REPORTABLE  

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.10766 OF 2013

Management of Bharat Heavy Electricals Ltd.           ….Appellant(s)

VERSUS

M. Mani        .…Respondent(s)

WITH

CIVIL APPEAL No.10767 OF 2013

Management of Bharat Heavy Electricals Ltd.         ….Appellant(s)

VERSUS

T.A. Mathivanan(D) Thr. L.Rs.       .…Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1. These  appeals  are  filed  against  the  common

final judgment and order dated 16.04.2007 passed

by the High Court of Judicature at Madras in Writ

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Appeal Nos.3789 of 2003 and 3790 of 2003 whereby

the  High  Court  allowed  the  appeals  filed  by  the

respondents and directed the appellant to reinstate

the respondents with continuity of service and other

attendant  benefits  but  without  payment  of  back

wages.

2. In order  to  appreciate  the  issues involved in

these  two  appeals,  it  is  necessary  to  set  out  the

facts in detail.  

3. The appellant in both the appeals is a Public

Sector  undertaking  known  as-Bharat  Heavy

Electricals Ltd.(BHEL). It has a plant at Ranipet in

District  Vellore,  Tamil  Nadu.  M.  Mani-Respondent

in  Civil  Appeal  No.10766/2013  and  T.A.

Mathivanan(since dead) and represented by his legal

representatives-respondent  in  connected  Civil

Appeal No.10767/2013 were the employees of BHEL

at  all  relevant  time  and  were  working  as  Driver

Grade II in the plant.

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4. On 17.02.1991, both the respondents were on

duty  in  the  night  shift  in  the  Plant.  They  were

supposed  to  remain  present  all  the  time  in  the

Transport  Department  of  the  Plant  so  that  on

receiving the call they would attend the place of call

with their respective vehicles.

5. It  was,  however,  noticed  by  the  officials

concerned on duty that both the respondents were

not  found  present  on  their  respective  seats  and

instead  were  found  driving  one  forklift  FLV  in

another shop floor.   It  was also noticed that they

both  had  unauthorizedly  removed  one  heavy

machine  called-"Face  Milling  Cutter  of  500

diameter” from one shop floor and kept it on forklift

and  loaded  in  company's  ambulance,  which  was

being  driven  by  T.A.  Mathivanan.   Both  of  them

then  managed  to  take  the  said  machine  in

ambulance outside factory premises through South

gate.

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6. The  officials,  who  witnessed  the  incident,

reported  the  incident  to  the  appellant

(Management).  The  appellant  took  up  the  matter

with seriousness and issued charge-sheet  to both

the respondents. They were asked to submit their

explanation.  Both  denied  the  charges.  The

appellant,  therefore,  appointed Enquiry  Officer  for

holding  regular  departmental  enquiry.   Both  the

respondents  participated  in  the  enquiry

proceedings.  The  Enquiry  Officer  recorded  the

evidence of the witnesses and submitted his report.

The Enquiry Officer, on evaluation of the evidence,

held  the  charges  as  proved  against  both  the

respondents.  He  held  that  both  the  respondents

were involved in committing theft  of  "Face Milling

cutter"  and  were  caught  in  the  factory  premises

while  on  duty.  The  appellant  accepted  the  report

and  dismissed  the  respondents  from  service  on

31.08.1991.   Against  their  dismissal  order,  the

respondents  filed  departmental  appeals.   The

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appeals were dismissed.

7. This event gave rise to filing of two cases. One

was by the State in the Court of Magistrate seeking

prosecution of the respondents under Section 379 of

the Indian Penal Code, 1860 (in short “IPC”) and the

other was by the respondents against the appellant

(employer)  in  Labour  Court  challenging  legality  of

their  dismissal  orders  (ID  Nos.  801  and  839  of

1993).  So far as the criminal case was concerned,

the  Magistrate,  by  his  order  dated  24.11.1992,

acquitted the respondents from the charge.   

8. As regards the cases before the Labour Court

out of  which these  two appeals  arise,  the  Labour

Court  framed  three  issues,  first,  whether  the

enquiry conducted by the Enquiry Officer was legal

and  proper;  second,  whether  the  findings  of  the

Enquiry  Officer  holding  the  charge  as  proved

against  the  respondents  are  correct;  and  third,

whether these two employees are entitled to claim

the relief of reinstatement with back wages?  

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9. By  Award  dated  06.08.2001  (Annexure-P-9),

the Labour Court answered the reference in favour

of the employees by recording the following findings:

"Hence it can not be said that there has been denial of reasonable opportunity during the enquiry."  

and then in Para 7, it was held that,  

"it  can  not  be  considered  that  the departmental  enquiry  has  not  been  held properly."  

and then in Para 8 it was held that,  

"till  the  disposal  of  the  criminal  case,  the Management  ought  to  have  stayed  the departmental  enquiry and they should have passed the order only after the conclusion of the criminal proceedings."  

and, in the same Para 8, it was held that,  

"Therefore, the object of this provision is that till  proceedings  of  criminal  court,  the departmental enquiry should not be initiated. Therefore, the respondent ought not to have appointed  enquiry  officer  to  conduct  the enquiry in respect of same charge which has been pending before the Criminal Court. Such an enquiry held is contrary to principles of natural  justice.  On this ground, I  hold that departmental  enquiry  is  held  not  in accordance with principle of natural justice"  

and in last line of Para 8, it was held that,  

“it  is  for  this  reason  the  removal  of  the employee from service is not justified."

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The Labour Court then lastly in para 9 held that,  

“Having held that the departmental enquiry has  not  been  conducted  according  to principle  of  natural  justice,  it  has  to  be decided whether the finding of  the Enquiry Officer that the charge against the petitioner is correct.  When the criminal case has been pending  the  finding  of  the  Enquiry  Officer that the petitioner is guilty of the charge is not correct.  Further the petitioner has been acquired by the criminal court.  Hence when in  the  criminal  proceedings,  the  petitioner has  been  found  not  guilty,  I  hold  that  the findings  of  the  Enquiry  Officer  that  the charge  against  the  petitioner  had  been proved, is not correct.”

10. To sum up, the Labour Court held that, firstly,

the  departmental  enquiry  was  properly  held;

secondly,  the  employer  instead  of  holding  an

enquiry should have stayed it awaiting the outcome

of the criminal case; thirdly, since the criminal case

resulted  in  the  acquittal  of  the  respondents,  the

departmental enquiry stood vitiated as violating the

principle  of  natural  justice;  fourthly,  since  the

employer did not lead any evidence in support of the

charge, the charge remained unproved; and lastly,

the dismissal orders are bad in law in the light of

the four grounds and, therefore, the respondents be

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reinstated  in  service  with  payment  of  full  back

wages by the appellant.

11. The  appellant,  felt  aggrieved,  filed  writ

petitions in the High Court.  The Single Judge,  by

order dated 31.07.2003(Annexure-P-11), allowed the

writ  petitions,  set  aside  the  award  of  the  Labour

Court and remanded the case to the Labour Court

for  deciding  both  the  matters  afresh.  The  Single

Judge held that  when the  Labour  Court  held the

departmental  enquiry to be legal  and proper then

the  only  question  that  remained  for  the  Labour

Court to decide was as to whether the punishment

imposed  on  two  employees,  i.e.,  “dismissal”  was

just, legal and proper or it required any interference

in its quantum and, if so, to what extent.  Having

observed this, the writ Court remanded the cases to

Labour Court to decide the cases afresh on merits.

This is what the learned Single Judge in concluding

para held,

“10. Keeping in view of all  these aspects,  I

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think interest of justice would be served by quashing the awards in  both the cases and directing  both  the  matters  are  to  be considered  afresh  by  the  Labour  Court.   It goes  without  saying  that  both  the  matters should be taken up for hearing together and shall  be  disposed  of.   Since  the  matter  is pretty old, the Industrial Disputes are to be decided  as  expeditiously  as  possible, preferably within a period of six months from the date of receipt of a copy of this order.”

12. Felt  aggrieved,  the  respondents  filed  intra

court appeals in the High Court before the Division

Bench.  By impugned judgment, the Division Bench

allowed  the  appeals,  set  aside  the  order  of  writ

Court  and  directed  reinstatement  of  the

respondents  by  restoring  the  order  of  the  Labour

Court to this extent but declined to award to them

any  back  wages  except  continuity  of  service  and

other attendant benefits to the respondents.

13. Felt aggrieved by the judgment of the Division

Bench,  the  appellant(employer)  has  filed  these

appeals by way of special leave before this Court.

14.  Heard  Mr.  P.S.  Patwalia,  learned  senior

counsel for the appellant and Mr. M.A. Chinnasamy

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and  Mr.  M.K.  Perwez,  learned  counsel  for  the

respondents.

15. Having heard learned counsel  for  the parties

and on perusal  of  the  record of  the  case,  we are

constrained  to  allow  the  appeals,  set  aside  the

impugned judgment and uphold the dismissal order

of the respondents as legal and proper.

16. To begin with,  when we examine the legality

and  the  correctness  of  the  Awards  of  the  Labour

Court,  we  are  of  the  considered  opinion  that  the

Labour Court, having held and indeed rightly that

the  departmental  enquiry  conducted  by  the

appellant was legal and proper committed an error

in  holding  that  the  departmental  enquiry  got

vitiated  due  to  criminal  court's  order  which  had

acquitted the respondents from the charge of theft.

In  our  opinion,  there  was  no  occasion  for  the

Labour  Court  to  examine  this  issue  once  the

departmental  enquiry  was  held  legal  and  proper.

The  Labour  Court,  in  our  opinion,  committed  yet

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another  error  in  holding  that  since  the  appellant

failed to lead any evidence to prove the charge in

Labour  Court,  therefore,  the  dismissal  orders  of

respondents are liable to be set aside. This finding,

in our opinion, was again not legally sustainable.

17. In our opinion, once the Labour Court upheld

the departmental enquiry as being legal and proper

then  the  only  question  that  survived  for

consideration before the Labour Court was whether

the  punishment  of  “dismissal”  imposed  by  the

appellant to the respondents was legal and proper

or it requires any interference in its quantum.  

18. In other words, the Labour Court should have

then  confined  its  enquiry  to  examine  only  one

limited  question  as  to  whether  the  punishment

given  to  the  respondents  was,  in  any  way,

disproportionate to the gravity of the charge leveled

against  them  and  this,  the  Labour  Court  should

have examined by taking recourse to the provisions

of Section 11-A of the Industrial Dispute Act, 1947

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(in short “the Act”) and the law laid down by this

Court  in  the  case  of   The  Workmen  of  M/s

Firestone Tyre & Rubber Co. of India (Pvt.) Ltd.

vs. The Management & Ors., (1973) 1 SCC 813. It

was, however, not done thereby rendering the order

of Labour Court legally unsustainable.     

19. Similarly, in our considered view, the Labour

Court  failed  to  see  that  the  criminal  proceedings

and  departmental  proceedings  are  two  separate

proceedings in law.  One is initiated by the State

against the delinquent employees in criminal Court

and  other,  i.e.,  departmental  enquiry  which  is

initiated by the employer under the Labour/Service

Laws/Rules, against the delinquent employees.  

20. The Labour Court should have seen that the

dismissal order of  the respondents was not based

on the criminal Court's judgment and it could not

be so for the reason that it was a case of acquittal.

It was, however, based on domestic enquiry, which

the  employer  had  every  right  to  conduct

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independently of the criminal case.  

21. This Court has consistently held that in a case

where the enquiry has been held independently of

the  criminal  proceedings,  acquittal  in  criminal

Court is of no avail. It is held that even if a person

stood  acquitted  by  the  criminal  Court,  domestic

enquiry can still be held - the reason being that the

standard  of  proof  required  in  a  domestic  enquiry

and that in criminal case are altogether different. In

a  criminal  case,  standard  of  proof  required  is

beyond  reasonable  doubt  while  in  a  domestic

enquiry,  it  is  the  preponderance  of  probabilities.

(See Divisional Controller, Karnataka State Road

Transport Corporation vs. M.G. Vittal Rao-(2012)

1 SCC 442)       

22.    In the light of this settled legal position, the

Labour  Court  was  not  right  in  holding  that  the

departmental enquiry should have been stayed by

the appellant awaiting the decision of the criminal

Court  and  that  it  is  rendered  illegal  consequent

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upon passing of the acquittal order by the criminal

Court.   This  finding  of  the  Labour  Court  is,

therefore, also not legally sustainable.

23. Now coming to the order of writ Court (Single

Judge)  though,  in  our  opinion,  the  Single  Judge

rightly held the departmental enquiry as being legal

and proper but  committed an error  in remanding

the  case  to  the  Labour  Court  without  precisely

saying as to what the Labour Court has to decide

after  remand  and  why  writ  Court  cannot  decide

such issues in the writ petition.  We find that the

Single  Judge,  in  concluded  para  of  the  order,

remanded the whole case afresh for its decision on

merits.  

24. In our considered view, the Single Judge (Writ

Court)  having  held  the  enquiry  to  be  legal  and

proper instead of remanding the case to the Labour

Court  should  have  himself  examined  the  short

question  which  had  survived  for  consideration  in

the writ petition, namely, whether the punishment

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of dismissal was commensurate with the charges or

it  required  any  interference  by  the  Court  under

Section 11-A of the Act.  

25. In  other  words,  the  remand  to  the  Labour

Court  in  this  case  by  the  Single  Judge  was  not

called for.  It  would have become necessary, if  the

Single  Judge  had  come  to  a  conclusion  that  the

departmental  enquiry  is  illegal.  In such situation,

the question would have arisen as to whether the

employer  should  now  be  given  an  opportunity  to

prove the charge before the Labour Court on merits

by  adducing  evidence  provided  such  opportunity

had been asked for  in  any form by the  employer

(See-  Shankar Chakravarti  vs. Britannia Biscuits

Co. Ltd. & Anr. - AIR 1979 SC 1652).  

26. However, this occasion did not arise because,

as observed supra, the enquiry was held legal and

proper by the Labour Court and Single Judge.

27. Now coming  to  the  legality  of  the  impugned

judgment,  in  our  considered  opinion,  there  was

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absolutely  no  justification  on  the  part  of  the

Division Bench to have allowed the appeals of the

respondents and restored the order of  the Labour

Court  by  setting  aside  the  dismissal  order.   The

Division Bench, in our view, did not  take note  of

correct  legal  position,  which  we  have  discussed

above.

28.   In our opinion, this is a clear case where the

departmental enquiry was held legal and proper. We

also, on going through the record of the case, hold

that  the  departmental  enquiry  was  properly  held

and was, therefore, legal and proper.  So far as the

quantum  of  punishment  imposed  on  the

respondents  is  concerned,  having  regard  to  the

nature of charge which stood proved in the enquiry,

in our view, the order of dismissal from service was

the appropriate punishment. It was commensurate

with the charge.  

29. An act of theft committed by an employee while

on  duty  is  a  serious  charge.  This  charge  once

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proved  in  enquiry,  the  employer  is  justified  in

dismissing the employee from service.  

30. We are not impressed by the submission urged

by  the  learned  counsel  for  the  respondents

(employees)  when  he  urged  that  once  the

respondents  (employees)  were  acquitted  from  the

charge of theft by the criminal Court, the dismissal

orders  deserve  to  be  set  aside  entitling  the

employees to seek reinstatement in service. Learned

counsel  read  the  entire  criminal  Court's  order  to

show  that  it  was  an  honorable  acquittal  of  the

employees from the charge of theft.

31. The answer to the aforementioned submission

lies in the law laid down by this Court in the case of

Karnataka SRTC (supra).  At the cost of repetition,

we may say that in the case on hand, the dismissal

orders  had  not  been  passed  on  the  basis  of

employees’ conviction by the criminal Court which

later stood set aside by the superior Court.  Had it

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been  so,  then  the  situation  would  have  been

different  because once  the  conviction order  is  set

aside  by  the  superior  Court,  the  dismissal  order

which was solely based on passing of the conviction

order also stands set aside.  Such was not the case

here.

32. In the case on hand, the appellant (employer)

had  conducted  the  departmental  enquiry  in

accordance with law independently of the criminal

case wherein the Enquiry Officer, on the basis of the

appreciation of  evidence brought on record in the

enquiry  proceedings,  came to a conclusion that  a

charge  of  theft  against  the  delinquent  employees

was  proved.   This  finding  was  based  on

preponderance  of  probabilities  and  could  be

recorded by the Enquiry Officer notwithstanding the

order of criminal Court acquitting the respondents.

33. In view of the foregoing discussion, the appeals

succeed and are allowed. Impugned judgment is set

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aside.  As  a  consequence  thereof,  the  dismissal

orders of the respondents herein are held legal and

proper and accordingly upheld.

………...................................J. [R.K. AGRAWAL]

…..…...................................J.      [ABHAY MANOHAR SAPRE]

New Delhi;        November 09, 2017  

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ITEM NO.1501              COURT NO.8        SECTION XII (For judgment)                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Civil Appeal  No(s).  10766/2013 MANAGEMENT OF BHARAT HEAVY  ELECTRICALS LTD.               Appellant(s)                                 VERSUS M.MANI                                   Respondent(s) WITH C.A. No. 10767/2013 (XII) Date  :  09-11-2017  These  appeals  were  called  on  for pronouncement of judgment today. For Appellant(s)    Mr. B. K. Satija, AOR                     For Respondent(s)   Mr. M. A. Chinnasamy, AOR

Mr. C. Rubravathi, Adv. Mr. V. Senthil Kumar, Adv.

                   Dr. Kailash Chand, AOR                              Hon'ble  Mr.  Justice  Abhay  Manohar  Sapre pronounced the judgment of the Bench comprising Hon'ble Mr. Justice R.K. Agrawal and His Lordship.     

The appeals are allowed in terms of the signed reportable judgment.

(SWETA DHYANI)                              (SUMAN JAIN) SENIOR PERSONAL ASSISTANT                 BRANCH OFFICER

(Signed reportable judgment is placed on the file)  

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