The Petitioner, employed as a clerk by Respondent Nos. 1 and 2 (a trust managing an auditorium in Mumbai), was dismissed from service following allegations of demanding illegal gratification from a third-party complainant, Smt. Sukhbir Kaur. The initial charge was that Petitioner demanded Rs. 45,000 from Smt. Kaur for booking the auditorium, which was not required as per the regular procedures. Following the issuance of a chargesheet and domestic enquiry, Petitioner was terminated by Respondent Nos. 1 and 2. In response, the Petitioner approached the Labour Court, challenging the termination, and seeking reinstatement with back wages.

The Petitioner’s counsel, Mr. Naikare, argued that the Industrial Court had exceeded its revisionary jurisdiction, which is traditionally narrow under Section 44 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act (MRTU & PULP Act). He contended that the Labour Court had provided a well-reasoned decision, and the Industrial Court should not have interfered, especially given the lack of concrete evidence to prove the allegations of bribery and the subsequent withdrawal of the complaint by Smt. Kaur. He also highlighted that the punishment of dismissal was grossly disproportionate to the alleged misconduct.

Conversely, Respondent Nos. 1 and 2 defended the termination, asserting that the Petitioner had indeed engaged in misconduct by making false representations to Smt. Kaur and demanding illegal payments. They also pointed to the sequence of events where Smt. Kaur’s complaint was later withdrawn but only after the Petitioner allegedly requested her to do so, thereby admitting to his mistake.

The case raised crucial issues regarding the fairness of domestic enquiries and the scope of judicial review. The Labour Court, after declaring the enquiry unfair, had provided an opportunity for Respondent Nos. 1 and 2 to present additional evidence. Three witnesses were examined, who corroborated the allegations made by Smt. Kaur. However, the Labour Court discarded their testimonies, deeming them as hearsay, which was a key error.

The Industrial Court, on the other hand, emphasized that in domestic enquiries, the standard of proof is based on the preponderance of probabilities, not beyond a reasonable doubt. The court noted that even hearsay evidence could be admissible in such proceedings, provided it holds logical probative value. Citing the Supreme Court’s decision in State of Haryana vs. Rattan Singh (1977), the Industrial Court ruled that the Labour Court’s findings were perverse, as they ignored crucial evidence and failed to meet the standard required for dismissing the termination.

Moreover, the Industrial Court highlighted that the charge against the Petitioner—demanding a bribe—was of serious nature, and the penalty of dismissal was proportionate given his prior history of similar misconduct.

This case serves as an important reminder of the judicial standards applicable to domestic enquiries in labor disputes. Domestic enquiries, conducted by employers in cases of alleged misconduct, do not require the strict application of evidentiary rules under the Indian Evidence Act. Rather, a reasonable assessment based on the totality of the evidence presented is sufficient. However, if the enquiry is deemed unfair or the findings are perverse, the decision may be overturned by higher courts, such as the Industrial Court, exercising its revisionary jurisdiction.

Additionally, the case underscores the limited scope for challenging the proportionality of penalties in misconduct cases. The courts generally defer to the employer’s discretion regarding disciplinary action, particularly when the charge involves serious misconduct such as bribery or dishonesty.

In conclusion, the legal framework governing labor disputes ensures that both the employee and employer have access to fair procedures. However, the scope of judicial intervention is critical in preventing arbitrary decisions, particularly when domestic enquiries are contested. The Petitioner’s case demonstrates how the Industrial Court’s revisionary powers can be exercised to correct errors in fact-finding by lower courts, ensuring that justice is served. This case also highlights the importance of maintaining proportionality in disciplinary action, especially in instances involving serious misconduct like bribery. Ultimately, the decision of the Industrial Court, in this case, stands as a precedent for future disputes of similar nature, emphasizing the balance between employer discretion and the right to fair treatment in disciplinary proceedings.