Supreme Court Reiterates That Termination Without A Lawful Enquiry Is Invalid

The Supreme Court in Kanhaiya Sharma v. M/s P.E.B. Steel Lloyd Ltd., 2025 LLR 1096, decided on 17 November 2025, dealt with a dispute arising from the dismissal of a workman without any documented domestic enquiry. The case involved an employee who had been terminated abruptly, with the employer asserting misconduct but failing to produce any material showing that charges were framed; an enquiry was held, or an opportunity of hearing was provided. The core issue before the Court was whether such a termination, unsupported by procedure or evidence, could legally stand.

The Court held that dismissal without a fair and proper enquiry is contrary to the principles of natural justice and cannot be sustained. It reaffirmed that before imposing the punishment of termination, the employer must conduct a domestic enquiry that is reasonable, unbiased and compliant with statutory requirements. Merely alleging misconduct is insufficient, there must be substantive evidence and a documented process demonstrating that the employee was given a real opportunity to defend himself.

On the issue of procedural compliance, the Court emphasized that defects in the disciplinary process cannot be cured later before a tribunal or court. The legality of a termination must be assessed based on the employer’s actions on the date of dismissal, not post-hoc explanations offered during litigation. Since there was no charge-sheet, no enquiry report, and no contemporaneous record of any misconduct, the Court found that the termination was arbitrary and unlawful.

For employers, the judgment highlights the importance of conducting a structured and defensible disciplinary process. Termination must always be supported by clear documentation of charge-sheets, enquiry notices, minutes of hearings, and reasoned findings. Relying on verbal complaints or internal impressions exposes the organization to reinstatement orders, back-wages, or compensation liabilities. HR and legal teams must ensure that disciplinary action follows due process every single time.

Above all, the ruling reinforces that termination is not merely an administrative decision, but a legally examinable act requiring procedural fairness. Employers who maintain transparent disciplinary systems and proper records will be far better positioned to manage workforce issues without facing avoidable litigation.