A retained outsider cannot conduct disciplinary inquiries where standing orders require an employer’s officer or employee.

Banwari Singh Rana was appointed as a temporary Tandoori Cook in 1975 and was subsequently posted as Chef de Partie at Ashok Hotel. Following a complaint alleging unauthorised absence, the Management issued him a charge-sheet under the ITDC Conduct, Discipline and Appeal Rules, 1978. A departmental enquiry was conducted by Shri Hardam Lal, who had been engaged by ITDC on a retainership basis for conducting enquiries. Rana was removed from service for remaining unauthorisedly absent for approximately 500 days; his departmental appeal was rejected.

The Labour Court held that the enquiry was invalid because the Enquiry Officer was not an officer/employee of the Corporation as required by Standing Order 16(iii). It nevertheless directed reinstatement without back wages or continuity of service, observing that Rana had admitted the charge and that the enquiry was vitiated only on a technical ground. Rana challenged the denial of back wages, while the Management challenged the direction of reinstatement.

During the proceedings, Rana attained superannuation in 2004 and died on 13 November 2015; his legal representatives were impleaded.

1. Whether the departmental enquiry was invalid because the Enquiry Officer, engaged on a retainership basis, was not an officer/employee of the Corporation within the meaning of Standing Order 16(iii)?

2. Whether the finding that the termination was illegal automatically entitled the workman to reinstatement, back wages and continuity of service?

3. Whether, in view of the workman’s superannuation, death, unauthorised absence and admission of the charge, monetary compensation should be awarded instead of reinstatement or full back wages?

The Court applied Standing Order 16(iii), which requires that a disciplinary enquiry be conducted by an “officer/employer” not lower in status than the accused employee; the expression was interpreted to require an officer or employee within the employer-Corporation’s organisational hierarchy.

Relying on Hotel Kanishka v. Delhi Administration, 1995 SCC OnLine Del 321, the Court held that a person engaged on a retainership basis, even if accorded status equivalent to an officer, is not thereby made an officer/employee of the Corporation for purposes of the Standing Orders.

The Court also applied the limited scope of judicial review under Articles 226 and 227, under which interference with Labour Court findings is warranted only for perversity, patent illegality, absence of evidence or jurisdictional error, as stated in International Airport Authority of India v. International Air Cargo Workers Union, (2009) 13 SCC 374.

Finally, relying on Allahabad Bank v. Krishan Pal Singh, (2021) 19 SCC 227, it held that reinstatement with full back wages is not automatic upon an illegal termination and that the relief may be moulded, including by awarding lump-sum compensation where reinstatement is impracticable.

The Court held that Standing Order 16(iii) contemplated an officer belonging to the Corporation’s organisational structure because the requirement of comparative status would otherwise have little meaning in relation to an outsider.

Shri Hardam Lal’s appointment order expressly described him as engaged “on retainership basis” for conducting departmental enquiries and merely granted him status equivalent to an officer; it did not appoint him to any office, post or regular scale under the Corporation.

His appointment in other disciplinary matters did not alter the nature of his engagement. Consequently, the enquiry violated Standing Order 16(iii), rendering the termination illegal.

However, the Court distinguished illegality of termination from entitlement to a particular remedy. Rana had remained unauthorisedly absent for approximately 500 days and had admitted the absence during the enquiry, seeking only leniency on account of personal and family difficulties.

Reinstatement had also become impossible because he had superannuated before the Labour Court’s award and had subsequently died. Balancing the procedural illegality against the admitted misconduct and the practical impossibility of reinstatement, the Court held that neither reinstatement nor full back wages and continuity of service was appropriate.

It rejected the claim for automatic reinstatement, back wages and continuity of service, holding that the appropriate relief must be moulded in light of the workman’s admitted prolonged absence, superannuation and subsequent death.

The direction of reinstatement was modified, and the Management was directed to pay ₹3,00,000 as lump-sum compensation to the legal representatives of the deceased workman within eight weeks.

Both writ petitions were disposed of accordingly.