Supreme Court of India
CHAMOLI DISTRICT CO-OPERATIVE BANK LTD. THROUGH ITS SECRETARY/ MAHAPRANDHAK & ANR.versusRAGHUNATH SINGH RANA & ORS.
- Citation
- 2016 INSC 430
- Decided
- 17 May 2016
- Disposal
- Dismissed
- Bench
- ABHAY MANOHAR SAPRE
Holding
The Supreme Court held that dismissal without a statutorily mandated disciplinary inquiry violating Regulation 85 and natural‑justice principles is invalid, and the dismissal order was rightly quashed.
Summary
The Chamoli District Co-operative Bank dismissed its Branch Manager, Raghunath Singh Rana, after issuing a fresh charge‑sheet in 1993 without conducting a disciplinary inquiry as required by Regulation 85 of the Uttar Pradesh Co‑operative Societies Employees Service Regulations, 1975. The employee challenged the dismissal in a writ petition, arguing that the principles of natural justice and the statutory procedure were violated. The High Court quashed the dismissal, holding that no inquiry had been held and directed the bank to conduct a fresh inquiry within six months. On appeal, the Supreme Court affirmed that the disciplinary inquiry is mandatory and that a penalty, especially dismissal, cannot be imposed without complying with the statutory regulations and natural‑justice requirements. Consequently, the Court dismissed the appeal, leaving the High Court’s order intact and allowing the bank to hold a de‑novo inquiry.
Issues considered
- Whether dismissal of an employee without conducting a disciplinary inquiry as mandated by Regulation 85 is legally valid.
- Whether the principles of natural justice are mandatory under the Uttar Pradesh Co‑operative Societies Employees Service Regulations, 1975.
- Whether a penalty of dismissal can be imposed without compliance with statutory procedural requirements.
- Whether the High Court's order quashing the dismissal should be upheld.
Legislation cited
- Uttar Pradesh Co-operative Societies Act, 1965
- Uttar Pradesh Co-operative Societies Employees Service Regulations, 1975s. Regulation 84, s. Regulation 85, s. Regulation 86
Subjects
disciplinary inquirynatural justiceservice regulationsdismissalco-operative bankRegulation 85de novo inquiryprocedural fairness
Judgment
[2016] 7 S.C.R. 86
A CHAMOLI DISTRICT CO-OPERATIVE BANK LTD. THROUGH
ITS SECRETARY/ MAHAPRANDHAK & ANR.
v.
RAGHUNATH SINGH RANA & ORS.
B (Civil Appeal No. 2265of2011)
MAY 17,2016
[ABHAY MANOHAR SAPRE AND ASHOK BHUSHAN, JJ.)
Service Law - Disciplinary Proceedings - Non-holding of
inquiry - Effect of - Dismissal from service - Challenged in writ
c petition - Dismissal order quashed by High Court - On appeal,
held: Conducting of inquiry was mandatory as per the service
regulations - Thus, in view of specific statutory rules, compliance
of principles of natural justice was mandatory - A penalty cannot
be imposed without following the statutory provisions governing
D the disciplinary proceedings and principles of natural justice - Facts
of the present case show that no inquiry was conducted - Therefore,
dismissal order was rightly quashed by High Court - Employer is at
liberty to proceed with disciplinmy inquiry de-novo - Ut1ar Pradesh
Co-operative Societies Employees Service Regulations, 1975 -
Regn. 85 - Principles of Natural Justice.
E
Dismissing the appeal, the Court
HELD: 1. Regulation 85 of Uttar Pradesh Co-operative
Societies Employees Service Regulations, 1975 is a statutory
Regulation according to which an opportunity to the employee to
F produce at his own cost or to cross-examine witnesses in his
defence and shall also be given an opportunity of being heard in
person, if he so desires. Regulation 85 (i)(b) specifically mandates
the said requirements. [Para 14) (94-E-F)
2. Conducting of an inquiry was murulutory and without
G conducting of an inquiry and without any inquiry report having
been served on the employee/respondent No.1, Disciplinary
Authority could not have proceeded to impose any punishment.
The compliance of principles of natural justice by the appellant-
Bank is not a mere formality,· more so when the statutory
provisions specifically provide that disciplinary proceedings shall
H
86
CHAMOLI DISTI. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK 87
v. RAGHUNATH SINGH RANA
be conducted with due observations of the principles of natural A
justice. Even where there are no specific statutory rule requiring
observance of natural justice, the compliance of natural justice is
necessary. [Paras 18, 19] (95-C-D]
Sur Enamel and Stamping Works Pvt. Ltd. v. Their
Workmen (1964) 3 SCR 616; State Bank of India v. 8
R.K. Jain and Ors. 1972 (1) SCR 755 : (1972) 4 SCC
304; State of Uttranchal & Ors. v. Kharak Singh 2008
(12) SCR 54 : (2008) 8 SCC 236; ECIL v. B. Karunakar
1993 (2) Suppl. SCR 576 : (1993) 4 SCC 727; Radhey
Shyam Gupta v. UP. State Agro Industries Corporation
Ltd. And Another 1998 (3) Suppl. SCR 558 : (1999) 2 c
SCC 21; Syndicate Bank and Others v. Venkatesh
Gururao Kurati 2006 (1) SCR 920 : (2006) 3 SCC
150 - relied on.
3. Imposing of any penalty on an employee of the employer-
bank, that too major penalty of dismissal from service, can only D
be done after following the statutory provisions governing the
disciplinary proceedings. [Para 17) [95-A)
4. From the pleadings and the materials on record, it is
clear that no inquiry was conducted by the employer-Bank in
conformity with Regulation 85 (i)(b) after issuance of charge-sheet E
dated 16.01.1993. The High Court has set aside the dismissal
order after coming to the conclusion that without holding an
inquiry the employee/respondent No.I has been dismissed. No
materials have been brought in the appeal to indicate that any
inquiry was conducted or inquiry report was submitted subsequent
F
to the charge-sheet dated 16.01.1993. [Para 15) (94-F-G)
5. The High Court has rightly quashed the dismissal order
by giving liberty to the Bank to hold de-novo inquiry within a
period of six months, if it so desires. The Bank shall be at liberty
to proceed with the Disciplinary Inquiry as per directions of the
G
High Court. [Para 22) (101-D-E)
Case Law Reference
(1964) 3 SCR 616 relied on Para 19
1972 (1) SCR 755 relied on Para20
2008 (12) SCR 54 relied on Para 21 H
88 SUPREME COURT REPORTS [2016] 7 S.C.R.
A 1993 (2) Suppl. SCR 576 relied on Para 21
1998 (3) Suppl. SCR 558 relied on Para 21
2006 (1) SCR 920 relied on Para 21
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2265
of201 l.
B From the Judgment and Order dated 01.12.20 I 0 in Writ Petition
(S/B) No. 159 of 2002 passed by the High Court of Uttarakhand at
Nainital.
Subramaniam Prasad, Sr. Adv., Nagendra Singh, Vishwa Pal Singh,
Himanshu Pal, Advs. for the Appellants.
c K. Raghavacharyulu, Kailash Pandey, Ranjeet Singh, Arindam
Dey, Himanshu Nailwal, K.V. Sreekumar, Advs. for the Respondents.
The judgment of the Court was delivered by
ASHOK BHUSHAN, J. I. This appeal has been filed against
the order dated 01.12.20 I 0 of the Division Bench of the High Court of
D Uttrakhand by which judgment, the writ petition filed by the respondent-
Raghunath Singh Rana has been disposed of after quashing the dismissal
order dated 01.02.2002. Aggrieved by the judgment, the Chamoli District
Co-operative Ltd., is in appeal before this Court.
The short facts necessary for deciding this appeal are: the Chamoli
E District Co-operative Bank Ltd. (hereinafter referred to as 'the appellant/
Bank') is a District Co-operative Bank registered under the U.P. Co-
operative Societies Act, 1965 (hereinafter referred to as 'the Act'). The
Raghunath Singh Rana, respondent No. I (hereinafter referred to as 'the
employee/Respondent No. I') at the relevant time, was working as a
F Branch Manager at Ghat Branch of the Chamoli District. A charge sheet
dated 03.07.1992 was issued to the employee leveling 19 charges against
him. The employee/respondent No. I was asked to reply upto 3rd August,
1992. There was allegation against the employee/respondent No. I that
he made payments to the bearers of cheques without its prior collection
and made payment to the bearer of the cheque, causing loss to the
G appellant/Bank. Further charges were that he had not taken any action
against the persons concerned and had thus committed serious
irregularities. Another set of charges were imputation that the respondent-
employee has issued overdrafts/loans against the provision of the Act.
2. The employee/respondent No. I submitted a reply on 31.07.1992
H denying the allegations. On 05.8.1992, an Inquiry Officer was appointed
CHAMOLI DISTT. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK 89
v. RAGHUNATH SINGH RANA [ASHOK BHUSHAN, J.]
to conduct the inquiry. The Inquiry Officer also submitted a report on A
21.09.1992. The employee/respondent No. l was placed under suspension
by order dated 21.10.1992. No further steps were taken on the inquiry
report dated 21.09.1992. However, a fresh charge sheet containing the
charges which were levelled in the charge sheet dated 03.07.1992 as
well as six additional charges was issued on 16.01.1993. The employee/
B
respondent No. I submitted a reply dated 04.02.1993 to the charge sheet
denying the allegations. After submission of the reply by the employee/
respondent No. I, a show-cause notice was issued to the petitioner by
the District Co-operative Bank Ltd. dated 04.05 .1993 asking the
employee/respondent No. I to submit a reply, failing which action under
Regulation 84 of the U.P. Co-operative Societies Employees Service c
Regulations Act, 1975 was to be taken. The Disciplinary Authority passed
a Resolution dated 11.07 .2000 that charges against the employee/
respondent No. I have been proved and further action to be taken. The
Disciplinary Authority passed an order on 01.02.2002, dismissing the
employee/respondent No. I with immediate effect. Aggrieved by dismissal
D
order, writ petition was filed by the employee-respondent No. I praying
for quashing the order dated 01.02.2002 with further prayer that
employee/respondent No. I be reinstated in service with full back wages
and salary.
3. The employee/respondent No. I's case in the writ petition was
that after receipt of the charge sheet dated 18.01.1993, reply was E
submitted by the employee but without holding an inquiry, the Disciplinary
Authority took a decision to dismiss the petition. No Inquiry have been
held as provided by statutory regulations, hence, the entire proceedings
are liable to be set aside.
4. The appellant-Bank filed a counter affidavit in the writ petition. F
In the counter affidavit no inquiry report subsequent to charge sheet
dated 18.01.1993 was referred to.
5. The Division Bench of the High Cou11 heard the matter and
vide judgment dated 01.12.2010 quashed the dismissal order. The Division
Bench took the view that dismissal orders have been passed without G
holding an inquiry which deserves to be set aside.
6. Learned senior counsel appearing for the appellant-Bank
contends that Inquiry Officer had issued a letter dated 11.09.1992 to the
employee/respondent No. I asking the employee/respondent No. I to
appear on 18.09.1992 at I 0.00 AM, but employee/respondent No. I failed H
90 SUPREME COURT REPORTS [2016] 7 S.C.R.
A to appear in the inquiry, hence, the view of the High court that no inquiry
was held is not correct. He further submits that inquiry report dated
21.09.1992 was submitted by the Inquiry Officer which has been brought
on record as Annexure P3. Learned counsel for the appellant-Bank
further submits that there were serious allegations against the employee/
respondent No. I on the basis of which the employee/respondent No. I
B
was dismissed from service.
7. It is further contended that First Information Reports have been
lodged against the employee/respondent No. l and criminal cases are
pending.
c 8. We have considered the submissions and perused the record.
9. The statutory regulations have been framed under the Act,
namely, U.P. Co-operative Societies Employees Service Regulations,
1975, which regulations are applicable with regard to the conduct of
Disciplinary enquiry against the employee/respondent No. I and where
D governing the field at the relevant time. Regulation 84, Chapter-VII of
the Regulation deals with Penalties, Regulation 85 deals with Disciplinary
proceedings, and Regulation 86 deals with Appeal. Regulation 85 which
deals with Disciplinary proceedings, is as follows:-
"85.Disciplinary Proceedings.-
E (i) The disciplinary proceedings against an employee shall be
conducted by the Inquiring Officer (referred to in clause (iv) ·
below) with due observance of the principles of natural justice for
which it shall be necessary -
(a) The employee shall be served with a charge-sheet containing
specific charges and mention of evidence in support of each
F
charge and he shall be required to submit explanation in respect
of the charges within reasonable time which shall not be less
than fifteen days;
(b) Such an employee shall also be given an opportunity to
produce at his own cost or to cross-examine witnesses in his
G defence and shall also be given an opportunity of being heard
in-person, if he so desires;
(c) Jf no explanation in respect of charge sheet is received or
the explanation submitted is unsatisfactory, the competent
authority may award him appropriate punishment considered
H necessary.
CHAMOLl DISTT. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK 91
v. RAGHUNATH SINGH RANA [ASHOK BHUSHAN, J.]
(ii) (a) Where an employee is dismissed or removed from service A
on the ground of conduct which has led to his conviction on a
criminal charge; or
(b) Where the employee has absconded and his whereabouts
are not known to the society for more than three months; or
(c) Where the employee refuses or fails without sufficient cause B
to appear before the Inquiring Officer when specifically called ·
upon in writing to appear; or
(d) Where it is otherwise (for reasons to be recorded) not
possible to communicate with him, the competent authority may
award appropriate punishment without taking or continuing c
disciplinary proceedings.
(iii) Disciplinary proceedings shall be taken by the society against
the employee on a report made to this effect by the inspecting
authority or an officer of the society under whose control the
employee is working.
D
(iv) The inquiring officer shall be appointed by the appointing
authority or by an officer of the society authorised for the purpose
by the appointing authority:
Provided that the officer at whose instance disciplinary action
was started shall not be appointed as an inquiring officer nor shall
the inquiring officer be the appellate authority. E
"
10. From the facts, as noted above, it is clear that charge sheet
dated 03.07.1992 was issued to the employee/respondentNo.1 to which
he submitted a reply on 31.07.1992. Inquiry report dated 21.09.1992
was issued and submitted. However, without proceeding any further on F
the basis of the inquiry report dated 21.09.1992, a fresh charge sheet
dated 18.01.1993 was issued to the employee/respondent No. I containing
24 charges. The employee/respondent No. I was asked to submit a reply
within 1S days. Reply to the subsequent charge sheet was again filed by
the employee/respondent No. I on 04.02.1993. The second charge sheet G
having been issued on 18.01.1993 which included all the charges which
were contained in the earlier charge sheet, the earlier proceedings
consequent to charge sheet dated 03.07.1992 stood abandoned. The
appellant-Bank decided to proceed with the Disciplinary Inquiry on the
basis of charge sheet dated 18.01.1993. After 18.01.1993 charge sheet
H
92 SUPREME COURT REPORTS [201E] 7 S.C.R.
A reply was submitted by the employee/respondent No. I on 04.02.1993
but there is no material on the record brought by the appellant-Bank
indicating that any inquiry proceedings were conducted.
11. It is relevant to note that in the writ petition filed by the
employee/respondent No. I, specific averme~1ts were made that
B disciplinary proceedings against him were conducted in violation of
principles of natural justice and against the procedure prescribed in
Regulation 85, which averments were made in paragraphs 19 and 25 of
the writ petition, to the following effect:-
"19. That since the whole of the procedure adopted in conducting
c of the disciplinary proceeding is against the principle of natural
justice and procedure mention in regulation 85, In fact, no inquiry
wo11h to name has been conducted by the respondents. The so
called inquiry was a mere eye-wash. It is a farce and fraud played
on the statutory rights of the petitioner."
25. That the disciplinary proceeding held against the petitioner
D was not conducted in accordance with the provisions of natural
justice and procedure prescribed under the Regulations of 1975.
Serious objections were raised by the petitioner through his replies
dated 31.07.1993, 04.02.1993 and 21.03.1993 but no heed was
given to the objections raised by the petitioner. Once the charge
E sheet has been issued to the petitioner, second charge sheet cannot
be sent by the Inquiry Officer in the same disciplinary proceeding.
But this objections was also not considered by the Inquiry Officer
or disciplinary authority. After the reply dated 04.02.1993 to the
charge-sheet dated 18.01.1993, no inquiry was held by the Inquiry
Officer. Instead of holding the inquiry in accordance with the
F provisions, the disciplinary authority sent the letter dated 04.05.1993
saying that the charges were proved against the petitioner. Between
18.01.1993 to 04.05.1993 no inquiry was held and the petitioner
was never called upon to cross examine the witnesses. No records
or documents which the petitioner has requested to inspect were
G summon or made available to the petitioner. Even these documents
were not available to the petitioner. Even those documents were
not inspected or considered by the disciplinary authority and inquiry
officer. The way the Disciplinary Proceeding were conducted it
cost serious doubt and aspersion against the respondents. It
appears that before the conduct of the inquiry the respondents
H
CHAMOLI DISTT. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK 93
v. RAGHUNATH SINGH RANA [ASHOK BHUSHAN, J.]
made up their mind to get rid of the petitioner and for that reason A
they have conducted the inquiry in such a perfunctory manner,
which is not known to services jurisprudence."
12. In the counter affidavit, the averments made in paragraph 19
and 25 were replied by the appellant-Bank in paragraph 18 and 24, which
are to the following effect:- B
" 18. That in reply to the contents of para nos.18 & 19 of the writ
petition it is submitted thatthe grounds on which the charges issued
were found proved was supplied to the petitioner vide letter no.251-
52 annexure no. 7 to the writ petition, instead of a copy of the
enquiry report. The letter of charges serves the purpose of an c
enquiry report. That it is incorrect to say that no reasonable
opportunity was given to the petitioner by the Inquiry Officer a
letter dated 6-1-93 Annexure No.5 to the writ petition was sent to
the petitioner to know whether he wanted to be cross-examined
by his witnesses, but the petitioner did not want any such
opportunity. Further, the petitioner was directed to appear before D
the committee of management in person, but he did not appear at
all. Another opportunity was given as per resolution no.14 dated
25.11.1993 which was also not available by him. Petitioner was
again given an opportunity to appear before the committee on 3-
8-2000 Annexure No. I 0 to the writ petition to explain his case E
personally, but he did not appear. It is therefore, totally false to
say that no opportunity of being heard was given to the petitioner.
Copy of the resolution no.14 dated 25.11.1993 is annexed herewith
and is marked as Annexure No. CA.5 to this counter affidavit."
24. That the contents of para nos.25, 26, 27 & 28 of the writ
F
petition are denied. It is incorrect to say that the second charge
sheet dated 18-1-93 was sent in the same disciplinary proceedings
as a matter of fact this was the first and the only chargesheet
issued. Disciplinary proceedings were initiated on 21.10.92 and,
therefore, charge sheet was issued to the petitioner on 18.1.93 to
which reply was submitted by the petitioner on 4.2.93. It is wrong G
to allege that records were not made available to the petitioner as
the petitioner did not want to refer to any record and he did not
make any request even during the course of the cross examination
of the witness. It is further incorrect to state that opportunity was
not given to the petitioner. That the answering respondent is justified
H
94 SUPREME COURT REPORTS [2016) 7 S.C.R.
A a dismissing the services of the petitioner as heavy loss of
Rs.35,00,000/- approximately was caused to the bank, exceeding
all his powers and overlooking all the norms laid down by the
bank in making unsecured advances to various customers/parties.
Therefore, the order of the respondents dismissing the services
of the petitioner is lawful and in the interest ofjustice and the writ
B
petition of the petitioner is liable to be dismissed on this ground
alone."
13. As noted above, learned counsel for the appellant/Bank has
referred to the letter issued by the Inquiry Officer dated 11.09 .1992,
calling the employee/respondent No.I to appear before the Inquiry Officer
c on 18.09.1992. The inquiry report dated 21.09.1992 mentioned that the
employee/respondent No. I did not appear, hence the inquiry report was
submitted. The letter dated 11.09 .1992 and the inquiry report dated
21.09 .1992 looses all its importance when the bank decided to issue a
fresh charge sheet on 18.11.1993 which includes all earlier charges.
D The petitioner submitted a reply on 04.02.1993 but thereafter no inquiry
proceeding seems to have taken place. The employee/respondent No. I
made a specific complaint that inquiry proceeding has not been held and
there is violation of Regulation 85. No specific reply have been made, by
the appellant/bank referring to any inquiry proceeding before the Inquiry
Officer or the date of any inquiry.
E
14. As noted above, Regulation 85 is a statutory Regulation
according to which an opportunity to the .employee to produce at his
own cost or to cross-examine witnesses in his defence and shall also be
given an opportunity of being heard in person, ifhe so desires. Regulation
85(i)(b) is specifically mandates the said requirements.
F
15. From the pleadings and the materials on record, it is clear that
no inquiry was conducted by the appellant/Bank in conformity with
Regulation 85(i)(b) after issuance of charge sheet dated 16.01.1993.
The High Court has set aside the dismissal order after coming to the
conclusion that without holding an inquiry the employee/respondent No. I
G has been dismissed. No materials have been brought in the appeal to
indicate that any inquiry was conducted or inquiry report was submitted
subsequent to the charge sheet dated 16.01.1993.
16. Learned counsel for the appellant/Bank has submitted that in
the Resolution passed by the Disciplinary Authority that inquiry report
H has been mentioned.
CHAMOLI DISTT. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK 95
v. RAGHUNATH SINGH RANA [ASH OK BHUSHAN, J .]
17. Imposing of any penalty on an employee of the bank that too A
major penalty of dismissal from service can only be done after following
the statutory provisions governing the disciplinary proceedings.
18. It is also relevant to note that after submission of reply dated
04.02.1993, Disciplinary Authority issued a show-cause notice on
04.05.1993 asking the employee/respondent No. I to submit his reply. B
When the Inquiry Officer was appointed, conducting of the inquiry was
mandatory and without conducting of an inquiry and without any inquiry
report having been served on the employee/respondent No. I, Disciplinary
Authority could not have proceeded to impose any punishment. The
compliance of principles ofnaturaljustice by the appellant-Bank is not a
mere formality, more so when the statutory provisions specifically provides c
that disciplinary proceedings shall be conducted with due observations
of the principles ofnatural justice.
19. The compliance of natural justice in domestic/disciplinary
inquiry is necessary has long been established. This Court has held that
even there are no specific statutory rule requiring observance ofnatural D
justice, the compliance ofnaturaljustice is necessary. Certain ingredients
have been held to be constituting integral part of holding ofan inquiry.
The Apex Court in Sur Enamel and Stamping Works Pvt. Ltd. v. Their
Workmen reported in ( 1964) 3 SCR 616 has laid down following:-
" ... An enquiry cannot be said to have been properly held unless, E
(i) the employee proceeded against has been informed clearly of
the charges levelled against hi111, (ii) the witnesses are examined
- ordinarily in the presence of the employee - in respect of the
charges, (iii) the employee is given a fair opportunity to cross-
examine witnesses, (iv) he is given a fair opportunity to examine F
witnesses including himself in his defence ifhe so wishes on any
relevant matter, and (v) the inquiry officer records his findings
with reasons for the same in his report."
20. The Apex Court again in State Bank oflndia Vs. RK. Jain
and Ors.. reported in ( 1972) 4 SCC 304 held that if an inquiry is vitiated
G
by violation of principles ofnaturaljustice or if no reasonable opportunity
was provided to the delinquent to place his defence, it cannot be
characterized as a proper domestic inquiry held in accordance with the
rules ofnaturaljustice. In paragraph 23, the following was laid down:-
" ...... As emphasised by this Court in Ananda Bazar Patrika (P)
H
96 SUPREME COURT REPORTS [2016] 7 S.C.R.
A Ltd. v. Its Workmen, (1964) 3 SCR 601, the termination of an
employee's service must be preceded by a proper domestic inquiry
held in accordance with the rules of natural justice. Therefore, it
is evident that ifthe inquiry is vitiated by violation of the principles
of natural justice or if no reasonable opportunity was provided to
a delinquent to place his defence, it cam1ot be characterized as a
B
proper domestic inquiry held in accordance with the rules of natural
justice ...... "
2I. The Apex Court in State of Uttranchal & Ors. Vs. Kharak
Singh reported in (2008) 8 SCC 236 had occasion to examine various
contours ofnaturaljustice which need to be specified in a departmental
c inquiry. The Apex Court noticed earlier judgments where principles were
laid down as to how inquiry is to be conducted. It is useful to refer
paragraphs 9, 10, 1 I, I 2, 13 and 15, which are to the following effect:-
" ..... 9. Before analyzing the correctness of the above submissions,
it is useful to refer various principles laid down by this Court as to
D how enquiry is to be conducted and which procedures are to be
followed.
10. The following observations and principles laid down by this
Court in Associated Cement Co. Ltd. vs. The Workmen and Anr.
[I 964] 3 SCR 652 are relevant:
E
" ...... In the present case, the first serious infirmity from which
the enquiry suffers proceeds from the fact that the three enquiry
officers claimed that they themselves had witnessed the alleged
misconduct of Malak Ram. Mr. Kolah contends that if the
Manager and the other officers saw Malak Ram committing
F the act of misconduct, that itself would not disqualify them
from holding the domestic enquiry. We are not prepared to
accept this argument. Ifan officer himself sees the misconduct
of a workman, it is desirable that the enquiry should be left to
be held by some other person who does not claim to be an
G eye- witness of the impugned incident. As we have repeatedly
emphasised, domestic enquiries must be conducted honestly
and bona fide with a view to determine whether the charge
framed against a particular employee is proved or not, and so,
care must be taken to see that these enquiries do not become
empty formalities. If an officer claims that he had himself seen
H the misconduct alleged against an employee, in fairness steps
CHAMOLI DISTT. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK 97
v. RAGHUNATH SINGH RANA [ASHOK BHUSHAN. J.]
should be taken to see that the task of holding an enquiry is A
assigned to some other officer. How the knowledge claimed
by the enquiry officer can vitiate the entire proceedings of the
enquiry is illustrated by the present enquiry itself........ .
..... It is necessary to emphasise that in domestic
enquiries, the employer should take steps first to lead evidence B
ai;ainst the workman charged, give an opportunity to the
workman to cross-examine the said evidence and then should
the workman be asked whether he wants to give any
explanation about the evidence led against him. It seems to us
that it is not fair in domestic enquiries against industrial
employees that at the very commencement of the enquiry, the
c
employee should be closely cross-examined even before any
other evidence is led against him. In dealing with domestic
enquiries held in such industrial matters, we cannot overlook
the fact that in a large majority of cases, employees are likely
to be ignorant, and so, it is necessary not to expose them to the D
risk of cross-examination in the manner adopted in the present
enquiry proceedings. Therefore, we are satisfied that Mr. Sule
is right in contending that the course adopted in the present
enquiry proceedings by which Malak Ram was elaborately
cross-examined at the outset constitutes another infirmity in
this enquiry." E
11) Jn ECIL v. B. Karunakar (1993) 4 SCC 727, it was held:
"(I) Where the enquiry officer is other than the disciplinary
authority, the disciplinary proceedings break into two stages.
The first stage ends when the disciplinary authority arrives at F
its conclusions on the basis of the evidence, enquiry 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. G
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 belongs to the second stage H
98 SUPREME COURT REPORTS . [2016] 7 S.C.R.
A 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
B
accepted. It is the second right exercisable at the second stage
which was taken away by the Forty-second Amendment. The
second stage 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
c with is the opportunity of making representation on the penalty
proposed and not of oppo1tun ity of making representation on
the repott of the enquiry officer. The latter right was always
there. But before the Forty-second Amendment of the
Constitution, the point of time at which it was to be exercised
had stood deferred ti II the second stage viz., the stage of
D
considering the penalty. Til I 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 Forty-second
Amendment of the Constitution is to advance the point of time
E 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 in respect of the charges.
F ***
Article 3 11 (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, particularly when they are not
borne out by the evidence or are arrived at by overlooking the
G evidence or misconstruing it, could themselves constitute new
unwarranted imputations. The proviso to Article 311 (2) 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
enquiry officer being only his delegate appointed to hold the
H
CHAMOLl DISTT. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK 99
v. RAGHUNATH SINGH RANA [ASHOK BHUSHAN, J.]
inquiry and to assist him), the employee's reply to the enquiry A
officer's report and consideration of such reply by the
disciplinary authority also constitute an integral part of such
inquiry.
Hence, when the enquiry officer is not the disciplinary
authority, the <lei inquent employee has a right to receive a copy B
ofthr. enquiry 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 rightto defend himself
against the charges levelled against him. A denial of the enquiry
officer's report before the disciplinary authority takes its C
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."
12) In Radhey Shyam Gupta vs. U.P. State Agro Industries
Corporation Ltd. and Another, ( 1999) 2 SCC 21, it was held: D
"34. But in cases where the termination is preceded by an
enquiry and evidence is received and findings as to misconduct
of a definitive nature are arrived at behind the back of the
officer and where on the basis of such a report, the termination
order is issued, such an order will be violative of the principles E
of natural justice inasmuch as the purpose of the enquiry is to
find out the truth' of the allegations with a view to punish him
and not merely to gather evidence for a future regular
departmental enquily. In such cases, the termination is to be
treated as based or founded upon misconduct and will be
punitive. These are obviously not cases where the employer F
feels that there is a mere cloud against the employee's conduct
but are cases where the employer has virtually accepted the
definitive and clear findings of the enquiry officer, which are
all arrived at behind the back of the employee - even though
such ·acceptance of findings is not recorded in the order of G
termination. That is why the misconduct is the foundation and
not merely the motive in such cases."
13) In Synd.icate Bank and Others vs. Venkatesh Gururao Kurati,
(2006) 3 sec 150, the following conclusion is relevant:
"18. In our view, non-supply of documents on which the enqui1y H
100 SUPREME COURT REPORTS [2016] 7 S.C.R.
A officer does not rely during the course of enquiry does not
create any prejudice to the delinquent. It is only those
documents, which are relied upon by the enquiry officer to
arrive at his conclusion, the non-supply of which would cause
prejudice, being violative of principles of natural justice. Even
then, the non-supply of those documents prejudice the case of
B
the delinquent officer must be established by the delinquent
officer. It is well-settled law that the doctrine of principles of
natural justice are not embodied rules. It cannot be put in a
straitjacket formula. It depends upon the facts and
circumstances of each case. To sustain the allegation of violation
c of principles of natural justice, one must establish that prejudice
has been caused to him for non-obsei-vance of principles of
natural _justice."
15. From the above decisions, the following principles would
emerge:
D (i) The enquiries must be conducted bona fide and care must
be taken to see that the enquiries do not become empty
formalities.
(ii) If an officer is a witness to any of the incidents which is the
subject matter of the enquiry or ifthe enquiry was initiated on
E a report ofan officer, then in all fairness he should not be the
Enquiry Officer. If the said position becomes known after the
appointment of the Enquiry Officer, during the enquiry, steps
should be taken to see that the task of holding an enquiry is
assigned to some other officer.
F (iii) In an enquiry, the employer/department shouid take steps
first to lead evidence against the workman/delinquent charged
and give an opportunity to him to cross-examine the witnesses
of the employer. Only thereafter, the workman/delinquent be
asked whether he wants to lead any evidence and asked to
give any explanation about the evidence led against him.
G
(iv) On receipt of the enquiry report, before proceeding further,
it is incumbent on the part of the disciplinary/punishing authority
to supply a copy of the enquiry report and all connectecl
materials relied on by the enquiry officer to enable him to offer
his views, if any."
H
CHAMOLI DISTT. CO-OP. BANK LTD. THR. SECY/MAHAPRANDHAK I0 I
v. RAGHUNATH SINGH RANA [ASHOK BHUSHAN, J.]
22. From the proposition of law, as enunciated by Apex Court as A
noted above, and the facts of the present case, we arrive at the fol lowing
con::lusions:-
(a) After service ofcharge sheet dated 16.01.1993 although the petitioners
submitted his reply on 04.02.1993 but neither Inquiry Officer fixed any
date of oral inquiry nor any inquiry was held by the Inquiry Officer. B
(b) Mandatory requirement of a disciplinary inquiry i.e. is holding of an
inquiry when the charges are refuted and serving the inquiry report to
the delinquent has been breached in the present case.
( c) The employee/respondent No. I having not been given opportunity to
produce his witnesses in his defence and having not been given an c
opportunity of being heard in person, the statutory provisions as enshdned
in Regulation 85 (i)(b ), have been violated.
(d) The Disciplinary Authority issued show case notice dated 04.05 .1993
to the employee/respondent No. I without holding of an inquiry and
subsequent resolution by Disciplinary Authority taken in the year 2000 D
without their being any fmther steps is clearly unsustainable. The High
Court has rightly quashed the dismissal order by giving liberty to the
bank to hold de-novo inquiry within a period of six months, ifit so desires.
(e) The bank shall be at libetty to proceed with the Disciplinary Inquiry
as per directions of th~ High Court in paragraph (I) of the judgment. E
The High Court has already held that petitioner shall be deemed to be
under suspension and shall be paid suspension allowance in accordance
with rules.
23. In view of the foregoing discussion and our conclusion, as
noted above, we do not find any merit in this appeal. In the result, the F
appeal is dismissed.
Kalpana K. Tripathy Appeal dismissed.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "disciplinary inquiry"Sign in to search