Holding

Section 11‑A empowers the Labour Court (and the High Court under Article 226) to alter the quantum of punishment only when it is shockingly disproportionate, and in this case the removal order was justified and the Labour Court’s reduction was unlawful.

Summary

The U.P. State Road Transport Corporation removed driver Subhash Chandra Sharma from service for a serious misconduct involving intimidation of an assistant cashier while intoxicated. The Labour Court, after finding the departmental inquiry valid, substituted the removal with a lesser penalty of one wage‑increment stoppage and 50% back wages, deeming the removal excessive. The Corporation appealed, arguing that the Labour Court could not alter the quantum of punishment when the inquiry was proper, and that the High Court should have set aside the Labour Court award under Article 226. The Supreme Court held that Section 11‑A of the Industrial Disputes Act allows the Labour Court (and the High Court under Article 226) to modify punishment only when it is shockingly disproportionate, which was not the case here. Consequently, the Court set aside the Labour Court award and restored the removal order, allowing the appeal.

Issues considered

Whether the Labour Court under Section 11‑A of the Industrial Disputes Act can substitute a removal order with a lesser punishment when the departmental inquiry is proper.
Whether the High Court exercising jurisdiction under Article 226 may interfere with a Labour Court award only if the punishment is shockingly disproportionate.
Whether the punishment of removal in the present case was shockingly disproportionate to the proved misconduct.

Legislation cited

Constitution of Indias. 226
Industrial Disputes Act, 1947s. 11-A

Subjects

Labour LawIndustrial Disputes ActSection 11-AArticle 226Removal from serviceDisciplinary inquiryProportionality of punishmentHigh Court jurisdiction

Judgment

U.P. STATE ROAD TRANSPORT CORPORATION A
v.
SUBHASH CHANDRA SHARMA AND ORS.

MARCH 15, 2000

[S. SAGHIR AHMAD AND D.P. WADHWA, JJ.] B

Labour Law.:

Industrial Disputf!S Act, 1947: s.11-A-Punishment of removal I dis-
missal-Power of Lab~ur Court to give appropriate relief ~f punishment is
found not justified-Held, Labour Court has discretion to award a lesser
c
punishment-This power is also available with High Court exercising jurisdic-
tion under Article 226 of the Constitution, if punishment/penalty is shockingly
disproportionate-However,, in the instant case, the charge against the delin-
. quent was of a seiious nature and the Labour Court having found that there was
no infi.rmity in conducting departmental inquiry, should not have interfered D
with the quantum of punishment-High Court also failed to exercise its juris-
diction under Article 226 in not correcting erroneous order of Labour Court-
Constitution of India-Article 226-Service Law-Removal from service.

A departmental inquiry was held against respondent No. 1, who was
working as a bus driver in the appellant-Corporation, on the charges that E
he remained absent from duty; that he unauthorisedly took the bus to a
different place lea~ing the conductor; and that he went in the cash room in
- .....
,~.

a drunken stWl:e,
-·.. \
demanded
.......
money from the Assistant Cashier and when
the latter refused the respondent threatened to assault him. The inquiry
officer found that the first two charges were not established but the third F
charge was fully established, which led to removal of the respondent from
service. On an industrial dispute having been raised by the respondent, a
reference was made to the Labour Court which held that the departmental
inquiry did not suffer from any infirmity. However, it found the punish-
ment of removal to be excessive, and substituted the punishment by stop-
page of one wage increment and ordered payment of 50% back wages. The G
Corporation challenged the award in a writ petition before the High Court
which dismissed the petition summarily. Aggrieved, the Corporation filed
the present appeal.

' It was contended for the appellant-Corporation that once the Labour H
451
452 SUPREME COURT REPORTS [2000] 2 S.C.R.
A Court found that the departmental inquiry conducted against the delin-
quent was proper and did not suffer from any infirmity, it should not have
interfered with the quantum of punishment; and that the High Court
should have set aside the award and maintained the order of removal.

Allowing the appeal, the Court
B
HELD: 1.1. Section 11-A of the Industrial Disputes Act, 1947 vests
the Labour Court with discretion to substitute the order of discharge or
dismissal of a workman into an order of reinstatement· of the workman on
such terms and conditions, if any, as it thinks fit or give such other relief to
the workman including the award of any lesser punishment in lieu .of
c discharge or dismissal as the circumstances of the case may require. This
power is also available to High Court under Article 226 of the Constitu-
tion, (hough it is qualified with a limitation that while seized with this
question as a writ court, interference is permissible only when the punish-
ment/penalty is shockingly disproportionate. [455-F, 454-F]
D
Union of India & Anr. v. B. C. Chaturvedi, [1995] 6 SCC 750; Colour-
Chem Ltd. v. A.L. Alaspurkar & Ors., [1998] 3 SCC 192 and Hind Construc-
tion & Engineering Co. Ltd. v. Workmen, AIR (1965) SC 917 = [1965] 2 SCR
85 = (1965) 1 LLJ 462, relied on.

E 1.2. However, in the instant case the Labour Court was not justified
in interfering with the order of removal of respondent from the service
when the charge against him stood proved. The charge against the re-
spondent was that he, in drunken state, along with a conductor went to the
Assistant Cashier in the cash room of the appellant and demanded money
F from the Assistant Cashier. When the Assistant Cashier refused, the
respondent abused him and threatened to assault him. It was certainly a
serious charge of misconduct against the respondent. The discretion exer-
cised by the Labour Court in the circumstances of the present case was
capricious and arbitrary and certainly not justified. [456-B]

G 1.3. The High Court failed to exercise its jurisdiction under Article
226 of the Constitution and did not correct the erroneous order of the
Labour Court which, if allowed to stand, would certainly result in miscar-
riage of justice. It could not be said that the punishment awarded to the
respondent was in any way "shockingly disproportionate" to the nature of
H
1
the charge found proved against him. [456-D-C]
-- U.P.S.R.T.C. v. S.C. SHARMA [S.S. AHMAD, J.]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2128 of2000.
453
A
From the Judgment and Order dated 27.4.98 of the Allahabad High
Court in C.1\:1.W.P. No. 12353 of 1998.

Ashok K. Srivastava for the Appellant.
B
Shrish Kr. Misra for the Respondents.

The Judgment of the Court was delivered by

S. SAGHIR AHMAD, J. Leave granted.

Respondent No. 1, [hereinafter referred to as 'Respondent'], who was c
a driver in the U.P. State Road Transport Corporation (appellant), was charge-
sheeted on 16.8.1989 for disciplinary proceedings. Three charges were indi-
cated in the charge-sheet. The first charge related to his habitual absence from
duty for the period June, 1988 to May, 1989, regarding which he also did not
submit the mileage form. The second charge was that on 19th May, 1989, D
when he reached Badaun at about 9 P.M. with Bus No. 8680, he informed the
Conductor, Dinesh Kumar, that the bus had developed some defects and,
therefore, he parked the bus in Badaun workshop. Dinesh Kumar, Conductor,
went to sleep in another bus, but when he woke up in the morning he found
that the Bus was taken by Respondent to Bareilly, regarding which ·an
information was also given by Dinesh Kumar to the Station Incharge, Badaun. E
The Bus was also seen coming back from Bareilly. It was noticed that in order
to cover up his act of taking the Bus to Bareilly, the Respondent got a remark
entered in his duty form by Rampa!, Vulcanizer of Badaun Depot, about the
defect in the Bus. The third and last charge against the Respondent was that
on 24th May, 1980 at about 8.30 PM, he, along with Shiv Kumar Sharma, F
Conductor, went to Ramesh Chandra, Assistant Cashier, in the cash rqom in
a drunken state. He demanded money from Ramesh Chandra and when the
latter refused, the Respondent abused and threatened to assault him, which was
treated as an act of misconduct. The charges were enquired into by Shri S.C.
Jain, a retired District Judge, who was appointed as the Enquiry Officer.
G
The Enquiry Officer submitted the Report on 21st September, 1990, in
which he found that the charge about habitual absence was not proved against
the Respondent. The other charge relating to taking the Bus to Bareilly was
also not established, but it was established that he had taken out the Bus
unauthorisedly from Badaun workshop to some place without taking the H
454 SUPREME COURT REPORTS [2000] 2 S.C.R.
A Conductor in the Bus. The third charge of misconduct was found fully
established. Thereafter, a show cause notice was issued to the Respondent on
12th August, 1991, and by order dated 31st August, 1991, he was removed
from service.

On an industrial dispute being raised by Respondent, a reference was
B made on 31st March, 1993 to theLabour Court for adjudication. The Labour
Court, by its award dated 6th December, 1996, came to the conclusion that
though the departmental enquiry did not suffer from any infirmity, the
punishment of 'removal' was excessive. It consequently set aside the order of
removal and substituted the punishment of removal by the punishment of
C. stoppage of one wage increment and payment of 50% of the back-wages. The
award was challenged by the appellant before the High Court in a writ petition
which was dismissed summarily on 27th April, 1998.

Learned counsel appearing for the appellant has contended that once it
was found by the Labour Court that the departmental enquiry conducted
D against the Respondent was proper and it did not suffer from any infirmity,
it was not open to it to interfere with the .quantum of punishment. It is
contended that the High Court should have, on that ground, set aside the award
and maintained the order of removal passed against the Respondent.

Whether it is open to Industrial. Tribunal or Labour Court or the High
E Court to interfere with the quantum of punishment is, no lor.ger, res integra,
as the question has been answered by this Court several times in its various
decisions. In Union of India & Am: v. B.C. Chaturvedi, [1995] 6 SCC 750,
a 3-Judge Bench of this Court has held that Section 11-A of the Industrial
Disputes Act, 1947 confers power on Industrial Tribunal/Labour Court to
F apply its mind on the question of proportion of punishment or penalty. It was
held that this power is also available to High Court under Article 226 of the
Constitution, though it was qualified with a limitation that while seized with
this question as a writ court, interference is permissible only when the
punishment/penalty is shockingly disproportionate. Again, a 3-Judge Bench of
this Court in Colour-Chem Ltd. v. A.L. Alaspurkar & Ors., [1998] 3 SCC 192,
G relying upon an earlier decision in Hind Construction & Engineering Co. Ltd.
v. Workmen, AIR (1965) SC 917 = {1965] 2 SCR 85 = [1965] 1 LLJ 462,
laid down as under :

"Consequently, it must be held that when looking to the nature of
H charge of even major misconduct which is found proved if. the
U.P.S.R.T.C. v. S.C. SHARMA [S.S. AHMAD, J.] 455

- punishment of dismissal or discharge as imposed is found to be
grossly disproportionate in the light of the nature of the misconduct
or the past record of the employee concerned involved in the
A

misconduct or is such which no reasonable employer would ever
impose in like circumstances, inflicting of such punishment itself
could be treated as legal victimisation."
B
Section 1lA of the Industrial Disputes Act provides as under:-

"JJA. Powers of Labour_ Court, Tribunals and National Tribunals to
give appropriate relief in case ·a.f discharge or dismissal of workmen
-c-Where an industrial dispute relating to the discharge or dismissal .c
of a workman has been referred to a Labour Court, Tribunal or
National Tribunal for adjudication and, in the course of the adjudi-
cation proceedings, the Labour Court, Tribunal or National Tribunal
as the case may be, is satisfied that the order of discharge or dismissal
was not justified, it may, by its award, set aside the order of discharge
or dismissal and direct reinstatement of the workman on such terms D
and conditions, if any, as it thinks fit, or give such other relief to the
workman including the award of any lesser punishment in lieu of
discharge or dismissal as the circumstances of the case may require:

Provided that in any proceeding under this section the Labour Court, E
Tribunal or National Tribunal, as the case may be, shall rely only on
the material on record and shall not take any fresh evidence in relation
to the matter."

This Section, as interpreted by this Court, no doubt, vests the Labour
Court with discretion to substitute the order of discharge or dismissal of a F
workman into an order of reinstatement of the workman on such terms and
conditions, if any, as it thinks fit or give such other relief to the workman
including the award of any lesser punishment in lieu of discharge ·::>r
dismissal as the circumstances of the case may require. Inthe present case,
the following industrial dispute was referred to the Labour Court for G
adjudication:

"Whether the termination of the service of their workman Sh.
Subhash Chandra Sharma S/o Shri Nathimal, driver by the employer
by order dt. 31.08.1991 is proper and legal? If not, what is the relief
(with details) to which the workman is entitled to?" H
456 [2000] 2 S.C.R.

-
SUPREME COURT REPORTS

A The Labour Court, while upholding the third charge against the respond-
ent nevertheless interfered with the order of the appellant remqving the
respondent from the service. The charge against the respondent was that he,
in drunken state, along with a conductor went to the Assistant Cashier in the
cash room of the appellant and demanded money from the Assistant Cashier.
When the Assistant Cashier refused, the respondent abused him and threatened
B
to assault him. It was certainly a serious charge of misconduct against the
respondent. In such circumstances, the Labour Court was not justified in
interfering with the order of removal of respondent from the service when the
charge against him stood proved. Rather we find that the discretion exercised
by the Labour Court in the circumstances of the present case was capricious
C and arbitrary and certainly not justified. It could not be said that the
punishment awarded to the respondent was in any way "shockingly dispropor-
tionate" to the nature of the charge found proved against him. In our opinion,
the High Court failed to exercise its jurisdiction under Article 226 of the
Constitution and did not correct the erroneous· order of the Labour Court
D which, if allowed to stand, would certainly result in miscarriage of justice.

We, therefore, allow the appeal, set aside the impugned judgment of the
High Court and the award dated December 6, 1996 of the Labour Court. There
shall, however, be no order as to costs.

R.P. Appeal .allowed.