UTTAR PRADESH STATE ROAD TRANSPORT CORPORATIONversusGAJADHAR NATH

394                      [2021]
              SUPREME COURT     9 S.C.R. 394
                             REPORTS                      [2021] 9 S.C.R.


A             UTTAR PRADESH STATE ROAD TRANSPORT
                         CORPORATION
                                      v.
                             GAJADHAR NATH
B                       (Civil Appeal No. 7536 of 2021)
                            DECEMBER 08, 2021
        [HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]
             Industrial Disputes Act, 1947 – Misconduct – Respondent-
      workman removed from service as conductor – Order of removal
C
      set aside by Tribunal – Confirmed by High Court – Held: Tribunal
      or High Court could not reject the evidence led by the appellant-
      employer in respect of misconduct of the workman before the
      adjudicator – Non lodging of FIR cannot be the circumstance
      against the witness examined by the employer – Initiation/non-
D     initiation of criminal proceedings against an employee has no
      bearing to prove misconduct in departmental proceedings – Order
      of removal from service not unfair or unjust in any manner – Orders
      of the High Court and Tribunal set aside – Order of punishment
      restored – Evidence Act, 1872.
E           Allowing the appeal, the Court
           HELD : 1. The domestic inquiry conducted can be
      permitted to be disputed before the Tribunal in terms of Section
      11A of the Industrial Disputes Act, 1947. [Para 5][397-E]
            Workmen of M/s Firestone Tyre and Rubber Co. of India
F           (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 are
      clearly erroneous and not sustainable in law. The representative
      of the employer has not been cross-examined on the question
G     that he has not inspected the bus on 12.11.1998. He has deposed
      that when he tried to record the statements of the passengers,
      the conductor misbehaved with him and used unruly words. Even
      that part of the statement has not been disputed in the

H
                                     394
        UTTAR PRADESH STATE ROAD TRANSPORT                           395
           CORPORATION v. GAJADHAR NATH

crossexamination. Therefore, the fact that the Assistant Traffic     A
Inspector was not able to record the names and addresses of the
passengers cannot be said to be unjustified. Since the passengers
are low-fare paying passengers, they might have been hesitant
to get involved in the issues of any action against the conductor.
The Inspector had found that 17 passengers were not issued
                                                                     B
tickets and such statement of the Inspector has also not been
disputed in the cross examination. The Tribunal or the High Court
could not reject the evidence led by the employer in respect of
misconduct of the workman before the adjudicator. Still further
non lodging of FIR cannot be the circumstance against the witness
examined by the employer. The initiation of criminal proceedings     C
against an employee or not initiating the proceedings has no
bearing to prove misconduct in departmental proceedings.
Therefore, the order of removal from service cannot be said to
be unfair and unjust in any manner which would warrant an
interference at the hands of the Tribunal and the High Court.
                                                                     D
The three reasons recorded by the Tribunal are absolutely
perverse and not supported by any evidence. The Tribunal had
misapplied the basic principles of law and the High Court has
thereafter wrongly confirmed the order. The orders of the High
Court and of the Tribunal are set aside. The order of punishment
dated is restored. [Paras 11, 12][403-A-F]                           E
     Karnataka State Road Transport Corporation v. Smt.
     Lakshmidevamma & Anr. AIR 2001 SC 2090 – followed.
     U.P. State Road Transport Corporation v. Suresh Chand
     Sharma (2010) 6 SCC 555: [2010] 7 SCR 239 – relied
     on.                                                             F

     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; State
     of Haryana & Anr. v. Rattan Singh (1977) 2 SCC 491 –            G
     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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396              SUPREME COURT REPORTS                        [2021] 9 S.C.R.


A                                    Case Law Reference
      [1973] 3 SCR 587                      relied on            Para 5
      [1984] 1 SCR 85                       referred to          Para 6
      [2010] 7 SCR 239                      relied on            Para 8
B           CIVIL APPELLATE JURISDICTION : Civil Appeal No.7536
      of 2021.
            From the Judgment and Order dated 20.01.2021 of the High Court
      of Judicature at Allahabad in Writ-C No.51777 of 2009.
            Nishit Agrawal, Harsh Mishra, Ms. Upasha Agrawal, Advs. for
C
      the Appellant.
           Nagarkatti Kartik Uday, Gaurav Srivastava, Advs. for the
      Respondent.
              The Judgment of the Court was delivered by
D             HEMANT GUPTA, J.
              Leave granted.
             2. The order dated 20.1.2021 passed by the High Court of
      Allahabad is the subject matter of challenge in the present appeal at the
E     instance of the employer whereby the order dated 22.10.2008 passed by
      the Industrial Tribunal1 was not interfered with. The Tribunal directed
      that the respondent2 be reinstated in service and ordered 50% of the
      salary to be paid for the period when he was not in employment.
             3. The workman was removed from service as conductor on
F     account of misconduct on 14.12.2001. He raised an industrial dispute
      which was referred to the Tribunal. On 5.5.2008, the Tribunal returned a
      preliminary finding that the domestic inquiry conducted into the charges
      levelled against the workman in question was not fair and proper.
      Therefore, the employer led evidence by examining Sheshmani Mishra,
      an Assistant Traffic Inspector3 who had conducted inspection of the
G     vehicle on 12.11.1998. The said witness supported the report submitted
      by him to the Assistant Regional Manager as Ex.P/10. He deposed that
      he checked the bus at Katra when the bus was coming from Banda to
      1
        For short, the ‘Tribunal’
      2
        For short, the ‘workman’
      3
H       For short, the ‘Inspector’
         UTTAR PRADESH STATE ROAD TRANSPORT                                      397
    CORPORATION v. GAJADHAR NATH [HEMANT GUPTA, J.]

Allahabad. All the 17 passengers in the bus had stated that they had             A
given 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 the
passengers, the conductor misbehaved with him and used unruly words
which he could not state even before the Court. In the cross-examination,
                                                                                 B
he deposed that his report was dated 13.11.1998 and that such report
does not bear the signature of driver or the conductor. Further, no
statement of any of the passengers was filed.
       4. The learned Tribunal considering the said statement, set aside
the order of removal inter alia holding that the Inspector should have
recorded the statements of passengers who have been found travelling             C
without ticket and if they had shown reluctance in recording their
statements, at least their oral statements, names and addresses must
have been submitted. The Tribunal also returned a finding that the
Inspector was not proved to have inspected the bus on 12.11.1998. It
was also observed that if the conductor had misbehaved with the Inspector,       D
why an FIR was not recorded in the concerned police station. On these
grounds, the learned Tribunal set aside the order of removal.
       5. The scope of an adjudicator under the Industrial Disputes Act,
19474 may be noticed. The domestic inquiry conducted can be permitted
to be disputed before the Tribunal in terms of Section 11A of the Act.           E
This Court in a judgment reported as Workmen of M/s Firestone Tyre
and Rubber Co. of India (P.) Ltd. v. Management & Ors.5 held that
in terms of Section 11A of the Act, if a domestic inquiry has been held
and finding of misconduct is recorded, the authorities under the Act have
full power and jurisdiction to reappraise the evidence and to satisfy
themselves whether the evidence justifies the finding of misconduct.             F
But where the inquiry is found to be defective, the employer can lead
evidence to prove misconduct before the authority. This Court held as
under:
          “32. From those decisions, the following principles broadly emerge:-
                                                                                 G
          (1) The right to take disciplinary action and to decide upon the
          quantum of punishment are mainly managerial functions, but if a
          dispute is referred to a Tribunal, the latter has power to see if
          action of the employer is justified.
4
    For short, the ‘Act’
5
    (1973) 1 SCC 813                                                             H
398      SUPREME COURT REPORTS                            [2021] 9 S.C.R.


A     (2) Before imposing the punishment, an employer is expected to
      conduct a proper enquiry in accordance with the provisions of the
      Standing Orders, if applicable, and principles of natural justice.
      The enquiry should not be an empty formality.
      (3) When a proper enquiry has been held by an employer, and the
B     finding of misconduct is plausible conclusion flowing from the
      evidence, adduced at the said enquiry, the Tribunal has no
      jurisdiction to sit in judgment over the decision of the employer as
      an appellate body. The interference with the decision of the
      employer will be justified only when the findings arrived at in the
      enquiry are perverse or the management is guilty of victimisation,
C     unfair labour practice or mala fide.
      (4) Even if no enquiry has been held by an employer or if the
      enquiry held by him is found to be defective, the Tribunal in
      order to satisfy itself about the legality and validity of the
      order, had to give an opportunity to the employer and employee
D     to adduce evidence before it. It is open to the employer to
      adduce evidence for the first time justifying his action, and it
      is open to the employee to adduce evidence contra.
      (5) The effect of an employer not holding an enquiry is that the
      Tribunal would not have to consider only whether there was a
E     prima facie case. On the other hand, the issue about the merits
      of the impugned order of dismissal or discharge is at large before
      the Tribunal and the latter, on the evidence adduced before it, has
      to decide for itself whether the misconduct alleged is proved. In
      such cases, the point about the exercise of managerial functions
F     does not arise at all. A case of defective enquiry stands on the
      same footing as no enquiry.
      (6) The Tribunal gets jurisdiction to consider the evidence placed
      before it for the first time in justification of the action taken only,
      if no enquiry has been held or after the enquiry conducted by an
G     employer is found to be defective.
      (7) It has never been recognised that the Tribunal should
      straightway, without anything more, direct reinstatement of a
      dismissed or discharged employee once it is found that no domestic
      enquiry has been held or the said enquiry is found to be defective.
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         UTTAR PRADESH STATE ROAD TRANSPORT                                     399
    CORPORATION v. GAJADHAR NATH [HEMANT GUPTA, J.]

       (8) An employer, who wants to avail himself of the opportunity of        A
       adducing evidence for the first time before the Tribunal to justify
       his action, should ask for it at the appropriate stage. If such an
       opportunity is asked for, the Tribunal has no power to refuse. The
       giving of an opportunity to an employer to adduce evidence for
       the first time before the Tribunal is in the interest of both the
                                                                                B
       management and the employee and to enable the Tribunal itself to
       be satisfied about the alleged misconduct.
       (9) Once the misconduct is proved either in the enquiry conducted
       by an employer or by the evidence placed before a Tribunal for
       the first time, punishment imposed cannot be interfered with by
       the Tribunal except in cases where the punishment is so harsh as         C
       to 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 Estate
       v. The Workmen, 1971-1 SCC 742 within the judicial decision              D
       of a Labour Court or Tribunal.”
       6. The question as to whether the employer is required to seek
liberty to prove misconduct in the written statement or could lead
evidence at a later stage was considered by a Constitution Bench of this
Court in a judgment reported as Karnataka State Road Transport                  E
Corporation v. Smt. Lakshmidevamma & Anr.6. Therein this Court
was examining a conflict, if any, between two judgments reported
Shambhu Nath Goyal v. Bank of Baroda & Ors.7 and Rajendra Jha
v. Presiding Officer, Labour Court, Bokaro Steel City, District
Dhanbad & Anr.8.The majority opinion of the Court noticed thatthe               F
right of a management to lead evidence before the Labour Court or the
Industrial Tribunal in justification of its decision under consideration by
such Tribunal or Court is not a statutory right. This is actually a procedure
laid down by this Court to avoid delay and multiplicity of proceedings in
the disposal of disputes between the management and the workman.
                                                                                G
       “17. Keeping in mind the object of providing an opportunity to the
       management to adduce evidence before the Tribunal/Labour Court,

6
  AIR 2001 SC 2090
7
  (1983) 4 SCC 491
8
  1984 Supp. SCC 520                                                            H
400                 SUPREME COURT REPORTS                          [2021] 9 S.C.R.


A               we are of the opinion that the directions issued by this court in
                Shambhu Nath Goyal’s case need not be varied, being just and
                fair. There can be no complaint from the management side for
                this procedure because this opportunity of leading evidence is being
                sought by the management only as an alternative plea and not as
                an admission of illegality in its domestic inquiry. At the same time,
B
                it is also of advantage to the workmen inasmuch as they will be
                put to notice of the fact that the management is likely to adduce
                fresh evidence, hence, they can keep their rebuttal or other
                evidence ready. This procedure also eliminates the likely delay in
                permitting the management to make belated application whereby
C               the proceedings before the Labour Court/Tribunal could get
                prolonged. In our opinion, the procedure laid down in Shambhu
                Nath Goyal’s case is just and fair.
                18. There is one other reason why we should accept the procedure
                laid down by this Court in Shambhu Nath Goyal’s case. It is to be
D               noted that this judgment was delivered on 27th of September, 1983.
                It has taken note of almost all the earlier judgments of this Court
                and has laid down the procedure for exercising the right of leading
                evidence by the management which we have held is neither
                oppressive nor contrary to the object and scheme of the Act. This
                judgment having held the field for nearly 18 years, in our opinion,
E               the doctrine of stare decisis require us to approve the said
                judgment to see that a long-standing decision is not unsettled
                without strong cause.”
             7. Now on merits, keeping in view the principles of law, learned
      counsel for the appellants-employer contended that the Indian Evidence
F     Act, 18729 applies to all judicial proceedings in or before any Court.
      Since the domestic inquiry is not by a Court, therefore, strict rules of the
      Evidence Act are not applicable to such domestic inquiry. Reliance is
      placed upon a three-Judge Bench of this Court reported as State of
      Haryana & Anr. v. Rattan Singh10 wherein in respect of a conductor
G     who was found to have not issued tickets, this Court held as under:
                “4. It is well settled that in a domestic enquiry the strict and
                sophisticated rules of evidence under the Indian Evidence Act
                may not apply. All materials which are logically probative for a
      9
          For short, the ‘Evidence Act’
      10
H          (1977) 2 SCC 491
          UTTAR PRADESH STATE ROAD TRANSPORT                                       401
     CORPORATION v. GAJADHAR NATH [HEMANT GUPTA, J.]

          prudent mind are permissible. There is no allergy to hearsay             A
          evidence provided it has reasonable nexus and credibility. It is
          true that departmental authorities and Administrative Tribunals
          must be careful in evaluating such material and should not glibly
          swallow what is strictly speaking not relevant under the Indian
          Evidence Act. For this proposition it is not necessary to cite
                                                                                   B
          decisions nor text books, although we have been taken through
          case-law and other authorities by counsel on both sides. The
          essence of a judicial approach is objectivity, exclusion of extraneous
          materials or considerations and observance of rules of natural
          justice. Of course, fairplay is the basis and if perversity or
          arbitrariness, bias or surrender of independence of judgment vitiate     C
          the conclusions reached, such finding, even though of a domestic
          tribunal, cannot be held good. However, the courts below
          misdirected themselves, perhaps, in insisting that passengers who
          had come in and gone out should be chased and brought before
          the tribunal before a valid finding could be recorded. The ‘residuum’
                                                                                   D
          rule to which counsel for the respondent referred, based upon
          certain passages from American Jurisprudence does not go to
          that extent nor does the passage from Halsbury insist on such
          rigid requirement. The simple point is, was there some evidence
          or was there no evidence — not in the sense of the technical
          rules governing regular court proceedings but in a fair                  E
          commonsense way as men of understanding and worldly wisdom
          will accept. Viewed in this way, sufficiency of evidence in proof
          of the finding by a domestic tribunal is beyond scrutiny. Absence
          of any evidence in support of a finding is certainly available for
          the court to look into because it amounts to an error of law apparent
                                                                                   F
          on the record. We find, in this case, that the evidence of Chamanlal,
          Inspector of the Flying Squad, is some evidence which has
          relevance 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 Transport
Corporation v. Suresh Chand Sharma11, this Court set aside the order               G
of the High Court wherein the writ petition was allowed holding that the
passengers without tickets have not been examined and cash with the
employee was not checked. This Court relied upon the judgment of this

11
     (2010) 6 SCC 555                                                              H
402                SUPREME COURT REPORTS                          [2021] 9 S.C.R.


A     Court in Rattan Singh and found that the punishment of dismissal from
      service was not disproportionate to the proved delinquency of the
      employee.
            9. The Division Bench of the Allahabad High Court to which the
      learned Single Bench was bound in a judgment reported as U.P. State
B     Road Transport Corporation through M.D. & Ors. v. Rajendra
      Prasad12 allowed the appeal of the employer wherein the Tribunal
      returned a finding that 16 passengers who were without tickets at the
      time of inspection were not examined. Therefore, the punishment order
      was 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 argument
                raised by the learned counsel for the claimant/respondent to the
                effect that the passengers were required to be examined during
                enquiry and accordingly, we hold that the finding with regard to
                examination of passengers given by the Tribunal is perverse being
D               contrary to the Law and being so is unsustainable. It is also for
                the reason that the enquiry officer after examining the witnesses
                including claimant/respondent held that the charge levelled against
                the claimant/respondent found proved.
                                             xx xx xx
E
                37. Further, in the present case, claimant/respondent-Rajendra
                Prasad is a conductor of the bus and he was entrusted with the
                duty to collect the ticket from the passengers travelling in the bus
                and deposit the same with the Corporation however in the present
                case, from the material on record, the position which emerges out
F               is 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 inspire
      confidence as he had not recorded the names and addresses of the
G     passengers. It is not the case of the workman that the passengers were
      required to be examined but at least there should have been some evidence
      that there were passengers who were found travelling without any ticket.
      Since the basic evidence is not available on record, therefore, the finding

      12
H          2019 SCC OnLine All 5152
      UTTAR PRADESH STATE ROAD TRANSPORT                                      403
 CORPORATION v. GAJADHAR NATH [HEMANT GUPTA, J.]

of the Tribunal cannot be said to be illegal or unwarranted which was         A
rightly not interfered with by the High Court.
        11. We find that the order of the Tribunal and that of the High
Court are clearly erroneous and not sustainable in law. The representative
of the employer has not been cross-examined on the question that he
has not inspected the bus on 12.11.1998. He has deposed that when he          B
tried to record the statements of the passengers, the conductor misbehaved
with him and used unruly words. Even that part of the statement has not
been disputed in the cross-examination. Therefore, the fact that the
Inspector was not able to record the names and addresses of the
passengers cannot be said to be unjustified. Since the passengers are
low-fare paying passengers, they might have been hesitant to get involved     C
in the issues of any action against the conductor. The Inspector had
found that 17 passengers were not issued tickets and such statement of
the Inspector has also not been disputed in the cross-examination. The
Tribunal or the High Court could not reject the evidence led by the
employer in respect of misconduct of the workman before the adjudicator.      D
Still further non lodging of FIR cannot be the circumstance against the
witness examined by the employer. The initiation of criminal proceedings
against an employee or not initiating the proceedings has no bearing to
prove misconduct in departmental proceedings. Therefore, we find that
the order of removal from service cannot be said to be unfair and unjust
in any manner which would warrant an interference at the hands of the         E
Tribunal and the High Court. The three reasons recorded by the Tribunal
are absolutely perverse and not supported by any evidence. The Tribunal
had misapplied the basic principles of law and the High Court has
thereafter wrongly confirmed the order.
      12. Consequently, the appeal is allowed. The orders of the High         F
Court and of the Tribunal are set aside. The order of punishment dated
14.12.2001 is hereby restored.

Divya Pandey                                                Appeal allowed.
                                                                              G




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