Gujarat High Court Quashes Dismissal of Bank Employee in Industrial Dispute — Labour Court Order Set Aside for Ignoring Complainant's Withdrawal and Failing to Consider Proportionality of Punishment. Termination of Sub-Staff Based on False Complaint Without Proper Inquiry Violates Principles of Natural Justice and Section 11A of Industrial Disputes Act, 1947.

High Court: Gujarat High Court In Favour of Accused

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2026-05-18 15:35:35

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Case Note & Summary

The petitioner, Gokalbhai Devrajbhai Tala (Patel), was appointed as a sub-staff at Rajkot Nagarik Sahkari Bank Ltd. on 1 November 1995 and his services were regularized on 1 August 1996. On 24 December 2012, he was served with a charge sheet, show cause notice, and transfer order from Rajkot to Surat. Despite the complainant withdrawing the complaint and admitting it was false due to personal issues, the bank terminated the petitioner's services on 24 December 2013. The petitioner raised an industrial dispute, which was referred to the Labour Court, Rajkot as Reference (LCR) No. 27 of 2014. The Labour Court rejected the reference by order dated 1 October 2019. Aggrieved, the petitioner filed the present petition under Articles 226 and 227 of the Constitution of India read with the Industrial Disputes Act, 1947. The High Court heard both sides and found that the Labour Court had ignored the crucial fact that the complainant had withdrawn the complaint and admitted it was false. The court held that the Labour Court failed to properly exercise its powers under Section 11A of the Industrial Disputes Act to consider the proportionality of the punishment. The High Court quashed the Labour Court's order and directed the respondent bank to reinstate the petitioner with continuity of service and 50% back wages. The court emphasized that the punishment of dismissal was disproportionate given the circumstances.

Headnote

A) Industrial Law - Termination of Service - Proportionality of Punishment - Section 11A, Industrial Disputes Act, 1947 - The Labour Court failed to consider that the complainant had withdrawn the complaint and admitted it was false, and did not properly exercise its discretion under Section 11A to assess whether dismissal was proportionate - Held that the Labour Court's order was perverse and required interference (Paras 5-10).

B) Industrial Law - Natural Justice - Complainant Withdrawal - The bank proceeded with termination despite the complainant's withdrawal and admission of falsehood, which vitiated the disciplinary proceedings - Held that the employer cannot ignore such material evidence (Paras 5-10).

Issue of Consideration

Whether the Labour Court erred in upholding the dismissal of the petitioner despite the complainant withdrawing the complaint and admitting it was false, and whether the punishment of dismissal was disproportionate to the alleged misconduct.

Final Decision

The High Court allowed the petition, quashed the Labour Court order dated 1 October 2019, and directed the respondent bank to reinstate the petitioner with continuity of service and 50% back wages.

Law Points

Industrial Dispute
Termination
Proportionality of Punishment
Natural Justice
Complainant Withdrawal
Labour Court Review

Case Details

2026:GUJHC:9515

R/Special Civil Application No. 4564 of 2020

2026-01-28

Hemant M. Prachchhak

2026:GUJHC:9515

Krishnan M. Ghavariya for Petitioner, Varun K. Patel for Respondents

Gokalbhai Devrajbhai Tala (Patel)

Rajkot Nagarik Sahkari Bank Ltd. & Anr.

Nature of Litigation

Industrial dispute challenging termination of employment

Remedy Sought

Petitioner sought quashing of Labour Court order and reinstatement with consequential benefits

Filing Reason

Petitioner was dismissed from service despite complainant withdrawing the complaint and admitting it was false

Previous Decisions

Labour Court rejected Reference (LCR) No. 27 of 2014 on 1 October 2019

Issues

Whether the Labour Court erred in upholding the dismissal despite the complainant's withdrawal and admission of falsehood Whether the punishment of dismissal was disproportionate to the alleged misconduct

Submissions/Arguments

Petitioner argued that the Labour Court ignored the complainant's withdrawal and admission of false complaint, and failed to consider proportionality under Section 11A Respondents argued in support of the Labour Court's order

Ratio Decidendi

The Labour Court failed to consider the complainant's withdrawal and admission of falsehood, and did not properly exercise its discretion under Section 11A of the Industrial Disputes Act to assess the proportionality of the punishment of dismissal.

Judgment Excerpts

Despite the fact that the complainant had withdrawn his complaint, and admitted the fact that he had filed a false complaint due to personal issues with the petitioner, the bank passed the transfer order and the petitioner’s services came to be terminated on 24.12.2013. Learned counsel Mr. Ghavariya has submitted that the impugned order passed by the Labour Court is illegal...

Procedural History

Petitioner appointed on 1 November 1995, regularized on 1 August 1996. Charge sheet and transfer order on 24 December 2012. Termination on 24 December 2013. Industrial dispute raised, referred as Reference (LCR) No. 27 of 2014 to Labour Court, Rajkot. Labour Court rejected reference on 1 October 2019. Petitioner filed Special Civil Application No. 4564 of 2020 in High Court of Gujarat. High Court allowed petition on 28 January 2026.