Thursday, September 10, 2020

Guest Post: Conviction Records in Labour Law — A Closer Look at the Decision in Sushil Singhal

(This is a guest post by Vasudha Passi Verma)

Individuals who have been convicted of a criminal offence often find it difficult to reintegrate into society even after they have served a sentence prescribed by law. Apart from the stigma which attaches to a conviction, these individuals also lose several formal rights for the rest of their lives. This fate is especially tragic when it befalls individuals involved in minor or petty crimes, or young offenders, or those convicted under penal provisions which were not constitutional to begin with, such as section 377 of the Indian Penal Code for instance. Like other statutes struck down for unconstitutionality, it was only made ineffective prospectively, which means that individuals convicted under the provision from 1860-1947 serve carceral sentences and emerge with conviction records. All of these individuals are equally struck by blanket exclusions based on conviction records, and are thus deprived permanently of avenues to reform, self-actualize, or find constructive purpose.

Most jurisdictions recognize this, and attempt to reduce this impact. Some states in the US expunge criminal records of low-level and first-time offenders to prevent prejudice to opportunities otherwise available to the individual. In India, the attempt to prevent prejudice has culminated in the Probation of Offenders Act of 1958 (‘the Act’).

Sections 3 and 4 of the Act allow courts to offer a lighter sentence to persons who have committed minor crimes, or otherwise exhibit a character which makes it expedient in the opinion of the court to grant probation. These sections allow the court to exercise discretion and award a lighter sentence or ‘probation’. However, section 12 of the Act attempts to reduce the post-carceral disadvantage that these individuals face by relieving them of the disqualifications which accompany a conviction. 

The provision has the potential to create significant impact, but this has remained unfulfilled due to the conflicting and inconsistent construction that courts have placed upon it. In Sushil Singhal’s case, the Supreme Court had the opportunity to give meaning to section 12, which it missed. 

Sushil Singhal’s case
Sushil Singhal, the appellant, was an employee of the Punjab National Bank. As part of his duty, he was asked to deposit a sum of money which he instead misappropriated. The bank reported him to the police, and he was tried and subsequently convicted. He was also dismissed from his position because section 10(1)(b) of the Banking Regulation Act of 1949 required that the respondent bank dismiss and refuse to employ individuals convicted of offences involving moral turpitude. He was subsequently granted probation, and moved the Industrial Tribunal arguing that the dismissal was a “disqualification attached to conviction under [a] law”, and he was entitled to not suffer it. 

The court upheld his dismissal. In considering the effect of section 12, it asked whether dismissal from employment was a "disqualification attached to conviction under [a] law", and found that it was instead a "civil consequence". To arrive at the correct interpretation of the law, the court ought to have considered two distinct questions, namely whether the dismissal was at all a “disqualification”, and whether the dismissal in the present case was “attached to conviction”. 

Is dismissal from employment a “disqualification”?
In determining what a “disqualification” is, two views are possible. The first is that since the provision reads “notwithstanding anything contained in any other law... disqualification, if any, attaching to a conviction of an offence under such law”, that “such law” refers to disqualifications under statutes which specify the disqualification, or those to which the non-obstante clause pertains. This was the view taken in Shankar Dass. The other view is the one taken in Harichand, which read the provision to mean “conviction of an offence under such law”, where “such law” referred to the statute which specified the offence. Since the decision in Harichand did not acknowledge the decision in Shankar Dass despite adjudicating the same subject, it was in fact per incuriam, and the meaning of “such law” in Section 12 continues to refer to disqualifying statutes.

Thus, an individual who faces exclusion under a statute which creates the exclusion based on conviction should be relieved of it if they are granted probation. However, the Supreme Court in Sushil Singhal cited both Shankar Dass as well as Harichand to create sub-categories of “disqualification” to which section 12 applied. 

In Shankar Dass, the Supreme Court attempted to gauge the meaning of a “disqualification”. In that case, the appellant was convicted, granted probation, but dismissed nevertheless based on a departmental proceeding. The court held that “disqualification” in section 12 refers to disqualifications under statutes which provide for such “disqualifications”, such as for example the Representation of People Act, 1951 (which co-incidentally uses the word ‘disqualification’). The court appeared to have been emphasising that the benefit of section 12 could only be granted when the disqualification was under a statute. While the use of the example may be considered illustrative, the court did not specify whether statutes which use the word ‘disqualification’ differed from those that do not.

The Court in Sushil Singhal understood this ratio to mean that there exists a class of “other statutes” for which section 12 is effective. Apart from the Representation of People Act, the Court (wrongly) relied on Harichand to include within this category criminal statutes.

However, it did not attempt to clarify the meaning of “other statutes”. It did not even clarify if the basis of this determination was indeed the use of the word ‘disqualification’. Since the dismissal was based on the Banking Regulation Act, which was not a criminal statute, and did not contain the word ‘disqualification’, the Court’s determination allowed it to hold that the dismissal of the appellant was not a “disqualification” and the benefit of section 12 therefore need not be granted. However, the word “disqualification” should have instead been constructed to include all exclusions or bars stipulated by a statute where they attach to conviction. This is because of the following factors:

  • Beneficial legislation 
Statutes which confer a benefit on individuals or classes of individuals by protecting them from an oppressive circumstance should be interpreted broadly and given wide meaning. Since the Act, and in particular Section 12, attempts to protect certain individuals against the deprivation of their rights, it is a beneficial statute. In order to give section 12 wide effect, it should be read broadly. A broad reading would not limit its meaning to disqualifications expressly called ‘disqualifications’. Rather, such a reading would account for statutes which create a disqualification but for reasons of drafting or simplicity do not label them as such. For instance, the Court in Trikha Ram upheld an order of dismissal but noted that it should not operate in any way as a “disqualification or bar” against future employment. The court in Sushil Singhal did not consider if the Act was a beneficial legislation. 

  • “disqualification, if any”

The use of “disqualification” under section 12 is followed by the words “if any”. If the legislature had intended the provision to be read narrowly, it could have omitted “if any”, since the sentence ‘shall not suffer disqualification attaching to a conviction’ would have made grammatical sense. However, the inclusion of “if any” indicates that the legislature intended the provision to cover any kind of disqualification, and not just one which is expressly labelled so. This is a broad category but is limited by the requirement that the disqualification be mandated by statute. Thus, the section does not go as far as to create absolute parity of treatment with individuals without conviction records, but attempts to undo the harms of formal exclusion. 


Therefore, the word “disqualification” should be broadly construed. Such an interpretation would have acknowledged that a compulsory dismissal was indeed a disqualification created by the Banking Regulation Act, capable of receiving the benefit of section 12. Fortunately, the word has subsequently been interpreted broadly in matters connected with employment. For instance, section 12 has been held to protect retirement benefits, as well as employment opportunities received through compassionate appointment

Was the dismissal in this case attached to conviction? 
The Court was of the opinion that the dismissal of the appellant was a “disciplinary proceeding” against the employee. It argued that section 12 does not preclude disciplinary action against an individual, which is a “civil consequence”.

However, the court adopted the incorrect approach to this question. Instead of focusing on civil or criminal consequences, the court should have focused on whether the disqualification was attached to a conviction under a law. In Punjab Water Supply Sewerage Board, Karam Singh and in P.R. Mohan all of which the Court relied upon, the decision to dismiss was based on the discretionary ability to dismiss i.e. the departmental proceeding was a decision and not a mandate under a statute. 

The Court was in fact applying the ratio in Swarn Singh, where the appellant was dismissed under the same provision of the Banking Regulation Act, and sought re-appointment under section 12. Yet, even in that case, the Supreme Court attempted to characterise the dismissal as a discretionary act. It referred to Article 311(2) of the Constitution which confers a power on the government to dismiss a person “on the ground of conduct which has led to his conviction on a criminal charge”. However, the dismissal in both of these cases was based on a mandatory stipulation, making the dismissal not one of discretion but statute, and thus a ‘disqualification based on conviction under a law’ under section 12. 

In the abstract, the court’s reasoning was correct. Had the dismissal been the outcome of a discretionary disciplinary proceeding, the respondent bank would have been able to successfully demonstrate the legal basis to do so, and section 12 would not have applied. However, in this case, the respondent bank did not initiate its own disciplinary proceeding or act on the misconduct until the conviction, despite having the ability to do so as per Swarn Singh. The respondent, in fact, argued that the grant of probation did not “wash away” the finding of guilt or the “factum of conviction”, and relied on the ratio in T.R. Chellappan

That appears to be a reasonable view to take. Being convicted of a criminal offence means that an individual can be demonstrated to have committed it beyond reasonable doubt. Therefore, the grant of probation cannot take away the finding of culpability. Such a reading, however, fails to acknowledge the purpose of section 12. Surely all disqualifications attached to conviction actually attach to the finding of fact of commission of the offence. Without the finding, an order of conviction is purely an order of sentencing. It would make no sense to assume that the statutes which exclude based on conviction for an offence actually exclude based on the deprivation of personal liberty that the individual suffered whilst serving their sentence.

In fact, such a reading effectively nullifies section 12 in entirety. A more honest reading of the section would acknowledge that the only individuals who are granted probation are those in whom a court of law has seen a ‘character’ capable of change and reform, and therefore section 12 intends to erase any disqualification based on their conviction record, as the finding of culpability itself is deemed to not reflect on their future prospects.

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