Holding

An employer cannot punish an employee for conduct that is not expressly prescribed as misconduct in the certified standing orders or service regulations; the High Court's view to the contrary is rejected.

Summary

The petitioner, a former Sales Tax Inspector removed for proven misconduct, applied for a Head Clerk position with Ahmedabad Municipal Corporation and falsely claimed he had resigned voluntarily, suppressing the fact of his removal. Upon discovery, he was charge‑sheeted and removed again, and his challenges before the Labour Court and Gujarat High Court were rejected. He filed a Special Leave Petition before this Court, contending that the High Court erred in holding that an act not enumerated in the certified standing orders could still be treated as misconduct. The Court held that, consistent with penal jurisprudence, only conduct expressly prescribed as misconduct in the certified standing orders or service regulations can attract disciplinary penalty; an employer cannot retrospectively label any omission or commission as misconduct. While acknowledging that suppression of material facts is indeed misconduct, the Court rejected the High Court’s view that such unenumerated misconduct could be punished. Consequently, the petition was dismissed.

Issues considered

Whether suppression of a material fact concerning prior removal constitutes misconduct punishable under service regulations when such conduct is not enumerated in the certified standing orders.
Whether an employer may deem any act or omission as misconduct and impose penalty despite its absence from the certified standing orders or service regulations.
Whether the High Court's view that unenumerated misconduct can be punished is legally valid.

Subjects

labour lawmisconductstanding ordersservice regulationssuppression of material factdisciplinary actionex post factospecial leave petition

Judgment

556
A

RASIKLAL YAGHAJ!BHAI PATEL
B
v.

AHMEDABAD MUNICIPAL CORPORA T!ON AND ANOTHER

January 14, 1985
c '
[D.A. DESAI AND RANGANATH MISRA, JJ.]

Labour La1v-Mi£Conduct-Whether suppression of111aterialfact regardiT1g
prior dismi~sal at rhe ti!ne of obtaining fresh en1p[uy1ne11t constitutes "miscon-
duct" - Whether St anding Orders or Service Regulations should enunierate an act
D or omissison as "niisconduct" - f;ffect of non-prescribing the acts of" misccnduct"
in the Standing Order/Service Regulations.

The petitioner applied for the post of Head Clerk with Ahmedabad
Municipal Corporation in a prescribed form which contained a column requiring
the applicant to state whether he had been removed from service and, if so,
reasons for such removal. The petitioner, who had earlier been removed from
service of the Sales Tax Department on the ground of proved TI?-isconduct, made
E a false suggestion that he had voluntarily left service because of transfer. Ultima-
tely, when these facts came to light, he was charge-sheeted and removed from
service. The L3.bour Court rejected his petition against removal from service on
the ground that the misconduct alleged against him is proved. Thereupon, he
filed a writ petition in the High Court. The High Court while dismissing his
petition held that even if the allegation of misconduct does not constitute miscon-
duct amongst those enumerated in the relevant service regulations yet the emplo-
yer can attribute what would otherwise per se be a misconduct though not enu-
F merated and punish him for the same.

Dismissing the petition by the Petitioner,

HELD : (1) It is a well-settled canon of penal jurisprudence that removal or
dismissal from service on account of the misconduct constitutes penalty in law and
therefore the workman sought to be charged for misconduct must have adequate adva-
G nce notice of what action or what conduct would constitute misconduct. Therefore,
under, the Certified Standing Orders or Service regulations, it is necessary for the
employer to prescribe what would be the misconduct so that the workman/ernplo..
Yee knows the pitfall he should guard against. But, if after undergoing the elabo-
rate exercise of enumerating misconduct, it is left to the unbridled discretion of the.
employer to dub any conduct as misconduct, the workman will be on tenter-
hooks and he will be punished by ex post facto determination by the employer.
H Therefore, it cannot be left to the vagaries of management to say ex post facto
R.V. PATEL v. MUNICIPAL CORPORATION (Desai, J.) 557

that some acts of omission or commission nowhere found to be enumerated in .A
the relevant standing order is none-the-Jess a misconduct not strictly falling
within the enumerated misconduct in the relevant standing order but yet a
misconduct for the purpose of imposing a penalty. · [559C-E; B-C; 561C and DJ

Glaxo Laboratories y. The Presiding Officer, Labour Court, Meerut &
Ors. [1984J 1 SCR 230 fo!lowed. B

.., ' Saletn Erode Electricity Distribution Co. Ltd. v. Salem Erode Electric!t.~'
Distribution Co. ltd. Em/iloyees Unicm [196612 SCR 498, Western India Match
Cotnpany Lid. v. Workman [1974] SCR 434, Workmen of Lakheri Cen1ent Works
Ltd. v. Assooiated Cement Companies Ltd. 1970 20. Indian Factories & Labour
• Reports 243 & Rohtak Hissar District Electricity Supply Co. Ltd. v. State of
Utter Pradesh & Ors. [1966J 2 SCR 863 referred to. c
(2) It is thus well-settled that unless either in the Certified Standing
Order or in the service regulations an act or omission is prescribed as misconduct,
' it is not open to the employer to fish out some conduct as misconduct and punish
the workman even though the alleged misconduct would not be comprehended in
any of the enumerated misconduct. [561E] D
(3) In the instant case, the petitioner is shown to be guilty of suppression
of a material fact which would weigh with any employer in giving him employ-
ment and therefore, the case of the petitioner does not merit consideration under
Art. 136 of the Constitution and his petition for special leave to appeal must
accordingly fail. The High Court was right in holding that the suppresie1 veri and
suggestio fills£ would constitute misconduct. But, the finding of the High Court E
that even if the misconduct does n9t fall in any of the enumerated misconducts,
yet for the purpose of service regulation, it would none-the-Jess be a misconduct
punishable as such is not the correct view of Jaw and it has to be rejected.
[557H; 561H; 562 A, BJ
l CIVIL APPBLLATE JURISDICTION : Special Leave Petition (Civil)
No. 5523 of 1984.
F
From the Judgment and Order dated 28th November, 1983 of
'-1 the High Court of Gujarat in Special Civil Application No. 4649
-. of 1981.

Vimal Dave for the Petitioner .
•
The Judgment of the Court was delivered by G

DESAI, J. Petitioner is shown to be guilty of suppression of a
material fact which would weigh with any employer in giving him
eml'loyment and therefore, the case of the petitioner does not merit
consideration under Art. 136 of the Constitution and his petition for
special leave to appeal against the decision of a Division Bench of
H
558 SUPREME COURT REPORTS [1985) 2 S.C.R.
A
the Gujarat High Court in Special Application No. 4649 of 1981
dated November 28, 1983 must accordingly fail but this short epistle
became a compelling necessity in view of the statement of law
appearing in the judgment of the High Court which if permitted to
go uncorrected, some innocent person may suffer in future. That
B is the only justification for this short order.

The petitioner on his application was recruited in the Sales
Tax Department on September 30, 1950 and at the relevant time he
was working as Sales Tax Inspector. By an order dated January, 31
1964 of the Commissioner of Sales Tax, Gujarat State, the petitioner
c who was at the relevant time working as Sales Tax Inspector was •
charged with misconduct of gross negligence and acted with gross
impropriety fn demanding illegal gratification, and as these charges
were held proved, the Commissioner of Sales Tax imposed a penalty
of removal from service. This is not in dispute and therefore it
can be safely stated that the petitioner wa.s removed from the
D service of the Sales Tax Department on account of the proved
misconduct.

After being removed from the Sales Tax Department, the
petitioner joined service in Bhakta Vallabh Dhola College, Ahmedabad
('college' for short) on May 15, 1964. Whi\e continuing his service
E with the college, the petitioner applied on January 13, 1968 for the
post of Head-Clerk with Ahmedabad Municipal Corporation. The
application hat! to be made in the prescribed form, Column
No. 14 of which required the applicant to state whether the
applicant had been removed from service and if so, reasons for j
removal and if the !applicant had voluntarily left previous
service, reasons for leaving the service should be stated. While
F answering this column, the petitioner stated that he had served
in the Sales Tax Department from September 30, 1950 to January
31, 1964 and that he has resigned from service due to transfer. It
thus appeared that the petitioner was guilty of suppressio veri and
suggestio false inasmuch as he suppressed the material fact that he
was removed from service on the ground of proved misconduct and
G that he made a false suggestion that he had voluntarily left service
because of transfer. Ultimately when these facts came to light, he
was charge-sheeted and removed from service. A petition to the
Labour Court was rejected on the ground that the misconduct
alJeged against the petitioner is proved. His writ petition to the
High Court proved unsuccessful. Hence he filed this petition for
H special leave.
It v. PATEL v. MUNICIPAL CORPORATION (Desai, J.) 559

The High Court while dismissing the _petition held that even if
A
the allegation of misconduct does not constitute misconduct amongst
those enumerated in the relevant service regulations yet the employer
can attribute what would otherwise per se be a misconduct though
not enumerated and punish him for the same. This proposition

. .
appears to us to be startling because even though either under the
Certified Standing Orders or service regulations, it is necessary for
the employer to prescribe what would be the misconduct so that the
workman/employee knows the pitfall he should guard against. If
after undergoing the elaborate exercise of enumerating misconduct,
B

it is left to the unbridled discretion of the employer to dub any
•
conduct as misconduct, the workman will be on tenterhooks and he c
will be pcnished by ex post facto determination by the employer. It
is a well-settled canon of penal jurisprudence-removal or dismissal
from service on account of the misconduct constitutes penalty in
Jaw-that the workman sought to be charged for misconduct must
have adequate advance notice of what ~ction or what conduct would
constitute m sconduct. The legal proposition as stated by the High D
Court would have necessitated indepth examination, but for a recent
decision of this Court in Glaxo Laboratories v. The Presiding Officer,
Labour Court Meerut & Ors.(') in which this Court specifically
repelled an identical contention advanced by Mr. Shanti Bhushan,
learned counsel who appeared for the employer in that case observ-
ing as under ;
E
> "Relying on these observations, Mr. Shanti
Bhushan urged that this Court has in terms held that there
L can be some other misconduct not enumerated in the stand-
ing order and for which the employer may take appropriate
action. This observation cannot be viewed divorce.ct from
the facts of the case. 'What started in the face of the court
in that case was that the employer had raised a technical F
objection ignoring the past history of litigation between the
parties that n pplication under Sec. 33A was_ not maintain-
able. It is in this context that this Court observed that the
previous action might have been the outcome of some
misconduct not enumerated in the standing order. But the
extracted observation cannot be elevated to a proposition
G
of law that some misconduct neither defined nor enumera-
ted and which may be believed by the employer ta be
misconduct ex post facto would expose the workman to ·a

(I) [1984] ! S.C.R. 230. H
560 SUPREME COURT REPORTS ( 1985] 2 S.C.R.
A
penalty. The law will have to move two centuries back-
l ward to accept such a construction. But it is not necessary
to go so far because in Salem Erod" Electricity Distribution·
Co. Ltd. v. Salem Erode Electricity Distribution Co. Ltd.
Employees Union,(') this Court in terms held that the object
B underlying the Act was to introduce uniformity of terms
and conditions of employment in respect of workmen
belonging to the same category and discharging the same
or similar work under an industrial establishment, and that
these terms and conditions of industrial employment should
be well-established and should be known to employees
c before they accept the employment. If such is the object,
no vague undefined notion about any act, may be inno-
cuous, which from the employer's point of view may be
misconduct but not provided for in the standing order for
which a penalty can be imposed, cannot be incorporated in
the standing orders. r ram certainty of conditions of
0 employment, we would have to return to the days of hire
and fire which reverse movement is hardly justified. In
this connection, we may also refer to Western India Match
Company Ltd v. Workmen(') in which this Court held that
any condition of service if inconsistent with certified stand-
ing orders, the same could not prevail and the certified
standing orders would have precedence over all such
E agreements. There is really one interesting observation in
this which deserves noticing Says the Court :

"In the sunny days of the market economy theory
people sincerely believed that the economy law of
demand and supply in the labour market would settle a
F mutually beneficial bargain between the employer and
the workman Such a bargain, they took it for granted,
would secure fair terms and conditions of employment to
the workman. This law they venerated as natural law.
They had an abiding faith in the verity of this law. But
the experience of the working of this law over a long
period has belief their faith."

Lastly we may refer to Workmen of Lakheri Cement Works

(t) [19661 2 S.C.R. 498.
H (2) [1974] 1 S.C.R. 434.
R.V. PATEL'· MUNICIPAL COAPORAT!ON (Desai, J) 561

Ltd. Associated Cement Companies Ltd (I) This Court A
repelled the contention •hat the Act must prescribe the
minimum which has to be prescribed in an industrial
establishment, but it does not exclude the extension other-
wise. Relying upon the earlier decision of this Court in
Rohtak Hissar District Electricity Supply Co. Ltd. v. State
B
of Ulfar Pradesh & Ors (2) the Court held that everything
. ' which is required to be prescribed with precision and no
argument can be entertained that something not prescribed
can yet be taken into account as varying what is prescribed.
In short it cannot be left to the vagaries of management to
say ex post facto that some acts of omission or commission c
nowhere found to be enumerated in the relevant standing
order is none-the-less . a misconduct not strictly falling
within the enumerated misconduct in the relevant standing
order but yet a misconduct for the purpose of imposing a
penalty. Accordingly, the contention of Mr. Shanti Bhushan
that some other act of misconduct which would per se be D
an act of misconduct though not enumerated in S.O. 22
can be punished under S.O. 23 must be rejected.
It i• thus well-settled that unless either in the Certified Standing
Order or in the service regulations an act or omission is prescribed as
misconduct, it is not open to the employer to fish out some conduct
a. misconduct and punish the workman even though the alleged
misconduct would not be comprehended in any of the enumerated
> misconduct.

L. The High Court fell into error when is observed that :

"The conduct of the petitioner in suppressing the material
facts and misrepresenting his past on the material aspect
cannot be said to be a good conduct. On the contrary it
i• unbecoming of him that he should have deliberately
'
suppressed the material fact and tried to obtain employ-
ment by deceiving the Municipal Corporation. It i•
clearly a misconduct."

After thus holding that the suppr.sslo very and suggestio fa/st G
would constitute misconduct, the High Court held even if it
·)...
(I) [1970] 20 Indian Factories & Labour Report•, 243.
(2) [1966] 2 S.C.R. 863. H
562 SUPREME COURT REPORTS (1985] 2 <,c.R.
A does not fall in any of the enumerated misconducts, yet for the
purpose of service regulation, it would none-the-less be a.miscon- 1 -.-.
duct punishable as such. We are unable to accept this view of law
and it has to be rejected.

Having clearly restated the legal position, we reject this special
B
leave petition.

c M.L.A. Appeal dismissed.

.J