The central legal principle established in the judgment is that misconduct in employment disputes must have a rational relation to the employment and should impact employee discipline or the employer's business reputation, empowering the employer to take disciplinary action.

1. This is an application to quash an award passed by the Labour Court, Quilon, by the issue of an appropriate writ or order. The dispute referred to the court for adjudication concerned the dismissal of driver P. Velayudhan by the petitioner.

2. The charge against Velayudhan was that on 16-6-1965 he picked up a quarrel with a stranger while he was on duty after getting himself drunk. On that day, Velayudhan drove bus K.L.D. 2427 plying between Calicut and Kuttiadi. The bus started from Calicut at about 2.00 p. m. and reached Kuttiadi at 5-15 p. m. Since the service had to be resumed only the next morning from Kuttiadi to Calicut, the driver and conductor were halting for the night in a room on the second floor of a building in Kuttiadi. At about 9.00 p. m. Velayudhan came to the room and found a person described as a 'cooly painter' sleeping in the verandah attached to the first floor of the building. Velayudhan, who is alleged to have been drunk at the time, picked up a quarrel with the stranger. A crowd gathered at the spot and in spite of Velayudhan being forcibly removed and put in his room, he came out of the room and again quarrelled with the stranger. A report regarding the incident was submitted by the conductor of the bus K. Sankaran and the Checking Inspector Ibrahim. Thereafter a charge-sheet was delivered to Velayudhan and he submitted his explanation. A domestic enquiry was conducted and in the enquiry it was found that Velayudhan was guilty of the charge, and he was dismissed from service by the writ petitioner. The cause of Velayudhan was espoused by the 1st respondent.

3. The finding of the Labour Court was that Velayudhan was not on duty at the time when the quarrel took place and that his conduct in picking up the quarrel with the stranger unconnected with the employment cannot reasonably be regarded as misconduct by the employer, in the absence of standing orders. The court also found that there is no evidence to show that Velayudhan was drunk at the time. The court observed that "altercation or misbehaving in a disorderly manner with a stranger for reasons not connected with the employment, and that too on provocation offered by the stranger" will not constitute misconduct which could be taken cognisance of by the management. The court was of the opinion that the evidence that the driver was smelling alcohol on that night would not mean that he was drunk.

4. It was contended on behalf of the management that a worker need not be on duty at the time he commits the misconduct in order that the management may take cognisance of it and impose a punishment, and that even in the absence of standing orders, an employer can take disciplinary proceedings as regards the conduct of an employee, which the employer regards as subversive of discipline, or which may reflect discredit upon his business or may render the employee unworthy of being employed.

5. In Agnani v. Badri Das & Others 1963-1 L.L.J. 684, a person employed as a sub-editor of a newspaper took the side of another employee and had a quarrel with the lessee of the provisions store run for the benefit of the employees of the same employer. The other employees demanded return of his articles pawned with the 'shop-keeper which he refused to do unless he was paid his dues. The incident took place at the shop in the staff colony constructed by the employer. On a complaint from certain residents of the staff colony the management passed a resolution authorising an enquiry committee to conduct an enquiry against the concerned employee. The enquiry committee framed nine charges, and one of the charges was in regard to the quarrel with the shop-keeper. The concerned employee was found guilty of seven out of nine charges and was ultimately dismissed from service; the Industrial Tribunal directed reinstatement of the employee. The High Court quashed the order of the Industrial Tribunal. But the Supreme Court restored the order of the Tribunal. The Court in th