IMPORTANT POINTS
1. 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.
2. Once the employer has lost the confidence in the employee and the bona fide loss of confidence is affirmed, 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.
3. It is a settled legal proposition that in a case of misconduct of grave nature like corruption, theft, no punishment other than the dismissal may be appropriate.

Headnote:Labour Laws- Departmental Enquiry on charges of theft- On acquittal of workman in criminal proceedings, whether order of dismissal as a consequence of domestic enquiry deserves to be set aside- The question of considering reinstatement after decision of acquittal or discharge by a competent criminal Court arises only and only if the dismissal from services was based on conviction by the criminal Court in view of provisions of Article 311 (2) (b) of Constitution , or analogous provisions in the statutory rules applicable in a case- In a case where enquiry has been held independently of criminal proceedings, acquittal in a criminal Court is of no help-The law is otherwise- Even if a person stood acquitted by a criminal Court, domestic enquiry can be held, the reason being that the standard of proof required in a domestic enquiry and that in a 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 that constitutes the test to be applied-As the standard of proof in both the proceedings is quite different, and termination is not based on mere conviction of an employee in a criminal case, acquittal of employee in criminal case cannot be the basis of taking away the effect of departmental proceedings (Paras 8, 19)
        Labour Laws- Respondent employee while working as helper in appellant-Corporation subjected to disciplinary proceedings on charges of theft-Order passed by Disciplinary Authority imposing punishment of dismissal of respondent from service -On Reference Labour Court held that departmental enquiry conducted against respondent was fair and proper-Writ Petition-Allowed by High Court to the extent that order of dismissal was modified into an order of termination-Writ Appeal-Allowed by Division Bench holding that respondent was entitled to be reinstated into service -Appeal- Domestic enquiry found delinquent employee guilty of all the charges- No grievance on behalf of respondent-workman that statutory provisions/principles of natural justice had not been observed while conducting the enquiry- Disciplinary Authority imposed the punishment of dismissal from service which could not be held to be disproportionate or non-commensurate to the delinquency- Single Judge as well as Division Bench had simply decided the case taking into consideration acquittal of delinquent employee and nothing else-Award of the Labour Court did not warrant any interference-Appeal disposed off (Paras 24 to 26)
        Labour Laws- Departmental Enquiry on charges of theft-Dismissal from services-Whether employee can be reinstated even after loss of confidence-Held an employer is not bound to keep an employee in service with whom relations have reached the point of complete loss of confidence/faith between the two-Once the employer has lost the confidence in the employee and bona fide loss of confidence is affirmed, order of punishment must be considered to be immune from challenge, for the reason that discharging office of trust and confidence requires absolute integrity, and in a case of loss of confidence, reinstatement cannot be directed (Paras 20 to 22)
       Facts of the Case :
        Issue in consideration in present appeal was whether on acquittal of workman in criminal proceedings, whether order of dismissal as a consequence of domestic enquiry deserves to be set aside.
       Findings of the Court :
        The Court held that as the standard of proof in both the proceedings is quite different, and termination is not based on mere conviction of an employee in a criminal case, acquittal of employee in criminal case cannot be the basis of taking away the effect of departmental proceedings.

Judgement Key Points

The criminal standard of proof (beyond reasonable doubt) does not apply to disciplinary or domestic enquiries.

In disciplinary proceedings, the applicable standard is preponderance of probabilities, which differs fundamentally from the higher threshold required in criminal trials. An acquittal in a criminal case therefore has no bearing on independent departmental proceedings, as the two operate under distinct evidentiary requirements and objectives. The termination or dismissal based on a fair domestic enquiry cannot be set aside merely due to such acquittal, absent identical facts, evidence, or proof standards being overlooked. This principle upholds the employer's authority to enforce discipline based on administrative needs, including loss of confidence in cases of grave misconduct like theft. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)

JUDGMENT

Dr. B.S. Chauhan, J

1. Leave granted.

2. This appeal has been preferred against the judgment and order dated 27.10.2009 passed by the High Court of Karnataka at Bangalore in Writ Appeal No.702 of 2009, by which it has dismissed the appeal preferred by the appellant against the judgment and order dated 27.1.2009 passed by the learned Single Judge allowing the writ petition No. 14354 of 2007 of the respondent-workman against the Award of the Labour Court dated 17.2.2005.

3. Facts and circumstances giving rise to this appeal are:-

(A) The respondent employee while working as helper in the appellant-Corporation in 1986 was subjected to disciplinary proceedings vide charge-sheet dated 4.2.1987 which contained the article of charges mainly on the allegations that on 3.10.1986 the respondent stayed away beyond his duty hours at his place of employment i.e., Divisional Workshop and opened the door of the blacksmith Section with the aid of a duplicate key and pulled the gas cylinder trolley and equipment from blacksmith Section to the cash room alongwith four other employees of the appellant-Corporation and opened the inner door of the cash room by cutting the padlock and used the gas cylinder equipment for committing the theft from cash chest.

(B) The Divisional Traffic Officer was appointed as the enquiry officer by the Disciplinary Authority vide order dated 11.11.1993 to enquire into the charges leveled against the respondent in the disciplinary proceedings. During the course of enquiry, the management witnesses clearly stated that the respondent was present at the place of incident. On the basis of the material produced on behalf of the management, the enquiry officer found the charges leveled against the respondent proved and accordingly the enquiry report was filed.

(C) The Disciplinary Authority after considering the material on record concurred with the findings recorded by the Inquiry Officer and after completing the legal formalities imposed the punishment of dismissal of the respondent from service w.e.f. 14.2.1997.

(D) The respondent raised the industrial dispute. Thus, the State Government made a Reference to the Principal Labour Court for adjudication of the dispute and the same came to be registered as Reference No.6 of 1999. On the basis of pleadings, the Labour Court framed various issues for its consideration, inter-alia, as to whether the departmental enquiry conducted against the respondent was fair and proper.

(E) The Labour Court by its order dated 20.11.2004 arrived at the conclusion that the departmental enquiry conducted against the respondent was fair and proper. By its award dated 17.2.2005, the Court answered the reference in negative holding that there was sufficient evidence before the enquiry officer to hold that the respondent with his colluders had actively involved in breaking and opening the door of the cash room and drilling the cash chest to commit the theft. The respondent was caught red handed and hence the charges were rightly held to be proved.

(F) Being aggrieved by the said award of the Labour Court, the respondent filed W.P. No.14354 of 2007(LK) before the High Court which stood allowed by the learned Single Judge vide order dated 27.1.2009 to the extent that the order of the dismissal was modified into an order of termination. The management was directed to pay the terminal benefits since the respondent had retired from service. However, the learned Single Judge arrived at the conclusion that the respondent was not entitled to any wages or other monetary benefits till the date of his termination.

(G) Being aggrieved by the said order of the learned Single Judge, the respondent filed a Writ Appeal No.702 of 2009 (L-KSRTC) under Section 4 of the Karnataka High Court Act. The Division Bench vide impugned judgment and order dated 27.10.2009 allowed the appeal filed by the respondent quashing the award of the Labour Court and reversing the order of the learned Single Judge. The Division Benc

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2011 Supreme(SC) 1086

2011 (8) Supreme 185SUPREME COURT OF INDIADr. B.S. Chauhan and T.S. Thakur, JJ.The Divisional Controller, KSRTC — AppellantversusM.G. Vittal Rao — RespondentCivil Appeal No. 9933 of 2011(Arising out of SLP(C) No.7083 of 2010)Decided on : 18-11-2011

Cases Referred (36)

2011 (8) Supreme 185
SUPREME COURT OF INDIA
Dr. B.S. Chauhan and T.S. Thakur, JJ.
The Divisional Controller, KSRTC — Appellant
versus
M.G. Vittal Rao — Respondent
Civil Appeal No. 9933 of 2011
(Arising out of SLP(C) No.7083 of 2010)
Decided on : 18-11-2011