' ZIA PERWAZ, J.---This Appeal, under section 47(3) of the Industrial Relations Ordinance, 2002, (the IRO) is directed against the impugned order dated 12-1-2004 passed by the learned Labour Court- V at Karachi on Application No,197 of 2002, filed by the respondent herein which was partly allowed and the respondent was directed to be reinstated in service.
2. The respondent was an employee of the appellant, working as Cashier at its Adam Arcade Branch. Cash dealings of this Branch of the appellant involved transfer of cash in excess of the prescribed limit as well as providing of cash as and when required by the Branch were being dealt with by its main feeding branch at Zaibunnisa Street. On 23-5-2001, the respondent, working as Cashier at the Adam Arcade Branch of the appellant transmitted cash amounting to Rs,1.4 million to the Zaibunnisa Street Branch, which was the feeding branch. On physical verification of the transmitted amount a shortage of Rs,146,000 was detected and therefore the cash was not accepted and was returned back to the Adam Arcade Branch at about 4.45 p.m. The Branch Manager of Adam Arcade Branch also physically checked the cash at the counter which led to discovery of further shortage of Rs,375,000, making a total shortfall of Rs,521,000. The respondent accepted the short fall of Rs,521,000 and passed a voucher dated 23-5-2001 for the shortfall in the suspense account to the extent of Rs,521,000 and the Books were balanced. On 19-6-2001, a charge-sheet was issued to the respondent. Thereafter an inquiry was conducted and the respondent was found guilty. Accordingly, he was dismissed from service. The respondent filed an appeal before the Chairman, Review Committee which was also dismissed. The respondent, then, filed Grievance Petition under section 25-A of the IRO, 1969 before the Labour Court-V at Karachi, which was partly allowed by the impugned order and the penalty of dismissal from service was converted into postponement of promotion for three years and the respondent was directed to be reinstated in service. Being aggrieved by the impugned order, the appellant has filed the present appeal.
3 Learned counsel for the appellant submitted that once the employee was found guilty of misconduct, it was the sole discretion of the employer to decide the quantum of punishment and contended that the Labour Court has no jurisdiction to interfere with exercise of such discretion of the employer. He also contended that once the employee uses the funds of the employer for his personal benefits, recovery of such funds does not absolve the employee of the misconduct committed by him.
4. On the other hand, the counsel for the respondent has contended that it is an admitted position that no financial loss was suffered by the appellant as the entire amount of the shortfall has been made good by the respondent. He also contended that the allegation of shortage has been levelled against the respondent and that no charge of embezzlement or misappropriation has been made in the Special Report and the charge of misappropriation and embezzlement was only an after-thought. He submitted that shortage of amount in the cash is a usual matter and, it cannot be termed as misappropriation or embezzlement. He also contended that had this been a case of misappropriation the appellant would have lodged a report to that effect with the area police, however, no such report has been lodged. Finally he stated that the trial Court has rightly reached the conclusion that the respondent has not committed any wrong for which the major penalty could be awarded and prayed that the Appeal may be dismissed and the respondent be allowed to resume his duties. In support of his contentions, he relied on the cases reported as (i)
Shamim Ahmed Kazmi v. Pakistan International Airlines Corporation and another (2005 SCMR 638),
(ii) A.D.B.P. And another v. Akif Javed (2005 SCMR 752), and (iii) President, United Bank Limited. V.
Iftikhar Hussain Khan and another (2003 PLC (C.S.) 497).
5. I have heard the learned counsel for the parties and have gone through the record with the assistance of the learned counsel.
6. In view of the arguments advanced by the respective counsel for the parties, the points for consideration are:
(1) Whether the grievance notice served by the respondent upon the appellant was valid?
(2) Whether the charge of embezzlement has been proved?
(3) Whether the impugned order, imposing penalty of postponement of promotion for a period of three years from the date when it became due, is a legal order?
7. Regarding the first point, concerning the validity of the grievance notice, the admitted position is that in the year 1981, when Habib Bank Limited, United Bank Limited, Muslim Commercial Bank and Allied Bank Limited were all nationalized banks, the rules of service were framed for the manner of service of grievance notice by an aggrieved employee. In the present case the- dismissal order was signed by the Regional General Manager, however, instead of addressing the grievance petition to the Regional General Manager, who was the competent Authority, the respondent addressed the grievance petition to the Chairman, Review Committee. The question regarding issue of grievance notice has been discussed in detail in the case of (2002 SCMR 943), the relevant portion whereof reads as under: "6. On the other hand learned counsel appearing for caveator contended that the appeal so filed by the petitioner against letter of dismissal dated 2nd May, 1996 to the next higher authority cannot be treated a grievance notice within the meaning of section 25-A, IRO. To substantiate his arguments, he relied upon 1984 PLC 89.
7. We have looked into available record as well as the impugned judgment consciously. It is an uncontroverted fact that against the dismissal order dated 22nd May, 1996 no grievance notice as required under section 25-A, IRO was served by the petitioner upon the employer. There is no gain in saying that the Appellate Authority is always considered to be distinct and different entity from the original authority competent to make appointment. According to the contents of appointment letter dated 4th May, 1983 the petitioner was appointed as Cashier by Regional Manager of MCB being the Appointing Authority whereas appeal was addressed in the name of the President of the Bank who admittedly was not his Appointing Authority. In addition to it, according to the Muslim Commercial Bank Ltd. (Staff) Service Rules, 1981, petitioner being a Cashier was a Category-II official, therefore, President of MCB could not be his Appointing Authority meaning thereby that for the purpose of section 25-A, I..R.O. Regional Manager would be the employer of the petitioner. As such we are inclined to associate ourselves with the contention put forward by the learned counsel for the caveator.
' As a result of above discussion we are of the opinion that petitioner initiated incompetent proceedings against the respondent as no grievance notice under section 25-A I.R.O., was issued.
As such, relief was rightly declined to him by High Court, vide impugned order."
8. In view of the above, a grievance notice addressed to the Chairman, Review Committee, who was not the Appointing Authority, was not valid and it was required to be addressed to the appointing authority/employer.
9. The second point for consideration is whether the charge levelled against the respondent i,e, the charge of embezzlement, was proved or not. Admittedly, it was the respondent who sent an amount of Rs,1.4, million to the Zaibunnisa Branch of the appellant. The amount on arrival was found short by Rs,146,000. When the amount was not accepted and returned back by the Zaibunnisa Branch, it was again checked by the Branch Manager and a further deficit of Rs,375,000 was detected. It was found that in the packets 2 currency notes of Rs,1000 denomination were put on top and two on a bottom and in between 96 currency notes of Rs,500 denomination were put.
Thus, giving an impression that it was a packet of 100 notes of Rs,1000 denomination, containing Rs, 100,000 while in fact it was a packet containing 4 notes of Rs,1000 denomination and 96 notes Rs,500 denomination, totalling Rs,52,000. When the respondent was confronted with this he admitted that it was done by him and readily agreed to reimburse the amount. Since the respondent admitted his guilt, therefore, there was no need to gather any evidence to prove the same. At no point of time the respondent raised any objection or contended that the confession was obtained from him through undue influence or under duress or coercion. Accordingly, I am of the considered view that in view of the admission of the respondent and the subsequent return of the major portion of the amount, the charge of embezzlement stood proved beyond any reasonable doubt.
10. The third point for consideration is whether the order setting aside the penalty of dismissal from service and imposing a penalty of postponement of promotion for a period of three years from the date when it became due, is a legal order.
11. The types of punishment that could be awarded under the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 are enumerated in section 15 thereof, relevant portion whereof is as under: "15. Punishments. (1)....Not relevant...
(2) A workman found guilty of misconduct shall be liable to any of the following punishments:-- fine in the manner prescribed under the Payment of Wages Act, 1936 (IV of 1936), upto three paisa in the rupee of the wages payable to him in a month; withholding of increment or promotion for a specified period not exceeding one year; reduction to a lower post; or dismissal without payment of any compensation in lieu of notice."
12. A bare perusal of the above Section shows that a person found guilty of misconduct shall be liable to any one of the following punishments, namely, (i) fme in the manner prescribed under the Payment of Wages Act, 1936 (IV of 1936); withholding of increment or promotion for a specified period not exceeding one year; reduction to a lower post; or dismissal without payment of any compensation in lieu of notice.
13. Sub-section (3) of Section 15 of the above Standing Order describes "misconduct" as under: "(3) The following acts and omissions shall be treated as misconduct:-- ..... (not relevant)....... theft, fraud, or dishonesty in connection with the employer's business or property; to (1)....... (not relevant)...."
14. From the above quoted clause (b) of sub-section (3) of section 15 of the Ordinance it is clear that a person guilty of theft, fraud or dishonesty in connection with the employer's business or property is liable to one of the above mentioned punishments.
15. Now it may be seen whether the acts of the respondent attract the above quoted provisions of law or whether they fall out of the pail. As discussed above, a shortage of Rs,521,000 was found in the cash which was under the direct supervision of the respondent. The respondent never reported to his superiors of any shortage in cash. As argued by the counsel for the respondent, in banks shortage of cash is a routine occurrence. However, it is worth mentioning that shortage of cash of such a huge amount (more than half a million Rupees) appears to be distinct from shortage of a few currency notes which may be attributed to human error. Furthermore, the manner in which the respondent tried to deceive his superiors coupled with the amount involved is not a routine matter.
It smells of ulterior motives and dishonesty. The respondent tried to deceive his superiors by putting two notes of Rs,1000 denomination on top and two on the bottom and between them, in place of 96 notices of Rs,1000, he put same number of notes of Rs, 500 denomination. Thus, he deliberately misrepresented Rs,500 notes as Rs,1000 notes and tried to cheat his employers. The respondent did not approach his superiors straightaway to inform them that a sum of Rs,521,000 is short in his cash Then perhaps he would have been considered as guilty of negligence. The acts of the respondent confirm that he misappropriated a sum of Rs,521,000 and then he tried to cover up the matter by cheating his superiors/employers in the manner described above and the case is not one involving "short cash" simpliciter. Thus, the respondent is not guilty of theft only, but he is guilty of all the three acts mentioned in the said sub-clause i,e, theft, fraud and dishonesty.
16. An inquiry revealed that the respondent was guilty and accordingly he was dismissed from service. It is the sole discretion of the employer to decide the quantum of punishment keeping in view the nature of the banking business and maintenance of financial discipline. The Labour Court has no jurisdiction to interfere with exercise of such discretion of the employer. This issue was considered at length in the case of Punjab Road Transport v. Punjab Labour Court No,2 and another, wherein, after observing that in determining the exact punishment to the inflicted the factors invariably taken into consideration in the case of an employee are the length of his service, the quality of service rendered by him and the gravity of the default or dereliction of duty, it was held that "In awarding a punishment permitted by law the employer is exercising a discretion which is not open to review by any outside Authority. It is only when he does not observe the law or exceeds its limits that the intervention of an outside authority or Tribunal is called for." Therefore, employer acted in accordance with the law and did not exceed its limits, it was not open to the Labour Court to set aside the punishment awarded by the employer and to substitute his own judgment therefor.
17. The learned counsel for the respondent has contended that the allegation of shortage has been levelled against the respondent and that no charge of embezzlement or misappropriation has been made in the Special Report and the charge of misappropriation and embezzlement was an afterthought. This contention is fully repelled by the first para. On page 2 of the Special Report, which reads as under: "From the foregoing, it is evident That Mr. Muhammad Bashir, Cashier has committed misappropriation/embezzlement." (Emphasis supplied).
18. The learned counsel also contended that no loss was caused to the appellant and that if this was a case of misappropriation the appellant would have lodged a report to that effect with the area police, however, no such report has been lodged.
19. Mere fact that the amount embezzled was returned by the respondent to the appellant does not absolve the respondent of the misconduct committed by him. It is proved that the respondent is liable to refund the amount so embezzled but at the same time he has also to face the other consequences of his dereliction. One such consequence is the departmental inquiry and punishment for the default committed by the employee. In the present case the shortage was detected by the Zaibunnisa Street Branch and then by the Manager of the Adam Arcade Branch.
Since there was a deliberate act to defraud the persons involved with handling of the cash, therefore, it cannot be termed as a simple shortage of cash. Therefore, apart from refunding the money so embezzled, the respondent was also liable to face the departmental action therefor. In the case of Sultan Ahmed v. National Bank of Pakistan and others (2003 PLC (C.S.) 1247, a similar plea, that since the alleged embezzled amount was already deposited by the employee, therefore, penalty of dismissal from service was illegal, which was repelled in the following manner. "The mere fact that the amount allegedly drawn in a fraudulent manner, was returned and no loss was caused to the bank, would not remove the charge of misconduct against the petitioner who being custodian of public and private money was not supposed to act in breach of trust. The employees of financial institutions and banks are required to be extremely fair in the dealings and their conduct should be above board so that people may not lose confidence in the financial institutions. The dishonest use of private property for personal gain even temporarily, without an intention to cause loss to a party or the bank, would not only be an act of misconduct but also constitutes a criminal offenee." The penultimate sentence in the above quoted passage also furnishes ample reason for not initiating a criminal proceedings against the respondent as this would cast a shadow as to the financial discipline and credibility in the mind of public in respect of such bank. Even otherwise, if, for obvious reasons, taking a lenient view of the matter, no criminal proceedings were initiated against the respondent, it would not mean that no misconduct was committed by the respondent. If the employer took a lenient view and did not report the matter to police, such leniency cannot be made basis to conclude that no case for misappropriation and embezzlement has been made out.
20. The learned counsel for the Respondent has relied on the case of President. United Bank Limited v. Iftikhar Hussain Khan and another (2003 PLC (C.S) 497) wherein the Hon'ble Supreme Court partly allowed the appeal of the bank and instead of dismissal from service, awarded penalty of postponement of promotion of the employee for a period of three years. In this case the facts were that the respondent No,l. Who was Manager of a branch of the appellant, obtained some advance which was duly sanctioned. However, there was some delay as he deposited the amount beyond the prescribed period. Thus, the facts of this case, where no embezzlement is involved, are totally different than the case in hand.
21. Likewise, the cases relied upon by learned counsel for the respondent, namely, (i) Agricultural Development Bank of Pakistan and another v. Akif Javed (2005 SCMR 752) and (ii) Shamim Ahmed Kazmi v. Pakistan International Airlines (2005 SCMR 638) are also distinguishable. In the first case, the respondent who was an employee of the bank, was dismissed from service on the ground that he obtained illegal gratification from a person for providing him employment in the bank. The Service Tribunal, mainly on the grounds that the employee was not is a position to appoint any person in the bank and that in the preliminary inquiry neither the respondent nor the complainant will examine, partly accepted the appeal of the respondent and modified the punishment of dismissal from service to compulsory retirement. In the second case the petitioner, on the complaint of a foreign passenger for overcharging on excess baggage, was dismissed from service. In this case also the Service Tribunal converted such punishment into compulsory retirement. The facts of these two cases are totally different and therefore the law laid down in these cases is of no help to the appellant. In none of these cases the employees were custodians of the amounts which they misappropriated. In the case in hand, the respondent was custodian of the amounts out of which he embezzled.
22. As the guilt of the respondent is proved, the conversion of the punishment by the Labour Court is not tenable and the impugned order dated 12-1-2004 of Labour Court-V is hereby set aside.
Appeal is allowed.