Holding

Dismissal of the conductor for gross misconduct and breach of trust is proper and not disproportionate.

Summary

Sanjay Kumar Nautiyal, a bus conductor employed by Uttaranchal Transport Corporation, was caught in a surprise check for deliberately leaving waybill entries blank, issuing tickets without proper destination details, undercharging passengers and misappropriating ticket money. A disciplinary enquiry proved 13 charges of gross misconduct and breach of trust, leading to his dismissal. The Labour Court set aside the dismissal, deeming it harsh relative to the misconduct and reduced the penalty to stoppage of two increments and forfeiture of 50% back wages. The High Court upheld this reduction, noting the small monetary loss, but denied back wages. On appeal, the Supreme Court held that a bus conductor occupies a post of trust; breach of such trust justifies dismissal and the punishment was not disproportionate. Consequently, the Court set aside the High Court order and restored the dismissal.

Issues considered

Whether dismissal of a bus conductor for misappropriation of ticket money constitutes a disproportionate punishment under the U.P. Industrial Disputes Act, 1947.
Whether the post of a bus conductor is a post of trust warranting dismissal for breach of trust.

Legislation cited

U.P. Industrial Disputes Act, 1947s. 2(1-A), s. 6(2-A)

Subjects

dismissalgross misconductbreach of trustbus conductormisappropriation of fundsindustrial disputesproportionalitypost of trustdisciplinary action

Judgment

..'""""'· [2008] 3 S.C.R. 549

UTTARANCHAL TRANSPORT CORPORATION A
v.
SANJAY KUMAR NAUTIYAL
(Civil Appeal No. 696 of 2006)
FEBRUARY 27, 2008
y -f B
[DR. ARIJIT PASAYAT AND D.K. JAIN, JJ.]

Labour Laws:
Dismissal - Gross misconduct - Breach of trust -
Dismissal of Respondent Bus Conductor for gross misconduct c
in duty and misappropriation of public funds/ticket money -
Justification - Held: Justified - Respondent, who was acting
in a fiduciary capacity, was guilty of breach of trust - Courts
> ""'\ below erred in holding the punishment imposed upon him to
be disproportionate - UP Industrial Disputes Act, 1947 - D
s.2(1-A).
Respondent was employed as a Bus Conductor in
Appellant-Transport Corporation. On a surprise checking
by the personnel of Appellant-Transport Corporation.
E
Respondent was found· guilty of gross misconduct in duty
_anci_ m_isappropriation of public funds/ticket money.
Consequently Respondent was dismissed from service.
.. x. The Labour Court, in exercise of powers under s.2(1-A)
of the U.P. Industrial Disputes Act, 1947, set aside the
dismissal of Respondent holding the punishment F
imposed upon him to be harsh in comparison to the
quantum of misconduct and directed his reinstatement
with stoppage of two annual increments in salary without
future effect and forfeiture of 50% backwages. Appellant
filed writ petition. High Court held that the amount G
. "' involved was meagre and therefore the punishment
imposed upon Respondent was dis-proportionate, but he
was not entitled to be paid any back-wages.

549 H
550 SUPREME COURT REPORTS [2008] 3 S.C.R.

A The question which arose for consideration in the
present appeal is whether inasmuch as Respondent
Conductor held a post of trust, the punishment of his
removal from service was not dis-proportionate.
Allowing the appeal, the Court
B
HELD: Misconduct in such cases where the bus
conductor either had not issued tickets to a large number
of passengers or had issued tickets of lower
denomination, punishment of removal is proper. It is the
c responsibility of the conductors to collect correct fare
charges from the passengers and deposit the same with
the Corporation. They act in fiduciary capacity and it would
be a case of gross misconduct if they do not collect any
fare or the correct amount of fare. A conductor holds a
post of trust. A person guilty of breach of trust should be
0
imposed punishment of removal from service. It is
misplaced sympathy by Courts in awarding lesser
punishments where on checking it is found that the Bus
Conductors have either not issued tickets to a large
number of passengers, though they should have, or have
E Issued tickets of a lower denomination knowing fully well
the correct fare to be charged. Bus Conductors who by
their ·actions or inactions cause financial loss to tho
Corporations are not fit to be retained in service. Above
being the position, the Labour Court and the High Court •
F were not justified in holding that the punishment awarded
was dis-proportionate. [Paras 4, 5] [556-A-G; 557-A]
V Ramana v. A.P SRTC and Ors. (2005) 7 SCC 338 -
relied on.
G CIVIL APPELLATE JURISDICTION : Civil Appeal No. 696
of 2006
From the final Judgment and order dated 4/8/2005 of
the High Court of Uttaranchal at Nainital in W.P. No. 251/2001
H (S/S).
UTIARANCHAL TRANSPORT CORPORATION v. 551
" ~
SANJAY KUMAR NAUTIYAL [DR. ARIJIT PASAYAT, J.]

B.N. Jha and Jatinder Kumar Bhatia, for the Appellant. A
The Judgment of the Court was delivered by
Dr. ARIJIT PASAYAT, J. 1. In this appeal, Uttaranchal
Roadways Transport Corporation (in short the 'Corporation')
calls in question legality of the judgment rendered by a learned 8
),. -t Single Judge of the Uttaranchal High Court partly allowing the
writ petition filed by the appellant-Corporation. Before the High
Court the Corporation had challenged the order passed by the
Presiding Officer, Labour Court, Dehradun in Reference Case
No.25 of 2000 whereby it had ordered that respondent shall be c
re-instated into service with 50% back wages with minor
punishment of stoppage of two increments without cumulative
effect.
2. Background facts in a nutshell are as follows:
. ~

Sanjay Kumar Nautiyal-respondent was employed as
D
conductor in the appellant-establishment and was posted at
Saharanpur Depot at the relevant time. On 22.4.1996
respondent was assigned duty of conductor in bus having
registration No.UP-15-9496. Duty of respondent included
booking of tickets and collecting money when the said bus plied E
on its assigned route. The respondent was duty bound to keep
correct accounts by filling details of tickets and making entry in
x the waybill sheet provided by the appellant, thereby showing
.... ~
number of passengers travelling, place of boarding and
destination of passengers. F
On the same day i.e. 22.4.1996, surprise checking was
conducted by the personnel of appellant under the supervision
of Jamil Ahmad, Traffic Inspector with M.A. Khan and Nandan
Singh, Assistant Traffic Inspectors. The bus was plying on the G
Saharanpur Haridwar route. On checking by the above-
• "°'\ mentioned persons it was found that the respondent had not
mentioned the destination and boarding places of the
passengers in the waybill. The column pertaining to above-
mentioned details was left blank deliberately in order to mis-
H
552 SUPREME COURT REPORTS (2008) 3 S.C.R.

A appropriate public money. Further, the respondent had also
manipulated the entries and had entered wrong/lesser amounts
charged from the passengers. Tickets issued by the respondent
also ·did not clearly show the destination and boarding places
of the passengers and it was deliberately written in the said
B manner, by the respondent in order to conceal the correct
information in case of any cross verification. Some tickets
issued by the respondent did not show any destination or
boarding place, which was left blank deliberately. The
respondent had not issued tickets to about half of the total
c passengers travelling on the bus and had also charged money
against the un-issued ticket, from the passengers. Entry
regarding the above-mentioned irregularities by the respondent
had been made by checking staff in the waybill. Therefore, it is
absolutely clear that respondent had mis-appropriated the public
0
money, and had deliberately made wrong entries to such effect ,. .
in the way bill.
Checking staff of the Corporation made the complaint
against respondent on the same day i.e. 22.4.1996 The conduct
of respondent from the above-mentioned facts was treated to
E be grossly improper and against the Service Rules as framed
for the employees of appellant. The conduct also amounts to
mis-appropriation of public money and cheating.
On receiving complaint from checking staff, Assistant • ,_
Regional Manager, Saharanpur issued directions to Senior
F Station-in-charge, Saharanpur to give report after examining the
documents regarding the previous way bills and ticket counter
foils submitted by the respondent. On examination of the way
bills and ticket counter foils by Senior Station-in-charge it was
found that the respondent attended duties only for four days in
G the relevant month before the surprise checking was conducted.
It was found that on all occasions respondent had taken recourse + •
to similar tactics in filling up of passenger tickets and waybills,
as was found by checking staff on 22.4.1996. Over writing. in
the tickets, destination and boarding place of passenger not
H mentioned in the ticket, if it was mentioned, the same was not
UTTARANCHAL TRANSPORT CORPORATION v. 553
.J
~ SANJAY KUMAR NAUTIYAL [DR. ARIJIT PASAYAT, J.]

clear or legible or readable. There was no carbon impression A
'~
found on backside of ticket. In the waybill the amount of money
has been altered by over writing and deducted from the original.
Report was submitted to Assistant Regional Manager, U.P.
SRTC, Saharanpur on 9.7.1996.

. ~
After receiving report Assistant Regional Manager, B
Saharanpur forwarded the matter to Regional Manager,
Dehradun with recommendation of disciplinary enquiry along
with the above mentioned enquiry report. Regional Manager,
Dehradun after consideration of complaint against the
respondent by checking staff, report of Traffic Inspector, c
recommendation of Assistant Regional Manager, Saharanpur
and seriousness as well as gravity of the matter, initiated
disciplinary proceedings against the respondent. Charge sheet
. ,..._
was served upon the respondent and in total 13 charges were
framed against him on the basis of above mentioned records, D
by the appellant.
The respondent filed reply to the charge sheet served upon
him by the appellant. Respondent could not explain the
irregularities committed and took the way of general defence
that the column in the waybill was left blank due to the fact that E
large number of passengers were travelling in the bus. The
respondent further claimed that there was no over-writing done
}<'

~
by him on the waybill, and someone else may have done it, in
order to falsely implicate him. The respondent refused to cross-
examine the witness produced by the appellant before the F
enquiry officer, Shiv Ratan Kumar, Traffic Inspector. The witness
who had conducted enquiry proved the report before enquiry
officer. The respondent also failed to give clarification to enquiry
officer regarding blank columns in tickets and carbon
impression. Again he took the general defence that it has been G
,, ~
made by mistake. The enquiry report was submitted to Regional
Manager, Dehradun and in the report it was found that charges
proposed in the charge sheet were proved against the
respondent on the basis of documents, oral statement and
circumstances of the case. The report was submitted to Regional H
554 SUPREME COURT REPORTS [2008] 3 S.C.R.

A Manager, Dehradun.
Regional Manager, Dehradun on perusal of enquiry
proceedings as well as report and evidence recorded by enquiry
officer (documentary as well as oral) proposed termination of
services of the respondent along with forfeiture of salary
8 pertaining to suspension period of the respondent. Show cause
notice to such effect was issued to the respondent. Respondent
replied to the show cause notice and raised certain issues
regarding the conduct of disciplinary proceedings. However,
Regional Manager, Dehradun found the respondent guilty of
C gross misconduct on duty as well as mis-appropriation of public
funds/ticket money and also for submitting tempered waybills.
Regional Manager, Dehradun dismissed respondent from
service and forfeited the salary for suspension period.
D Appeal against the order of Regional Manager, Dehradun
before General Manager, Western Division, UPSRTC, Meerut
filed by respondent was dismissed. Second appeal before
Assistant Managing Director, UPSRTC, Lucknow was also
dismissed. Subsequently, respondent filed Adjudication Case
No.25 of 2000 before the Labour Court, Dehradun, thereby
E challenging the dismissal from service by the appellant. The
Labour Court vide order dated 31.7 .2000 set aside the dismissal
of respondent by appellant. The punishment/penalty to
respondent was considered to be harsh in comparison to the
quantum of misconduct and it was reduced to stoppage of two •
F annual increments in salary without future effect with forfeiture
of 50% of the back salary.
It is to be noted that the Labour Court had found the
respondent guilty of charges framed in the charge sheet. Labour
G Court did not deem it proper to record oral evidence of the parties
and had only relied upon the documentary evidence pertaining
to the disciplinary enquiry.
-r •
Aggrieved by the above mentioned order of Labour Court
dated 31.7.2000 in Adjudication case No.25 of 2000, appellant
H filed Writ Petition before the High Court of Uttaranchal at Nainital.
UTTARANCHAL TRANSPORT CORPORATION v. 555
SANJAY KUMAR NAUTIYAL [DR. ARIJIT PASAYAT, J.]
_,
The High Court dismissed the Writ Petition of appellant on the A
'""' ground that the presumption that the punishment of removal/
dismissal from service was excessive and Labour Court was
correct in exercising powers provided under Section 6(2-A) of
U.P. Industrial Disputes Act, 1947 (in short the 'Act') by setting
aside the order of removal/dismissal. B
Before the High Court primary stand of the appellant was
r- ~ that in view of the proved mis-conduct of respondent the
punishment awarded was fully justified and the Labour Court
should not have interfered with the punishment. The High Court
did not accept the stand. It noted that the amount involved was c
meager and therefore the punishment awarded was dis-
proportionate. However, the High Court held that the respondent
shall not be paid any back wages but other punishments
awarded were maintained.
D

. ""'
In support of the appeal, learned counsel for the appellant
submitted that the Labour Court and the High Court had
unnecessarily given consideration to the amount involved without
appreciating the fact that the conductor holds a post of trust and
therefore the punishment of removal from service as awarded
cannot be considered dis-proportionate. E

It is submitted that order of the High Court has been passed
without appreciating the fact that termination of service is very
appropriate to the seriousness of charges levied against the
respondent in view of fraud and misappropriation of public money
-.j "" by the respondent clearly proved by the surprise checking team
F

as well. The station in charge and the court below have also
held respondent to be guilty of fraud and mis-appropriation of
public money and the charges levied on respondent were clearly
proved after proper enquiry.
G
3. In spite of service of notice the respondent has not
appeared .
• -+: 4. In V Ramana v. A.P SRTC and Ors. (2005 (7) SCC
338) it was held as follows:
H
556 SUPREME COURT REPORTS [2008] 3 S.C.R.

A "4 ...... In Kamataka State Road Transport Corporation v. ,... ..
B. S. Hul/ikatti (JT 2001 (2) SC 72), it was held that
misconduct in such cases where the bus conductor either
had not issued tickets to a large number of passengers or
had issued tickets of lower denomination, punishment of
B removal is proper. It is the responsibility of the conductors
to collect correct fare charges from the passengers and
deposit the same with the Corporation. They act in fiduciary
capacity and it would be a case of gross misconduct if .. ~

they do not collect any fare or the correct amount of fare.
c A conductor holds a post of trust. A person guilty of breach
of trust should be imposed punishment of removal from
service. The factual position shows that the appellant's
conduct in collecting fare at the designated place and not
collecting fare from persons who had already travelled
were in violation of various Regulations contained in The
D
Andhra Pradesh State Road Transport Corporation
Employees (Conduct) Regulations, 1963 (in short
'Regulations'). In the Kamataka State Road Transport
~ .
case (supra) it was held that it is misplaced sympathy by
Courts in awarding lesser punishments where on checking
E it is found that the Bus Conductors have either not issued
tickets to a large number of passengers, though they
should have, or have issued tickets of a lower
denomination knowing fully well the correct fare to be
charged. It was finally held that the order of dismissal should
F not have been set aside. The view was reiterated by a ~

three Judge Bench in Regional Manager, RSRTC v. •
Ghanshyam Sharma (2002 (1) LLJ 234), where it was
additionally observed that the proved acts amount either
to a case of dishonesty or of gross negligence, and Bus
G Conductors who by their actions or inactions cause
financial loss to the Corporations are not fit to be retained
in service.
5. The principle was reiterated in Regional Manager, "1""" •
U.PS.R. TC. Etawha and Ors. v. Hoti Lal and Anr (JT
H
UTTARANCHAL TRANSPORT CORPORATION v. 557
SANJAY KUMAR NAUTIYAL [DR. ARIJIT PASAYAT, J.)

2003 (2) SC 27) A
5. Above being the position, the Labour Court and the High
Court were not justified in holding that the punishment awarded
was dis-proportionate.
6. In view of the above, the order of the High Court is set B
aside. The punishment awarded by the disciplinary authority as
upheld by the appellate authority stands restored .
..- _., 7. The appeal is allowed with no order as to costs.
B.B.B. Appeal allowed. c