TNSTC had dismissed K Tamilmaran from service on January 17, 1998 for not issuing a ticket to a passenger who paid Rs 2.25 for it.
Justices M Jaichandren and R Mahadevan, while granting the relief, however, refused to order payment of back wages and reversed an order of a single judge, awarding 30 per cent of back wages.
TNSTC appealed against setting aside the dismissal order while the conductor wanted 100 per cent back wages.
The judges pointed out that the conductor had been charged with not issuing a ticket to passenger on September 13, 1997.
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A checking Inspector had also accused the conductor of being in possession of Rs 10.30 in excess of the tickets.
He was charged with abandoning the vehicle midway when the irregularities were found out and attempts were made to issue a memo to him after obtaining statements from the passenger and the driver.
He said he abandoned the bus only to meet his superiors and explain the charges levelled against him.
The judges said the single judge had rightly set aside the dismissal order as the passenger had not been questioned in the domestic enquiry conducted against the conductor.
"The writ petitioner does not deserve back wages due to his conduct at the relevant point of time," the bench said.