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Criminal Trial And Disciplinary Proceedings- Acquittal In Former Has No Effect On The Latter

  • In the case of Maharashtra State Road Transport Corporation vs. Dilip Uttam Jayabhay, the Hon’ble SC has set aside the order of the Industrial Court which directed the Maharashtra State Road Transport Corporation to re-employ a driver who was fired after disciplinary proceedings. The SC further observed that acquittal in a criminal trial will have no effect on the disciplinary proceedings as the standard of proof in both the cases is different and has different objectives.
  • In the instant case, disciplinary proceedings were instituted against a driver who met with an accident with a jeep, in which four people had died. The Labour Court, on finding that there was negligence on the part of the driver, terminated his employment.
  • In the opinion of the Labour Court, acquittal in the criminal case will not impact it’s decision as the former was based on failure of the prosecution to establish it’s case and not because the driver was innocent. In a revision petition filed by the driver, the Industrial Tribunal held that the Labour Court was mistaken in terminating the employment of the driver. The Industrial Tribunal laid emphasis on the acquittal in the criminal case and held that there was contributory negligence on the part of both the drivers.
  • The Bombay HC was also in agreement with the view of the Industrial Court and dismissed the writ petition filed by the MSRTC challenging the order. Aggrieved, they filed an appeal before the SC.
  • The primary issue which needed the Court’s consideration was whether the termination of employment of the driver could be said to be unfair on the ground that the same was disproportionate to the misconduct.
  • The Court held that even if the argument of contributory negligence could be accepted as true, it would not absolve the driver of his own misconduct, as we could not say that the driver was not negligent at all.
  • The Court, while allowing the appeal, observed that the Industrial Court had been mistaken in laying so much stress on the acquittal order passed by the Criminal Court. The Court said that the order of acquittal was mainly based on the lack of evidence as most of the prosecution witnesses had turned hostile. This acquittal would have no bearing on the disciplinary proceedings where it has been proved that the driver was negligent in his conduct which led to loss of four innocent lives.
  • The Court also said that the punishment of dismissal was not disproportionate to the guilt of the accused.


Remitting Matter To Arbitration Tribunal Under An Application Under 34(4) Arbitration Act A Matter Of Discretion- SC

  • A bench of the Hon’ble SC has held that an application filed under section 34(4) of the Arbitration Act does not mandate the Court to refer the matter to the Arbitration Tribunal as the same is within the discretion of the Court.
  • As per section 34(4) of the aforementioned Act, the court may, at the request of any party may adjourn the proceedings and may refer the matter to the Arbitration Tribunal to give the same an opportunity to resume arbitral proceedings or to take any other action which will eliminate the grounds for setting aside the Arbitration Award.
  • The Court observed that the discretionary power under 34(4) can be exercised only to fill the gaps in the reasoning or there are inadequate reasonings given for the findings which are already in the award.
  • In the instant case titled I-Pay Clearing Services Private Limited vs. ICICI Bank Limited, an arbitration award was passed by the arbitrator in a dispute between I-Pay Clearing Services and ICICI Bank. the award was challenged by filing a petition under section 34 of the Arbitration Act on the ground that on the first point of determination which stated whether the Contract was illegally and abruptly terminated by the respondent, an award of Rs.50 crores was ordered to be paid to I-Pay by ICICI Bank, without recording any finding on the same.
  • I-Pay filed an application under section 34(4) of the Act for the rectification of any lacunae in the award by taking any appropriate action. The HC held that the defect is not curable and that there is no merit in the application filed under Section 34(4) and dismissed the same.
  • An appeal was filed before the Apex Court in which it was contended that the lack of reasoning is a curable defect and thus the award can be remitted to the arbitrator under section 34(4). But according to the contention raised by ICICI Bank, the award suffered from patent illegality as the same was passed without taking into consideration the relevant evidence on record.
  • The Hon’ble SC held that under the pretext of filling up gaps in the reasoning offered in the award, it cannot be remitted to the arbitrator when there are no findings or contentious issues in the award. If such a case of no findings arise, then the same is a cogent ground for setting the award aside and not to cure it under section 34(4) of the Arbitration Act as the same is incurable. The Court also held that in the absence of any findings on the contentious issue, the same is liable to be set aside as it prima facie appears that the Award is illegal due to absence of any findings.

Employee Refusing Promotion Not Entitled To Financial Upgradation Merely Because They Suffer Stagnation- SC

  • The Hon’ble SC in the case titled Union of India vs. Manju Arora has held that any Central Government employee who has refused the offer of promotion will not be entitled to the financial upgradation under the O.M. dated 9/8/1999.
  • An Assured Career Progression Scheme was launched under the O.M. dated 9/8/1999 by the Ministry of Personnel, Public Grievances and Pensions, Government of India. The benefit of this scheme was given to employees who could not get promotion after 12 years of service. It provided financial upgradation to the next higher grade of pay to such employees.
  • In the instant case, two employees named Suman Lata Bhatia and Manju Arora, who were originally appointed to the post of Senior Translator (Hindi) were offered a promotion to the post of translation Officer (Hindi). Citing personal reasons they refused the promotion. However, the benefits of the ACP Scheme were given to them which were later withdrawn on finding that they were given wrongly.
  • Aggrieved by the same, they filed an appeal before the Central Administrative Tribunal, Principal Bench. The Tribunal found that they were not entitled to the same and thus, rejected it. The HC, on the other hand, found that they were entitled to the benefit of the ACP Scheme, and were rightly given the benefit of the first upgradation.
  • This order was challenged before the Supreme Court. The Court observed that the aforementioned scheme was a safety net which dealt with the problem of genuine stagnation and hardship which was faced by the employees due to lack of adequate promotional avenues.
  • The Court further held that the benefit of the ACP Scheme would be available only to those employees who could not avail the regular promotion. The Court further observed that it was not the case of lack of promotional opportunity, but the employee choosing not to opt for the same due to her own personal reasons. The Court also observed that it was this particular crucial fact which was not paid attention to by the HC.
  • The Apex Court also observed that it is this rejection of promotion by the employees that gives rise to administrative difficulties and also difficulties in manning higher positions.
  • Thus, finding merit in the contentions raised by the appellants, the appeal was allowed and it was declared that the employees refusing regular promotional opportunity would not be entitled to the benefit of financial upgradation under the ACP Scheme.
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