U.P. STATE ROAD TRANSPORT CORPORATIONversusSURESH CHAND SHARMA

                    [2010) 7 S.C.R. 239


    U.P. STATE ROAD TRANSPORT CORPORATION                          A
                              v.
                SURESH CHAND SHARMA
              (Civil Appeal No. 3086 of 2007)
                        MAY 26, 2010
                                                                   B
 [DR. B.S. CHAUHAN AND SWATANTER KUMAR, JJ.]

    Service Law:

     Misconduct - Misappropriation of public money -               c
Appropriate punishment - Conductor in State Road Transport
Corporation recovering travelling fare from passengers but not
issuing tickets to them - Misappropriating the recovered fare
i.e. public money - Conductor terminated from service -
Punishment of termination challenged as being                      D
dispr_oportionate on the ground that the amount
misappropriated ~as petty - Held: The challenge is not
tenable - Amount misappropriated may be small or large; it
is the mens rea to misappropriate the public money that is
relevant - In cases of corruption! misappropriation, the only      E
punishment is dismissal - Any sympathy in such cases would
be opposed to public interest.

     Termination - On ground of misconduct - Labour Court
declined relief to the employee - Writ petition - High Court
directed re-instatement - Justification of - Held: Not justified   F
- The High Court dealt with the matter in a most cryptic
manner - Did not give cogent reasons while reversing the
order of Labour Court - Judgment/Order - Obligation of the
Court to record reasons for the order made - Administration
of Justice.                                                        G

    Disciplinary proceedings were initiated against a Bus
Conductor in State Road transport Corporation on the
allegation that he recovered fare from travelling
                              239                                  H
..
         240    SUPREME COURT REPORTS             [2010) 7 S.C.R.


     A passengers, but did not issue tickets to them, and thus
       misappropriated the fare recovered from the passengers.
       The charges were found proved by the Disciplinary
       Authority and consequently, the Conductor was

     8
                                   .
       terminated from. service. He raised an industrial dispute.
                                                            '
           The Labciur Court decrined to give any relief to the
       Conductor on which he filed writ petition. The High Court
       directed re-instatement of the Conductor, but without
       back wages.
     c        In the present cross-appeals, the Corporation
         contended that the High Court had mis-directed itself as
         it did not give any cogent reason for setting aside the
         well-reasoned Award pf the Labour Court.

     D        Per contra, the Conductor submitted that there was
         no justification for imposing the punishment of dismissal
         and once the Award of the Labour Court was set aside,
         the Conductor was entitled to full back wages.

           Allowing the appeal of the Corporation and
     E dismissing that of the Conductor, the Court

            HELD:1.1. The Labour Court considered the matter
       at length and came to the conclusion that enquiry had
       been conducted strictly in accordance with law. There
     F has been no violation of the principles of natural justice
       or any other statutory provision. The employee
       (Conductor) was given full opportunity to defend himself,
       he cross examined the witnesses examined by the
       Corporation. The Enquiry Officer has rightly appreciated
     G the evidence and found the charges proved. The
       Disciplinary Authority has taken a right decision
       accepting the enquiry report and punishment order was
       passed after serving second show cause to the
       employee. [Para 9) [246-G-H; 247-A]
     H
 U.P. STATE ROAD TRANSPORT CORPORATION v.               241
            SURESH CHAND SHARMA
     1.2. The Labour Court recorded a finding of .fact that A ,
the passengers were found travelling without tickets and
they had already paid fare to the employee/Conductor.
Thus, it is not a case where the said employee could not
issue the ticket -ind recover the fare from the travelling ·
passengers, ratiler the finding has been recorded that B
after recovering the fare from the passengers, he did not
issue tickets to them. Thus, there was an intention to mis-
appropriate the fare recovered from the passengers who
were found travelling without tickets. [Para 10] [247-E-F]

    2.1. The High Court dealt with the matter in a most        C
cryptic manner. It decided the Writ Petition only on the
ground that the passengers found without tickets, had
not been examined and the cash with the employee was
not checked. The reasoning so given by the High Court
cannot be sustained in the eye of law. No other reasoning      D
has been given whatsoever by the High Court. [Paras 11,
12 and 14] [247-G; 248-C-D; 249-A-B]

     2.2. Moreso, the High Cou'rt is under an obligation to
give not only the reasons but cogent reasons while             E
reversing the findings of fact recorded by a domestic
tribunal. In case the judgment and order of the High
Court is found not duly supported by reasons, the
judgment itself stands vitiated. While decid_ing a case, the
court is under an obligation to record reasons, however,       F
brief, the same may be, as it is a requirement of principles
of natural justice. Non-observance of the said principle
would vitiate the judicial order. In view of the above, the
judgment and the order of the High Court is liable to be
set aside. [Paras 14 and 19] [249-A-B; 250-C-D]                G
    State of Haryana & Anr. v. Rattan Singh AIR 1977 SC
1512; State of Maharashtra v. Vithal Rao Pritirao Chawan AIR
1982 SC 1215; State of U. P. v. Battan & Ors. (2001) 10 SCC
607; Raj Kishore Jha v. State of Bihar & Ors. AIR 2003 SC
                                                               H
    242      SUPREME COURT REPORTS            [2010] 7 S.C.R.


A 4664; State of Orissa v. Dhaniram Luhar AIR 2004 SC 1794;
  State of West Bengal v. Atu/ Krishna Shaw & Anr. AIR 1990
  SC 2205; State of Uttarancha/ & Anr. v. Sunil Kumar Singh
  Negi AIR 2008 SC 2026 and Krishna Swami v. Union of India
  & Ors. AIR 1993 SC 1407, relied on.
B
       3. There is no force in the submission that for
  embezzlement of such a petty amount, punishment of
  dismissal could not be justified, for the reason that it is
  not the amount embezzled by a delinquent employee but
  the mens rea to mis-appropriate the public money that is
C relevant. In a case of corruption/misappropriation, the
  only punishment is dismissal. Thus, the contention raised
  that the punishment of dismissal from service was
  disproportionate to the proved delinquency of the
  Conductor, is not worth acceptance. The award of the
D Labour Court is restored. [Paras 20, 21, 22] (250-E; 251-
  B-D]

       Municipal Committee, Bahadurgarh v. Krishnan Bihari &
  Ors. AIR 1996 SC 1249; Ruston & Hornsby (/) Ltd. v. T.B.
E Kadam, AIR 1975 SC 2025; U.P. State Road Transport
  Corporation v. Basudeo Chaudhary & Anr. (1997) 11 SCC
  370; Janatha Bazar (South Kanara Central Cooperative
  Wholesale Stores Ltd.) & Ors. v. Secretary, Sahakari
  Noukarara Sangha & Ors. (2000) 7 SCC 517; Karnataka State
F Road Transport Corporation v. B. S. Hullikatti AIR 2001 SC
  930 and Regional Manager, R. S. R. T. C. v. Ghanshyam
  Sharma (2002) 10 SCC 330, relied on.

        Divisional Controller N.E.K.R. T.C. v. H. Amaresh AIR
    2006 SC 2730 and U.P.S.R. T.C. v. Vinod Kumar, (2008) 1
G SCC 115, referred to.
                       Case Law Reference:
          AIR 1977 SC 1512     relied on           Para 12

H         AIR 1982 SC 1215     relied on           Para 14
U.P. STATE ROAD TRANSPORT CORPORATION v.                  243
           SURESH CHAND SHARMA
    (2001) 1o sec 607        relied on            Para 14       A

    AIR 2003 SC 4664         referred to          Para 14

    AIR 2004 SC 1794         relied on           · Para 14

    AIR 1990 SC 2205         relied on            Para 15
                                                                B
    AIR 2008 SC 2026         relied on            Para 16

    AIR 1993 SC 1407         relied on            Para 18

    AIR 1996 SC 1249         relied on            Para 21
                                                                c
    AIR 1975 SC 2025         relied on            Para 21

    (1997) 11 sec 370        relied on            Para 21

    (2000) 1 sec 517         relied on            Para 21
    AIR 2001 SC 930          ·relied on           Para 21       D

    (2002) 1o sec 330        relied on            Para 21
    AIR 2006 SC 2730         referred to          Para 21
    (2008) 1 sec 115         referred to          Para 21       E
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3086 of 2007.

    From the Judgment & Order dated 07.09.2005 of the High
Court of Uttaranchal at Nainital in Writ Petition No. 4143 of   F
2001 (M/S) (Old No. 9129 of 1996).

                              WITH

Civil Appeal No. 3088 of 2007
                                                                G
    Suraj Singh (for Pradeep Mishra) for the Appellant.

   Dr. J.N. Dubey, Anurag Dubey, Meenesh Dubey, Anu
Sawhney for the Respondent.
                                                                H
    244      SUPREME COURT REPORTS                     [2010] 7 S.C.R.


A         The Judgment of the Court was delivered by

          DR. B.S. CHAUHAN, J. 1. Both these appeals have been
  preferred against the impugned judgment and order of the High
  Court of Uttaranchal at Nainital in Writ Petition No. 4143 of 2001
  by which the Writ Petition filed by the Respondent-employee
8
  of the U.P. State Road Transport Corporation (hereinafter
  referred to as the 'Corporation') has been allowed directing his
  re-instatement in service, but without back wages. The
  Corporation has filed appeal being aggrieved of the order of
  re-instatement and reversal of the Award of the Labour Court
C dated 28.4.1995, while Civil Appeal No.3088 of 2007 has been
  preferred by the employee Shri Suresh Chand Sharma claiming
  full back wages.

         2. Facts and circumstances giving rise to these appeals
D   are that the said employee while working as a Conductor on
    bus No.UTL-9194 on the route Haridwar-Rishikesh was found,
    on checking on 24.5.1987, carrying 13 passengers without
    ticket from whom he has already recovered the fare and on
    10.5.1988 on bus No.UGA-9059 on which he was working as
E   a Conductor, 10 passengers were found without ticket.
    However, the employee had already recovered the fare from
    them. The Corporation served charge sheets upon the
    employee on 16.5.1988 and 7.7.1988 in respect of the mis-
    conducts dated 10.5.1988 and 24.5.1987. Employee submitted
F   his reply to the charge sheets. However, the management not
    being satisfied with his reply decided to proceed with the
    regular enquiry and one Shri H.L. Saxena, a retired l.F.S. Officer
    was appointed as Enquiry Officer. The enquiry was conducted
    on both the charges giving full opportunity of hearing/defence
G   to the employee. Enquiry Officer submitted the enquiry report
    wherein charges in respect of both the misconducts had been
    found proved. The Disciplinary Authority accorded its
    concurrence thereto. The management served the copy of the
    enquiry report and issued a second show cause dated
    14.12.1988 to the employee to which he submitted his reply on
H



                                             ,~   ..
 IJ.P. STATE ROAD TRANSPORT CORPORATION v. 245
SURESH CHAND SHARMA [DR. B.S. CHAUHAN, J.]
9.1.1999. The Disciplinary Authority was not satisfied with his     A
reply and after considering the material on record, the Authority
passed the punishment order dated 29.1.1989 dismissing the
employee from service.

    3. Being aggrieved, the Employee preferred a                    B
Departmental Appeal which was duly considered by the
Appellate Authority and rejected vide order dated 21.3.1990.
The Employee raised an industrial dispute and thus, the matter
was referred by the Appropriate Government to the Labour
Court vide reference dated 19.12.1991 to the following effect:      C

           "Whether the termination of the services of the
     applicant/workman Shri S.C. Sharma slo Late Shri Om
     Prakash, conductor by the employer from 29.1.1989 is
     unjustified and/or illegal? If so, which benefit/
     compensation the applicant/workman is entitled and to          D
     what extent?

     4. Both the parties appeared before the Labour Court, filed
their replies and affidavits. Both parties filed documentary
evidence and also led oral evidence and advanced E
submissions in support of their respective cases. The Labour .
Court considered all aspects and vide Award dated 28.4.1995
held that enquiry had been held strictly in accordance with law
and both the charges in respect of both the incidents were found
duly proved. Therefore, the employee was not entitled to any
                                                                 F
relief whatsoever.

      5. Being aggrieved, the employee challenged the Award
by filing C.M.W.P. No.9129 of 1996 before the High Court of
Judicature at Allahabad which was transferred to the High Court
at Nainital after Re-organisation of States and the said            G
transferred case was registered as Writ Petition No. 4143 (M/
S) of 2001. The High Court allowed the Writ Petition partly vide
impugned judgment and order dated 7.9.2005 and dire.cted the
re-instatement of the employee without back wages. Hence,
these appeals.                                                      H·
    246     SUPREME COURT REPORTS                  [2010] 7 S.C.R.


A      6. We have heard Shri Suraj Singh, learned counsel
  appearing for the Corporation and Dr. J.N. Dubey, learned
  senior counsel appearing for the employee. Large number of
  submissions have been made by the parties and it has been
  contended on behalf of the Corporation that the High Court has
B not recorded any reason whatsoever while setting aside the
  Award of the Labour Court. No fault could be found with the
  Award of the Labour Court and it was not necessary for the
  checking authority to record the evidence of the passengers who
  were found travelling without tickets nor it was necessary to
c check the cash at the hand of the employee. The High Court
  mis-directed itself while setting aside the well-reasoned Award
  of the Labour Court without giving any reason whatsoever. Thus,
  the appeal of the Corporation deserves to be allowed and
  Award of the Labour Court deserved to be restored.
D       7. Per contra, Dr. J.N. Dubey, learned counsel appearing
  for the employee has submitted that the High Court was justified
  in accepting the submissions on behalf of the employee that
  material witnesses were not examined. Thus, no disciplinary
  proceeding could be initiated against the employee. There was
E no justification for imposing the punishment of dismissal by the
  authority and once the Award of the Labour Court is set aside,
  the employee was entitled to full back wages. Thus, the
  Corporation's appeal is liable to the dismissed and appeal filed
  by the employee deserves to be allowed.
F
         8. We have considered the rival submissions made by
    learned counsel for the parties and perused the record.

        9. The Labour Court has considered the matter at length
  and came to the conclusion that enquiry had been conducted
G strictly in accordance with law. There has been no violation of
  the principles of natural justice or any other statutory provision.
  The employee was given full opportunity to defend himself,
  cross examined the witnesses examined by the Corporation.
  The Enquiry Officer has rightly appreciated the evidence and
H found the charges proved in respect of both the incidents. The
   U.P. STATE ROAD TRANSPORT CORPORATION v. 247
  SURESH CHAND SHARMA [DR. S.S. CHAUHAN, J.]
  Disciplinary Authority has taken a right decision accepting the   A
  enquiry report and punishment order was passed after serving
· second show cause to the employee. The Labour Court
  recorded the findings on facts as under:

            "As far as the question of conclusions drawn by the
                                                                    8
      Enquiry officer is concerned, in the enquiry conducted in
      respect of first charge sheet dated 7.7.1988 Ext.E/2,
      statement of Shri Atar Singh, Traffic Inspector has been
      recorded wherein he has proved the report Ext.E/1 of Shri
      Atar Singh, Traffic Inspector. Shri Atar Singh had checked    C
      the vehicle and 13 without ticket passengers have been
      found travelling from whom the petitioner-workman had
      already taken Rs . .431- as fare. Shri Atar Singh has
      accordingly made a remark on the way bill and obtained
      the signatures of petitioner-workman also. The petitioner-
      workman did not ask any question in cross-examination to      D
      this witness. The petitioner workman has also not asked
      any question in cross- examination with the other witness
      Shri Kailash Chandra, Traffic Inspector." (Ephasis added)

       10. The Labour Court recorded a finding of fact that in      E
 respect of both the mis-conducts the passengers were found
 travelling without tickets and they had already paid fare to the
 employee/Conductor. Thus, it is not a case where the said
 employee could not issue the ticket and recover the fare from
 the travelling passengers, rather the finding has been recorded    F
 that after recovering the fare from the passengers, he did not
 issue tickets to them. Thus, there was an intention to mis-
 appropriate the fare recovered from the passengers who were
 found travelling without tickets at both the times.

     11. The High Court dealt with the matter in a most cryptic     G
 manner. RelevanUmain part of the judgment of the High Court
 reads as under:

      "5 ..... The Inspector in the cross-examination has also
      stated on oath that the cash was not checked. The learned     H
    248      SUPREME COURT REPORTS                    [2010) 7 S.C.R.


A         counsel for the petitioner further submitted that when the
          bus was checked, ten passengers were boarded on the
          bus and they were drunk and they were also denying
          taking the tickets. The learned Tribunal has not considered
          this fact at all. I find force in the contention of the learned
B         counsel for the petitioner. The learned Tribunal ought to
          have considered this fact that neither the passengers were
          examined, nor the cash was checked. Therefore, the order
          of the learned Tribunal cannot be sustained in the eye of
          law."
c                                                   (Emphasis added)

       12. The High Court has decided the Writ Petition only on
  the ground that the passengers found without tickets, had not
  been examined and the cash with the employee was not
D checked. No other reasoning has been given whatsoever by
  the Court.

       13. In State of Haryana & Anr. Vs. Rattan Singh AIR 1977
  SC 1512, this Court has categorically held that in a domestic
E enquiry, complicated principles and procedure laid down in the
  Code of Civil Procedure, 1908 and the Indian Evidence Act,
  1872 do not apply. The only right of a delinquent employee is
  that he must be informed as to what are the charges against
  him and he must be given full opportunity to defend himself on
  the said charges. However, the Court rejected the contention
F that enquiry report stood vitiated for not recording the statement
  of the passengers who were found travelling without ticket. The
  Court held as under:

                 "We cannot hold that merely because statements of
G         passengers were not recorded the order that followed was
          invalid. Likewise, the re-evaluation of the evidence on the
          strength of co-conductor's testimony is a matter not for the
          court but for the administrative tribunal. In conclusion, we
          do not think courts below were right in over-turning the
H         finding of the domestic tribunal."
 U.P. STATE ROAD TRANSPORT CORPORATION v. 249
S'JRESH CHAND SHARMA [DR. B.S. CHAUHAN, J.]
      14. In view of the above, the reasoning so given by the High A
Court cannot be sustained in the eye of law. More so, the High
Court is under an obligation to give not only the reasons but
cogent reasons while reversing the findings of fact recorded by
a domestic tribunal. In case the judgment and order of the High
Court is found not duly supported by reasons, the judgment itself B
stands vitiated. (Vide State of Maharashtra Vs. Vithal Rao
Pritirao Chawan, AIR 1982 SC 1215; State of U.P. Vs. Battan
& Ors. (2001) 10 SCC 607); Raj Kishore Jha Vs. State of Bihar
& Ors. AIR 2003 SC 4664; and State of Orissa Vs. Dhaniram
Luhar AIR 2004 SC 1794.                                            .C

     15. In State of West Bengal Vs. Atul Krishna Shaw & Anr.
AIR 1990 SC 2205, this Court obseNed that "giving of reasons
is an essential element of administration of justice. A right to
reason is, therefore, an indispensable part of sound system of
judicial review."                                                  D

    16. In State of Uttarancha/ & Anr. Vs. Suni/ Kumar Singh
Negi AIR 2008 SC 2026, this Court held as under:

     "Right to reason is an indispensable part of a sound          E
     judicial system; reasons at least sufficient to indicate an
     application of mind to the matter before Court. Another
     rationale is that the affected party can know why the
     decision has gone against him. One of the salutary
     requirements of natural justice is spelling out reasons for
                                                                   F
     the order made".

    17. In Raj Kishore Jha (supra), this Court obseNed as
under:

     "Before we part with the case, we feel it necessary to        G
     indicate that non-reasoned conclusions by appellate Courts
     are not appropriate, more so, when views of the lower
     Court are differed from. In case of concurrence, the need
     to again repeat reasons may not be there. It is not so in
     case of reversal. Reason is the heartbeat of every            H
    250       SUPREME COURT REPORTS                  [2010] 7 S.C.R.


A         conclusion. Without the same, it becomes lifeless".

         18. In fact, "reasons are the links between the material, the
    foundation for these erection and the actual conclusions. They
    would also administer how the mind of the maker was activated
    and actuated and their rational nexus and synthesis with the
8
    facts considered and the conclusion reached". (vide: Krishna
    Swami Vs. Union of India & Ors. AIR 1993 SC 1407)

       19. Therefore, the law on the issue can be summarized to
  the effect that, while deciding the case, court is under an
C obligation to record reasons, however, brief, the same may be
  as it is a requirement of principles of natural justice. Non-
  observance of the said principle would vitiate the judicial order.

      Thus, in view of the above, the judgment and order of the
D High Court impugned herein is liable to be set aside.

       20. We do not find any force in the submissions made by
  Dr. J.N. Dubey, learned Senior counsel for the employee that
  for embezzlement of such a petty amount, punishment of
  dismissal could not be justified for the reason that it is not the
E amount embezzled by a delinquent employee but the mens rea
  to mis-appropriate the public money.

        21. In Municipal Committee, Bahadurgarh Vs. Krishnan
    Bihari & Ors., AIR 1996 SC 1249, this Court held as under:-
F
          "In a case of such nature - indeed, in cases involving
          corruption - there cannot be any other punishment than
          dismissal. Any sympathy shown in such cases is totally
          uncalled for and opposed to public interest. The amount
          misappropriated may be small or large; it is the act of
G         misappropriation that is relevant."

       Similar view has been reiterated by this Court in Ruston
  & Hornsby(/) Ltd. Vs. T.B. Kadam, AIR 1975 SC 2025; UP.
  State Road Transport Corporation Vs. Basudeo Chaudhary
H & Anr., (1997) 11 SCC 370; Janatha Bazar (South Kanara
 U.P. STATE ROAD TRANSPORT CORPORATION v. 251
SUPESH CHAND SHARMA [DR. 8.S. CHAUHAN, J.]
Central Cooperative Wholesale Stores Ltd.) & Ors. Vs.                A
Secretary, Sahakari Noukarara Sangha & Ors., (2000) 7 SCC
517; Kamataka State Road Transport Corporation Vs. B.S.
Hullikatti, AIR 2001 SC 930; and Regional Manager,
R.S.R. 1:c. Vs. Ghanshyam Sharma, (2002) 10 SCC 330.
                                                                     8
    In Divisional Controller N. E. K. R. T. C. Vs. H. Amaresh, AIR
2006 SC 2730; and U.P.S.R. T.C. Vs. Vinod Kumar, (2008) 1
SCC 115, this Court held that the punishment should always
be proportionate to the gravity of the misconduct. However, in
a case of corruption/misappropriation, the only punishment is        C
dismissal.

     22. Thus, in view of the above, the contention raised on
behalf of the employee that punishment of dismissal from
service was disproportionate to the proved delinquency of the
employee, is not worth acceptance.                                   D

     Appeal preferred by the Corporation i.e. Civil Appeal No.
3086 of 2007 is allowed. The judgment and order of the High
Court dated 7.9.2005 is hereby set aside and the Award of the
Labour Court dated 28.4.1995 is restored. The appeal                 E-
preferred by the employee i.e. Civil Appeal No.3088 of 2007
is hereby dismissed. No order as to costs.

8.8.8.                                    Appeals disposed of.