The Gauhati High Court has clarified that, following an illegal termination without domestic enquiry, reinstatement can only be denied on the ground of “loss of confidence” if objective facts are pleaded and proved by the employer. Mere subjective satisfaction or suspicion cannot suffice. This decision upholds and applies Supreme Court precedent, and holds persuasive and binding value within the State of Assam’s labour law adjudication.
Summary
| Category | Data |
|---|---|
| Case Name | WP(C)/5922/2023 of JOYANTA KUMAR DUTTA Vs THE STATE OF ASSAM AND ANR |
| CNR | GAHC010216072023 |
| Date of Registration | 05-10-2023 |
| Decision Date | 16-10-2025 |
| Disposal Nature | Disposed Of |
| Judgment Author | HONOURABLE MR. JUSTICE DEVASHIS BARUAH |
| Court | Gauhati High Court |
| Bench | Single Judge |
| Precedent Value | Binding within Gauhati High Court’s jurisdiction |
| Type of Law | Labour Law, Industrial Dispute Adjudication |
| Questions of Law |
|
| Ratio Decidendi | The Court held that upon illegal termination without a domestic enquiry, the employer bears the burden to objectively prove alleged misconduct and grounds such as “loss of confidence.” Loss of confidence as a ground to deny reinstatement must be based on objective facts, not mere subjective assertions. The employer failed to prove misconduct or loss of confidence with evidence. Consequently, the workman was held entitled to reinstatement with certain back wages. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The Court reasoned that the employer’s burden is to prove allegations amounting to misconduct or loss of confidence with objective facts; subjective dissatisfaction is not enough. The employer’s failure to examine the author of pivotal documents, inconsistent use of documents, and lack of material to establish loss of confidence rendered the labour court’s finding perverse. |
| Facts as Summarised by the Court | The petitioner, employed since 2009, was terminated in 2021 after allegations of misappropriation related to fuel payments. No domestic enquiry was held. The communication which formed the basis of allegations was later recanted. The management failed to produce substantive evidence, and the labour court held against the petitioner, denying reinstatement but awarding some terminal benefits. The High Court found the labour court’s findings perverse and unsupported by evidence. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and labour authorities within Gauhati High Court’s jurisdiction |
| Persuasive For | Other High Courts, particularly on standards for employer’s burden in loss of confidence terminations |
| Follows |
|
What’s New / What Lawyers Should Note
- The judgment reinforces that loss of confidence must be objectively pleaded and proved by the employer; subjective assertions or mere suspicion are insufficient.
- The employer’s failure to adduce the author of exculpatory/exhibitory documents as a witness, or to provide factual investigation evidence, will be held against it.
- The Labour Court’s selective reliance on documents without witness testimony cannot justify findings of misconduct or loss of confidence.
- Even in absence of a domestic enquiry, the management must establish just cause before a labour tribunal; otherwise, reinstatement cannot ordinarily be denied.
- Backwages may be limited depending on pleadings/evidence regarding gainful employment, but full denial requires specific employer proof.
Summary of Legal Reasoning
- The Court began by noting the procedural history: the termination was not preceded by any domestic enquiry. In such circumstances, upon an industrial dispute and referral to the Labour Court/Tribunal, the employer must substantiate the allegations and the justification for termination.
- The key basis for the termination was a communication dated 15.10.2020 from a third party, but later communications from the same party exonerated the petitioner. The employer nevertheless failed to examine this third party (author), and no substantive investigation was detailed or proved.
- The Labour Court had selectively relied on the original, now-recanted communication while disregarding subsequent clarifications—without sound evidentiary reasoning. The High Court found this approach perverse and unsupported by evidence.
- On the denial of reinstatement and the plea of “loss of confidence,” the Court directly applied the Supreme Court decision in Kanhaiyalal Agrawal, outlining that (a) the position of trust/confidence, (b) abuse and forfeit of such position by objective facts, and (c) how reinstatement would be embarrassing or detrimental must all be pleaded and proved—not simply asserted.
- Here, the employer failed to fulfill these requirements: there was no proof of post, no evidence of abuse, and no objective facts demonstrating detriment or embarrassment.
- The Court held that, accordingly, the petitioner was entitled to reinstatement and partial backwages (for the stated period, since there was no evidence from the employer about gainful employment thereafter). Relief was granted, vacating the Labour Court’s award and directing reinstatement with backwages between termination and the Labour Court award.
Arguments by the Parties
Petitioner:
- Termination was effected without a domestic enquiry or opportunity to defend, violating laws and established procedure.
- The only allegation was a recanted communication; subsequent clarifications exonerated the petitioner.
- No meaningful investigation details or evidence of misconduct were provided by the employer.
- Labour Court selectively relied on unproven documents while ignoring exculpatory material also not proven by witness testimony.
- Sought reinstatement with backwages; relied on Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya (2013) 10 SCC 324.
- Argued that “loss of confidence” must be objectively proved as per Kanhaiyalal Agrawal v. Factory Manager.
Respondent (Management):
- Received an initial letter alleging petitioner’s involvement in misappropriation; internal investigations were claimed to have been conducted.
- The co-accused resigned, but as petitioner refused, disciplinary action was initiated.
- Asserted that the petitioner held a position of trust and thus loss of confidence applied.
- Cited Supreme Court’s Air-India Corporation v. V.A. Rebellow for the principle that subjective suspicion can suffice for termination in sensitive posts.
- Contended that, even if termination was illegal, reinstatement should be denied due to alleged loss of confidence.
- Stated (at final relief stage) that no assertion in petition regarding unemployment, thus back wages should be denied for the period after the award.
Factual Background
The petitioner was employed with the respondent management (emergency medical services operator) since 2009. In March 2021, relying on an initial letter from a fuel vendor alleging outstanding payments involving the petitioner and another manager, the petitioner was show-caused for alleged misappropriation. Soon after, the vendor issued further letters stating the petitioner had no involvement. The petitioner’s service was nevertheless terminated without a domestic enquiry on grounds of alleged misconduct. The industrial dispute was referred to the Labour Court, which held against the petitioner but granted some terminal benefits. The High Court found the Labour Court’s findings unsupported by the evidence and awarded reinstatement with partial back wages.
Statutory Analysis
The Court interpreted Section 10 of the Industrial Disputes Act, 1947, concerning reference of industrial disputes and the powers of the Labour Court to adjudicate. The procedural safeguards and burden upon the employer, in the event of absence of domestic enquiry, were directly considered in light of the Act and Supreme Court precedent. There is no discussion of reading down, expansive or narrow interpretation, or constitutional provisions in the judgment.
Procedural Innovations
No new procedural guidelines or directions were issued; the Court applied existing law and precedent to the facts.
Alert Indicators
- ✔ Precedent Followed – The Court closely applied and affirmed established Supreme Court precedent regarding “loss of confidence” and employer’s burden following illegal termination.