Supreme Court: The bench of Ajay Rastogi* and Abhay S. Oka, JJ has held that the decision of the Labour Court should not be based on mere hypothesis and it cannot overturn the decision of the management on ipse dixit. Stating that Labour Court’s jurisdiction under Section 11-A of the Industrial Dispute Act, 1947 although is a wide one but it must be judiciously exercised, the Court said,

“Judicial discretion, it is trite, cannot be exercised either whimsically or capriciously. It may scrutinize or analyse the evidence but what is important is how it does so.”

Factual Background

  • The respondent-­workman was dismissed from his services by the Standard Chartered Bank for drunkenness within the premises of the appellant-Bank and for manhandling and assaulting the senior officers and also hurling abuses at the management. The alleged delinquency had been committed on 12th January,1988.
  • The enquiry officer after holding enquiry in terms of the Bipartite Settlement and after due compliance of the principles of natural justice held the charges proved against the delinquent respondent and the disciplinary authority after due compliance, confirmed the finding recorded by the enquiry officer and punished him with the penalty of dismissal from service by an order dated 22nd August, 1991.
  • The Industrial Tribunal, However, revisited the record of enquiry and apprised the statement of the management witnesses and recorded a finding that the Bank management has “miserably failed” to establish the charges levelled against the respondent-workman and hence, set aside the order of dismissal from service and directed the appellant to reinstate the respondent-workman in service with full back wages, seniority and all the consequential   benefits attached to the post by its Award dated 14th September, 2006.
  • The High Court also upheld the said order.
  • The respondent-workman had attained the age of superannuation on 31st January, 2012 and during the period of litigation, he has throughout been paid his last wages drawn in terms of Section 17¬B of the Act 1947. The respondent-workman had been paid around Rs. 57 Lakhs.
  • The Supreme Court had, on 27th February, 2015, stayed the payment of back wages.


It was argued that after the domestic enquiry was held to be fair and proper, the Tribunal has a limited scope to interfere with the findings recorded in the domestic enquiry and unless the finding is perverse and not supported by a piece of evidence, it was not open for the tribunal to interfere within the scope of Section 11¬A of the Industrial Disputes Act, 1947,

The Court noticed that once domestic enquiry was held it to be fair and proper, the Tribunal had a very limited scope to interfere in the domestic enquiry to the extent as to whether there is any apparent perversity in the finding of fact which has been recorded by the enquiry officer in his report of enquiry obviously, based on the evidence recorded during the course of enquiry and as to whether the compliance of the Bipartite Settlement which provides the procedure of holding enquiry is violated or the punishment levelled against the workman commensurate with the nature of allegation proved against him. However, if the punishment is grossly disproportionate, the tribunal will always be justified to interfere by invoking its statutory power under Section 11-A of the Act 1947.

“The scope of judicial review in the matter of domestic enquiry is to examine whether the procedure in holding domestic enquiry has been violated or the principles of natural justice has been complied with, or any perversity in the finding of guilt recorded during the course of domestic enquiry has been committed.”

The Court noticed that the Tribunal has converted itself into a Court of Appeal as an appellate authority and has exceeded its jurisdiction while appreciating the finding recorded in the course of domestic enquiry and tested on the broad principles of charge to be proved beyond reasonable doubt which is a test in the criminal justice system and has completely forgotten the fact that the domestic enquiry is to be tested on the principles of preponderance of probabilities and if a piece of evidence is on record which could support the charge which has been levelled against the delinquent unless it is per se   unsustainable or perverse, ordinarily is not to be interfered by the Tribunal, more so when the domestic enquiry has been held to be fair and proper.

The Court, hence, held that the Tribunal has completely overlooked and exceeded its jurisdiction while interfering with the finding recorded during the course of enquiry in furtherance of which, the respondent was dismissed from service and the High Court has also committed a manifest error while passing the judgment impugned.

However, looking to the peculiar facts of this case where the respondent-workman had been paid Rs.57,16,517.72 and had attained the age of superannuation on 31st January, 2012, stay was granted by this Court in reference to back wages by order 27th February, 2015, while upholding the order of penalty of dismissal from service dated 22nd  August, 1991 passed by the authority in the domestic enquiry, the Court directed that no recovery shall be made in reference to the payment which has been made over to the workman in the interregnum period.

[Standard Chartered Bank v. RC Srivastava, 2021 SCC OnLine SC 830, decided on 29.09.2021]

*Judgment by: Justice Ajay Rastogi

Know Thy Judge | Justice Ajay Rastogi

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