2000 (9) TMI 1057 - SC - Indian Laws

Supreme Court: Discretion in Misappropriation Cases

The Supreme Court set aside the High Court's decision confirming the reinstatement of four employees with 25% back wages by the Labour Court. The Supreme ... - Issues Involved: The issue involved in this case is whether the High Court was justified in confirming the order passed by the Labour Court reinstating the respondents-workmen with 25% back wages despite the specific finding of fact that the charges of breach of trust and misappropriation of goods had been clearly established.Judgment Details:Issue 1: Charges of Breach of Trust and MisappropriationThe case involved a Cooperative Society charging four employees with breach of trust and misappropriation of goods. The Labour Court found the charges to be clearly established based on documentary evidence, admissions of the workmen, and stock verification reports. The Labour Court, in exercise of its discretionary power under Section 11A of the Industrial Disputes Act, ordered the reinstatement of the employees with 25% back wages. The High Court confirmed this decision, but the Supreme Court held that once misappropriation is proved, reinstatement with back wages is not justified.Issue 2: Legal PrecedentsThe Supreme Court referred to legal precedents such as Municipal Committee, Bahadurgarh v. Krishnan Behari and U.P. State Road Transport Corporation v. Basudeo Chaudhary to support its decision. These cases established that in cases of proven misconduct, the employer has the discretion to impose appropriate penalties, and the Labour Court should not interfere with the employer's decision.Issue 3: Discretion of EmployerThe Supreme Court emphasized that in cases of proved misappropriation, the past record of the employees should not be a consideration for reinstatement. It is within the discretion of the employer to consider past records, but the Labour Court cannot override the penalty imposed by the employer in such cases.Conclusion:The Supreme Court allowed the appeals, setting aside the High Court's order confirming the reinstatement with back wages. The Court held that in cases of proven misappropriation, reinstatement is not justified, and the Labour Court should not interfere with the employer's decision on penalties.