Supreme Court Upholds Dismissal in MSRTC Accident Case: Dilip Uttam Jayabhay vs. Maharashtra State Road Transport Corporation (03 January 2022)

Introduction

Date of the Judgment: 03 January 2022

Citation: (2022) INSC 1

Judges: M. R. Shah, J., B. V. Nagarathna, J.

Can an employer dismiss an employee for misconduct even if a criminal court acquits them of related charges? The Supreme Court of India recently examined this question in a case involving the Maharashtra State Road Transport Corporation (MSRTC) and one of its drivers. The core issue was whether the Industrial Court was correct in overturning the dismissal of a driver involved in a fatal accident, and whether the punishment was disproportionate to the misconduct. The Supreme Court, in this case, overturned the decision of the Industrial Court and the High Court, upholding the dismissal of the driver.

The judgment was delivered by a two-judge bench of Justices M. R. Shah and B. V. Nagarathna. Justice M.R. Shah authored the opinion.

Case Background

The respondent, a driver for MSRTC, was involved in a serious accident on 23 October 1992. While driving a bus, he collided with a jeep coming from the opposite direction. The accident occurred because the driver took the bus to the extreme right side of the road, which was the wrong side, leading to a head-on collision. The impact of the collision was severe, resulting in the immediate death of four passengers and serious injuries to six others. The jeep was completely crushed, and the bus also sustained significant damage.

Following the accident, the driver was subjected to a disciplinary inquiry by MSRTC. After the inquiry, he was dismissed from service. Simultaneously, he faced criminal prosecution under Section 279 of the Indian Penal Code (IPC) for rash driving. Although he was later acquitted in the criminal case, the Labour Court upheld his dismissal. However, the Industrial Tribunal, considering the acquittal and finding contributory negligence, ordered his reinstatement without back wages but with continuity of service.

MSRTC then filed a writ petition before the High Court of Judicature at Bombay, challenging the Industrial Tribunal’s order. The High Court not only dismissed MSRTC’s petition but also directed the corporation to pay the driver back wages from 1 November 2003, to 31 May 2018, the date of his superannuation, along with retiral benefits. MSRTC then appealed to the Supreme Court.

Timeline

Course of Proceedings

The respondent’s dismissal was initially upheld by the Labour Court, which re-evaluated all evidence, including the criminal court’s acquittal. However, the Industrial Tribunal, in revision, overturned the Labour Court’s decision. The Tribunal cited the driver’s acquittal in the criminal case and observed contributory negligence, concluding that the dismissal was disproportionate to the misconduct. The Industrial Tribunal ordered reinstatement without back wages but with continuity of service, using powers under item No. 1(g) of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act, 1971).

MSRTC challenged this decision before the High Court of Judicature at Bombay. The High Court dismissed MSRTC’s writ petition, agreeing with the Industrial Tribunal’s decision. Furthermore, the High Court directed MSRTC to pay the driver back wages from 1 November 2003 to 31 May 2018, along with retiral benefits. MSRTC then appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation and application of item No. 1(g) of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act, 1971). This provision deals with unfair labor practices related to the discharge or dismissal of employees. Specifically, clause (g) addresses situations where an employee is dismissed for misconduct of a minor or technical character, without considering the nature of the misconduct or the employee’s past service record, resulting in a shockingly disproportionate punishment.

The relevant portion of Schedule IV of the MRTU & PULP Act, 1971, as cited in the judgment, is:

“Schedule IV
1. To discharge or dismiss employees—
(a) by way of victimisation;
(b) not in good faith, but in the colourable exercise of the employer’s rights;
(c) by falsely implicating an employee in a criminal case on false evidence or on concocted evidence;
(d) for patently false reasons;
(e) on untrue or trumped up allegations of absence without leave;
(f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste;
(g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct or the past record of service of the employee, so as to amount to a shockingly disproportionate punishment.”

Additionally, the case also references Section 279 of the Indian Penal Code (IPC), under which the driver was initially prosecuted. Section 279 of the IPC deals with rash driving or riding on a public way.

Arguments

Appellant (MSRTC) Arguments:

• 
  MSRTC argued that the Industrial Court erred in interfering with the dismissal order, as the punishment was not disproportionate to the misconduct.
• The High Court and Industrial Court failed to appreciate the difference between disciplinary and criminal proceedings.
• The acquittal in the criminal case should not have influenced the disciplinary proceedings, as the standards of proof and objectives are different. MSRTC cited Samar Bahadur Singh vs. State of U.P. & Ors., (2011) 9 SCC 94 and Union of India & Ors. vs. Sitaram Mishra & Anr., (2019) 20 SCC 588 to support this point.
• The Labour Court correctly held that the acquittal in the criminal case was due to the prosecution’s failure to examine key witnesses, not due to the driver’s lack of negligence, while the departmental proceedings found misconduct.
• Given the fatal accident caused by the driver’s negligence and his past disciplinary record (four punishments in three years), the dismissal was not disproportionate.
• The Industrial Court itself noted that the misconduct was not minor or technical, and there was no victimization or bad faith by MSRTC.
• The driver admitted to being gainfully employed after dismissal, making reinstatement unwarranted.
• The High Court’s direction to pay back wages was beyond the scope of the writ petition filed by MSRTC.

Respondent (Driver) Arguments:

• 
  The Industrial Court rightly found the dismissal disproportionate to the misconduct, constituting an unfair labor practice under item No. 1(g) of Schedule IV of the MRTU & PULP Act, 1971.
• The accident was not solely the driver’s fault, as the jeep driver was also on the wrong side of the road.
• The criminal court’s acquittal, indicating negligence on the part of the jeep driver as well, justified the Industrial Court’s decision to order reinstatement.
• The High Court correctly upheld the Industrial Court’s order for reinstatement without back wages.

[TABLE] of Submissions by Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether, in the facts and circumstances of the case, the punishment of dismissal can be said to be an unfair labor practice on the ground that the same was disproportionate to the misconduct proved, and therefore, the Industrial Court was justified in interfering with the order of dismissal and ordering reinstatement with continuity of service.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

On the difference between disciplinary and criminal proceedings:

• Samar Bahadur Singh vs. State of U.P. & Ors., (2011) 9 SCC 94 – Supreme Court of India

  This case was cited to emphasize that disciplinary proceedings and criminal proceedings operate in different fields, with different objectives and standards of proof.

• Union of India & Ors. vs. Sitaram Mishra & Anr., (2019) 20 SCC 588 – Supreme Court of India

  This case was also cited to reinforce the principle that an acquittal in a criminal case does not automatically exonerate an employee in departmental proceedings.

On the interpretation of clause No. 1(g) of Schedule IV of the MRTU & PULP Act, 1971:

• The Court analyzed the provision to determine whether the misconduct was minor or technical and whether the punishment was shockingly disproportionate.

  The Court emphasized that the provision applies only when the misconduct is minor or technical, and the past record of the employee has not been considered.

Legal Provisions Considered:

• Item No. 1(g) of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act, 1971).

  This provision deals with unfair labor practices related to the discharge or dismissal of employees for misconduct of a minor or technical character.

• Section 279 of the Indian Penal Code (IPC)

  This provision deals with rash driving or riding on a public way.

[TABLE] of Authorities Considered by the Court:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

✓ The Supreme Court relied on Samar Bahadur Singh vs. State of U.P. & Ors., (2011) 9 SCC 94* and Union of India & Ors. vs. Sitaram Mishra & Anr., (2019) 20 SCC 588* to emphasize that disciplinary and criminal proceedings operate in different fields with different objectives and standards of proof. The Court held that the acquittal in the criminal case had no bearing on the disciplinary proceedings.

✓The Court interpreted clause No. 1(g) of Schedule IV of the MRTU & PULP Act, 1971 and held that the dismissal was not for misconduct of a minor or technical character. The Court also stated that the Industrial Court did not consider the past record of the driver, where he was punished four times in three years of service.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the following factors:

✓ The seriousness of the misconduct: The driver’s rash and negligent driving resulted in a fatal accident with four deaths.

✓ The difference between disciplinary and criminal proceedings: The Court emphasized that an acquittal in a criminal case does not absolve an employee of misconduct in departmental proceedings.

✓ The driver’s past disciplinary record: The fact that the driver had been punished four times in three years of service was considered relevant.

✓ The interpretation of item No. 1(g) of Schedule IV of the MRTU & PULP Act, 1971: The Court found that the misconduct was not minor or technical, and the punishment was not disproportionate.

✓ The fact that the driver was gainfully employed after dismissal: This was a factor against reinstatement.

[TABLE] of Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio Table

Logical Reasoning Flowchart:

The Supreme Court’s reasoning was based on several key points. The Court emphasized that the disciplinary proceedings were distinct from the criminal proceedings and that the acquittal in the criminal case did not exonerate the driver from misconduct in the departmental inquiry. The Court noted that the misconduct was serious, involving a fatal accident caused by the driver’s rash and negligent driving. The Court also highlighted that the Industrial Court had not considered the driver’s past disciplinary record, where he was punished four times in three years.

The Court rejected the argument that the punishment was disproportionate, stating that the dismissal was justified given the seriousness of the misconduct and the driver’s past record. The Court also stated that the Industrial Court had wrongly invoked clause No.1(g) of Schedule IV of the MRTU & PULP Act, 1971, which applies only when the misconduct is minor or technical.

The Court also considered the fact that the driver was gainfully employed after his dismissal, which weighed against his reinstatement. The Court also found the High Court’s direction to pay back wages to be beyond the scope of the writ petition.

The Supreme Court stated, “Even while acquitting the accused – respondent – driver who was facing the trial under Sections 279 and 304(a) of IPC Criminal Court observed that the prosecution failed to prove that the incident occurred due to rash and negligent driving of the accused – respondent herein only and none else.”

The Court also observed, “Therefore, at the best even if it is assumed that even driver of the jeep was also negligent, it can be said to be a case of contributory negligence. That does not mean that the respondent – workman was not at all negligent. Hence, it does not absolve him of the misconduct.”

The Court concluded, “Therefore, in the facts and circumstances of the case, the Industrial Court wrongly invoked clause No.1(g) of Schedule-IV of the MRTU & PULP Act, 1971.”

There was no dissenting opinion in this case. The judgment was delivered by a two-judge bench, and both judges concurred with the final decision.

Key Takeaways

✓ Disciplinary proceedings are separate from criminal proceedings; an acquittal in a criminal case does not automatically mean the employee is innocent of misconduct in departmental proceedings.

✓ Employers can dismiss employees for serious misconduct, even if there is a criminal acquittal, provided the departmental inquiry establishes the misconduct.

✓ Industrial Courts should not interfere with disciplinary actions if the misconduct is serious and the punishment is not shockingly disproportionate, considering the nature of the misconduct and the employee’s past record.

✓ The provision of item No. 1(g) of Schedule IV of the MRTU & PULP Act, 1971, applies only to minor or technical misconduct, and not to serious misconduct like rash and negligent driving resulting in fatalities.

✓ The past disciplinary record of an employee is a relevant factor in determining the proportionality of punishment.