter of the cheques were the account holders themselves or bearer cheques issued apparently for payment to somebody else. The Inquiry Officer gave the following reasons for holding that the respondent was aware of the misappropriation but had concealed the same:-- "In a small village Branch of 3 persons it is not possible to keep such a heavy misappropriation in camera. Besides this, Shamsul Aulia (accused) is a local person and most of the clients might be known to him by face."

8. The Inquiry Officer drew his conclusion from the above observations. Clearly the same is based on surmises and conjectures and not on any evidence. It has not been proved as a fact that any of the customers was known to the respondent and that the payments were made to the customer.

9. In the case of Muhammad Shamim decided on 12-9-1974 the Hon'ble Supreme Court had held that a question of fact determined by an Inquiry Officer as to whether or not an employee had committed the offence charged with cannot be gone into by the Labour Court which is only concerned with the question as to whether the action was in accordance with the law. In that case the Inquiry Officer had found that the employee had committed theft and thus the Hon'ble Supreme Court held that it was not open to the Labour Court to re-determine this question. The judgment was delivered in the case by the Hon'ble Mr. Justice Wahid-ud-Din. However in the latter judgment, Cresent Jute Products Ltd, ibid, decided on 28-6-1978, authored by the Hon'ble Mr. Justice Karam Ilahi Chauhan, and the Hon'ble Mr. Justice Wahid-ud-Din, also graced the Bench, it was held as follows:-- "The words `shall go into all the facts of the case clearly signify that the Junior Labour Court has full and complete powers to enter even into questions of fact and to arrive at its own conclusions regardless of there being no illegality of procedure in the domestic proceedings. By use of these words the intention of the Legislature appears to provide a double check, one in the form of a domestic enquiry to be held by an employer and the other in the form of a judicial determination by the Junior Labour Court itself."

10. The earlier judgment of the Hon'ble Supreme Court may have turned on its own facts. However since the Cresent Jute Products Ltd. case is later in time and lays down a clear enunciation of the law on the extent of which the Labour Court can determine question of fact the principle laid down therein is to be followed. Even on the touchstone of Muhammad Shamim's case the finding of the Inquiry Officer cannot be sustained, which as stated above is based not on evidence but on presumptions.

11. Although the Bank has been able to establish that the respondent had not followed the instructions regarding obtaining of the signature of the presenter, but has failed to show as to how such failure had facilitated the misappropriation by the Manager Attaullah. Thus the impugned judgment and order of the Labour Court is upheld. The appeal is dismissed and so also the cross-objection as having become infructuous. H.B.T./420/P Appeal dismissed. *** 2005 PLC 291 [N.-W.F.P. Labour Appellate Tribunal] Before Mian Shakirullah Jan, C.J AFTAB AHMAD Versus GOVERNMENT OF N.-W.F.P. through Secretary Forest and 4 others Appeal No.20 of 2000, decided on 14th April, 2004. Industrial Relations Ordinance (XXIII of 1969)

Ss. 25-A, 37(3) & 38

West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance (VI of 1968), S.Os. 12(3) & 15(4)

Forfeiture of Golden Handshake amount

Grievance petition

Appeal to Labour Appellate Tribunal

Appellant, after satisfactorily serving 6/7 years as Assistant Forest Munshi, went abroad on six months leave without pay; in the meantime Collective Bargaining Agent Union of the Corporation accepted Golden Handshake offer of Government and agreement was arrived at between parties in that respect

Agreement showed that amount of Golden Handshake would not be paid to those employees against whom embezzlement cases were pending till decision of their cases; in the meantime on complaints regarding illicit cutting of trees in areas under charge of appellant, an inquiry Was held and appellant was held responsible for cutting of trees and also for tampering with the record and in the light of inquiry report, Authority ordered forfeiture of amount of Golden Handshake of appellant

Grievance petition filed by appellant against forfeiture of said amount having been dismissed by Labour Court, appellant had filed appeal before Labour Appellate Tribunal

Appellant neither was associated with proceedings of Enquiry Committee nor he was given any show-cause notice showing his guilt in the alleged illicit cutting of trees

Inquiry Officer in his report had admitted that statement of appellant could not be recorded as he had gone abroad

Before taking an action against appellant, the mode as laid down in Order 15(4) of West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 should have been followed which implied that as and when any misconduct of any, workman came to the notice of employer, workman would be informed within a period of one month in writing of alleged misconduct and he would be given an opportunity to explain circumstances alleged against him, but that had not been done in case of appellant and he was condemned unheard

Impugned order of Labour Court was set aside and Labour Appellate Tribunal while accepting appeal, allowed Golden Hand Shake amount to appellant which was withheld/forfeited by respondent-Corporation. Ijaz Anwar for Appellant. Nisar Ahmad Khan for Respondent. Date of hearing: 25th October, 2003. JUDGMENT This appeal is directed against the judgment and order of the Presiding Officer of the Labour Court. Peshawar (Camp at Mangora) dated 29-2-2000 vide which the grievance petition filed by one Aftab Ahmed, an employee of the Forest Development Corporation, N.-W.F.P., against forfeiture of his Golden Hand Shake amount of Rs.66,357, was dismissed.

2. Facts leading to the filing of the instant appeal are that one Aftab Ahmad joined Forest Development Corporation (hereinafter referred to as FDC) as Assistant Forest Munshi on 14-1-1990 vide Exh. P.W.3/1. After satisfactorily serving 6/7 years in the said capacity, in November, 1996, he applied for six months leave without pay and on verbal assurance from his immediate boss regarding approval of his leave, he proceeded on leave and then went abroad. In the year 1997, certain complaints were received by the high-ups of FDC from the royalty holders of FDC Lot No.172/M regarding illicit cutting of trees in Lilowani Compartment Nos.12, 13, 14 and 15, and on which, the Manager Forest Operations, N.-W.F.P. FDC, Swat, ordered enquiry into the allegations vide order dated 2-7-1997 and the Inquiry Committee consisting of two members/Officers of the FDC started enquiry into the facts. In the meantime, the CBA Union of the FDC accepted the Golden Hand Shake offer of the Government and agreement was arrived at between the Government and the CBA of FDC on 20th December, 1997 and in. this agreement it was also decided that the amount of Golden Hand Shake would not be paid to those employees against whom embezzlement cases were pending till decision of their cases. The enquiry initiated on the complaints of royalty holders of Lot No.172/M was completed on 3-1-1998 wherein the said Aftab Ahmad, Assistant Forest Munshi, being Incharge of the said Lot No.172/M during the said period, was held responsible for cutting trees and also for tampering in the record. In the said report it was recommended that the amount of Golden Hand Shake may not be paid to him and be forfeited in favour of the FDC. The Manager Forest Operations/respondent No.3 in the light of enquiry report dated 3-1-1998, addressed a letter dated 5-1-1998 (vide Exh. P.W.1/9 to the Managing Director, FDC, N.-W.F.P./respondent No.2 for necessary action and the Managing Director/respondent No.2 consented with the enquiry report and ordered forfeiture of amount of Golden Hand Shake of Aftab Ahmed, vide letter. Order dated 10th February, 1998.

3. Aftab Ahmad, being aggrieved of the order dated 10-2-1988 regarding forfeiture of his Golden Hand Shake amount of Rs,66,357, served a grievance notice upon the high-ups the FDC and thereafter he filed a grievance petition under section 25-A of the Industrial Relations Ordinance before the Labour Court. The petitioner in support. of his petition appeared as P.W. as his own witnesses besides producing three other witnesses while the FDC produced a sole witness Muhammad Afzal Deputy Forest Manager, Alpuri as R.W.1. The learned Presiding Officer of the Labour Court after going though the material placed by the parties in support of their claims and hearing the arguments of their learned counsel, came to conclusion that the FDC has rightly forfeited the petitioner's amount of Golden Hand Shake in view of fraud committed by him as per enquiry dated 3-1-1998, vide order of the learned Labour Court dated 29-2-2000, hence the instant appeal by Aftab Ahmad.

4. The learned counsel for the appellant has contended that the appellant was permanent worker of the FDC, having served for 6/7 years, and till winding up of the FDC, he was performing his duties satisfactorily; that the appellant was not associated with the proceedings of the Enquiry Committee nor he was given any show-cause notice showing hig guilt in the alleged cutting of the trees etc. and as such the proceedings of the Enquiry Committee qua the fixation of responsibility upon the appellant regarding cutting of illicit trees, etc., are not binding upon him and that the amount of Golden Hand Shake was illegally withheld by the respondents and that the learned Labour Court has confined its findings of the extent of absence of the appellant though it was not the matter in dispute and as such decided the petition on wrong premises.

5. While on the other hand, the learned counsel appearing for the FDC, has submitted that on the basis of proper enquiry conducted by the FDC, the appellant was found guilty and in terms of Clause-8 of the Golden Hand Shake Scheme, the appellant's amount of Golden Hand Shake was forfeited in favour of the FDC; that the grievance petition before the Labour Court was not maintainable on two fold grounds i.e. firstly, no grievance notice was served upon the respondents and secondly, the same was lacking any of the circumstances provided under Order 12(3) of the Standing Order Ordinance, 1968, requiring him to invoke the provisions of section 25-A of the I.R.O.

6. The perusal of enquiry report Exh. R.W.1/9 clearly shows that appellant was not associated with the enquiry proceedings as it contains certain observations to the effect: "The statement of Lot I/C Mr. Aftab Ahmad could not be recorded as he is gone abroad. Thus the genuine reasons for changes in the record may be well-known to him." Admittedly, there is nothing on the record to show that the appellant was abroad and this fact has also been admitted by the sole witness of the respondents in his cross-examination and as such before taking any action against the appellant, the mode laid down in Order 15(4) of the Standing Order Ordinance should have been followed which implies that as and when any misconduct of any worker/workman comes to the notice of the employer, the workman shall be informed, within a period of one month in writing of the alleged misconduct and shall be given an opportunity to explain the circumstances alleged against him. But conversely, the Authorities at the helm of affairs of the FDC did not bother to fulfil such legal formalities in that after receipt of facts findings enquiry indicating fault of the appellant, a proper enquiry against the appellant should have been conducted and the appellant should have been given show-cause notice/charge-sheet to explain the alleged accusations levelled against him and if the appellant was abroad and his service through ordinary mode of service was not possible, then the appellant should have been informed about the initiation of enquiry through publication of notice in the Newspaper and as such the maxim of golden principle of natural justice "audi alteram partem" has flagrantly been violated and this legal lacuna on the part of FDC created a vacuum which out rightly makes the impugned order on their part a sheer nullity in the eye of law.

7. As regards the non-service of grievance notice upon the respondents, suffice to say that the appellant while appearing as P.W. 1 has produced the copies of grievance notice dispatched to the respondents through registered post which have been exhibited as Exh. P.W. 1/1 to Exh. 1/4 and the postal Receipts bearing Nos.78,79 80 are exhibited as Exh. P.W.1/5. So in view of the dispatch of the grievance notices through registered post, for all practical purposes the same are deemed to have been served upon the respondents.

8. So far as the third contention of the learned counsel for the respondent that there was no circumstance in terms of Standing Order 12(3) of the Standing Order Ordinance, 1968, requiring the appellant to move the Labour Court, suffice to say that the appellant along with other employees of the FDC was terminated from service on the basis of agreement arrived at between the CBA of the FDC and the Government and as per the Scheme the appellant was given an amount of Rs.66,357 as Golden Hand Shake but later on, as a punishment, the same amount through an order dated 10th Feb., 1998, impugned herein, was withheld/forfeited in favour of the FDC on the ground that the appellant was found responsible for illicit cutting of the trees as well as changes in the record and this unilateral action on the part of FDC is tantamount to dismissal of the appellant attracting the provisions of the aforesaid Standing Order. So the appellant has rightly invoked the jurisdiction of the Labour under section 25-A of the I.R.O.

9. In view of the above discussion, the order of the Labour Court is set aside and while accepting this appeal, the appellant is allowed Golden Hand Shake withheld/forfeited by the respondent i.e. amount of Rs.66,357, with no order as to costs. H.B.T./3/N.-W.F.P. Appeal accepted. ***