A fair disciplinary enquiry cannot be overturned for absent cash verification where other evidence proves misconduct.

Hari Shankar was employed as a conductor with the Delhi Transport Corporation (DTC) from 21 May 1985. During a vigilance inspection on 29 March 1994, he was allegedly found to have re-issued old and used tickets to passengers after collecting fare and was also found carrying several punched tickets. A charge-sheet was issued alleging dishonesty, financial loss to DTC, breach of rules, and conduct prejudicial to DTC’s prestige.

Following a departmental enquiry, in which he was found guilty, he was dismissed from service with effect from 10 October 1995.

The Labour Court held that the enquiry was fair and consistent with natural justice but set aside the enquiry findings on the ground that the cash had not been checked and that there was ambiguity regarding whether certain tickets were stale. It consequently directed reinstatement with lump-sum compensation of ₹80,000.

DTC challenged the award under Article 226 of the Constitution. During the proceedings, Hari Shankar was granted benefits under Section 17B of the Industrial Disputes Act, 1947.

1. Whether the Labour Court was justified in interfering with the findings of a fair and valid domestic enquiry on the grounds that cash was not verified and that there was ambiguity regarding the validity of certain tickets.

2. Whether DTC was entitled to an opportunity to lead additional evidence before the Labour Court to establish the misconduct.

3. Whether the Labour Court exceeded the permissible limits of judicial review by reappreciating evidence and substituting its own conclusions for those of the Enquiry Officer.

The Court held that judicial review under Article 226 is supervisory and does not permit the High Court to act as an appellate court or reappreciate evidence unless the Labour Court’s conclusion is arbitrary, perverse, or unsupported by evidence.

Domestic enquiries are not governed by strict rules of evidence; misconduct must be established on a preponderance of probabilities, provided there is some material supporting the finding.

Once an enquiry is found fair and compliant with natural justice, interference with its findings is permissible only where the findings are based on no evidence or are manifestly perverse.

Relying on Karnataka State Road Transport Corporation v. Lakshmidevamma, (2001) 5 SCC 433, and Shambhu Nath Goyal v. Bank of Baroda, (1983) 4 SCC 491, the Court held that an employer seeking to adduce additional evidence must make a timely request, ordinarily in its written statement; such a right is not automatic or statutory.

The Court further relied on UPSRTC v. Suresh Chand Sharma and related authorities to hold that non-verification of cash does not ipso facto vitiate a domestic enquiry, although it may be relevant where the remaining evidence is substantially deficient.

The Court found that the Labour Court had impermissibly reassessed the evidence despite upholding the fairness of the enquiry. The contemporaneous checking report recorded the ticket numbers, the passengers’ statements, the recovery of used or punched tickets, and Hari Shankar’s admission; his signatures on the checking report and passenger statements were undisputed.

His explanation that the tickets related to passengers whose fares had allegedly been refunded, and his allegation that vigilance officials falsely implicated him for refusing a bribe, were unsupported by independent or contemporaneous evidence.

The absence of cash verification was therefore not decisive because the other incriminating material sufficiently established the misconduct on a preponderance of probabilities.

The Labour Court’s insistence on further proof regarding the validity of each ticket and cash reconciliation applied an unduly strict standard of proof and effectively substituted its own assessment for that of the Enquiry Officer.

DTC was also not entitled to lead additional evidence because it had not sought such permission at the appropriate stage.

The writ petition was accordingly allowed, and the Labour Court’s award dated 4 December 2009 was set aside.

DTC was directed to receive the deposited sum of ₹80,000 with accrued interest, if any, within four weeks.

Amounts already paid to Hari Shankar under Section 17B of the Industrial Disputes Act were held non-recoverable, as they constituted subsistence allowance during the pendency of the proceedings.