UTTAR PRADESH STATE ROAD TRANSPORT CORPORATION versus GAJADHAR NATH on 8 December 2021

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SUPREME COURT REPORTS

[2021] 9 S.C.R.

AUTTAR PRADESH STATE ROAD TRANSPORTCORPORATION

v.

GAJADHAR NATH

(Civil Appeal No. 7536 of 2021)

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DECEMBER 08, 2021

[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]

Industrial Disputes Act, 1947 – Misconduct – Respondent-workman removed from service as conductor – Order of removalCset aside by Tribunal – Confirmed by High Court – Held: Tribunalor High Court could not reject the evidence led by the appellant-employer in respect of misconduct of the workman before theadjudicator – Non lodging of FIR cannot be the circumstanceagainst the witness examined by the employer – Initiation/non-Dinitiation of criminal proceedings against an employee has nobearing to prove misconduct in departmental proceedings – Orderof removal from service not unfair or unjust in any manner – Ordersof the High Court and Tribunal set aside – Order of punishmentrestored – Evidence Act, 1872.

EAllowing the appeal, the Court

HELD : 1. The domestic inquiry conducted can bepermitted to be disputed before the Tribunal in terms of Section11A of the Industrial Disputes Act, 1947. [Para 5][397-E]

Workmen of M/s Firestone Tyre and Rubber Co. of IndiaF(P.) Ltd. v. Management & Ors. (1973) 1 SCC 813 :[1973] 3 SCR 587 – relied on.

2. The order of the Tribunal and that of the High Court areclearly erroneous and not sustainable in law. The representativeof the employer has not been cross-examined on the questionGthat he has not inspected the bus on 12.11.1998. He has deposedthat when he tried to record the statements of the passengers,the conductor misbehaved with him and used unruly words. Eventhat part of the statement has not been disputed in the H

crossexamination. Therefore, the fact that the Assistant TrafficInspector was not able to record the names and addresses of thepassengers cannot be said to be unjustified. Since the passengersare low-fare paying passengers, they might have been hesitantto get involved in the issues of any action against the conductor.The Inspector had found that 17 passengers were not issuedtickets and such statement of the Inspector has also not beendisputed in the cross examination. The Tribunal or the High Courtcould not reject the evidence led by the employer in respect ofmisconduct of the workman before the adjudicator. Still furthernon lodging of FIR cannot be the circumstance against the witnessexamined by the employer. The initiation of criminal proceedingsagainst an employee or not initiating the proceedings has nobearing to prove misconduct in departmental proceedings.Therefore, the order of removal from service cannot be said tobe unfair and unjust in any manner which would warrant aninterference at the hands of the Tribunal and the High Court.The three reasons recorded by the Tribunal are absolutelyperverse and not supported by any evidence. The Tribunal hadmisapplied the basic principles of law and the High Court hasthereafter wrongly confirmed the order. The orders of the HighCourt and of the Tribunal are set aside. The order of punishmentdated is restored. [Paras 11, 12][403-A-F]

Karnataka State Road Transport Corporation v. Smt.Lakshmidevamma & Anr. AIR 2001 SC 2090 – followed.

U.P. State Road Transport Corporation v. Suresh ChandSharma (2010) 6 SCC 555: [2010] 7 SCR 239 – reliedon.

Shambhu Nath Goyal v. Bank of Baroda & Ors. (1983)4 SCC 491 : [1984] 1 SCR 85; Rajendra Jha v.Presiding Officer, Labour Court, Bokaro Steel City,District Dhanbad & Anr. 1984 Supp. SCC 520; Stateof Haryana & Anr. v. Rattan Singh (1977) 2 SCC 491 –referred to.

U.P. State Road Transport Corporation through M.D.& Ors. v. Rajendra Prasad 2019 SCC OnLine All 5152– referred to.

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ACase Law Reference

BCIVIL APPELLATE JURISDICTION : Civil Appeal No.7536of 2021.

From the Judgment and Order dated 20.01.2021 of the High Courtof Judicature at Allahabad in Writ-C No.51777 of 2009.

Nishit Agrawal, Harsh Mishra, Ms. Upasha Agrawal, Advs. forCthe Appellant.

Nagarkatti Kartik Uday, Gaurav Srivastava, Advs. for theRespondent.

The Judgment of the Court was delivered byDHEMANT GUPTA, J.

Leave granted.

2. The order dated 20.1.2021 passed by the High Court ofAllahabad is the subject matter of challenge in the present appeal at theEinstance of the employer whereby the order dated 22.10.2008 passed bythe Industrial Tribunal[1] was not interfered with. The Tribunal directedthat the respondent[2] be reinstated in service and ordered 50% of thesalary to be paid for the period when he was not in employment.

3. The workman was removed from service as conductor onFaccount of misconduct on 14.12.2001. He raised an industrial disputewhich was referred to the Tribunal. On 5.5.2008, the Tribunal returned apreliminary finding that the domestic inquiry conducted into the chargeslevelled against the workman in question was not fair and proper.Therefore, the employer led evidence by examining Sheshmani Mishra,an Assistant Traffic Inspector[3] who had conducted inspection of theGvehicle on 12.11.1998. The said witness supported the report submittedby him to the Assistant Regional Manager as Ex.P/10. He deposed thathe checked the bus at Katra when the bus was coming from Banda to 1 For short, the ‘Tribunal’

2 For short, the ‘workman’

H3 For short, the ‘Inspector’

Allahabad. All the 17 passengers in the bus had stated that they hadgiven the money but the conductor did not issue even a single ticket.Thus, the Inspector concluded that all the passengers were without ticket.He also deposed that when he tried to record the statement of thepassengers, the conductor misbehaved with him and used unruly wordswhich he could not state even before the Court. In the cross-examination,he deposed that his report was dated 13.11.1998 and that such reportdoes not bear the signature of driver or the conductor. Further, nostatement of any of the passengers was filed.

4. The learned Tribunal considering the said statement, set asidethe order of removal inter alia holding that the Inspector should haverecorded the statements of passengers who have been found travellingwithout ticket and if they had shown reluctance in recording theirstatements, at least their oral statements, names and addresses musthave been submitted. The Tribunal also returned a finding that theInspector was not proved to have inspected the bus on 12.11.1998. Itwas also observed that if the conductor had misbehaved with the Inspector,why an FIR was not recorded in the concerned police station. On thesegrounds, the learned Tribunal set aside the order of removal.

5. The scope of an adjudicator under the Industrial Disputes Act,1947[4] may be noticed. The domestic inquiry conducted can be permittedto be disputed before the Tribunal in terms of Section 11A of the Act.This Court in a judgment reported as Workmen of M/s Firestone Tyreand Rubber Co. of India (P.) Ltd. v. Management & Ors.[5] held thatin terms of Section 11A of the Act, if a domestic inquiry has been heldand finding of misconduct is recorded, the authorities under the Act havefull power and jurisdiction to reappraise the evidence and to satisfythemselves whether the evidence justifies the finding of misconduct.But where the inquiry is found to be defective, the employer can leadevidence to prove misconduct before the authority. This Court held asunder:

“32. From those decisions, the following principles broadly emerge:-

(1) The right to take disciplinary action and to decide upon thequantum of punishment are mainly managerial functions, but if adispute is referred to a Tribunal, the latter has power to see ifaction of the employer is justified.

4 For short, the ‘Act’

5 (1973) 1 SCC 813

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(2) Before imposing the punishment, an employer is expected toconduct a proper enquiry in accordance with the provisions of theStanding Orders, if applicable, and principles of natural justice.The enquiry should not be an empty formality.

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(3) When a proper enquiry has been held by an employer, and thefinding of misconduct is plausible conclusion flowing from theevidence, adduced at the said enquiry, the Tribunal has nojurisdiction to sit in judgment over the decision of the employer asan appellate body. The interference with the decision of theemployer will be justified only when the findings arrived at in theenquiry are perverse or the management is guilty of victimisation,unfair labour practice or mala fide.

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(4) Even if no enquiry has been held by an employer or if theenquiry held by him is found to be defective, the Tribunal inorder to satisfy itself about the legality and validity of theorder, had to give an opportunity to the employer and employeeto adduce evidence before it. It is open to the employer toadduce evidence for the first time justifying his action, and itis open to the employee to adduce evidence contra.

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(5) The effect of an employer not holding an enquiry is that theTribunal would not have to consider only whether there was aEprima facie case. On the other hand, the issue about the meritsof the impugned order of dismissal or discharge is at large beforethe Tribunal and the latter, on the evidence adduced before it, hasto decide for itself whether the misconduct alleged is proved. Insuch cases, the point about the exercise of managerial functionsFdoes not arise at all. A case of defective enquiry stands on thesame footing as no enquiry.

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(6) The Tribunal gets jurisdiction to consider the evidence placedbefore it for the first time in justification of the action taken only,if no enquiry has been held or after the enquiry conducted by anemployer is found to be defective.

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(7) It has never been recognised that the Tribunal shouldstraightway, without anything more, direct reinstatement of adismissed or discharged employee once it is found that no domesticenquiry has been held or the said enquiry is found to be defective.

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(8) An employer, who wants to avail himself of the opportunity ofadducing evidence for the first time before the Tribunal to justifyhis action, should ask for it at the appropriate stage. If such anopportunity is asked for, the Tribunal has no power to refuse. Thegiving of an opportunity to an employer to adduce evidence forthe first time before the Tribunal is in the interest of both themanagement and the employee and to enable the Tribunal itself tobe satisfied about the alleged misconduct.

(9) Once the misconduct is proved either in the enquiry conductedby an employer or by the evidence placed before a Tribunal forthe first time, punishment imposed cannot be interfered with bythe Tribunal except in cases where the punishment is so harsh asto suggest victimisation.

(10) In a particular case, after setting aside the order of dismissal,whether a workman should be reinstated or paid compensation is,as held by this Court in The Management of Panitole Tea Estatev. The Workmen, 1971-1 SCC 742 within the judicial decisionof a Labour Court or Tribunal.”

6. The question as to whether the employer is required to seekliberty to prove misconduct in the written statement or could leadevidence at a later stage was considered by a Constitution Bench of thisCourt in a judgment reported as Karnataka State Road TransportCorporation v. Smt. Lakshmidevamma & Anr.[6]. Therein this Courtwas examining a conflict, if any, between two judgments reportedShambhu Nath Goyal v. Bank of Baroda & Ors.[7] and Rajendra Jhav. Presiding Officer, Labour Court, Bokaro Steel City, DistrictDhanbad & Anr.[8].The majority opinion of the Court noticed thattheright of a management to lead evidence before the Labour Court or theIndustrial Tribunal in justification of its decision under consideration bysuch Tribunal or Court is not a statutory right. This is actually a procedurelaid down by this Court to avoid delay and multiplicity of proceedings inthe disposal of disputes between the management and the workman.

“17. Keeping in mind the object of providing an opportunity to themanagement to adduce evidence before the Tribunal/Labour Court, 6 AIR 2001 SC 2090

7 (1983) 4 SCC 491

8 1984 Supp. SCC 520

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Awe are of the opinion that the directions issued by this court inShambhu Nath Goyal’s case need not be varied, being just andfair. There can be no complaint from the management side forthis procedure because this opportunity of leading evidence is beingsought by the management only as an alternative plea and not asan admission of illegality in its domestic inquiry. At the same time,Bit is also of advantage to the workmen inasmuch as they will beput to notice of the fact that the management is likely to adducefresh evidence, hence, they can keep their rebuttal or otherevidence ready. This procedure also eliminates the likely delay inpermitting the management to make belated application wherebyCthe proceedings before the Labour Court/Tribunal could getprolonged. In our opinion, the procedure laid down in ShambhuNath Goyal’s case is just and fair.

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18. There is one other reason why we should accept the procedurelaid down by this Court in Shambhu Nath Goyal’s case. It is to beDnoted that this judgment was delivered on 27th of September, 1983.It has taken note of almost all the earlier judgments of this Courtand has laid down the procedure for exercising the right of leadingevidence by the management which we have held is neitheroppressive nor contrary to the object and scheme of the Act. Thisjudgment having held the field for nearly 18 years, in our opinion,Ethe doctrine of stare decisis require us to approve the saidjudgment to see that a long-standing decision is not unsettledwithout strong cause.”

7. Now on merits, keeping in view the principles of law, learnedcounsel for the appellants-employer contended that the Indian EvidenceFAct, 1872[9] applies to all judicial proceedings in or before any Court.Since the domestic inquiry is not by a Court, therefore, strict rules of theEvidence Act are not applicable to such domestic inquiry. Reliance isplaced upon a three-Judge Bench of this Court reported as State ofHaryana & Anr. v. Rattan Singh[10] wherein in respect of a conductorGwho was found to have not issued tickets, this Court held as under:

“4. It is well settled that in a domestic enquiry the strict andsophisticated rules of evidence under the Indian Evidence Actmay not apply. All materials which are logically probative for a 9 For short, the ‘Evidence Act’H10 (1977) 2 SCC 491

prudent mind are permissible. There is no allergy to hearsayevidence provided it has reasonable nexus and credibility. It istrue that departmental authorities and Administrative Tribunalsmust be careful in evaluating such material and should not gliblyswallow what is strictly speaking not relevant under the IndianEvidence Act. For this proposition it is not necessary to citedecisions nor text books, although we have been taken throughcase-law and other authorities by counsel on both sides. Theessence of a judicial approach is objectivity, exclusion of extraneousmaterials or considerations and observance of rules of naturaljustice. Of course, fairplay is the basis and if perversity orarbitrariness, bias or surrender of independence of judgment vitiatethe conclusions reached, such finding, even though of a domestictribunal, cannot be held good. However, the courts belowmisdirected themselves, perhaps, in insisting that passengers whohad come in and gone out should be chased and brought beforethe tribunal before a valid finding could be recorded. The ‘residuum’rule to which counsel for the respondent referred, based uponcertain passages from American Jurisprudence does not go tothat extent nor does the passage from Halsbury insist on suchrigid requirement. The simple point is, was there some evidenceor was there no evidence — not in the sense of the technicalrules governing regular court proceedings but in a faircommonsense way as men of understanding and worldly wisdomwill accept. Viewed in this way, sufficiency of evidence in proofof the finding by a domestic tribunal is beyond scrutiny. Absenceof any evidence in support of a finding is certainly available forthe court to look into because it amounts to an error of law apparenton the record. We find, in this case, that the evidence of Chamanlal,Inspector of the Flying Squad, is some evidence which hasrelevance to the charge levelled against the respondent. Therefore,we are unable to hold that the order is invalid on that ground.”

8. In a judgment reported as U.P. State Road TransportCorporation v. Suresh Chand Sharma[11], this Court set aside the orderof the High Court wherein the writ petition was allowed holding that thepassengers without tickets have not been examined and cash with theemployee was not checked. This Court relied upon the judgment of this ABC

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ACourt in Rattan Singh and found that the punishment of dismissal fromservice was not disproportionate to the proved delinquency of theemployee.

9. The Division Bench of the Allahabad High Court to which thelearned Single Bench was bound in a judgment reported as U.P. StateBRoad Transport Corporation through M.D. & Ors. v. RajendraPrasad[12] allowed the appeal of the employer wherein the Tribunalreturned a finding that 16 passengers who were without tickets at thetime of inspection were not examined. Therefore, the punishment orderwas set aside being in contravention of the principles of natural justice.The Division Bench of the High Court held as under:C“24. In view of the above, we find no substance in the argumentraised by the learned counsel for the claimant/respondent to theeffect that the passengers were required to be examined duringenquiry and accordingly, we hold that the finding with regard toexamination of passengers given by the Tribunal is perverse beingDcontrary to the Law and being so is unsustainable. It is also forthe reason that the enquiry officer after examining the witnessesincluding claimant/respondent held that the charge levelled againstthe claimant/respondent found proved.

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37. Further, in the present case, claimant/respondent-RajendraPrasad is a conductor of the bus and he was entrusted with theduty to collect the ticket from the passengers travelling in the busand deposit the same with the Corporation however in the presentcase, from the material on record, the position which emerges outFis to the effect that he collected the fair from 16 passengers/persons but did not deposit the same.”

10. On the other hand, learned counsel for the respondent-workman argued that the statement of the Inspector does not inspireconfidence as he had not recorded the names and addresses of theGpassengers. It is not the case of the workman that the passengers wererequired to be examined but at least there should have been some evidencethat there were passengers who were found travelling without any ticket.Since the basic evidence is not available on record, therefore, the finding of the Tribunal cannot be said to be illegal or unwarranted which wasrightly not interfered with by the High Court.

11. We find that the order of the Tribunal and that of the HighCourt are clearly erroneous and not sustainable in law. The representativeof the employer has not been cross-examined on the question that hehas not inspected the bus on 12.11.1998. He has deposed that when hetried to record the statements of the passengers, the conductor misbehavedwith him and used unruly words. Even that part of the statement has notbeen disputed in the cross-examination. Therefore, the fact that theInspector was not able to record the names and addresses of thepassengers cannot be said to be unjustified. Since the passengers arelow-fare paying passengers, they might have been hesitant to get involvedin the issues of any action against the conductor. The Inspector hadfound that 17 passengers were not issued tickets and such statement ofthe Inspector has also not been disputed in the cross-examination. TheTribunal or the High Court could not reject the evidence led by theemployer in respect of misconduct of the workman before the adjudicator.Still further non lodging of FIR cannot be the circumstance against thewitness examined by the employer. The initiation of criminal proceedingsagainst an employee or not initiating the proceedings has no bearing toprove misconduct in departmental proceedings. Therefore, we find thatthe order of removal from service cannot be said to be unfair and unjustin any manner which would warrant an interference at the hands of theTribunal and the High Court. The three reasons recorded by the Tribunalare absolutely perverse and not supported by any evidence. The Tribunalhad misapplied the basic principles of law and the High Court hasthereafter wrongly confirmed the order.

12. Consequently, the appeal is allowed. The orders of the HighCourt and of the Tribunal are set aside. The order of punishment dated14.12.2001 is hereby restored.

Divya Pandey

Appeal allowed.

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