Dear Madhumita,
What type of party it was? Were there special invitees like valued customers or business partners? Was code of conduct circulated when the circular for the party was issued? Was it mentioned that this will be the "official" party? Where the party was conducted, was it in the company premises or somewhere outside?
One of the employees had been intimate with another employee. But then what was the reaction of the recipient employee? Did he/she accepted his/her advances or tried to spurn it? How are the relations between these two employees? Do they get intimate anyway?
I recommend you discuss the matter with the seniors. If the seniors give go-ahead then talk to the recipient employee and ask his/her reaction and try to probe what is in his/her mind? If the advances were against his/her wishes then tell him/her to submit the proper application. On the strength of the application, you can proceed further.
The recipient employee might want to lodge a protest but not in writing in that case call both the parties together and discuss this subject in front of them. Counsel to the recipient employee that discretion has to be exercised in all types of the official parties. Yes, parties do happen in an informal atmosphere. One may
let one's down hair, nevertheless, crossing the line is dangerous and it could have negative repercussions on his/her career and additionally, such instances could vitiate the company environment.
Lastly, it is important for you to circulate a code of conduct before organising the party. Avoiding repetition of such instances is important.
Thanks,
Dinesh Divekar