Extraordinary delay and superannuation justify substituting reinstatement with lump-sum compensation.

The respondent, appointed as a conductor by the Delhi Transport Corporation (“DTC”) on 15 November 1979, was alleged to have sold bogus tickets and possessed bogus tickets at his residence while on duty.

A departmental charge-sheet was issued on 7 August 1987, and an FIR was registered under Sections 420, 468 and 471 of the IPC.

The domestic enquiry found the charges proved, resulting in termination on 20 January 1988.

The respondent was acquitted in the criminal case on 1 April 1995 on the ground that the prosecution had failed to establish the essential ingredients of the offences, while granting him the benefit of doubt.

He thereafter sought reinstatement and initiated industrial proceedings.

The Labour Court held the domestic enquiry contrary to the principles of natural justice because the principal management witness merely adopted a pre-recorded report and was not examined in the workman’s presence.

DTC had neither reserved its right in the written statement to lead evidence on the merits of the misconduct nor sought to lead such evidence when the matter was fixed for management evidence; its evidence was expressly closed.

The Labour Court consequently held the termination illegal and directed reinstatement with continuity of service and full back wages.

DTC challenged the rejection of its amendment application under Order VI Rule 17 CPC and the consequential Award.

Whether the Labour Court ought to have permitted DTC to amend its written statement and lead evidence on the merits of the alleged misconduct after the domestic enquiry had been held invalid and the management’s evidence had been closed.

Whether the respondent’s acquittal in the criminal proceedings precluded DTC from proving the alleged misconduct in the industrial adjudication.

Whether, considering the prolonged pendency of the dispute, the respondent’s superannuation and the payments made under Section 17B of the Industrial Disputes Act, reinstatement with continuity of service and full back wages should be replaced by lump-sum compensation.

Whether the delay in raising the industrial dispute justified denial of relief.

The Court applied Order VI Rule 17 of the Code of Civil Procedure, 1908, governing amendment of pleadings, and the principles of natural justice applicable to domestic enquiries, including the requirement that management witnesses be properly examined and made available for effective cross-examination.

Where a domestic enquiry is vitiated, the employer may seek an opportunity before the Labour Court to prove the misconduct on merits; however, the request should ordinarily be made in the written statement or before evidence is closed.

The Court further applied the settled distinction between criminal prosecution and disciplinary/industrial adjudication: criminal charges must be proved beyond reasonable doubt, whereas misconduct in disciplinary proceedings may be established on a preponderance of probabilities; consequently, an acquittal does not by itself bar proof of misconduct in the industrial proceeding.

Relief following an illegal termination is discretionary and may be moulded to meet the ends of justice, particularly in view of the long passage of time, superannuation and other relevant circumstances.

The Court disapproved of DTC’s conduct in failing to plead its alternative right to lead evidence on the merits, and in expressly declining to lead evidence even after the matter was fixed for that purpose.

Nevertheless, the Court held that this procedural default did not, in the circumstances, justify permanently denying DTC an opportunity to prove the alleged misconduct; the Labour Court ought to have permitted such evidence and then adjudicated the charges on their merits.

The respondent’s criminal acquittal was not decisive because the criminal case and the industrial dispute operated under different standards of proof.

However, a remand after nearly four decades from the alleged misconduct, more than two decades of pendency before the High Court, and the respondent’s superannuation would serve no useful purpose and would prolong the litigation.

The Court therefore exercised its discretion to mould the relief.

It also rejected DTC’s delay objection because the respondent had approached the management soon after his acquittal and thereafter pursued conciliation and adjudication; the delay was sufficiently explained in the circumstances.

However, the Court declined to remand the matter because of the extraordinary lapse of time, the respondent’s superannuation and the prolonged pendency of the dispute.

The Award directing reinstatement with continuity of service and full back wages was modified.

In substitution, DTC was directed to pay the respondent lump-sum compensation of ₹4,00,000 within four weeks.

The petition and pending application(s) were disposed of accordingly.