REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. __3485______OF 2009 [Arising out of Special Leave Petition (Civil) No. 6195 of 2006]

DIVISIONAL MANAGER,  

RAJASTHAN S.R.T.C. …APPELLANT VERSUS

KAMRUDDIN         … RESPONDENT

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. Extent of interference with the quantum of punishment imposed by an  

employer on a delinquent employee by the Labour Court in exercise of its  

power under Section 11A of the Industrial  Disputes Act, 1947 (for short,  

“the Act”) is in question in this appeal which arises out of a judgment and  

order dated 16.11.2005 passed by a Division Bench of the Rajasthan High  

Court, Jaipur Bench, Jaipur.

3. The said question arises in the following factual matrix:  

Respondent herein was appointed as a conductor by the appellant –  

corporation on or about 6.8.1982 as a daily wager for a specific period on  

the expiry whereof his services came to an end.   

He was, however, appointed as a conductor on probation for a period  

of  two  years  by  an  offer  dated  26.3.1983,  inter  alia,  on  the  terms  and  

conditions laid down therein; the relevant claim whereof reads as under:

“4. That on being caught by the inspection team  and on finding corruption their services could be  terminated  at  any  time  and  the  security  amount  would be seized.”

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Within  the  aforementioned  period  of  probation,  inspections  were  

carried out in the buses in which he had been discharging his duties as a  

conductor and on not less than five occasions, i.e., on 4.4.1983, 11.5.1983,  

23.9.1983, 21.11.1983 and 8.2.1984, he was found to have not issued tickets  

to the passengers.   Indisputably, on or about 19.4.1993, in relation to the  

incident which took place on 4.4.1983, a warning was administered to him,  

stating:  

“You  were  on  duty  on  date  4.4.83  in  the  vehicle  no.  6070  at  the  Vayavar  Udaipur  road.  After  the  inspection  of  the  vehicle  it  was  found  that  you  were  carrying  2  passengers  without  tickets. The Checking staff collected the fare from  the same and issued the tickets.

Therefore,  you  are  hereby  warned  to  be  careful in the near future otherwise your probation  period would be terminated.”

After  he  was  found  guilty  of  having  not  issued  tickets  to  the  two  

passengers  and  carrying  180  kilograms  luggage  without  a  ticket,  a  

disciplinary  proceeding  was  initiated  against  him.  He  was  placed  under  

suspension.  

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The fairness of the disciplinary enquiry is not in question.  By reason  

of  an  order  dated  15.6.1984,  the  Divisional  Manager  of  the  Corporation  

being the Appointing Authority terminated his services, stating:

“On the basis  of the complaints  received against  Shri  Kamruddin  S/o  Shri  Sikandar  Khan,  Conductor, Vayavar Depot he was suspended vide  the Office Order No. 395 dated 13.2.84 and was  issued the Charge sheet no. 404 dated 24.2.84.  In  respect of the inquiry of the imposed charges the  Divisional  Depot Manager,  Ajmer was appointed  the Inquiry Officer vide the Office order no. 581  dated 3.3.84.   

After completing the inquiry by the Inquiry  Officer the enquiry report was produced.  I have  carefully  gone  through  the  same along  with  the  available  record.   The Inquiry Officer  has  found  the  conductor  guilty  of  the  imposed  charges.   I  fully agree with the view of the Inquiry Officer.  

Therefore,  I,  Divisional  Manager,  RSRTC,  Ajmer,  impose  the  following  punishment  under  Section 36(5)  and (7) of the Standing Orders on  Shri  Kamruddin  s/o  Shri  Sikandar  Khan,  Conductor, Vayavar Depot after finding him guilty  in the aforesaid case.  

1. I seize the remaining salary of the suspension period in  the interest of the Corporation.

1. I  terminate  his  probation  period  after  removing  him  from the services of the Corporation with immediate effect.”  

4. Respondent  raised  an  industrial  dispute.   By  reason  of  an  Award  

dated  16.7.1996,  the  Labour  Court  despite  finding  that  the  enquiry  was  

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fairly conducted opined that the punishment inflicted on the respondent was  

disproportionate to the gravity of the misconduct committed by him, stating:

“Therefore,  it  would  not  be  just  and  proper  to  impose the severe punishment of the termination  from the service but  keeping in view the proved  misconduct on the part of the applicant this court  could  amend  the  penalty  keeping  in  view  the  provisions  of  Section  11(A)  of  the  Industrial  Disputes  Act  and  as  per  the  facts  and  circumstances  of  the  case  it  would  be  just  and  proper that the punishment of the stoppage of two  grade  increments  with  cumulative  effect  be  awarded  and  the  same would  be  made effective  from the date of inspection i.e. 8.2.84 and further  that the applicant would not be entitled of the back  wages.  That he would be reinstated in the service  in continuation of his service as if he has not been  terminated  from  the  service  of  the  corporation.  Accordingly, the Award is passed.”

In support of its aforementioned finding, the Tribunal relied upon a  

decision of the Rajasthan High Court in RSRTC vs. Shri Ram Yadav [1995  

(3)  WLC 16] as  also  the  decision  of  this  Court  in  Rajasthan State  Road  

Transport Corporation vs. Bhagyo Mal & Ors. [1994 Supp (1) SCC 573].

5. A writ  petition  preferred thereagainst  by the  Corporation  has been  

dismissed both by a learned single judge.  A Division Bench of the High  

Court by reason of the impugned judgment dismissed an intra-court appeal  

preferred by the appellant.

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6. Mr. Sushil  Kumar Jain, learned counsel  appearing on behalf of the  

appellant would contend that in a case of this nature where the respondent  

has been found guilty of commission of a misconduct of misappropriation,  

no interference with the quantum of punishment was warranted.  

7. Mr.  B.K.  Satija,  learned  counsel  appearing  on  behalf  of  the  

respondent,  on the other  hand,  would contend that  this  Court  should not  

interfere with the impugned judgment as imposition of the punishment of  

dismissal  from  service  having  regard  to  the  guidelines  issued  by  the  

Corporation itself was wholly disproportionate to the charges of misconduct  

framed against the respondent.  Learned counsel in this connection would  

draw our  attention  to  the  statement  made in the counter  affidavit,  which  

reads as under:

“It is  respectfully submitted that  the Corporation  in number of standing orders has taken decision in  regard  to  awarding  financial  punishment,  where  the Conductor is carrying the passengers without  ticket.   Operative  Portion  of  Section  36  of  standing order is reproduced hereunder for ready  reference:

’36. One  or  more  of  the  following  penalties may, for good and sufficient reasons,  be  imposed  on  a  worker  by  a  competent  authority;  penalties  from (v)  to  (vii)  shall  be  appealable-

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(i) Censure:- Three  censures  in  a  period  of  one  year  will  involve  withholding of one increment.

(ii) Withholding of increments or promotion.

(ii) Recovery from pay/wages of the whole or part of  any pecuniary loss caused to the employer by negligence or  breach of any law.  

(ii) Fine upto 2% of worker’s wages.

(ii) Forfeiture  of  wages  during  the  period  or  of  suspension.

(ii) Reduction to a lower post or grade.

(ii) Termination  of  service,  which  shall  not  be  a  disqualification for future employment.

(ii) Dismissal  from  service  which  shall  be  disqualification for future employment.’

It  is  respectfully  submitted  that  the  petitioner  Corporation  has  issued  number  of  semi  Government order,  where the decision to impose  financial  punishment  was  decided  by  the  Corporation and the cases pertaining to traveling  without  ticket  were  settled  imposing  financial  punishment upon the employee/workman.”

8. Our attention was also drawn to a corrigendum issued on 24.7.1982,  

the relevant portion whereof reads as under:

“ Recently  circular  No.  625  dt.05.06.1982  was issued by the General Manager for charge of  

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full route fare from the without ticket passengers,  because  correct  information  regarding  journey  undertaken  was  not  being  provided  by  the  passengers as well as by the conductors to conceal  fraudulent activities.

During  the  last  meeting  of  the  Divisional  Managers, clarification was sought with regard to  certain  points  to  enable  the  officers  and  inspectorial  staff  to  implement  the  directions  imparted in the circular under reference.  Further,  instructions in this regard are imparted as under:-

1. The cases where the conductor has realized  fare,  but  has  not  issued  tickets,  it  shall  be  presumed that the passenger had been undertaking  journey from the originating point of the bus to the  terminal point and the conductor had realized fare  for the journey being undertaken by the passenger.  Hence,  full  fare  of  the  route  along  with  equal  penalty  or  Rs.5/-  whichever  is  more,  shall  be  chargeable from the conductor.”

Our attention was also drawn to the Office Order dated 12.01.2006,  

the relevant portion whereof reads as under:-   

“ Nigam has decided to prefer a Special Leave  Petition before the Hon’ble Supreme Court against  order  dt.  16.11.2005  passed  by  Hon’ble  High  Court of Rajasthan Bench at Jaipur and it has also  been decided that Sh. Kamruddin S/o Sh. Sikandar  Khan, Ex-Conductor, Vyavar Depot be reinstated  subject to the outcome of Special Leave Petition.

Therefore,  Kamruddin  S/o  Sh.  Sikandar  Khan, Ex-Conductor, Vyavar Depot in pursuance  of order dt.  04.02.2003 passed by learned Single  Judge of the Hon’ble High Court Bench at Jaipur  

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and  order  dt.  16.11.2005  passed  by  Division  Bench  of  the  High Court  of  Rajasthan  at  Jaipur  and compliance  of  Award dt.  16.07.1996  passed  by Labour and Industrial Tribunal Ajmer in LCR  No. 24/96 (263/90) is hereby reinstated and posted  at Vyavar Depot subject to the decision of Special  Leave Petition.”

Learned counsel furthermore urged that as in implementation of the  

said  Award passed  by the  Labour  Court  as  affirmed by the  High Court,  

respondent had been reinstated in service by an office order dated 12.1.2006  

and his services having been terminated again by an order dated 2.6.2006 in  

view of the order of stay granted this Court, this Court may restore the order  

passed by the Labour Court.   

9. It is not a case where the misconduct against the respondent had not  

been proved. It is also not a case where the domestic enquiry was found to  

have been conducted in an unfair  manner or contrary to the principles of  

natural justice.  The services of the respondent had been terminated while  

the  period  of  probation  was not  over.   As a  conductor,  his  performance  

during the period of probation was found to be unsatisfactory. It is not in  

dispute  that  a disciplinary proceeding was initiated against  him while  he  

was found to have committed similar misconduct for the fifth time.  It is  

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also beyond any doubt or dispute that he had also been served with a letter  

of warning.  

10. The power  of  Labour  Court  and/or  Industrial  Tribunal  in  terms of  

Section  11A  of  the  Industrial  Disputes  Act,  1947  to  interfere  with  the  

quantum of  punishment  although  cannot  be  denied,  but  it  is  also  a  well  

settled principle of law that the said power should be exercised judiciously.

The Labour Court relied upon the decision of this Court in  Bhagyo  

Mal (supra) wherein the High Court allowed back wages to the workman  

concerned.  This Court in the facts and circumstances of the case found the  

order of the High Court to be self-contradictory, stating:

“When  the  High  Court  had  found  that  the  respondent  –  employee  deserved  punishment  on  account of his misconduct, the High Court could  not have rewarded the employee by granting him  the back wages particularly when the Tribunal had  converted  the  order  of  dismissal  into  that  of  the  stoppage  of  two  increments  with  cumulative  effect.   We,  therefore,  allow the  appeal  and  set  aside  that  part  of  the  order  of  the  High  Court  whereby  the  respondent  –  employee  has  been  given the benefit of back wages.  The rest of the  order is maintained.”

We fail to understand as to how the said decision advanced the case  

of the respondent.  

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11. The  question  with  regard  to  imposition  of  appropriate  punishment  

upon a conductor of a bus belonging to a corporation constituted under the  

Road Transport  Corporation  Act,  1950 came up for  consideration  before  

this Court in Karnataka State Road Transport Corporation vs. B.S. Hullikatti  

[(2001) 2 SCC 574], wherein it was held:

“5. On the facts as found by the Labour Court  and the High Court, it is evident that there was a  short-charging of the fare by the respondent from  as many as 35 passengers.  We are informed that  the respondent had been in service as a Conductor  for nearly 22 years. It is difficult to believe that he  did not know what was the correct fare which was  to  be  charged.  Furthermore,  the  appellant  had  during  the  disciplinary  proceedings  taken  into  account  the  fact  that  the  respondent  had  been  found guilty for as many as 36 times on different  dates. Be that as it may, the principle of res ipsa  loquitur, namely, the facts speak for themselves, is  clearly applicable in the instant case. Charging 50  paise per ticket less from as many as 35 passengers  could  only  be  to  get  financial  benefit  by  the  Conductor. This act was either dishonest or was so  grossly negligent that the respondent was not fit to  be retained as a Conductor because such action or  inaction of his is bound to result in financial loss  to the appellant-Corporation.  

6. It  is  misplaced  sympathy  by  the  Labour  Courts in such cases when on checking it is found  that  the  Bus  Conductors  have  either  not  issued  tickets  to  a  large  number  of  passengers,  though  they should have, or have issued tickets of a lower  

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denomination knowing fully well the correct fare  to be charged.  It  is  the responsibility of the Bus  Conductors  to  collect  the  correct  fare  from  the  passengers  and  deposit  the  same  with  the  Company. They act in a fiduciary capacity and it  would be a case of gross misconduct if knowingly  they do not collect any fare or the correct amount  of fare.”

A three judge Bench of this Court in Regional Manager, RSRTC vs.  

Ghanshyam Sharma [(2002)  10  SCC  330],  reiterated  the  said  principle,  

stating:

“4. This  Court  in  Karnataka  SRTC  v.  B.S.  Hullikatti  has  held  that  in  such  cases  where  the  bus conductors carry passengers without ticket or  issue tickets at a less rate than the proper rate, the  said acts would inter alia amount to either being a  case of dishonesty or of gross negligence and such  conductors  were not  fit  to  be retained in  service  because such inaction or action on the part of the  conductors  results  in  financial  loss  to  the  Road  Transport Corporation.  This Court was firmly of  the opinion that in cases like the present, orders of  dismissal should not be set aside.

5. Furthermore, we agree with the observations  of  the  Single  Judge  in  the  present  case  that  the  Labour Court was not justified in interfering with  the  punishment  of  dismissal.   Though  under  Section  11-A  the  Labour  Court  has  jurisdiction  and  powers  to  interfere  with  the  quantum  of  punishment, however the discretion has to be used  judiciously.   When the main duty or  function  of  the conductor  is  to  issue  tickets  and collect  fare  and then deposit the same with the Road Transport  

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Corporation and when a conductor fails to do so,  then  it  will  be  misplaced  sympathy to  order  his  reinstatement instead of dismissal.”

Recently  in  Uttaranchal  Transport  Corporation  vs.  Sanjay  Kumar  

Nautiyal [2008 (12) SCC 131], Hullikatti (supra) has been followed.  

12. Standing Order No. 36 whereto our attention has been drawn merely  

provides for different nature of penalties which can be imposed on a worker  

stating  that  penalties  specified  at  Serial  Nos.5  to  7  therein  would  be  

appealable.  A  corrigendum thereto  was  issued  on  24.7.1982  by  way  of  

clarification with regard to the full route fare as contained in Circular No.  

625 dated 5.6.1982. The said corrigendum has nothing to do with the nature  

or quantum of penalty.  The same does not provide for a substitution of the  

penalty provided for in the Certified Standing Order.  In any event, Certified  

Standing Order would prevail over such circulars.   

13. It may be true that in execution of the Award passed by the Labour  

Court,  for  a  short  time respondent  was  put  back  in  service.  This  Court,  

however, as indicated hereinbefore, stayed the operation of the judgment by  

reason whereof Award as also the judgment of the High Court became non-

operational.  We are, therefore, of the opinion that by itself that may not be  

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a  ground  to  refrain  ourselves  from  following  the  authoritative  binding  

precedents.   

14. For the  aforementioned reasons,  the impugned judgment  cannot  be  

sustained.  It is set aside accordingly.  The appeal is allowed.  However, in  

the facts and circumstances of the case, there shall be no order as to costs.  

……………………………….J. [S.B. Sinha]

..…………………………..…J.     [Dr. Mukundakam Sharma]

New Delhi; May 12, 2009

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