The Bombay High Court has held that making an incorrect claim regarding travel distance for transport allowance cannot, by itself, be equated with misappropriation of the employer's funds. The Court further observed that where the misconduct is accompanied by mitigating circumstances, and the punishment of dismissal is shockingly disproportionate to the nature of the charge proved, judicial interference with the penalty is warranted.

Justice Sandeep V. Marne was hearing a writ petition filed by an employee challenging the Industrial Tribunal's refusal to interfere with his dismissal from service. The petitioner had been deputed to the employer's warehouse and was entitled to transport allowance. He claimed allowance for round trips. Following a verification exercise, the employer alleged that the actual round-trip distance was only 35 km and charged the petitioner with dishonestly claiming excess transport allowance of ₹17,868 between January 2011 and June 2012. A departmental enquiry culminated in his dismissal, which the Industrial Tribunal upheld. The petitioner contended that multiple routes existed, that he had progressively reduced the claimed distance as he became aware of shorter routes, and that the punishment of dismissal was grossly disproportionate.

The High Court found that the enquiry officer had overlooked material evidence showing that one of the employer's own witnesses acknowledged the existence of an alternative route measuring 22 km one way, corresponding to the petitioner's later claim of a 44 km round trip. Consequently, the Court held that the charge relating to the period from April 2012 to June 2012 had not been proved, while only the claims relating to the earlier periods could be sustained to a limited extent.

Rejecting the employer's contention that the case involved misappropriation, the Court held that the dispute essentially concerned an incorrect claim regarding the distance travelled for transport allowance. It observed that the employer itself had repeatedly accepted claims based on varying distances before raising objections, indicating uncertainty regarding the exact distance.

“The case involves making of wrongful claim in respect of distance for transport allowance. It appears that the Respondent itself was not sure about the exact distance and went on sanctioning the claims for varied distances over a period of time,” the Court observed.

The Court noted that the punishment of dismissal imposed on the Petitioner is grossly disproportionate to the proved misconduct. It clarified that though the Court would not have interfered with the quantum of punishment, as it is for the employer to choose the punishment. However, despite the existence of various mitigating factors and a clean past record, the Respondent imposed the harshest possible punishment of dismissal from the services of the Petitioner. Hence, the Court held the punishment to be shockingly disproportionate to the proved misconduct.

Accordingly, the Court set aside the Industrial Tribunal's award and held the petitioner's dismissal to be illegal and void. Instead of directing reinstatement, however, it awarded the petitioner lump sum compensation of ₹8 lakh in lieu of reinstatement and back wages.

Case Title: Ananta Rajaram Walunj v. Grupo Antolin Pune (P) Ltd. [Writ Petition No. 12101 of 2019]

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