Removal from service for misappropriating Rs.3.50 was disproportionate, entitling the deceased employee’s family to terminal benefits.

K. Shanmugasundaram, the late husband of the first respondent, was employed as a Conductor with the appellant-Transport Corporation.

He was issued a charge memo alleging misappropriation of ₹3.50 and a shortfall of ₹51 in the daily collection.

The first charge was found proved, while the second was not proved.

He challenged the disciplinary findings by filing I.D. No. 25 of 1999 before the Labour Court, Tiruchirappalli.

During the pendency of the industrial dispute, he died, and his wife, daughter and son were brought on record.

The Labour Court dismissed the industrial dispute by award dated 11.11.2009.

The first respondent thereafter filed W.P.(MD) No. 17020 of 2016.

The learned Single Judge allowed the writ petition, holding that removal from service for the alleged misappropriation of ₹3.50 was perverse, and directed that the deceased employee be treated as having continued in service, with payment of terminal benefits including pension.

The Transport Corporation challenged that order in the present writ appeal.

Whether the disciplinary consequence of removal from service, imposed in relation to the proved misappropriation of ₹3.50, could be sustained in the circumstances of the case?

Whether the first respondent was entitled to terminal benefits payable in respect of the deceased employee, including pensionary or contributory-pension-related benefits, despite the Corporation’s objection regarding non-contribution to the Contributory Pension Fund Scheme?

Whether the entitlement and computation of terminal benefits should be determined through a working sheet and an opportunity for the first respondent to raise objections?

The Court applied the principle that a disciplinary punishment must bear a reasonable relationship to the proved misconduct and that removal from service may be interfered with when it is disproportionate or perverse in relation to the gravity of the proved charge.

It further applied the principle that, upon interference with the disciplinary outcome and reinstatement or deemed continuation in service, the employee’s legally payable terminal benefits must be determined in accordance with the applicable service and pension scheme.

The Court noted the Corporation’s contention that employees inducted on and from 11.01.1991 were governed by a Contributory Pension Fund Scheme, but expressly declined to adjudicate that issue at that stage and confined the relief to payment of terminal benefits legally payable to the deceased employee.

The Court accepted the learned Single Judge’s assessment that removal from service for the proved amount of ₹3.50 was unsustainable and did not disturb the direction granting the deceased employee the benefit of deemed continuity of service.

However, in relation to the Corporation’s objection concerning the absence of contributions to the Contributory Pension Fund Scheme, the Division Bench did not determine the applicability or effect of that scheme.

Instead, it clarified that the first respondent was entitled to receive only those terminal benefits legally payable to the deceased employee.

To ensure that the amount was correctly calculated and that the respondent had an opportunity to contest the computation, the Court directed the Corporation to prepare and furnish a working sheet, subject to objections and a reasoned response by the Corporation.

The Court upheld the entitlement of the first respondent to the terminal benefits payable to her late husband, while leaving the precise computation and the issue relating to the Contributory Pension Fund Scheme open for determination during the benefits-calculation process.

The appellant was directed to furnish a working sheet of the terminal benefits on or before 30.10.2026.

If the first respondent raised objections, the Corporation was required to consider and answer them and pass an order within three weeks of receiving the objections.

The connected miscellaneous petition was closed.