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The Supreme Court has recently held that a Tribunal under the Industrial Disputes Act, 1947 cannot act as a Court of Appeal and act beyond its jurisdiction by appreciating the findings recorded in a domestic enquiry and test them on the broad principles of charge to be proved beyond reasonable doubt.                         

A Bench of Justices Ajay Rastogi and Abhay S Oka thus held that:

“The decision of the Labour Court should not be based on mere hypothesis. It cannot overturn the decision of the management on ipse dixit. Its jurisdiction under Section 11­A of the Act 1947 although is a wide one but it must be judiciously exercised.   Judicial discretion, it is trite, cannot be exercised either whimsically or capriciously. It may scrutinize or analyse the evidence but what is important is how it does so.”                    

The Court made these observations in an appeal filed by Standard Chartered Bank challenging an order dated passed by the Allahabad High Court in 2014 upholding the reinstatement of the respondent with full back wages awarded by the Tribunal dated 14th September, 2006. 

The respondent­workman was discharged of his duties on allegation of drunkenness within the premises of the appellant­Bank and manhandling and assaulting the senior officers and also hurling abuses at the management.

A departmental enquiry was conducted where the three officers with whom the alleged incident had occurred were produced by the management and in their defence a Watchman and an ex­employee of the Bank were present.

The enquiry officer after holding enquiry in terms of the Bipartite Settlement and after due compliance of the principles of natural justice held the charges proved against the delinquent respondent. The disciplinary authority after due compliance, confirmed these findings and dismissed the respondent from service by an order dated 22nd August, 1991.

Following a reference made by the appropriate government, the Tribunal after examining the record of enquiry held the domestic enquiry to be fair and proper.

It then revisited the record of inquiry and apprised the statement of the management witnesses and defence witnesses. It thus found that the management of the   appellant­Bank   has miserably failed   to establish the charges levelled against the respondent­workman and went on to set aside the order of dismissal.

While challenging the said award, the appellant submitted that after the domestic enquiry was held to be fair and proper, the Tribunal has a limited scope to interfere with the findings recorded in the domestic enquiry and unless the finding was perverse and not supported by a piece of evidence, it was not open for the tribunal to interfere within the scope of Section 11­A of the Industrial Disputes   Act,   1947.

The Bench noted that the nquiry officer after affording opportunity   of   hearing and   due   compliance   of   principles   of natural justice recorded the finding of charge being proved.

It was further found that the Tribunal after re-appraisal of the record of domestic enquiry held it to be fair and proper, had a very limited scope to interfere in the domestic enquiry   to   the   extent as   to   whether   there   is   any   apparent perversity in the finding of fact which has been recorded by the enquiry officer in his report of enquiry obviously, based on the evidence recorded during the course of enquiry and as to whether the compliance of the Bipartite Settlement which provides the procedure   of   holding   enquiry   is   violated   or   the   punishment levelled against the workman commensurate with the nature of allegation proved against him and if it is grossly disproportionate, the tribunal will always be justified to interfere by invoking its statutory power under Section 11­A of the Act 1947.

The Court was thus of the view that the Tribunal had converted itself into a Court of Appeal   as   an   appellate   authority   and   has   exceeded   its jurisdiction while appreciating the finding recorded in the course of domestic enquiry and tested on the broad principles of charge to be proved beyond reasonable doubt which is a test in the criminal justice system.

It added,

“… the domestic  enquiry is to be tested on the principles of preponderance of probabilities and if a piece of evidence is on record which could support the charge which has been levelled against the delinquent unless it is per se   unsustainable   or perverse, ordinarily is not to be interfered by the Tribunal, more so when the domestic enquiry has been held to be fair and proper and, in our view, the Tribunal has completely overlooked and exceeded   its   jurisdiction   while   interfering   with   the   finding recorded during the course of enquiry in furtherance of which, the respondent was dismissed from service and the High Court has also committed a manifest error while passing the judgment impugned.”

Accordingly, the Court allowed the appeal and set aside the award passed by the Tribunal and upheld by the Allahabad High Court.

Since the Tribunal had awarded full back wages, seniority and all the consequential benefits to the respondent, the Court found that a sum of Rs.57,16,517.72 had been paid to the respondent­workman in the interregnum period. 

Looking to the peculiar facts of the case where the had attained the age of superannuation on 31st January, 2012, the Court considered to to be appropriate to observe that no recovery shall be made for the payment  made over to the workman in the interregnum period.

Case Title: Standard Chartered Bank V. R.C. Srivastava