Employee Cannot Take Advantage Of Own Delay; Employer Not Required To Preserve Disciplinary Records For Eternity: Bombay High Court

"The Respondent-Bank is not supposed to preserve the records relating to disciplinary proceedings of the Respondent for eternity. If the order of the Industrial Tribunal is upheld, the same would tantamount to granting premium to the errant litigant who would succeed by deliberately not exercising the remedy and waiting for employer to destroy records," Bombay High Court, in a significant judgment, held that an employee who raises a belated industrial dispute cannot be permitted to take advantage of the employer's inability to produce complete enquiry records.

 Justice Sandeep V. Marne observed that an employer is justified in destroying records after a reasonable period if no challenge is raised, and a delay of 13 years by the employee in seeking reinstatement constitutes a "stale claim" that prejudices the employer’s defense.

Court Criticizes Rewarding Negligent Litigants

The court noted that while the Industrial Disputes Act (ID Act) does not prescribe a specific limitation period for a Reference, a dispute must be "existing" to be referred. The bench emphasized that the Industrial Tribunal committed a material irregularity by branding an enquiry "perverse" solely because the Bank could not produce 24-year-old witness depositions, especially when the employee himself failed to produce the copies provided to him during the original enquiry.

The Respondent, a Clerk at the Bank of India, was dismissed on October 18, 2000, following a domestic enquiry into allegations of fraudulent withdrawals from customer accounts totaling nearly Rs. 4 Lakhs. Although his departmental appeal was dismissed in 2001, he remained silent for 12 years, only raising a demand for reinstatement in 2013 after being acquitted by a criminal court.

Delay In Raising Dispute

The Central Government made a Reference to the Industrial Tribunal, Pune, in 2014. However, the Respondent delayed another four years before filing his Statement of Claim in 2018. The Industrial Tribunal eventually set aside the dismissal, holding the enquiry findings "perverse" because the Bank, having destroyed old records as per policy, could not produce the original evidence of 11 witnesses before the Tribunal.

Legal Issues Before The Court

The primary question before the court was whether a dismissal can be set aside as perverse only because the employer is unable to produce enquiry proceedings due to an inordinate delay by the employee. The court also examined whether an acquittal in a criminal trial automatically impacts the findings of a domestic enquiry conducted on the same charges.

Employer Not Bound To Preserve Records Indefinitely

The Court observed that the Bank was justified in destroying records after the passage of a decade, as it had no occasion to believe a challenge would arise after 13 years of silence. It noted that the Respondent had "virtually acquiesced" in his dismissal by failing to correspond with the Bank or challenge the order for over a decade.

Court On Responsibility To Maintain Records

Justice Marne held that when a claim is raised after such a gross delay, the burden of producing copies of the enquiry proceedings should ideally shift to the claimant. The court remarked that the Industrial Tribunal should have drawn an adverse inference against the employee for failing to produce the photocopies of the depositions which were admittedly provided to him during the 2000 enquiry.

"The Respondent alone needs to be held responsible for the delay. Since Respondent is solely responsible for delay, he cannot be permitted to take benefit of his own wrong."

Inability To Produce Evidence Is Not Perversity

The bench clarified that "perversity" in a legal sense involves a finding based on no evidence or one that no reasonable person could reach. In this case, the Enquiry Officer’s 24-page report discussed the evidence of 11 witnesses in detail. The Court held that the mere inability of the Bank to produce the underlying depositions decades later does not render the Enquiry Officer's report perverse.

Prejudice Caused To Employer’s Defense

Relying on the Supreme Court precedent in SBI vs. M.J. James, the Court highlighted that laches and delay obscure facts and prevent fair adjudication. The Bank was unable to trace its former customers and employees to lead fresh evidence before the Tribunal after 24 years, which "grossly prejudiced" its defense due to the Respondent's "inactive acquiescence."

"Laches unlike limitation is flexible... Often, relevant and material evidence go missing or are not traceable causing prejudice to the opposite party. It is, therefore, necessary for the court to consciously examine whether a party has chosen to sit over the matter and has woken up to gain any advantage."

Domestic Enquiry vs. Criminal Prosecution

The Court reiterated the settled legal position that the standards of proof in a domestic enquiry (preponderance of probabilities) and a criminal trial (proof beyond reasonable doubt) are entirely different. An acquittal in a criminal case does not automatically vitiate a dismissal based on a separate departmental enquiry, as the purpose of the latter is to maintain discipline within the institution.

Higher Standard Of Honesty For Bank Employees

The Court invoked the ratio in Damoh Panna Sagar Rural Reg. Bank vs. Munna Lal Jain, stating that bank employees are required to exercise a higher standard of honesty and integrity. It found that the Tribunal had erroneously "rewarded" the employee with full backwages and pensionary benefits despite the gravity of the misconduct involving misappropriation of customer funds.

The High Court concluded that the Industrial Tribunal’s orders were unsustainable in law. It held that the Tribunal had rewarded a negligent litigant at the cost of an employer who acted in good faith by following standard record-retention policies. Consequently, the High Court quashed the Tribunal's awards and upheld the Respondent's dismissal from service.

Date of Decision: 22 June 2026