2011 (11) TMI 419 - SC - Indian Laws

Theft from cash chest by an employee - Labour Court rejected the contention on behalf of the respondent-workman that he was entitled for re-instatement and all other consequential reliefs in view of the fact that he stood acquitted by the Criminal Court. However, the learned Single Judge as well as the Division Bench in appeal have accepted his contention and granted the reliefs. - held that - there can be no doubt regarding the settled legal proposition that as the standard of proof in both the proceedings is quite different, and the termination is not based on mere conviction of an employee in a criminal case, the acquittal of the employee in criminal case cannot be the basis of taking away the effect of departmental proceedings. Nor can such an action of the department be termed as double jeopardy. LOSS OF CONFIDENCE - Once the employer has lost the confidence in the employee and the bona fide loss of confidence is affirmed, the order of punishment must be considered to be immune from challenge, for the reason that discharging the office of trust and confidence requires absolute integrity, and in a case of loss of confidence, reinstatement cannot be directed.

Summary

Issues Involved:
1. Departmental Enquiry and Acquittal in Criminal Case
2. Loss of Confidence

Detailed Analysis:

1. Departmental Enquiry and Acquittal in Criminal Case:

The Supreme Court examined whether the respondent-employee, who was acquitted in a criminal trial, was entitled to reinstatement and other reliefs despite being dismissed from service following a departmental enquiry. The Court reiterated the legal principle that the standard of proof in criminal cases ("beyond reasonable doubt") differs from that in departmental proceedings ("preponderance of probabilities"). The Court cited several precedents, including *Nelson Motis v. Union of India* and *State of Karnataka v. T. Venkataramanappa*, to assert that acquittal in a criminal case does not preclude departmental proceedings for the same misconduct.

The Court also emphasized that both proceedings can continue simultaneously unless the charges in both are identical and involve the same evidence. It referenced *Capt. M. Paul Anthony v. Bharat Gold Mines Ltd.*, which held that simultaneous proceedings are permissible except when based on the same facts and evidence. The Court noted that the disciplinary authority's decision is not automatically invalidated by a criminal acquittal.

The Court concluded that the Labour Court's decision, which found the departmental enquiry fair and proper, did not warrant interference. The Labour Court had correctly noted the difference in the standard of proof between the two types of proceedings and upheld the dismissal despite the criminal acquittal.

2. Loss of Confidence:

The Supreme Court addressed the issue of loss of confidence, stating that once an employer loses confidence in an employee, reinstatement is not appropriate. The Court referenced *Air India Corporation Bombay v. V.A. Ravellow* and *Bharat Heavy Electricals Ltd. v. M. Chandrashekhar Reddy*, emphasizing that the employer's bona fide loss of confidence must be based on objective facts and not merely subjective feelings.

The Court outlined the criteria for loss of confidence: the employee must hold a position of trust, abuse that position, and continuing their employment would be detrimental to the employer's interests. The Court cited *State Bank of India v. Bela Bagchi*, affirming that financial loss is not necessary to justify dismissal if there is a loss of confidence.

The Court upheld the Labour Court's finding that the disciplinary proceedings were conducted fairly and that the charges were proven. It noted that the disciplinary authority's decision to dismiss the respondent was proportionate to the misconduct, given the gravity of the charges.

Conclusion:

The Supreme Court set aside the Division Bench's order, which had reinstated the respondent with back wages, and upheld the Labour Court's decision. The respondent was entitled only to the relief granted by the learned Single Judge, which modified the dismissal to termination and directed payment of terminal benefits without back wages. The appellant was directed to implement this relief within four months. The Court emphasized that judicial review focuses on the decision-making process rather than the decision itself.