Loss Of Confidence Justifies Termination In Financial Roles Upon Proven Misconduct; Employer Cannot Be Forced To Retain Employee: Delhi High Court
The Court held that Article 226 cannot reappreciate evidence or replace a Tribunal’s findings unless they are perverse or unsupported by evidence.
The Delhi High Court has held that the termination of an employee for continuous financial misappropriation is not "shockingly disproportionate", even if the individual has rendered long years of service. The Court noted that once the relationship of trust between an employer and employee is shaken by proved financial irregularities, the employer cannot be compelled to continue the relationship.
The Bench further clarified the limited scope of writ jurisdiction, stating that the High Court does not act as an appellate authority over Industrial Tribunals. It held that findings of fact reached by a fact-finding authority are generally final and cannot be disturbed merely because another view is possible.
Justice Shail Jain observed, “The doctrine of loss of confidence assumes particular significance in cases where the employee is entrusted with financial duties. Once such confidence is shaken by proved misconduct involving financial irregularities, the employer cannot be compelled to continue the relationship. Consequently, this Court finds that the punishment of termination is not ‘shockingly disproportionate’ to the gravity of the proven charges of continuous financial misappropriation…”.
Advocate Anil Singhal appeared for the petitioner along with the petitioner-in-person and Advocate Anju Bhattacharya appeared for the respondent.
The petitioner, Uma Shankar Sharma, was employed as a Sales Clerk with the Delhi State Co-operative Union Ltd. since 1971. His duties included maintaining cash books and accounting for receipts. During an internal audit covering 1986 to 1989, the management detected significant financial discrepancies.
It was alleged that the petitioner failed to account for funds totaling ₹40,403.64 and had a cash shortage of ₹916.08. Following a domestic enquiry that proved these charges, his services were terminated on June 30, 1989.
The petitioner challenged his termination before Industrial Tribunal No. I, Karkardooma Courts. In 1996, the Tribunal initially found the domestic enquiry invalid due to natural justice violations but allowed the management to lead fresh evidence to prove the charges.
On July 5, 2002, the Tribunal passed an award upholding the termination, concluding that the management had successfully proved the misappropriation through documentary evidence and the petitioner’s own admissions. The petitioner then moved the High Court via a writ petition assailing this award.
The Court rejected the petitioner's argument that the findings were based on insufficient evidence or coerced admissions. It noted that strict rules of the Evidence Act do not apply to industrial adjudication; rather, there must simply be some material on record to support the conclusion.
Here, the Tribunal relied on internal checking reports and handwritten notings by the petitioner himself, where he acknowledged the mistakes and undertook to deposit the funds. The Court found the petitioner’s claims of "coercion" to be vague and unsubstantiated by particulars.
Accordingly, the Bench found no infirmity, illegality, or perversity in the impugned award dated July 5, 2002. Consequently, the writ petition was dismissed as being devoid of merit.
Cause Title: Uma Shankar Sharma v. State (Govt. of NCT) & Anr. [Neutral Citation: 2026:DHC:2921]
Appearances:
Petitioner: Anil Singhal, Abhimanyu Sharma, Advocates along with Petitioner in person.
Respondents: Anju Bhattacharya, Nisha R. Chauhan, Vinod Fulara and Sakshi Ramola, Advocates.