The case involves the Maharashtra State Road Transport Corporation (Petitioner) challenging the judgment and orders of the Labour Court and Industrial Court, which had directed the reinstatement of an employee (Respondent) who was dismissed from service. The core issue is the dismissal of the Respondent, who was employed as a conductor, for alleged misconduct — selling already sold tickets to passengers and possessing excess cash.

The Respondent was employed by the Petitioner since 1980 and worked on a specific bus route.

On 24 January 2002, during a routine bus check, two passengers were found with tickets issued on 22 January 2002, which were already sold. Additionally, the Respondent was found to have excess cash. After a domestic inquiry, the Respondent admitted to the charges, and based on the inquiry report, he was dismissed from service by the Petitioner on 10 April 2002. The Respondent filed a complaint with the Labour Court challenging the dismissal. Initially, the Labour Court ordered reinstatement with full backwages. The decision was challenged in the Industrial Court, which dismissed the petition. The Petitioner filed this writ petition seeking to overturn those decisions.

The Labour Court had found the dismissal unjustified, even after the Respondent's admission of guilt during the inquiry. The Labour Court questioned the credibility of evidence, such as the passengers' tickets and excess cash.

The Industrial Court upheld the Labour Court's decision, leading the Petitioner to challenge it further in this writ petition.

The main argument by the Petitioner was that the Respondent's admission of guilt during the inquiry was sufficient to prove the charges and that the Labour Court erred in overturning the dismissal.

The Respondent argued that the courts below had rightly found the dismissal unjustified, emphasizing that the charges were not conclusively proven.

Charge of Selling Already Sold Tickets: The Court concluded that the charge was indeed substantiated based on the evidence, particularly the passengers' statements and the fact that they were caught with tickets issued two days earlier.

Charge of Excess Cash: The Court noted that even if the Respondent had returned part of the excess cash to a passenger, there was still a balance that matched the value of the tickets, proving the charge of excess cash.

The Court found the findings of the Labour Court to be perverse and unsustainable because it had ignored the direct evidence available, including the Respondent’s own admission and the statements of the passengers.

Penal Consequence: Although the Court agreed that the dismissal was justified, it declined to restore the penalty of dismissal due to the unusual circumstances of the Respondent’s reinstatement and continued service. The Court ruled that the period from 10 April 2002 to 21 June 2009 (when the Respondent was not working) should be treated as "dies non" (not working), and he was not entitled to backwages for that period.

1. The Labour Court and Industrial Court’s orders directing backwages and continuity of service were set aside.

2. The Respondent's period of service up to 10 April 2002 and from 22 June 2009 to 28 February 2017 (date of retirement) was treated as valid service for all purposes.

3. The period from 10 April 2002 to 21 June 2009 was treated as a break in service, and the Respondent was not entitled to backwages or any benefits for this period.

4. The Petitioner was directed to release the Respondent’s gratuity, leave encashment, and other retirement benefits within 8 weeks, calculating service from 1980 to 10 April 2002 and from 22 June 2009 to 28 February 2017, with interest at 8% per annum on the dues from the date of retirement until the payment date.

This decision balances the misdeeds of the Respondent with his long-term service, resulting in a partial relief for him while maintaining the integrity of the disciplinary action taken by the Petitioner.