An employee acquitted of criminal charges under the presumption of innocence is entitled to reinstatement and backwages if termination was not justified, highlighting principles of fair labor practices and reasonable doubt.

JUDGMENT :

Aarti Sathe, J.

1. This Letters Patent Appeal is directed against the judgment and order dated 1st March, 2011 (hereinafter referred to as `the impugned order’) passed by the learned Single Judge in Writ Petition No. 5752 of 1999 dismissing the Writ Petition filed by the Appellant Corporation (Original Petitioner), thereby upholding the order passed by the Industrial Court on 2nd September, 1999 in Revision Application (ULP) No. 152 of 1997 thereby confirming the order passed by the Labour Court in Complaint ULP No. 145 of 1990 which orders reinstatement of the Respondent as the Respondent on being honourably acquitted by the Sessions Court.

2. Briefly the facts are:-

i. The Appellant Corporation is incorporated under the State Financial Corporations Act, 1951 and is engaged in financing small scale industries in the state of Maharashtra. The service conditions of the employees of the Appellant Corporation are governed by the Bombay State Financial Corporation (Staff) Regulations, 1954 (hereinafter referred to as the Staff Regulations), which are framed under the State Financial Corporations Act, 1951 with the prior approval and sanction of the Reserve Bank of India;

ii. A criminal case No 298 of 1977 was registered against the Respondent under Section 497 of the Indian Penal Code, 1860 before the Judicial Magistrate First Class (JMFC) Nandurbar;

iii. On 1^st September 1983, the Respondent’s employment was confirmed on the post of a clerk in the Appellant Corporation. It was the Appellant’s case that at the time of appointment, the Respondent did not disclose to the Appellant that a criminal case was pending against him;

iv. On 31^st March 1987, JMFC, Nandurbar passed an order convicting the Respondent under Section 497 of the Indian Penal Code, 1860, and accorded him a punishment of 6 months rigorous imprisonment and a fine in regard to which the Appellant became aware of this only through newspaper articles published and the Appellant was not informed of such conviction;

v. On 5^th April 1989, the Appellant taking recourse to Regulation 39 of the Staff Regulations applicable to the Respondent’s employment, the Appellant terminated the services of the Respondent. Under such regulation, the Appellant is authorized to dismiss an employee who has been convicted of any offence involving moral turpitude;

vi. On 4^th May 1989, the Respondent preferred a departmental appeal under the provisions of the Staff Regulations assailing his dismissal. On 14^th May 1990 the departmental appeal preferred by the Respondent was decided. In such order passed by the Appellant authority, it was categorically held as also informed to the Respondent that as and when the Respondent is acquitted honourably, it would be open for him to ask for reinstatement in service;

vii. Assailing such order of the appellate authority and the termination, on 7^th August 1990, the Respondent filed Complaint (ULP) No. 145 of 1990 against the Appellant alleging unfair labour practice under Item 1(a) to 1(g) of Schedule-IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971(‘MRTU & PULP Act’), before the learned Labour Court, Nashik;

viii. The Respondent correspondingly had meanwhile filed an appeal before the Additional Sessions Judge, Nandurbar challenging his conviction by the Court of Judicial Magistrate, First Class, Dhule by order dated 31^st March 1987 in Criminal Case No. 298 of 1977. On 9^th May 1991, the Additional Sessions Judge, Nandurbar rendered judgment on the appeal filed by the Respondent, acquitting him, on the ground that the prosecution’s case against the Respondent was not