2016 (12) TMI 1905 - SC - Indian Laws

Violation of principles of natural justice - Termination of service - entitlement to service benefits except back wages which were limited to 50 per cent, from the date of termination to the date of superannuation - HELD THAT - On facts, it is clear that the High Court has gone wrong in holding that the Labour Court did not follow the procedure. It is seen from the award that the management had not sought for an opportunity for leading evidence. And despite granting an opportunity, no evidence was adduced after the Labour Court held that the findings of the inquiry officer were perverse. Therefore, the Labour Court cannot be faulted for answering the Reference in favour of the Appellant. The Labour Court, on the available materials on record, found that the termination was unjustified on the basis of a perverse finding entered by the inquiry officer. There was no attempt on the part of the management before the Labour Court to establish otherwise - It appears that the High Court itself has granted compensation since the Court felt that the termination was unjustified and since reinstatement was not possible on account of superannuation. In case, the High Court was of the view that termination was justified, it could not have ordered for payment of any compensation. In order to deny gratuity to an employee, it is not enough that the alleged misconduct of the employee constitutes an offence involving moral turpitude as per the report of the domestic inquiry. There must be termination on account of the alleged misconduct, which constitutes an offence involving moral turpitude. The judgment of the High Court cannot be sustained - Appeal allowed.

Summary

Issues:
1. Termination from service leading to industrial dispute and subsequent award by Labour Court.
2. Challenge of the award before the High Court and modification of the award.
3. Allegations against the Appellant, including collecting fare without issuing tickets, leading to termination.
4. Framing of issues by the Labour Court and findings on each issue.

Issue 1 - Termination from service and Labour Court Award:
The Appellant challenged the termination from service, leading to an industrial dispute and an award by the Labour Court. The Labour Court set aside the dismissal order but limited back wages to 50% due to the Appellant crossing the superannuation date.

Issue 2 - Challenge before High Court and Modification of Award:
The Respondent challenged the Labour Court's award before the High Court, resulting in modification. The High Court granted a one-time compensation equivalent to 50% of back wages, differing from the Labour Court's decision. The Appellant appealed to the Supreme Court against this modification.

Issue 3 - Allegations and Findings Against the Appellant:
The charge against the Appellant involved collecting fare without issuing tickets, leading to termination. The Labour Court found issues with the inquiry process, including lack of cross-examination of witnesses and biased conduct, resulting in a perverse finding by the inquiry officer.

Issue 4 - Framing of Issues and Labour Court Findings:
The Labour Court framed specific issues, including the fairness of the inquiry and legality of termination. It found the inquiry unfair and the termination illegal, emphasizing the lack of evidence and violation of natural justice principles. The Appellant was deemed entitled to all monetary benefits till superannuation due to the dismissal being held illegal.

Judgment Analysis:
The Supreme Court noted discrepancies in the High Court's judgment, emphasizing that the Labour Court had correctly found the termination unjustified based on the inquiry officer's perverse finding. The management failed to provide evidence to counter this, leading to the Appellant's favorable decision. The High Court's grant of compensation was deemed inappropriate if the termination was justified. The Court reinstated the Labour Court's award, entitling the Appellant to gratuity for continuous service till superannuation. The judgment highlighted the necessity of termination based on misconduct involving moral turpitude to deny gratuity, ultimately setting aside the High Court's decision.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the case and the subsequent judicial decisions at each stage.