Gujarat High Court
Director vs Kalpanaben H Vyas & 2 on 25 July, 2014
Author: Ks Jhaveri
Bench: Ks Jhaveri, A.G.Uraizee
C/LPA/952/2009 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 952 of 2009
In SPECIAL CIVIL APPLICATION NO. 24513 of 2007
[On note for speaking to minutes of order dated 23/06/2014 in
C/LPA/952/2009 ]
================================================================
DIRECTOR, INSTITUTE OF KIDNEY DISEASES & RESEARCH
CENTRE....Appellant(s)
Versus
KALPANABEN H VYAS & 2....Respondent(s)
================================================================
Appearance:
MR NIKHIL D JOSHI, ADVOCATE for the Appellant(s) No. 1
GOVERNMENT PLEADER for the Respondent(s) No. 2
MR VAIBHAV A VYAS, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 2 - 3
================================================================
CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
Date : 25/07/2014
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE KS JHAVERI) Upon hearing learned advocate for the appellant, the discrepancy pointed out by learned counsel for the appellants deserves to be corrected. Now, paragraph No.3.8 of the judgment dated 23.06.2014 be read as under: Page 1 of 3 1 of 50 C/LPA/952/2009 ORDER " 3.8 In rejoinder, Mr. Shelat has relied upon another decision of the Apex Court in the case of Haryana Financial Corporation And Another vs. Kailash Chandra Ahuja reported in (2008) 9 SCC 31. He submitted that the order passed by learned Single Judge is nothing but allowing the lady to commit further fraud and misappropriate amount which is required to be used for the benefit of patients of Kidney ailments. He submitted that assuming without admitting that even if the inquiry is not properly conducted, such a dismissal order could have been passed by the appellant in view of the undisputed facts of amount being credited into savings account and the same being withdrawn by the respondent without bringing it to the notice of the concerned authorities. He submitted that the impugned order passed by the learned Single Judge has been stayed since 07.05.2009 and the respondent no.1 has not moved any application for vacating stay and instead allowed the stay to operate for the last five years."
The note for speaking to Minute stands disposed of accordingly.
(K.S.JHAVERI, J.) Page 2 of 3 2 of 50 C/LPA/952/2009 ORDER (A.G.URAIZEE,J) pawan Page 3 of 3 3 of 50 C/LPA/952/2009 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL NO. 952 of 2009 In SPECIAL CIVIL APPLICATION NO. 24513 of 2007 FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE A.G.URAIZEE ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
================================================================ DIRECTOR, INSTITUTE OF KIDNEY DISEASES & RESEARCH CENTRE....Appellant(s) Versus KALPANABEN H VYAS & 2....Respondent(s) ================================================================ Appearance:
MR SN SHELAT, SENIOR COUNSEL WITH MR NIKHIL D JOSHI, ADVOCATE for the Appellant(s) No. 1 MS NISHA THAKORE, ASST GOVERNMENT PLEADER for the Respondent(s) No. 2 Page 1 of 47
4 of 50 C/LPA/952/2009 JUDGMENT MR SHALIN MEHTA, SENIOR COUNSEL WITH MR VAIBHAV A VYAS, ADVOCATE for the Respondent(s) No. 1 RULE SERVED for the Respondent(s) No. 2 - 3 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE A.G.URAIZEE Date : 23/06/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI)
1. This is a very unique and glaring case which has come up for our consideration today. An Indian woman, fraudulently has usurped money from the State Exchequer to the tune of Rs. 4,85,872/- and 4,94,320/- on two different occasions by falsely declaring her husbands as dead. This woman who is the respondent in the present case was a public servant and was part of a large scale scandal which came into light when CID Crime of the State investigated into a complaint filed by the appellant - Institute of Kidney Diseases & Research Centre. With this prelude, let us delve into the broad details of the case.
2. Respondent no. 1 was appointed by the appellant as a Junior Clerk and in due course was promoted as Senior Clerk. On 29.10.2004 the appellant received a phone call from the Treasury Office, Ahmedabad inquiring about the frequent claims for group insurance amount after the death of the employees working in the appellant Institute. The appellant was informed that the Treasury had received in all 36 claims Page 2 of 47 5 of 50 C/LPA/952/2009 JUDGMENT during the period 27.06.2003 to 05.10.2004 and that an amount of Rs. 1,20,62,240/- was disbursed to the heirs and claimants. Upon verification, the appellant found that most of the submitted claims were forged and no such employees were ever appointed by the appellant.
2.1 The appellant suspected a large scale scandal and possible involvement of the employees of the appellant Institute and hence lodged a complaint with CID, Crime on 30.10.2004 with a request to investigate into the complaint. The appellant Institute thereafter passed an order of suspension on 01.12.2004 against respondent no. 1 on the ground that respondent no. 1 had misappropriated sum of Rs. 485872 and 494320 by putting forged death claims before the Treasury Office.
2.2 CID, Crime Ahmedabad acted upon the complaint by the appellant and having found material lodged an FIR being C.R. I No. 37 of 2004 on 17.12.2004 against 26 accused persons including respondent no. 1 for the offences punishable under Sections 406, 409, 420, 465, 467, 468, 471, 474, 120B & 511 of Indian Penal Code. She was thereafter served with a chargesheet and all relevant documents were supplied with it. Respondent no. 1 demanded a month's time to reply to the chargesheet without demanding any further documents from the appellant. The appellant granted a week's time to respondent to file reply but the respondent sent a communication demanding series of documents. The appellant replied that since the documents were irrelevant the same could not be supplied to her and asked her to reply within a period of five days.
Page 3 of 47
6 of 50
C/LPA/952/2009 JUDGMENT
2.3 As no reply was received from respondent no. 1, the appellant decided to start inquiry proceedings which was duly informed to respondent no. 1. Respondent no. 1 objected to the appointment of the inquiry officer and did not remain present at the time fixed for the inquiry. Finally after several adjournments the Inquiry Officer submitted his report on 31.05.2005 holding the charges as proved against respondent no. 1. The appellant after taking into consideration all the relevant aspects of the case and considering the gravity of misconduct passed an order of dismissal against respondent no. 1. She thereafter preferred an appeal against the order of dismissal.
2.4 In the meantime respondent no. 1 filed a writ petition before this Court being SCA No. 21648 of 2006 which was disposed of with a a direction to decide the appeal filed by respondent no. 1. The appellant rejected the appeal preferred by respondent no. 1 by way of a well reasoned and speaking order dated 05.01.2007. Being aggrieved by the same, respondent no. 1 preferred another Writ Petition being SCA No. 24513 of 2007 challenging the dismissal order as well as the order passed in appeal. The learned Single Judge of this Court vide order dated 24.03.2009 set aside the order of dismissal and the one passed in appeal and directed the appellant to hold the inquiry from the stage prior to 27.05.2005. Being aggrieved by the said order, the appellant has preferred this appeal.
3. Mr. S.N. Shelat, learned Senior Counsel appearing with Mr. Nikhil Joshi for the appellant Institute submitted that Page 4 of 47 7 of 50 C/LPA/952/2009 JUDGMENT respondent no. 1 in collusion with two persons namely Bhaskar Jani and Yogendra Pandya preferred claim for compensation for the death of Dr. H.D. Vyas - Assistant Professor who died on 28.04.2004 claiming that she is the widow of the deceased though it was an admitted position that her husband was alive. He submitted that she was paid Rs. 4,94,320/- by the Treasury and accordingly credited to her account No. 23318 with Union Bank of India, Asarwa Branch by cheque no. 0811270 and thereafter she withdrew the said amount.
3.1 Mr. Shelat submitted that respondent no. 1 had earlier claimed the amount from the Treasury on producing death certificate of Dr. H.C. Vyas - RMO who died on 17.07.2003 claiming that she was the widow of the said person though her husband was still alive then. In this case also she was paid Rs. 4,85,872/- by the Treasury which was credited to her bank account No. 17348 with Central Bank of India, Asarwa Branch and the same was also withdrawn by her.
3.2 Mr. Shelat contended that this is a case where the court may look into not only the merits of the case but also the conduct of respondent no. 1. He contended that respondent no. 1 has not been able to dispute the facts of her claiming group insurance amounts twice from the treasury office of the government by falsely stating her husband to be an employee of the appellant and showing him dead twice.
3.3 Mr. Shelat contended that since the inquiry was based on documentary evidence the same was concluded in accordance with law and report thereof was submitted on Page 5 of 47 8 of 50 C/LPA/952/2009 JUDGMENT 31.05.2005. He submitted that considering the serious misconduct of respondent no. 1 in committing forgery and misappropriation of group insurance amount twice from the Treasury Office of the Government, dismissal order was passed against respondent no. 1. He contended that respondent no. 1 has not been able to show any prejudice caused to her so far as inquiry proceedings are concerned. He submitted that it is a settled law that the delinquent has to prove prejudice by alleged violation of the principles of natural justice and that when no other conclusion is possible on undisputed or admitted facts, Courts should not quash the proceedings exercising Writ Jurisdiction. He submitted that the penalty order against respondent no. 1 is just and proper considering the grave misconduct of respondent no. 1.
3.4 Mr. Shelat submitted that infact the appellant Institute had filed Civil Application No. 2476 of 2013 for production of additional evidence in the appeal which was allowed by this Court vide order dated 24.02.2014. He submitted that by way of producing additional evidence it has been brought on record that respondent no. 1 had deposited the cheques for Rs. 4,94,320/- and 4,85,472/- in her savings bank accounts with Central Bank of India and Union Bank of India respectively and had subsequently withdrawn the amounts by cheque on various dates.
3.5 Mr. Shelat submitted that respondent no. 1 has time and again tried to delay the inquiry proceedings with ulterior motive. He submitted that she was served with charge sheet on 06.04.2005 and given seven days' time to file reply but she demanded a month's time to reply. He submitted that instead Page 6 of 47 9 of 50 C/LPA/952/2009 JUDGMENT of replying to the chargesheet, respondent no. 1 sent a communication demanding series of irrelevant documents which were never in the custody of the appellant as the same were forged by her and her associates in crime. He submitted that finally date of hearing of the inquiry was fixed and she was intimated about the same and then she objected to the appointment of inquiry officer with a view to delay the proceedings. He further submitted that respondent no. 1 did not remain present at the time fixed for inquiry and did not send any communication for adjournment. The inquiry was therefore commenced ex-parte and finally the officer submitted his report on 31.05.2005 holding the charges as proved against respondent no. 1.
3.6 Mr. Shelat contended that the Governing Body of the appellant decided the appeal preferred by respondent no. 1 and passed a well reasoned and speaking order. He submitted that considering the misconduct of respondent no. 1, the appellant has lost faith and confidence in such an employee and therefore it is not in the interest of the institution to allow such a fraudulent lady to continue in the institution even for a day.
3.7 Mr. Shelat in support of his submissions relied upon the following decisions:
(i) The United Planters Association of Southern India vs. K.G. Sangameswaran and another reported in AIR 1997 SC 1300, para 17 of which reads as under:
"17. From a perusal of the provisions quoted above. it will be seen that the jurisdiction of the Page 7 of 47 10 of 50 C/LPA/952/2009 JUDGMENT Appellate Authority to record evidence and to come to its own conclusion on the questions involved in the appeal is very wide. Even if the evidence is recorded in the domestic enquiry and the order of dismissal is passed thereafter, it will still be open to the appellate Authority to records. if need be, such evidence as may be produced by the parties. Conversely, also if the domestic enquiry is ex parte of no evidence was recorded during those proceedings, the Appellate Authority would still be justified in taking additional evidenced to enable it to come to its own conclusions on the articles of charges framed against the delinquent officer."
(ii) Union Bank of India vs. Vishwa Mohan reported in AIR 1998 SC 2311 wherein para 9 reads as under:
"9. We are totally in disagreement with the above quoted reasoning of the High Court. The distinction sought to be drawn by the High Court that the first charge sheet served on the respondent related to the period when he was a clerk whereas other three charge sheets related to the period when he was promoted as a bank officer. In the present case, we are required to see the findings of the Inquiry Authority, the order of the Disciplinary Authority as well as the order of the Appellate Authority since the High Court felt that the charges levelled against the respondent after he was promoted as an officer were not of serious nature. A bare look at these charges would unmistakably indicate that they relate to the misconduct of a serious nature. The High Court also committed an error when it assumed that when the respondent was promoted as a bank officer, he must be having a good report otherwise he would not have been promoted. This finding is totally unsustainable because the various acts of misconduct came to the knowledge of the bank in the year 1989 and thereafter the first charge sheet was issued on 17th February, 1989. The respondent was promoted as a bank officer some time in the year 1988. At that time, no such adverse material relating to the misconduct of the respondent was noticed by the bank on which his Page 8 of 47 11 of 50 C/LPA/952/2009 JUDGMENT promotion could have been withheld. We are again unable to accept the reasoning of the High Court that in the facts and circumstances of the case "it is difficult to apply the principle of severability as the charges are so inextricably mixed up." If one reads the four charge sheets, they all relate to the serious misconduct which include taking bribe, failure to protect interest of banks, failure to perform duties with utmost devotion diligence, integrity and honesty, acting in a manner unbecoming of a bank officer etc. In our considered view, on the facts of this case, this principle has no application but assuming that it applies yet the High Court has erred in holding that the principle of severability cannot be applied in the present case. The finding in this behalf is unsustainable. As stated earlier, the appellant had in his possession the inquiry report/findings when he filed the statutory appeal as well as the writ petition in the High Court. The High Court was required to apply its judicial mind to all the circumstances and then form its opinion whether non-furnishing of the report would have made any difference to the result in the case and thereupon pass an appropriate order. In paragraph 13, this Court in Managing Director, ECIL, Hyderabad and others (supra) has very rightly cautioned:
"The Court/Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short cuts."
In our considered view, the High Court has failed to apply its judicial mind to the facts and circumstances of the present case and erroneously concluded that non supply of the inquiry report/findings has caused prejudice to the respondent."
(iii) M.C. Mehta vs. Union of India and Others And Inder Mohan Bensiwal Re: With Bharat Petroleum Corporation Ltd. Re : reported in AIR 1999 SC 2583 wherein the Apex Court in paras 22 & 23 has observed Page 9 of 47 12 of 50 C/LPA/952/2009 JUDGMENT as under:
"22. It is, therefore, clear that if on the admitted or indisputable factual position, only one conclusion is possible and permissible, the court need not issue a writ merely because there is violation of principles of natural justice.
23. Before we go into the final aspects of this contention, we would like to state that cases relating to breach of natural justice do also occur where all facts are not admitted or are not all beyond dispute. In the context of those cases, there is a considerable case law and literature as to whether relief can be refused even if the court thinks that the case of the applicant is not one of 'real substance' or that there is no substantial possibility of his success or that the result will not be different, even if natural justice is followed. See Malloch v. Aberdeen Corporation [1971] 1 W.L.R. 1578 (per Lord Reid and Lord Wilberforce), Glynn v. Keele University [1971] 1 W.L.R. 87, Cinnamond v. British Airport Authority [1980] 1 W.L.R. 582 and other cases where such a view has been held. The latest addition to this view is R v. Eating Magistrates' Court ex p Fannaran 1996 8 Admn LR 351 (358) (see DeSmith, Suppl., page 89) 1998 where Straughton, Lj, held that there must be 'demonstrable beyond doubt' that the result would have been different. Lord Woolf in Lloyd v. McMohan [1987] A.C. 625 (862) has also not disfavoured refusal of discretion in certain cases of breach of natural justice. The New Zealand court in McCarthy v. Grant 1959 NZLR 1014, however, goes half way when it says that (as in the case of bias), it is sufficient for the applicant to show that there is 'real likelihood - not certainty - of prejudice'. On the other hand, Garner's Administrative Law, 8th Edition, 1996, pages 271-
272, says that slight proof that the result would have been different is sufficient. On the other side of the argument, we have apart from Ridge v. Baldwin [1960] A.C. 40 ], Megarry, J., in John v. Rees [1970] Ch. 345, stating that there are always 'open and shut cases' and no absolute rule of proof of prejudice can be laid down. Merits are not for Page 10 of 47 13 of 50 C/LPA/952/2009 JUDGMENT the court but for the authority to consider. Ackner, J., has said that the 'useless formality theory' is a dangerous one and, however' inconvenient, natural justice must be followed. His Lordship observed that convenience and justice are often not on speaking terms'. More recently, Lord Bingham has deprecated the 'useless formality' theory in R v. Chief Constable of the Thames Valley Police Force ex p Cotton 1990 IRLR 344, by giving six reasons. (See also his article 'Should Public Law Remedies be Discretionary ?' 1991 PL 64). A detailed and emphatic criticism of the 'useless formality theory' has been made much (of) earlier in 'Natural justice, Substance or Shadow' by Prof. D. H. Clark of Canada (see 1975 PL, pages 27-63) contending that Malloch [1971] 1 W.L.R. 1578 ] and Glynn [1971] 1 W.L.R. 87] were wrongly decided. Foulkes (Administrative Law, 8th Edition, 1996, pages 323), Craig Administrative Law, 3rd Edition, page 596, and others say that the court cannot prejudge what is to be decided by the decision making authority. De Smith, 8th Edition, 1994, paras 10.031 to 10.036, says courts have not yet committed themselves to any one view though discretion is always with the court. Wade Administrative Law, 5th Edition, 1994, pages 526-530, say that while futile writs may not be issued, a distinction has to be made according to the nature of the decision. Thus, in relation to cases other than those relating to admitted or indisputable facts, there is considerable divergence of opinion whether the applicant can be compelled to prove that the outcome will be in his favour or he has to prove a case of substance or if he can prove a 'real likelihood' of success or if he is entitled to relief even if there is some remote chance of success. We may, however, point out that even in cases where the facts are not all admitted or beyond dispute, there is considerable unanimity that the courts can, in exercise of their 'discretion', refuse certiorari, prohibition, mandamus or injunction even though natural justice is not followed. We may also state that there is yet another line of cases as in State Bank of Patiala v. S. K. Sharma 1996 (3) SCC 364, Rajendra Singh v. State of M. P. 1996 (5) SCC 460, that even in relation to statutory provisions Page 11 of 47 14 of 50 C/LPA/952/2009 JUDGMENT requiring notice, a distinction is to be made between cases where the provision is intended for individual benefit and where a provision is intended to protect public interest. In the former case, it can be waived while in the case of the latter, it cannot be waived."
(iv) Aligarh Muslim University and Others vs. Mansoor Ali Khan reported in AIR 2000 SC 2783 wherein the Apex Court in para 20 has observed as under:
"20. As pointed recently in M.C. Mehta Vs. Union of India (1999 (6) SCC 237), there can be certain situations in which an order passed in violation of natural justice need not be set aside under Article 226 of the Constitution of India. For example where no prejudice is caused to the person concerned, interference under Article 226 is not necessary. Similarly, if the quashing of the order which is in breach of natural justice is likely to result in revival of another order which is in itself illegal as in Gadde Venkateswara Rao vs. Government of Andhra Pradesh (1965) 2 SCR 172 :
(AIR 1966 SC 828), it is not necessary to quash the order merely because of violation of principles of natural justice."
(v) State of Manipur vs. Y. Token Singh reported in 2007(5) SCC 65 more particularly para 23 which reads as under:
"23. The respondents, therefore, in our opinion, were not entitled to hold the posts. In a case of this nature, where the facts are admitted, the principles of natural justice were not required to be complied with, particularly when the same would result in futility. It is true that where appointments had been made by a competent authority or at least some steps have been taken in that behalf, the principles of natural justice are required to be complied with, in view of the Page 12 of 47
15 of 50 C/LPA/952/2009 JUDGMENT decision of this Court in Murugayya Udayar (supra)."
(vi) Article on Administrative Law (Second Edition) by C.K. Thaker wherein paras 17.2.4.1 explains the doctrine of admitted or undisputed facts in case of exclusion of natural justice and the same reads as under:
17.2.4.1 Doctrine explained It is true that all actions against a party which invoke penal or adverse consequences must be taken in accordance with the principles of natural justice but whether any particular principle of natural justice would be applicable to a particular situation or the question whether there has been any infraction of the application of that principle has to be judged in the light of the facts and circumstances of each case. If the facts are admitted, undisputed or proved, it is not necessary to issue notice or afford an opportunity of hearing.
(i) S.L. Kapoor vs. Jagmohan and Others reported in (1980) 4 SCC 379, wherein it is held that Where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue its writ to compel the observance of natural justice, not because it approves the non observance of natural justice but because Courts do not issue futile writs. But it will be a pernicious principle to apply in other situations where Page 13 of 47
16 of 50 C/LPA/952/2009 JUDGMENT conclusions are controversial, however, slightly, and penalties are discretionary.
(ii) State Bank of India and Others vs. Narendra Kumar Pandey reported in (2013) 2 SCC 740 wherein para 22 reads as under:
"22. We are of the view that the High Court also committed an error in holding that since no witness was examined in support of charges, it was a case of no evidence. In an ex parte inquiry, in our view, if the charges are borne out from documents kept in the normal course of business, no oral evidence is necessary to prove those charges. When the charged officer does not attend the inquiry, then he cannot contend that the Inquiring Authority should not have relied upon the documents which were not made available or disclosed to him. Of course, even in an ex parte inquiry, some evidence is necessary to establish the charges, especially when the charged officer denies the charges, uncontroverted documentary evidence in such situation is sufficient to prove the charges.
3.8 In rejoinder, Mr. Shelat has relied upon another decision of the Apex Court in the case of Haryana Financial Corporation And Another vs. Kailash Chandra Ahuja reported in (2008) 9 SCC 31. He submitted that the order passed by learned Single Judge is nothing but allowing the lady to commit further fraud and misappropriate amount which is required to be used for the benefit of patients of Kidney ailments. He submitted that assuming without admitting that even if the inquiry is not properly conducted, such a dismissal order could have been passed by the appellant in view of the undisputed facts of amount being credited into savings account and the same being withdrawn by the respondent without bringing it to the notice of the Page 14 of 47
17 of 50 C/LPA/952/2009 JUDGMENT concerned authorities. He submitted that the impugned order passed by the learned Single Judge has been stayed since 07.05.2009 and the respondent no. 1 has not moved any application for vacating stay and instead allowed the stay to operate as a result of which she is being paid subsistence allowance for the last 14 years.
3.9 Mr. Shelat further submitted that in view of the decision of the Apex Court if the departmental inquiry is not acceptable to this Court, without prejudice to the rights and contentions of the appellant, this Court may consider the case of the dismissal of respondent no. 1 into termination simplicitor.
4. Mr. Shalin Mehta, learned Senior Counsel appearing with Mr. Vaibhav Vyas, learned advocate for respondent no. 1 contended that the very initiation of the departmental inquiry, its continuation and conclusion thereof was illegal and arbitrary on various counts. He submitted that there has been gross violation of principles of natural justice at more than one stages of the inquiry.
4.1 Mr. Mehta submitted that there has been perversity on the part of the Inquiry Officer, Disciplinary Authority as well as the Appellate Authority since the authorities have taken into consideration irrelevant material or such material which legally could not have been taken into consideration more particularly when respondent no. 1 is not provided any opportunity to defend herself. He submitted that there has been undue haste in initiating and concluding the departmental inquiry which has prejudiced the defence of Page 15 of 47 18 of 50 C/LPA/952/2009 JUDGMENT respondent no. 1.
4.2 Mr. Mehta further contended that the Inquiry Officer informed respondent no. 1 to remain present before the Inquiry Officer on 27.05.2005 but unfortunately she came to be arrested on the same day and therefore could not remain present before the Inquiry Officer. He submitted that the inquiry officer held the inquiry ex-parte and examined witnesses on behalf of the institution and without giving any opportunity to cross examine the witnesses or examine defence witnesses the entire inquiry was concluded on the very first day and report was submitted on 31.05.2005. He submitted that without even supplying the report or any further show cause notice, the impugned order came to be passed on 03.06.2005 dismissing respondent no. 1 from service with retrospective effect from 01.06.2005 while she was in judicial custody in Sabarmati Central Jail, Ahmedabad. He submitted that therefore the impugned order is absolutely illegal and against the principles of natural justice.
4.3 Mr. Mehta contended that there is no evidence on record to establish that the applicant is claiming the amount which has been credited to her account. He submitted that in fact respondent no. 1 was under an impression that one Mr. Yogendra Pandya has given loan and therefore she had withdrawn that amount and thereafter repaid him in cash.
4.4 Mr. Mehta submitted that in view of the order passed by learned Single Judge remanding the matter to the appropriate authority to proceed further with the departmental inquiry from the stage prior to 27.05.2002 after giving sufficient Page 16 of 47 19 of 50 C/LPA/952/2009 JUDGMENT opportunity to respondent no. 1 to defend her case, the Disciplinary Authority is free to produce the documents in question before the Inquiry Officer in order to substantiate the charges levelled against her. He submitted that merely by producing the same on record of this appeal, gross illegality committed by the appellants cannot be brushed aside.
4.5 Mr. Mehta has drawn the attention of this Court to paragraph 20 of the impugned order and submitted that considering the same and by not affording any opportunity to respondent no.1 there is gross violation of principles of natural justice which has resulted into serious prejudice to respondent no. 1 and therefore this Court may not interfere in the present appeal.
4.6 Mr. Mehta has relied upon the following decisions in order to substantiate his contentions:
(i) South Bengal State Transport Corporation vs. Swapan Kumar Mitra and Others reported in AIR 2006 SC 3533 more particularly paras 13, 19 & 20 which read as under:
"13. In view of the Constitution Bench decision of this Court, as referred to herein earlier, we, therefore, cannot have any dispute that the respondent No. 1 was entitled to a copy of the inquiry report, report of the District Magistrate and all allied documents, including depositions of witnesses relied on by the District Magistrate. What should be the effect of non- supply of copies of these documents to respondent No. 1 ? Was it open to the Court to set aside the order of removal, quash the departmental proceedings and order reinstatement mechanically on the ground that the Page 17 of 47 20 of 50 C/LPA/952/2009 JUDGMENT copies of documents, as referred to herein earlier, were not supplied to the respondent No. 1 or a direction be give to the disciplinary authority, as was done by the learned Single Judge to supply copes of the documents and then permit the delinquent employee to make a representation or to file a comment on the same and thereafter to proceed from that stage to reach a fresh conclusion on the question of removal from service of Respondent No. 1 after taking into consideration the comments made by him and also the inquiry report and other evidences placed before the disciplinary authority. This aspect was also taken into consideration by the Consitition Bench of this Court in the case of Managing Director ECIL (supra) and it was held as under:
``The next question to be answered is what is the effect on the order of punishment when the report of the Inquiry Officer is not furnished to the employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non-furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back-wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to upholds the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to, stretching the Page 18 of 47 21 of 50 C/LPA/952/2009 JUDGMENT concept of justice to illogical and exasperating limits. It amounts to an ``unnatural expansion of natural justice'' which in itself is antithetical to justice.
Hence, in all cases where the Inquiry Officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court/Tribunal, and give the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment. The Court/Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short-cuts. Since it is the Courts/Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Courts/Tribunals find that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment. Where after following the above procedure, the Court/Tribunal sets aside the order of punishment, the proper relief that should be granted is to direct reinstatement of the employee with liberty to the authority/management to proceed with the inquiry, by placing the employee under suspension and continuing the inquiry from the stage of furnishing him with the report. The question whether the employee would be entitled to the back-wages and other benefits from the date of his dismissal to the date of his reinstatement if ultimately ordered should invariably be left to be Page 19 of 47 22 of 50 C/LPA/952/2009 JUDGMENT decided by the authority concerned according to law, after the culmination of the proceedings and depending on the final outcome. If the employee succeeds in the fresh inquiry and is directed to be reinstated, the authority should be at liberty to decide according to law how it will treat the period from the date of dismissal till the reinstatement and to what benefits, if any and the extent of the benefits, he will be entitled. The reinstatement made as a result of the setting aside of the inquiry for failure to furnish the report should be treated as a reinstatement for the purpose of holding the fresh inquiry from the stage of furnishing the report and no more, where such fresh inquiry is held. That will also be the correct position in law.'' (Emphasis supplied).
19. There is yet another aspect which is to be considered by us before we conclude this judgment. From a bare perusal of the order of the Division Bench, we find that the Division Bench also found that the findings of the disciplinary authority in passing the order of removal were perverse. We are unable to agree with this view of the Division Bench. In Roshan Di Hatti v. Commissioner of Income-tax, Delhi, [1977] 2 SCC 378, this Court, while considering the question of perversity of a finding, held that when the finding of fact was arrived at without any material or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law would have come to that determination, the decision can be said to be perverse. It is, however, true that if perversity is shown and proved, it would be open to the Writ Court to hold as such. But, in our view, this was not a case of perverse finding. It appears that disciplinary authority on consideration of the reports of the Inquiry Officer and the District Magistrate and evidences adduced before them, came to a conclusion of fact that it was due to rash and negligent driving of the respondent No. 1, the accident had occurred and as a result of this, 15 lives were lost and some passengers were seriously injured. However, it cannot be said that for non Page 20 of 47 23 of 50 C/LPA/952/2009 JUDGMENT supply of the inquiry report, it can legitimately be held that such a finding of the disciplinary authority was perverse in nature. In any view of the matter, when copies of the inquiry report have ben directed, by the learned Single Judge, to be supplied to the respondent No. 1, and thereafter the departmental proceedings to continue thereas no earthy reason for the Division Bench to interfere with such an order and decide the matter by going into the merits and direct quashing of the departmental proceeding at the appellate stage.
20. The decision in Kuldeep Singh v.
Commissioner of Police, [1999] 2 SCC 10 as relied on by Mr. Ganguly appearing for the respondent No. 1 in the question of perversity of the finding is, in our view, not at all applicable in view of our finding made hereinafter. Therefore, on his account also, the findings of the Division Bench on the question of perversity cannot, at all, be accepted and therefore liable to be set aside.
(i) Managing Director, ECIL, Hyderabad etc. vs. B. Karunakar etc. reported in AIR 1994 SC 1074 more particularly paras 7 and 9 which read as under:
7. What emerges from the above survey of the law on the subject is as follows:
Since the Government of India Act, 1935 till the 42nd Amendment of the Constitution, the Government servant had always the right to receive report of the Inquiry Officer/authority and to represent against the findings recorded in it when the Inquiry Officer/authority was not the disciplinary authority. This right was however, exercisable by him at the second stage of the disciplinary proceedings viz., when he was served with a notice to show cause against the proposed penalty. The issuance of the notice to show cause against the penalty necessarily required the furnishing of a copy of the inquiry Officer's report Page 21 of 47 24 of 50 C/LPA/952/2009 JUDGMENT since, as held by the Courts, the right to show cause against the penalty also implied the right to represent against the findings on the charges. This was considered to be an essential part of the reasonable opportunity, incorporated earlier in Section 240 (3) of the GOI Act and later in Article 311(2) of the Constitution as originally enacted.
The right to receive the Inquiry Officer's report and to show cause against the findings in the report was independent of the right to show cause against the penalty proposed. The two rights came to be confused with each other bacause as the law stood prior to the 42nd Amendment of the Constitution, the two rights arose simultaneously only at the stage when a notice to show cause against the proposed penalty was issued. If the disciplinary authority after considering the Inquiry Officer's report had dropped the proceedings or had decided to impose a penalty other than that of dismissal, removal or reduction in rank, there was no occasion for issuance of the notice to show cause against the proposed penalty. In that case, the employee had neither the right to receive the report and represent against the finding of guilt nor the right to show cause against the proposed penalty. The right to receive the report and to represent against the findings recorded in it was thus inextricably connected with the acceptance of the report by the disciplinary authority and the nature of the penalty proposed. Since the 42nd Amendment of the Constitution dispensed with the issuance of the notice to show cause against the penalty proposed even if it was dismissal, removal or reduction in rank, some courts took the view that the Government servant was deprived of his right to represent against the findings of guilt as well. The error occurred on account of the failure to distinguish the two rights which were independent of each other.
While the right to represent against the findings in the report is part of the reasonable opportunity available during the first stage of the inquiry viz., before the disciplinary authority takes into consideration the findings in the report. the right to show cause against the penalty proposed Page 22 of 47 25 of 50 C/LPA/952/2009 JUDGMENT belongs to the second stage when the disciplinary authority has considered the findings in the report and has come to the conclusion with regard to the guilt of the employee and proposes to award penalty on the basis of its conclusions. The first right is the right to prove innocence. The second right is to plead for either no penalty or a lesser penalty although the conclusion regarding the guilt is accepted. It is the second right exercisable at the second stage which was taken away by the 42nd Amendment.
The reason why the right to receive the report of the Inquiry Officer is considered an essential part of the reasonable opportunity it the first stage and also a principle of natural justice is that the findings recorded by the Inquiry Officer form an important material before the disciplinary authority which along with the evidence is taken into consideration by it to come to its conclusions. It is difficult to say in advance, to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions. The findings further might have been recorded without considering the relevant evidence on record, or by misconstruing it or unsupported by it. If such a finding is to be one of the documents to be considered by the disciplinary authority, the principles of natural justice require that the employee should have a fair opportunity to meet, explain and controvert it before he is condemned. It is the negation of the tenets of justice and a denial of fair opportunity to the employee to consider the findings recorded by a third party like the Inquiry Officer without giving the employee an opportunity to reply to it. Although it is true that the disciplinary authority is supposed to arrive at its own findings on the basis of the evidence recorded in the inquiry, it is also equally true that the disciplinary authority takes into consideration the findings recorded by the Inquiry Officer along with the evidence on record. In the circumstances, the findings of the Inquiry Officer do constitute an important material before the disciplinary authority which is likely to Page 23 of 47 26 of 50 C/LPA/952/2009 JUDGMENT influence its conclusions. If the Inquiry Officer were only to record the evidence and forward the same to the disciplinary authority, that would not constitute any additional material before the disciplinary authority of which the delinquent employee has no knowledge. However, when the Inquiry Officer goes further and records his findings, as stated above, which may or may not be based on the evidence on record or are contrary to the same or in ignorance of it, such findings are an additional material unknown to the employee but are taken into consideration by the disciplinary, authority while arriving at its conclusion. Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary, authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the Inquiry Officer's findings. The disciplinary authority is then required to consider the evidence, the report of the Inquiry Officer and the representation of the employee against it.
It will thus be seen that where the Inquiry Officer is other than the disciplinary authority, the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusions on the basis of the evidence, Inquiry Officer's report and the delinquent employee's reply to it. The second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. If the disciplinary authority decides to drop the disciplinary proceedings, the second stage is not even reached. The employee's right to receive the report is thus, a part of the reasonable opportunity of defending himself in the first stage of the inquiry. If this right is denied to him, he is in effect denied the right to defend himself and to prove his innocence in the disciplinary proceedings.
The position in law can also be looked at from a slightly different angle. Article 311(2) says that the employee shall be given a "reasonable opportunity of being heard in respect of the charges against him". The findings on the charges given by a third person like the enquiry Officer, Page 24 of 47 27 of 50 C/LPA/952/2009 JUDGMENT particularly when they are not borne out by the evidence or are arrived at by overlooking the evidence or misconstruing it, could themselves constitute new unwarranted imputations. What is further, when the proviso to the said Article states that "where it is proposed after such inquiry to impose upon him any such penalty such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed", it in effect accepts two successive stages of differing scope. Since the penalty is to be proposed after the inquiry, which inquiry in effect is to be carried out by the disciplinary authority (the Inquiry Officer being only his delegate appointed to hold the inquiry and to assist him), the employee's reply to the Inquiry Officer's report and consideration of such reply by the disciplinary authority also constitute an integral part of such inquiry. The second stage follows the inquiry so carried out and it consists of the issuance of the notice to show cause against the proposed penalty and of considering the reply to the notice and deciding upon the penalty. What is dispensed with is the opportunity of making representation on the penalty proposed and not of opportunity of making representation on the report of the Inquiry Officer. The latter right was always there. But before the 42nd Amendment of the Constitution, the point of time at which it was to be exercised had stood deferred till the second stage viz., the stage of considering the penalty. Till that time, the conclusions that the disciplinary authority might have arrived at both with regard to the guilt of the employee and the penalty to be imposed were only tentative. All that has happened after the 42nd Amendment of the Constitution is to advance the point of time at which the representation of the employee against the enquiry Officer's report would be considered. Now, the disciplinary authority has to consider the representation of the employee against the report before it arrives at its conclusion with regard to his guilt or innocence of the charges.
Page 25 of 47
28 of 50
C/LPA/952/2009 JUDGMENT
Hence it has to be held that when the Inquiry Officer is not the disciplinary authority, the delinquent employee has right to receive a copy of the inquiry Officer's report before the disciplinary authority arrives at its conclusions with regard to the guilt or innocence of the employee with regard to the charges levelled against him. That right is a part of the employee's right to defend himself against the charges levelled against him. A denial of the Inquiry Officer's report before the disciplinary authority takes its decision on the charges is a denial of reasonable opportunity to the employee to prove his innocence and is a breach of the principles of natural justice.
Hence the incidental questions raised above may be answered as follows:
(i) Since the denial of the report of the Inquiry Officer is a denial of reasonable opportunity and a breach of the principles of natural justice, it follows that the statutory rules, if any, which deny the report to the employee are against the principles of natural justice and, therefore, invalid. The delinquent employee will, therefore, be entitled to a copy of the report even if the statutory rules do not permit the furnishing of the report or are silent on the subject.
(ii) The relevant portion of Article 311(2) of the Constitution is as follows:
"(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges."
Thus the Article makes it obligatory to hold an inquiry before the employee is dismissed or removed or reduced in rank. The Article, however, cannot be construed to mean that it prevents or prohibits the inquiry when punishment other than that of dismissal, removal or reduction in rank is awarded. The procedure to be followed in awarding other punishments is laid down in the service rules governing the employee. What is further, Article 311(2) applies only to members of the civil services Page 26 of 47 29 of 50 C/LPA/952/2009 JUDGMENT of the Union or an all India service or a civil service of a State or to the holders of the civil posts under the Union or a State. In the matter of all punishments both Government servants and others are governed by their service rules. Whenever, therefore, the service rules contemplate an inquiry before a punishment is awarded, and when the Inquiry Officer is not the disciplinary authority the delinquent employee will have the right to receive the Inquiry Officer's report notwithstanding the nature of the punishment.
(iii) Since it is the right of the employee to, have the report to defend himself effectively, and he would not know in advance whether the report is in his favour or against him, it will not be proper to construe his failure to ask for the report, as the waiver of his right. Whether, therefore, the employee asks for the, report or not, the report has to be furnished to him.
(iv) In the view that we have taken, viz., that the right to make representation to the disciplinary authority against the findings recorded in the inquiry report is an integral part of the opportunity of defence against the charges and is a breach of principles of natural justice to deny the said right, it is only appropriate that the law laid down in Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra) should apply to employees in all establishments whether Government or non- Government, public or private. This will be the case whether there are rules governing the disciplinary proceeding or not and whether they expressly prohibit the furnishing of the copy of the report or are silent on the subject. Whatever the nature of punishment, further, whenever the rules require an inquiry to be held, for inflicting the punishment in question, the delinquent employee should have the benefit of the report of the Inquiry Officer before the disciplinary authority records its findings on the charges levelled against him. Hence question
(iv) is answered accordingly.
(v) The next question to be answered is what is the effect on the order of punishment when the report of the Inquiry Officer is not furnished to the Page 27 of 47 30 of 50 C/LPA/952/2009 JUDGMENT employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non- furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back-wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to a "unnatural expansion of natural justice" which in itself is antithetical to justice.
Hence, in all cases where the Inquiry Officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court! Tribunal, and give the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court., Tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the Court/Tribunal should not interfere with the order of punishment.
Page 28 of 47
31 of 50
C/LPA/952/2009 JUDGMENT
The Court/Tribunal should nut mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short-cuts. Since it is the Courts/ Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Courts/ Tribunals find that the furnishing of the report would have made a: difference to the result in the case that should set aside the order of punishment Where after following the above procedure the Courts/Tribunals sets aside the order of punishment, the proper relief that should be granted is to direct reinstatement of the employee with liberty to the authority, management to proceed with the inquiry, by placing the employee under suspension and continuing the inquiry from the stage of furnishing him with the report. The question whether the employee would be entitled to the back-wages and other benefits from the date of his dismissal to the date of his reinstatement if ultimately ordered should invariably be left to be decided by the authority concerned according to law, after the culmination of the proceedings and depending on the final outcome. If the employee succeeds in the fresh inquiry and is directed to be reinstated, the authority should be at liberty to decide according to law how it will treat the period from the date of dismissal till the reinstatement and to what benefits, if any and the extent of the benefits, he will be entitled. The reinstatement made as a result of the setting aside of the inquiry for failure to furnish the report should be treated as a reinstatement for the purpose of holding the fresh inquiry from the stage of furnishing the report and no more, where such fresh inquiry is held. That will also be the correct position in law.
In this connection we may refer to a decision of this court in State Bank of India v. N. Sundara Money, (1976) 3 SCR 160: (AIR 1976 SC 1111) Page 29 of 47 32 of 50 C/LPA/952/2009 JUDGMENT where the Court has shown the proper course to be adopted where the termination of service of an employee is faulted on a technical ground. This was a case where an employee was appointed as Cashier off and on by the State Bank of India between July 31, 1973 and August 29. 1973. Together with the earlier employment, this nine days, employment during the said period had ripen into 240 days of broken bits of service. The employment, however, was terminated without notice or payment of retrenchment compensation. The Court moulded the relief taking into consideration the long period which had passed and directed that the employee would be put back to the same position where he left off, but his new salary will be what he would draw were he to be appointed in the same post "today" de novo. He was further directed to be ranked below all permanent employees in that cadre and to be deemed to be a temporary hand till that time. He was not allowed to claim any advantages in the matter of seniority. As for the emoluments, he was left to pursue other remedies, if any.
Questions (vi) and (vii) may be considered together. As has been discussed earlier, although the furnishing of the Inquiry Officer's report to the delinquent employee is a part of the reasonable opportunity available to him to defend himself against the charges. before 42nd Amendment of the Constitution, the stage at which the said opportunity became available to the employee had stood deferred till the second notice requiring him to show cause against the penalty was issued to him. The right to prove his innocence to the disciplinary authority was to be exercised by, the employee along with his right to show cause as to why no penalty or lesser penalty should be awarded. The proposition of law that the two rights were independent of each other and in fact belonged to two different stages in the inquiry came into sharp focus only after the 42nd Amendment of the Constitution which abolished the second stage of the inquiry, viz., the inquiry into the nature of punishment. As pointed out earlier, it was mooted but not decided in E. Page 30 of 47 33 of 50 C/LPA/952/2009 JUDGMENT Bashyan's case (AIR 1988 SC 1000) (supra) by the two learned Judges of this Court who referred the question to the larger Bench. lt has also been pointed out that in K. C. Asthana's case (AIR 1988 SC 1338) (supra), no such question was either raised or decided. It was for the first time in Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra) that the question squarely fell for decision before this Court. Hence till 20th November, 1990, i.e., the day on which Mohd. Ramzan Khan's case (supra) was decided, the position of law, on the subject was not settled by this Court. It is for the first time in Mohd. Ramzan Khan's case (supra) that this court laid down the law. That decision made the law, laid down there prospective in operation, i.e., applicable to the orders of punishment passed after 20th November, 1990. The law laid down was not applicable to the orders of punishment passed before that date notwithstanding the fact that the proceedings arising out of the same were pending in courts after that date. The said proceedings had to be decided according to the law prevalent prior to the said date which did not require the authority to supply a copy of the Inquiry Officer's report to the employee. The only exception to this was where the service rules with regard to the disciplinary proceedings themselves made it obligatory to supply a copy of the report to the employee.
However, it cannot be gainsaid that while Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra) made the law laid down there prospective in operation, while disposing of the cases which were before the Court, the Court through inadvertence gave relief to the employees concerned in those cases by allowing their appeals and setting aside the disciplinary proceedings. The relief granted was obviously per incuriam. The said relief has, therefore, to be confined only to the employees concerned in those appeals. The law which is expressly made prospective in operation there cannot be applied retrospectively on account of the said error. It is now well settled that the courts can make the law laid down by them prospective in operation to prevent unsettlement of Page 31 of 47 34 of 50 C/LPA/952/2009 JUDGMENT the settled positions, to prevent administrative chaos and to meet the ends of justice. In this connection, we may refer to some well-known decisions on the point.
In L. C. Golak Nath v. State of Punjab, (1967) 2 SCR 762 : (AIR 1967 SC 1643), dealing with the question as to whether the decision in that case should be given prospective or retrospective operation, the Court took into consideration the fact that between 1950 and 1967, as many as twenty amendments were made in the Constitution and the legislatures of various States had made laws bringing about an agrarian revolution in the country. These amendments and legislations were made on the basis of the correctness of the decisions in Sankari Prasad Singh Deo v. Union of India, 1952 SCR 89: (AIR 1951 SC 458) and Sajjan Singh v. State of Rajasthan, (1965) 1 SCR 933 :
(AIR 1965 SC 845) viz., that the Parliament had the power to amend the fundamental rights and that Acts in regard to estates were outside the judicial scrutiny on the ground they infringed the said rights. The Court then stated that as the highest Court in the land, it must evolve some reasonable principle to meet the said extraordinary situation. The Court pointed out that there was an essential distinction between the Constitution and the statutes. The Courts are expected to and they should interpret the terms of the Constitution without doing violence to the language to suit the expanding needs of the society. In this process and in a real sense, they make laws. Though it is not admitted, such role of this Court is effective and cannot be ignored. Even in the realm of ordinary statutes, the subtle working of the process is apparent though the approach is more conservative and inhibitive. To meet the then extraordinary situation that may be caused by the said decision, the Court felt that it must evolve some doctrine which had roots in reason and precedents so that the past may be preserved and the future protected. The Court then referred to two doctrines familiar to American Jurisprudence, viz., Blackstonian view that the Court was not to pronounce a new rule but to maintain and expound Page 32 of 47 35 of 50 C/LPA/952/2009 JUDGMENT the old one and, therefore, the Judge did not make law but only discovered or found the true law. That view would necessarily make the law laid down by the Courts retrospective in operation. The Court, therefore, preferred the opinion of Justice Cardozo which tried to harmonise the doctrine of prospective overruling with that of stare decisis expressed in Great Northern Railway v. Sunburst Oil and Ref. Co., (1932) 287 US 358, 77 Led 360.
The Court also referred to the decisions subsequent to Sunburst and to the "Practice Statement (Judicial Precedent)" issued by the House of Lords recorded in (1966) 1 WLR 1234 and pointed out that the modern doctrine as opposed to the Blackstonian theory was suitable for a fast moving society. It was a pragmatic solution reconciling the two doctrines. It found law but restricted its operation to the future and thus enabled the Court to bring about a smooth transition by correcting its errors without disturbing the impact of those errors on the past transactions. It was left to the discretion of the court to prescribe the limits of the retroactivity. There by, it enabled the court to mould the reliefs to meet the ends of justice. The Court then pointed out that there was no statutory prohibition against the Court refusing to give retroactivity to the law declared by it. The doctrine of res judicata precluded any scope for retroactivity in respect of a subject matter that had been finally decided between the parties. The Court pointed out that the Courts in this land also, by interpretation, reject retroactivity of statutory provisions though couched in general terms on the ground that they affect vested rights. The Court then referred to Articles 141 and 142 to point out that they are couched in such wide and elastic terms as to enable this Court to formulate legal doctrines to meet the ends of justice. The only limitation therein is reason, restraint and injustice. These Articles are designedly made comprehensive to enable the Supreme Court to declare law and to give such direction or pass such order as is necessary to do complete justice. The Court then held that in the circumstances to deny the power to the Supreme Court to declare the operation of law prospectively Page 33 of 47 36 of 50 C/LPA/952/2009 JUDGMENT on the basis of some outmoded theory that the Court only finds law but does not make it is to make ineffective a powerful instrument of justice placed in the hands of the highest judiciary of this land. The Court then observing that it was for the first time called upon to apply the doctrine of prospective overruling evolved in a different country under different circumstances, stated that it would like to move warily in the beginning. Proceeding further, the Court laid down the following propositions :
"(1) The doctrine of prospective overruling can be invoked only in matters arising under our Constitution (2) it can be applied only by the highest court of the country, i.e., the Supreme Court as it has the constitutional jurisdiction to declare law binding on all the courts in India; (3) the scope of the retroactive operation of the law declared by the Supreme Court superseding its earlier decisions is left to its discretion to be moulded in accordance with the justice of the cause or matter before it."
The Court then declared that the said decision will not affect the validity of the Constitution (Seventeenth Amendment) Act, 1964 or other amendments made to the Constitution taking away or abridging the fundamental rights. The Court also declared that in future Parliament will have no power to amend Part III of the Constitution so as to take away or abridge the fundamental rights.
Accepting the lead given in the above decision, this Court has since extended the doctrine to the interpretation of ordinary statutes as well.
In Waman Rao v. Union of India, (1981) 2 SCR 1 :
(AIR 1981 SC 271), the question involved was of the validity of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 and again the device of prospective overruling was resorted to. In Atam Prakash v. State of Haryana, (1986) 2 SCC 249 : (AIR 1986 SC 859), the question was of the validity of the Punjab Pre-emption Act, 1913. The Court while holding that the relevant provisions of Page 34 of 47
37 of 50 C/LPA/952/2009 JUDGMENT the Act were ultra vires the Constitution gave a direction that the suits and appeals which were pending in various courts will be disposed of in accordance with the declaration made in the said decision, Where, however, the decrees had become final they were directed to be binding inter partes and it was held that the declaration granted by the Court with regard to the invalidity of the provisions of the Act would be of no avail to the parties to such decree.
In Orissa Cement Ltd, v. State of Orissa, 1991 Supp 1 SCC 430: (AIR 1991 SC 1676), the question involved was about the validity of the royalty and related charges for mining leases. Although the Court held that the levy was invalid since its inception, the Court held that a finding regarding the invalidity of the levy need not automatically result in a direction for a refund of all collections thereof made earlier. The Court held that the declaration regarding the invalidity of a provision of the Act enabling levy and the determination of the relief to be granted were two different things and, in the latter sphere, the Court had, and it must be held to have, a certain amount of discretion. It is open to the Court to grant moulded or restricted relief in a manner most appropriate to the situation before it and in such a way as to advance the interest of justice. It is not always possible in all situations to give a logical and complete effect to a finding. On this view, the Court refused to give a direction to refund to the assessees any of the amounts of cess collected until the date of the decision since such refund would work hardship and injustice to the State. We may also in this connection refer to Victor Linkletter v. Victor G. Walker,(l965) 381 US 618 :14 Law ed 2d 601, where it was held that a ruling which is purely prospective does not apply even to the parties before the court. The Court held that in appropriate cases a court may in the interest of justice make its ruling prospective and this applies in the constitutional area where the exigencies of the situation require such an application.
The direction with regard to the prospective operation of the law laid down in Mohd. Ramzan Page 35 of 47 38 of 50 C/LPA/952/2009 JUDGMENT Khan's case (AIR 1991 SC 471) (supra) was followed by various Benches of this Court, viz., S. P. Viswanathan v. Union of India, (1991) Supp 2 SCC 269 : (1991 AIR SCW 730); Union of India v. A. K. Chatterjee (1993) 2 SCC 191 and Managing Director, Food Corporation of India v. Narendra Kumar Jam, (1993) 2 SCC 400.
The apparent departure was in R. K. Vashisht v. Union of India, (1993) Supp 1 SCC 431. However, the employee there had made a request for a copy of the inquiry report but it was not furnished to him prior to the issue of the order of dismissal. It is in these circumstances that this Court, relying upon the proposition of law laid down in Mohd. Ramzan Khan's case (AIR 1991 SC
471) (supra) held that the order of dismissal was vitiated. lt is not clear from the decision whether the rules in that case required furnishing of the copy and at what stage.
However, it has to be noticed that although it is in Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra) that this Court for the First time accepted and laid down the law that the delinquent employee is entitled to the copy of the report before the disciplinary authority takes its decision on the charges levelled against him, Gujarat High Court in a decision rendered on 18th July, 1985 in Dr. H. G. Patel v. Dr. (Mrs.) K. S. Parikh, (1985) (2) 26 Guj LR 1385 and a full Bench of the Central Administrative Tribunal in its decision rendered on 6-11-1987 in Premnath K. Sharma v. Union of India, (1988)2 ASLJ 449. had taken a similar view on the subject. It also appears that some High Courts and some Benches of the Central Administrative Tribunal have given retrospective effect to the law laid down in Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra) notwithstanding the fact that the said decision itself had expressly made the law prospective in operation. The fact, however, remains that although the judgments in H. G. Patel's case and Premnath K. Sharma's case (supra) as well as some of the decisions of the High Courts and of the Benches of the Central Administrative Tribunal were either taking a similar view prior to the Page 36 of 47 39 of 50 C/LPA/952/2009 JUDGMENT decision in Mohd. Ramzan Khan's case (supra) or giving retrospective effect to the said view and those decisions were not specifically challenged, the other decisions taking the same view were under challenge before this Court both before Mohd. Ramzan Khan's case (supra) was decided and thereafter. In fact as stated in the beginning, the reference to this Bench was made in one such case as late as on the 5th August, 1991 and the matters before us have raised the same question of law. It has, therefore, to be accepted that at least till this Court took the view in question in Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra), the law on the subject was in a flux. Indeed, it is contended on behalf of the appellants! petitioners before us that the law on the subject is not settled even till this day in view of the apparent conflict in decisions of this Court. The learned Judges who referred the matter to this Bench had also taken the same view. We have pointed out that there was no contradiction between the view taken in Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra) and the view taken by this court in the earlier cases, and the reliance placed on K. C. Asthana's case (AIR 1988 SC 1338) (supra) to contend that a contrary view was taken there was not well merited. It will, therefore, have to be held that notwithstanding the decision of the Central Administrative Tribunal in Premnath K. Sharma's case (1988 (2) ASLJ 449) (supra) and of the Gujarat High Court in H. G. Patel's case (1985 (2) 26 Guj LR 1385) (supra) and of the other courts and tribunals, the law was in an unsettled condition till at least 20th November, 1990 on which day the Mohd. Ramzan Khan's case was decided. Since the said decision made the law expressly prospective in operation the law laid down there will apply only to those orders of punishment which are passed by the disciplinary authority after 20th November, 1990. This is so, notwithstanding the ultimate relief which was granted there which, as pointed out earlier, was per incuriam. No order of punishment passed before that date would be challengeable on the ground that there was a failure to furnish the inquiry report to the delinquent employee. The proceedings pending in courts/tribunals in respect Page 37 of 47 40 of 50 C/LPA/952/2009 JUDGMENT of orders of punishment passed prior to 20th November, 1990 will have to be decided according to the law that prevailed prior to the said date and not according to the law laid down in Mohd. Ramzan Khan's case (AIR 1991 SC 471) (supra). This is so notwithstanding the view taken by the different benches of the Central Administrative Tribunal or by the High Courts or by this Court in R. K. Vashist's case, (1993 Supp (I) SCC 431) (supra).
(ii) Judgement of the Single Judge (K.S. Jhaveri, J.) of this Court dated 19.03.2010 passed in SCA No. 15128 of 2005.
5. It is well settled position of law that the power of judicial review may not be exercised unless the administrative decision is illogical or suffers from procedural impropriety or it shocks the conscience of the court in the sense that it is in defiance of logic or moral standards but no standardised formula, universally applicable to all cases, can be evolved. Each case has to be considered on its own facts, depending upon the authority that exercises the power, the source, the nature or scope of power and the indelible effects it generates in the operation of law or affects the individual or society. When a court is satisfied that there is an abuse or misuse of power, and its jurisdiction is invoked, it is incumbent on the court to intervene. It is nevertheless, trite that the scope of judicial review is limited to the deficiency in the decision- making process and not the decision.
5.1 Today, before this Court, is an institution which is run by the funds and grants received from the Government as well as donations received from the citizens at large and is providing Page 38 of 47 41 of 50 C/LPA/952/2009 JUDGMENT treatment to poor patients suffering from kidney ailments at subsidized rates. It is the case of the appellant that respondent no. 1 while working as Senior Clerk in the Institute connived with other employees of the Institute and put forth forged claims for group insurance amount from the Government Treasury in respect of so called husbands and misappropriated funds by encashing two cheques for the amount of Rs. 4,85,872/- and Rs. 4,94,320/- and thereby caused loss to the Government.
5.2 While going through the records we have reached to an irresistible conclusion that respondent no. 1 was a beneficiary of two death claims in two different names i.e. Dr. H.C. Vyas, R.M.O and Dr. H.D. Vyas, Assistant Professor and by forging the case papers showed them as employees of the Institute and herself to be the wife of these two persons. Respondent no. 1 received two cheques from the office of Treasury for the amounts of Rs. 4,85,872/- and Rs. 4,94,320/- and realised both the cheques as amount of group insurance though the said persons were neither employees of Institute nor husbands of appellant. In fact the husband of appellant is alive.
6. This Court vide order dated 24.02.2014 passed in Civil Application No. 2476 of 2013 allowed the appellant - applicant therein to produce additional evidence on record. It is pertinent to be noted that respondent no. 1 has not disputed the said documents. Pursuant to the said order, the appellant has produced documents showing respondent no. 1 as savings bank account holder of Central Bank of India, Chamanpura Branch, Ahmedabad bearing no. 17348, bank statement of Central Bank of India showing deposit of cheque Page 39 of 47 42 of 50 C/LPA/952/2009 JUDGMENT bearing no. 811270 into the account of respondent no. 1 for Rs. 4,94,320/- and withdrawal of the amount to the tune of Rs. 4,90,000/- by respondent no. 1 on 14.10.2004 by cheque no. 152294 drawn on self. The appellant has also produced bank statement of Union Bank of India, Asarwa Branch, Ahmedabad which gives details of savings bank account of respondent no. 1 and showing deposit of cheque for an amount of Rs. 4,85,872/- in the account of respondent no. 1. The bank statement also shows subsequent withdrawal of Rs. 1 lakh by respondent no. 1 on 11.10.2003 vide cheque no. 377635 drawn on Self and withdrawal of amount by issuance of cheques in the name of one Mr. Y.N. Pandya to the tune of Rs. 2.50 lakhs and Rs. 1.30 lakhs vide cheque nos. 377637 and 377636 respectively on 13.10.2003.
6.1 Respondent no. 1 has not disputed the credit into her account for the aforesaid amounts and her subsequent withdrawals as stated hereinabove. She has also not disputed the fact that her husband has never been employed by the appellant and that he is alive as on date. Respondent no. 1 has twice shown her husband as an employee of the appellant and twice received the above mentioned cheques towards group insurance amount after putting forged and fictitious claims and showing her husband as dead. She is also facing criminal trial for offences under section 406, 409, 420, 465, 467, 468, 471, 120B and 511 of Indian Penal Code. Had the respondent no. 1 not been guilty or involved in the alleged scam, she would have drawn the attention of the appellant or the treasury office about the deposit of the cheques in her account.
Page 40 of 47
43 of 50
C/LPA/952/2009 JUDGMENT
7. An attempt has been made by respondent no. 1 to take a plea that there was gross violation of principles of natural justice in conducting the departmental inquiry and in this regard reliance has also been placed on the impugned order passed by the learned Single Judge in the writ petition. It is an admitted position that the respondent was served with charge sheet on 06.04.2005 and was given sufficient time to reply. Respondent no. 1 did not rebut the charges of cheque amount received by her and in fact did not reply to the charge sheet for over a month. The competent authority therefore initiated departmental inquiry which was duly informed to her. Respondent no. 1 has not been able to show any actual bias at the hands of inquiry officer other than the fact that the inquiry was commenced ex-parte. It is required to be noted that respondent no. 1 had not sent any message as regards her arrest on 27.05.2005 as the same has not come on record. Respondent no. 1 has not been able to point out from the records that she had conveyed to the inquiry officer about the same or sought adjournment.
7.1 It is required to be noted that principles of natural justice are not embodied principles and they cannot be put in a straight jacket. The applicability of principles of natural justice depends upon the context and facts and circumstances of the case. Even if it is assumed that respondent no. 1 was not given chance to defend her case, it is required to be borne in mind that she at no point of time be it before the Disciplinary Authority, Appellate Authority, learned Single Judge or this Court was in a position to explain the deposit of two cheques in her bank account and the subsequent withdrawals of the said amounts. No explanation has come Page 41 of 47 44 of 50 C/LPA/952/2009 JUDGMENT forth as to why respondent no. 1 had allowed deposit of the two cheques from the Treasury Office into her account and withdrawn the same. Considering the gravity of misconduct and the respondent no. 1 being guilty of criminal breach of trust and the appellant having lost confidence in her, she was served with order of dismissal.
7.2 Respondent no. 1 has been arraigned as accused no. 6 in the chargesheet filed by CID, Crime before the competent court. She is prima facie found involved in offences relating to forgery, forgery for the purpose of cheating, criminal breach of trust, falsification of accounts, cheating etc. The case on hand is not one where the service of the respondent came to be terminated without issuing chargesheet and subsequent departmental inquiry. This case reveals that charge sheet was served on respondent, she was given sufficient opportunity to file her reply thereto. For reasons best known to her, she chose not to file reply to the show- cause notice and allowed departmental inquiry to proceed ex- parte. There is nothing on record from which we can agree with the submissions of learned Senior Counsel, Mr. Shalin Mehta that there is infraction of principles of natural justice.
8. At this juncture, it shall be relevant to peruse the observations made by the Apex Court in the case of State Bank of India and Others (supra) wherein it is held that in an ex parte inquiry, if the charges are borne out from documents kept in the normal course of business, no oral evidence is necessary to prove those charges and that when the charged officer does not attend the inquiry, he cannot contend that the Inquiring Authority should not have relied upon the Page 42 of 47 45 of 50 C/LPA/952/2009 JUDGMENT documents which were not made available or disclosed to him and that even in an ex parte inquiry, some evidence is necessary to establish the charges, especially when the charged officer denies the charges, uncontroverted documentary evidence in such situation is sufficient to prove the charges.
8.1 Similarly it shall also be relevant to peruse the observations made by the Apex Court in the case of United Planters Association of Southern India (supra), the Apex Court has observed as under:
"9. It was next contended by the counsel for the appellant that the appellate Authority before whom an application to produce the evidence was filed should have allowed the charges levelled against the respondent as the Appellate Authority has jurisdiction and power to record evidence at the appellate stage as provided by section 41(2) read with Rule 9(3) or this Tamil Nadu shops a Establishments Rules 1943 learned counsel for the respondent has on the contrary contended that if an opportunity of hearing was not given to the respondent at the initial stage during the domestic enquiry the defect cannot be cured by giving him that opportunity at the appellate stage and therefore even if application to lead fresh evidence was not disposed of by the Appellate Authority it would not vitiate the order of that authority.
27. In the instant case the appellant has contended that the respondent did not participate in the domestic enquiry in spite of an opportunity of hearing having been provided to him. He was also offered the inspection of the document but he did not avail of that opportunity. He himself invoked the jurisdiction of the Appellate Authority and the order of dismissal passed against him was set aside on the ground that the appellant did not hold any domestic enquiry. it has already been Page 43 of 47 46 of 50 C/LPA/952/2009 JUDGMENT seen above that the Appellate Authority has to come to its own conclusion on the guilt of the employee concerned. since the Appellate Authority has to come to its own conclusion on the basis of he evidence recorded but, irrespective of the findings recorded in the domestic enquiry the rule laid down in Ratna's case (supra) will not strictly apply and the opportunity of hearing which is being provided to the respondent at the appellate stage will sufficiently meet his demands for a just and proper enquiry."
8.3 In the case of Channabasappa Basappa Happali vs. The State of Mysore reported in AIR 1972 SC 32, the Apex Court has held as under:
"5. It was contended on the basis of the ruling reported in Regina v.Durham Quarter Sessions Ex- parte Virgo(1) that on the facts admitted in the present case, a plea of guilty ought not to be entered upon the record and a plea of not guilty entered instead. Under the English law, a plea of guilty has to he unequivocal and the court must ask the person and of' the plea of guilty is qualified the Court must not enter a plea of guilty but one of not guilty. The police constable here was not on his trial for a criminal offence. It was a departmental enquiry, on facts of which due notice was given to him. He admitted the facts. In fact his counsel argued before us that he admitted the facts but not his guilt. We do not see any distinction between Admission of facts and admission of guilt. When he admitted the facts, he was guilty. The facts speak for themselves. It was-,a clear case of indiscipline and nothing less. If a police officer remains absent without leave and also resorts to fast as a demonstration against the action of the superior officer the indiscipline is fully established. The learned Single Judge in the High Court was right when he laid down that the plea amounted to a plea of guilty on the facts on which the petitioner was charged and we are in full agreement with the observations of the learned, Single Judge.
Page 44 of 47
47 of 50
C/LPA/952/2009 JUDGMENT
7. The learned counsel for the appellant further relied upon a ruling of this Court in Jagdish Prasad Saxena v. The State of Madhya Bharat [now Madhya Pradesh(2).That case is absolutely distinguishable. There are of course certain general observations about the importance of a departmental enquiry and how it should be conducted. We have here a clear case of a person who admitted the facts and did not wish to cross- examine any witness or lead evidence on his own behalf. He only stated that his acts should be adjudged on the basis of the documents which were in the case-. This was done and there cannot be a complaint that the depar tmental enquiry was either one-sided or not fair. On the whole therefore we are satisfied that the appellant was properly adjudged guilty of indiscipline in the departmental enquiry and the order of dismissal which was passed against him was merited. In view of the fact that we are satisfied that the appellant is one of those persons who thinks that other people in the world have to be corrected and that perhaps he is one who is impelled by his own thoughts, we think that the ends of justice would be served by not awarding costs against him. With these observations, we dismiss the appeal."
9. Going by the peculiar facts and circumstances of the case, we are of the opinion that considering that it is an admitted position that respondent no . 1 could not attend the departmental inquiry as she was in judicial custody and the fact that there has been considerable evidence on record which have not been disputed by respondent no. 1 with regard to deposit of cheques, withdrawal of amount, her husband still being alive etc we think it fit that the punishment of dismissal from service if converted to termination simplicitor shall meet the ends of justice.
Page 45 of 47
48 of 50
C/LPA/952/2009 JUDGMENT
10. It shall not be out of place to mention that this Court, considering the peculiar facts and circumstances of this case, at the outset had suggested respondent no. 1 to accept penalty of termination simplicitor. Even Mr. Mehta, learned Senior Counsel appearing for respondent no. 1 accepts that such an order would be in the interest of both the sides. However, respondent no. 1 was very adamant and did not accept the suggestion of this Court pursuant to which the matter was adjourned time and again for hearing. However, considering the interest of the parties, we have thought it fit to pass the following order.
11. In the premises aforesaid, appeal is partly allowed. The punishment of dismissal from service is hereby converted to termination simplicitor with effect from 06.06.2005. The impugned orders are modified to the aforesaid extent. Any retirement dues or amount if entitled by respondent no. 1 shall be paid after deducting the amount forged by respondent no. 1 within a period of one month from today. The amount of Provident Fund which is required to be paid to respondent no. 1 shall be paid to her and both the sides shall co-operate for the withdrawal as pension scheme is not applicable to the appellant institution. It is clarified that this judgement may not be treated as a precedent in view of the fact that the order is passed on the peculiar facts and circumstances of the present case. It is also clarified that the criminal trial shall not be influenced by the observations made by this Court in this appeal.
(K.S.JHAVERI, J.)
Page 46 of 47
49 of 50
C/LPA/952/2009 JUDGMENT
(A.G.URAIZEE,J)
divya
Page 47 of 47
50 of 50