Holding

A civil suit for damages cannot be maintained against a government employee for the same loss already addressed in departmental proceedings, and negligence alone does not constitute tortious misconduct.

Summary

The Punjab State Civil Supplies Corporation (the appellant, a State) sued two of its employees, an inspector and a field officer/supervisor, for loss of wheat allegedly caused by their negligence and misappropriation. Both employees had been dismissed in departmental proceedings; the inspector was reinstated after depositing the missing bags, while the supervisor's dismissal was later set aside by the High Court. The corporation filed a civil suit for damages, which was dismissed against the supervisor and allowed against the inspector, leading to appeals. The Supreme Court held that a civil suit for damages cannot be maintained for the same cause of action that has already been adjudicated in disciplinary proceedings, and that mere negligence does not constitute misconduct giving rise to tort liability. It also ruled that the High Court should have framed a substantial question of law under Section 100 CPC when hearing the supervisor's second appeal. Consequently, the Court allowed the appellant's appeal (Civil Appeal No. 6269 of 2003) and dismissed the other appeals.

Issues considered

The suitability of a civil suit for damages against government employees for loss of goods where departmental proceedings have already imposed a penalty for the same cause of action.
Whether negligence in the performance of duties under a contract of employment amounts to misconduct that can give rise to tort liability.
Whether the High Court was obliged to frame a substantial question of law under Section 100 of the CPC while hearing the second appeal of the supervisor.
Whether the appellant, as a State, can recover damages under Section 73 of the Indian Contract Act for loss of wheat.

Legislation cited

Subjects

Service lawTortNegligenceDepartmental proceedingsCivil suit for damagesBreach of contractMisappropriationDisciplinary actionState liabilitySection 73 Indian Contract ActSection 100 CPCSubstantial question of law

Judgment

A PUNJAB STA TE CIVIL SUPPLIES CORP. LTD.
v.
SIKANDER SINGH

FEBRUARY 24, 2006 ·•
B [S.B. SINHA AND P.P. NAOLEKAR, JJ.]

Service law---Torts--Damages---Civil Suit for damages for the goods
lost due to negligence of employee-lvlaintainability of-Shortages of wheat
C due to lack of proper supervision on the part of respondents working as
Inspector and Field Officer/Supervisor- Departmental proceedings initiated
and they were dismissed from service-Appellate authority directed
reinstatement of respondent 1 who was the actual holder of the stock and
against whom there were findings of misappropriation subject to his depositing
bags of wheat, found to be short--He complied with the said direction and
D was reinstated without backwages---No finding of misappropriation of goods
by respondent 2---Appellant filed a civil suit against respondents for recovery
of damages for the goods lost--Held, the civil suit for damages for breach of
. '

contract, or for tortious act is not maintainable against respondent I for the
self-same cause of action for which penalty has already been paid by him in
E departmental proceedings-,')uch a suit is not maintainable against respondent
't
2 as he was not found to have misappropriated goods-Mere negligence in
performance of duty resulting in loss of goods is not enough.

Service law---Torts·--Contract of Employment-Indian Contract Act
I872-Section 73-Civil suit in tort for damages by employer against
F employee-Held, a suit for damages by way of tortious claim is maintainable
only when one has a duty to perform towards another-A suit for damages is
maintainable only on ground of breach of the terms and conditions of the
contract resulting in damages and when there are acts of malfeasance,
misfeasance and nonfeasance.

G Torts-Negligence-Misconduct-Negligence in performance of duty
under contract of employment resulting in loss of goods of employer-Held,
negligence simpliciter may or may not amo~nt to misconduct-Negligence iri
the performance of duty under a contract of employment may give rise to a
disciplinary proceeding in which recovery of money from the delinquent can

H 694
'
·~

PUNJAB STATE CIVIL SUPPLIES CORP. v. SIKANDER SINGH 695

be directed by way of punishment-Such loss of goods would not give rise to A
r a cause of action under torts for recovery of money for the goods lost due to
. negligence in performance of duty.

Dismissal from service-Appeal Against-Code of Civil Procedure
1908-Section I OD-Respondent 2 filed a suit challenging the order imposing
punishment of removal from service-Suit and the first appeal dismissed-The B
High Court allowed the second appeal on the premise that the dereliction of
duty vis-a-vis supervisory control was not attrib'utable to him-Held, the High
Court could not have set aside the concurrent findings of two courts without
formulating a substantial question of law.

Respondents 1 and 2 were the employees of the appellant working C
as inspector and field officer/ supervisor. On physical verification of stocks,
shortages of 4513 bags of wheat were said to have been noticed. It was
alleged that whereas respondent 1 was the actual holder of the stock,
-'
respondent 2 was negligent in making proper supervision of the god owns
which resulted in shortages of wheat. Departmental proceedings were D
initiated against both of them any they were dismissed from service. In
departmental proceedings negligence of respondent 1 had been held to
\ have contributed to the loss of 2/3rd of the shortages. The appellate
authority directed his reinstatement subject to his depositing the requisite
number of bags of wheat. He complied with the said direction and was
later reinstated without backwages. E,
Respondent 2 filed a suit before the High Court against the order of
dismissal passed against him. The suit as also the first appeal w~re
dismissed. However, the High Court allowing the second appeal held that
order of dismissal is not sustainable as dereliction of duty vis-a-vis F
supervising control was not attributable to him. Appellant was in appeal
1 before the Supreme Court thereagainst.

The appellant filed a civil suit against the respondents 1 and 2 for
recovery of the price of the quantity of wheat which had been found to be
short alleging that shortage of wheat took place due to their negligence. G
The said civil suit was dismissed as against respondent 2 whereas the same
was allowed as against respondent 1 as he alone was found to be guilty of
misappropriation. Appeals were filed in the High Court by the appellant
- as well as respondent 1. The High Court dismissed the appeal of the
appellant and allowed the appeal of respondent 1. Hence an appeal to the
H
696 SUPREME COURT REPORTS (2006) 2 S.C.R.

A Supreme court by the appellant.
Dismissing the appeal, the Court

HELD: I.I. The appellant is a "State" within the meaning of Article
12 of the Constitution of India. The terms and conditions of service by
B and between the Appellant and the Respondents herein are governed by
the service rules and/or terms and conditions of contract. If the
respondents herein had committed misconduct th1ey could have been and
in fact were departmentally proceeded with. In the said departmental
proceedings appropriate punishments had been imposed upon them. So
far as defendant no. 1 is concerned, his negligence had been held to have
C contributed to the loss of 2/3rd of the shortages and by way of penalty, he
was asked by the appellate authority to deposit the requisite number of
bags of wheat and/ or pay the price thereof. The said order having been
complied with attained finality. It is binding on the appellant. The dispute
cannot, therefore, be permitted to be reopened. For his act of misconduct,
D he had also been denied backwages. rr in the departmental proceedings,
•defendant no. I had been asked to pay a penalty by way of recovery of
loss to the extent of which he was found responsible, that no civil suit could
have been maintained for the self"same cause of action. (702-C-E; F-G) . '

1.2. So far as defendant no. 2 is concerned., no finding of fact has
E been arrived at that he for any intent and purport appropriated any article
to his advantage. In absence of such a finding, it is difficult to understand
as to how under the common law, he could be proceeded against by way
of a civil suit for recovery of money. A civil suit for recovery might have
been maintainable only if he was found to have misappropriated the goods.
F Admittedly he has not. He was said to be negligent in performing his duties. •
It is now well-settled that negligence simpliciter may or may not amount
to misconduct. (704-8-C)

2. A suit for damages would be maintainable only on the ground of
breach of the terms and conditions of the contract and when there are
G acts of malfeasance, misfeasance and nonfeasance. A suit for damages for
breach of contract under common law can be decreed only when the
damages are found to have occurred by reason of such breaches on the
part of the defendant. For the said purpose, the extent of damages suffered
must be proved in terms or section 73 of the Indian Contract Act.

H 3.1. The appellants have not and in law could not hav.e filed any suit
•2-0 }.-

PUNJAB STATE CIVIL SUPPLIES CORP. v. SIKANDER SINGH 697
against the respondents herein alleging any tortious act on their part. A A
" ) suit for damages by way of tortious claim is maintainable only when
someone has a duty to perform towards others under a statute or
otherwise. Tortious acts, being not the ones which could be subject matter
of departmental proceedings or negligence under a contract of
employment, cannot give rise to a civil liability by way of monetary
compensation to the employer except in certain circumstances. B
[704-C-D; 705-D-EJ

3.2. Negligence in the performance of a duty under a contract of
,;.(
employment may give rise to a disciplinary proceeding but the same would
.. not give rise to a cause of action for recovery of money for the goods lost
as in the disciplinary proceeding itself recovery of money from the
c
delinquent can be directed by way of punishment. In this case the losses
caused by reason of misconduct on the part of the defendant no. l had
been directed to be recovered in the departmental proceedings and the
same stood recovered. [706-D-E; 705-D]
D
Dr. H. Mukherjee v. S.K. Bhargava, 11996[ 4 SCC 542; M.S. Grewal
v. Deep Chand Sood, [2001 J 8 SCC 151 and Poonam Verma v. Ashwin Patel,
'- \ [19961 4 sec 332, referred to.

Depot Manager, A.P.S.R.T. Corpn. v. N. Ramulu, [1997] ll SCC 319
and Jay Laxmi Salt Works (P) Ltd. v. State of Gujarat, 11994] 4 SCC 1, reti~d E
• upon

Union of India v. B. Dev, [1998] 7 SCC 691 and Official Liquidator,
Supreme Bank Ltd. v. P.A. Tendolkar, [1973] 3 SCR 364, distinguished.

4. The civil court could interfere with the order of dismissal from F
services in the event, inter alia, it was found that the order of dismissal
~ by way of punishment has been imposed in violation of the procedures
laid down in the statutory rules or in violation of the principles of natural
justice or suffered from illegalities or procedural irreguH1rities were
committed by enquiry oftjcer of the disciplinary authority in holding the
G
departmental proceedings. In view of the fact that the suit of the defendant
no. 2 was dismissed and the appeal preferred thereagainst had also been
i~
dismissed, it was obligatory on the part of the High Court to formulate a
substantial question of law. Without formulating such substantial question
of law in a case of this nature the High Court could not have set aside the
concurrent findings of two courts. [707-G-H; 708-A] H
/
698 SUPREME COURT REPORTS (2006] 2 S.C.R.

A R. V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami and V.P.
Temple, (2003( 8 SCC 752, distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6269 of2003.

From the Final Judgment and Order dated 6. 7.200 I of the Punjab and ..
B Haryana High Court in R.S.A. No. 2232 of 1998.
Mrs. Jayshree Wad, Ashish Wad, Arvind Gupta, Neeraj Kumar (for Ml
s. J.S. Wad & Co.), Sudhir Nandrajog, Ms. Tatini Basu, Ms. Kavita Sarin,
Abhishek Aggarwal and Raj N.S. Pundir for the Appellant.

C Anoop G. Choudhary, Jetendra Sin3h, Varinder Kumar Sharma and
K.K. Mohan for the Respondent.

The Judgment of the Court was delivered by

S.B. SINHA, J. These appeals arising out of a common judgment and •
D order dated 6. 7.200 l passed by the High Court of Punjab and Haryana at
Chandigarh were taken up for hearing together and are being disposed of by
this common judgment.

The Respondents herein were at all material times working as Inspector
and Field Officer/Supervisor. They were posted at Moga. A physical
E verification of stocks was carried out from 21st June, 1985 to 26th June,
l985; pursuant whereto shortages of 4513 bags of wheat were said to have
been found.

Allegedly, Tilak Raj, defendant No. I deposited in two instalments
F 2400 bags and 210 bags of wheat. In an audit report shortages of stock of
articles were said to have been highlighted.

It was alleged that, thus, shortages of wheet took place due to lack of
proper supervision on the part of the Respondents. It was furthermore alleged
that whereas the defendant No. I wa.s the actual holder of the stock, the
G defendant No. 2 being Senior Superintendent was negligent in making proper
supervision of the godowns.

Departmental proceedings were initiated against both of them. They
were dismissed from services. In the departmental proceedings, against the .....
defendant No. I, indisputably the appellate authority directed his reinstatement
H subject to his depositing remaining 400 bags of wheat, found to be short. He
PUNJAB STATE CIVIL SUPPLIES CORP. v. SIKANDER SINGH [SINHA, J ] 699
complied with the said direction of the appellate authority. As despite the A
same, he was not reinstated, a writ petition was filed by him before the High
Court wherein the High Court directed his reinstatement. The matter came up
before this Court in SLP(C) No.5609 of 1989 and by a judgment and order
dated 23.8.1989, while upholding the direction of the High Court as regard
his reinstatement the relief of backwages was denied.
B
So far as the order of dismissal passed in the departmental enquiry
against the defendant No. 2 is concerned, he filed a suit which was the
subject matter ofR.S.A. No. 2232of1998 before the High Court; the suit as
,y also the first appeal having been dismissed by orders dated 19 .11.1992 and
23.2.1998 respectively.
c
The Appellant herein filed a civil suit before the Civil Judge, Moga
against the Respondents herein for recovery of the price of the quantity of
wheat which had been found to be short.

In its plaint, the Appellant contended:
D
" ... The loss has been suffered by Punsup on account of mis-
\_ appropriation and unauthorized use of stocks by the defendant No. I
... & 2 for their own interest and benefit. Both the defendants are therefore
equally responsible to make good the shortages and loss suffered by
the plaintiffs on this account." E
Defendant No. 1 in his written statement denied and disputed the said
allegation stating that he had been made a scapegoat. Defendant No. 2 in his
written statement averred that defendant No. I being Inspector was the
custodian of the stock ap.d took over the charge from the previous Inspector
and it was he who handed over the charge to the successor and, thus, F
,
...
responsible for the stocks hold by him and as a supervisor he had nothing to
do with holding of actual stock.

The said civil suit was dismissed as against the defendant Respondent
No. 2 whereas the same was allowed as against defendant Respondent No.
I. A Regular First Appeal was filed in the High Court by the Appellant G
thereagainst which was marked as RFA No. 1780 of 1997. Defendant No. 1
also filed an appealthereagainst which was marked as 347 of 1997. Defendant
.~ , No. 2, as noticed before, also filed a second appeal, which was marked as
RFA No. 2232of1998. By reason of the impugned judgment the High Court
as regard the liability of defendant No. I held: H
700 SUPREME COURT REPORTS (2006] 2 S.C.R.

A ''. ..It has been admitted that Shri Tilak Raj defendant No. I after
having conceded the shortage of the bags has been directed by the
Appellate Committee to deposit 2/3rd of the said bags and that had
been made the condition precedent for reinstat<:ment in service. As a
sequel thereto, Tilak Raj has deposited the said bags and has been
reinstated accordingly. PUNSUP has not been able to address
B meaningful arguments for establishing the fact that the claim is in
exclusion of the said bags or is in inclusion of the said bags. It is also
the admitted case that Tilak Raj had joined the duty at the place of
posting on April 6, 1984 and nothing has bee:1 brought on record as
to whether the stocks etc. were in order on the date of his posting as
c the reliance has been placed upon the audit report for fixing the
liability. However, there is divergence vis-a-vis the physical verification
which has been carried out and the audit report which has been relied
upon. Thus, PUNSUP has not been able to establish the clear cut
liability against defendant No. I. It shall not be fair to rely upon the
audit report as the contents thereof have not been proved by way of
D any supportive evidence brought on record by PUNSUP. It is the
settled law that liability cannot be fastened only on the statement of
account/ audit reports as it is not discernible as to at what stage such
kind of loss had been suffered and at whose hands as nothing has
been brought on record that on the date of joining by defendant No.
E I the shortages were in existence or came into existence thereafter."

So far as Defendant No. 2 is concerned, it was opined:

"It is a separate matter that he has been held liable for dereliction of
duty vis-a-vis supervisory control but that too has been interpreted
differently in view of the judgments rendered by the Courts below.
F
Even otherwise from the facts brought on record, the supervisory
control of defendant No. 2 came into force w.e.f. December 21, 1984
and that prior thereto, the articles being in actual factual control of
defendant No. I, the dereliction of supervisory control could not have
been attributed to defendant No. 2. It is also the admitted case of the
G parties that defendant No. 2 submitted a complaint which is dated
April I0, 1985 to the immediate superior i.e. the District Manager
and that the entire action was started on the basis of the said complaint.
In this view of the facts, dereliction of duty vis-a-vis supervisory
control is not attributable to defendant No. 2."
"'·
H As regard the suit arising out of departmental proceeding against the
PUNJAB STATE CIVIL SUPPLIES CORP.,.. SIKANDER SINGH [SINHA, J.] 70 J
defendant no. 2, which was the subject matter of the Second Appeal, the A
High Court held:

''. .. However, the appeal filed by Sikander Singh has been dismissed
as has been dismissed from service only on account of dereliction of
duty of supervisory control. However, the admitted case is that the
control of stocks was that of defendant No. 1 and not that of defendant B
No. 2. Since I have concluded that dereliction of duty vis-a-vis
supervisory control is not attributable to defendant No. 2, as such the
order of dismissal passed against defendant No. 2 is not sustainable."

It was directed:
c
"In view of the above discussions, RFA No. 1780 of 1997 filed by
PUNSUP fails and is hereby dismissed and the RFA No. 347of1997
filed by Shri Tilak Raj defendant No. I is allowed and the suit filed
by PUNSUP is dismissed. RSA No. 2232 of 1998 filed by Sikander
Singh is also allowed in view of the fact that it has been held that D
dereliction of duty vis-a-vis supervisory control is not attributable to
defendant No. 2 appellant in RSA No. 2232 of 1998."
I.. j

The learned counsel appearing on behalf of the Appellant would submit
" that although the Defendant Nos. I and 2 were the employees of the Appellant,
a civil suit was maintainable against them for recovery of money as shortage E
of wheat took place due to their negligence. So far as, defendant No. 2 is
concerned, it was submitted that although he had no direct role to play but
in view of his acts of non-feasance, he will be liable therefor as he had a duty
.to supervise the godowns.

The Trial Court in its judgment proceeded on the basis that the defendant p
No. 1 was incharge of the godown and the defendant No. 2 was to act as a
supervisor and in view of the fact that admittedly shortages were found
during physical verification of the stock in the godown, the defendant No. I
alone was found guilty of mis-appropriation thereof. In support of the said
finding, reliance was placed on the audit report which was proved by PW-
1, Ashok Grover. Apart from an inference drawn on the said audit report, no G
other evidence was adduced by the appellant to show that the defendant No. I
in fact mis-appropriated the said stocks. On the said finding, the trial court
. came to the conclusion that the Appellant was entitled to recover a sum of
Rs. 10,80,140.12 towards the price of the articles. The Appellant was also
held to be entitled to Rs. 5,67,873.88 by way of interest at the rate of 18% H
702 SUPREME COURT REPORTS [2006] 2 S.C.R.

A per annum. Further interest of 18% per annum on the principal amount was
also directed to be paid.

The High Court, on the other hand, as noticed hereinbefore, arrived at
a finding of fact that audit report could not be said to be admissible in
evidence as the contents thereof were not proved by any supportive evidence
B therefor. The High Court, further, opined that in any event, no interest was
payable on the amount of damages.

The contention which has, however, been raised in these appeals, as
noticed hereinbefore, is that the Respondents are joirntly and severally liable
C for their acts of negligence.
The Appellant is a 'State' within the meaning of Article 12 of the
Constitution of India. The terms and conditions of service by and between
the Appellants and the Respondents herein are governed by the service rules
and/or terms and conditions of contract. If the Respondents herein had
D committed misconduct they could have been and in fact were departmentally
proceeded with. In the said departmental proceedings appropriate punishments
had been imposed upon them. So far as defendant No. I is concerned, therein
his negligence had been held to have contributed to the loss of 2/3rd of the
shortages and by way of penalty, he was asked by the appellate authority to
deposit the requisite number of bags of wheat and/ or pay the price thereof.
E The said order having been complied with attained finality. It is binding on
the appellant. The dispute cannot, therefore, be pe1mitted to be reopened.

If the Appellant herein intended to proceed further against the defendant
No. I, it could have done so by questioning the correctness or otherwise of
the said order of the appellate authority before an appropriate forum. Deposit
F of the requisite number of bags of wheat and/or price thereof resulted in the
defendant no.' s I reinstatement pursuant to an order passed by the High .,..
Court as also this Court. For his act of misconduct., he had also been denied
backwages. If in the departmental proceedings, ddendant No. I had been
asked to pay a penalty by way of recovery of loss to the extent of which he
G was found responsible, we are of the opinion that no civil suit could have
been maintained for the self-same cause of action.

So far as the defendant No. 2 is concerned, no finding of fact has been
arrived at that he for any intent and purport appropriated any article to his
advantage. In absence of such a finding, we fail to understand as to how
H under the common law, he could be proceeded against by way of a civil suit
'
_!--

PUNJAB STATE CIVIL SUPPLIES CORP. v. SIKANDER SINGH [SINHA, J.] 703

~ for recovery of money. A civil suit for recovery might have been maintainable A
only if he was found to have misappropriated the goods. Admittedly he has
not. He was said to be negligent in performing his duties.

It is now well-settled that negligence simpliciter may or may not amount
to misconduct. In Union of India and Ors. v. J. Ahmed, [1979] 2 SCC 286,
this Court stated the law thus : B
" ... The High Court has noted the definition of misconduct in Stroud's
,>{ Judicial Dictionary which runs as under:

"Misconduct means, misconduct arising from ill motive; acts of
negligence, errors of judgment, or innocent mistake, do not constitute c
such misconduct."

In industrial jurisprudence amongst others, habitual or gross negligence
constitute misconduct but in Utkal Machinery ltd. v. Workmen, Miss
Shanti Patnaik in the absence of standing orders governing the
employee's undertaking, unsatisfactory work was treated as misconduct D
in the context of discharge being assailed as punitive. In S. Govinda
l\
Menon v. Union of Jndia6 the manner in which a member of the
service discharged his quasi judicial function disclosing abuse of power
was treated as constituting misconduct for initiating disciplinary
proceedings. A single act of omission or error of judgment would
ordinarily not constitute misconduct though if such error or. omission
E
results in serious or atrocious consequences the same may amount to
misconduct as was held by this Court in P.H. Kalyani v. Air France,
Calcutta? wherein it was found that the two mistakes committed by
the employee while checking the load-sheets and balance charts would
involve possible accident to the aircraft and possible loss of human F
...,., life and, therefore, the negligence in work in the context of serious
I
consequences was treated as misconduct. It is, however, difficult to
believe that lack of efficiency or attainment of highest standards in
discharge of duty attached to public office would ipso facto constitute
misconduct. There may be negligence in performance of duty and a
lapse in performance of duty or erro;· of judgment in eval11ating the G
developing situation may be negligence in discharge of duty but would
.A not constitute misconduct unless the consequences directly attributable
to negligence would be such as to be irreparable or the resultant
damage would be so heavy that the degree of culpability would be
very high. An error can be indicative of negligence and the degree of H
704 SUPREME COURT REPORTS [2006) 2 S.C.R.

A culpability may indicate the grossness of the negligence. Carelessness
can often be productive of more harm than deliberate wickedness or
malevolence"

A suit for damages would be maintainable only on the ground of
breach of the terms and conditions of the contract and when there are acts
B of mal-feasance, mis-feasance and non-feasance.

A suit for damages for breach of contract under common law can be
decreed only when the damages are found to have occurred by reason of
such breaches on the part of the defendant. For the said purpose, the extent
of damages suffered must be proved in terms of Section 73 of the Indian
C Contract Act.

The Appellants have not and in law could not have filed any suit
against the Respondents herein alleging any tortious act on their part. A suit
for damages by way of tortiuous claim is maintainable only when someone
D has a duty to perform towards others under a statute or otherwise. In this
case, we are not dealing with any case of tortious act on the part of
Respondents herein.

The learned counsel appearing on behalf of the Appellant, however,
has placed strong reliance on Dr. H. Mukherjee v. S.K. Bhargava, [1996) 4
E sec 542. The said decision runs counter to the submissions of the learned
counsel. In that case a suit was filed as damages for harassment meted out
to the plaintiff. It was contended by the Appellant that the Civil Court had
no jurisdiction to entertain the suit in view of the Administrative Tribunals
Act, 1985. Rejecting the said contention, it was held:

F "The Tribunals under the Act are thus conferred with the exclusive
jurisdiction, powers and authority exercisable immediately before
the appointed day by all courts (except the Supreme Court) in relation
to the matters set out in clauses (a), (b) and (c) of sub-section (I) of
Section 14. The question is whether the present suit does fall under
any of the said clauses. We do not think that it does. The suit appears
G to be one based on alleged tortious acts of the defendant committed
with a view to harass the plaintiff and cause him mental pain and
injury. At this stage, it is not our province to say whether the
allegations are true or false. We have to take the plaint allegations
as they stand. We also assume for the purpose of this appeal that
H such a suit does lie according to law since no contention to the
PUNJAB STATE CIVIL SUPPLIES CORP. v. SIKANDER SINGH [SINHA, J.) 705
contrary has been urged before us nor was urged before the civil A
court or the High Court. This is a pure action for damages for
deliberately harassing the plaintiff by passing several vindictive and
ma/a fide orders and proceedings and also by fabricating official
records. Such a suit for damages is certainly not within the province
of Section 14.
B
Thus, tortious acts, being not fhe ones which could be subject matter
of departmental proceedings or negligence under a contract of employment,
cannot give rise to a civil liability by way of monetary compensation to the
employer except in certain circumstances.

We may at this juncture notice some other decisions relied upon by the C
learned counsel for the Appellant.

In Depot Manager, A.P.S.R.T. Corpn. v. N. Ramulu and Anr., [1997]
1 I SCC 319, the pecuniary loss caused to the employer was ordered to be
recovered from the delinquent by way of punishment and not in a civil suit. D
In this case, we have noticed that the losses caused by reason of
~ misconduct on the part of the defendant No. I had been directed to be recovered
in the departmental proceedings and the same stood recovered.

In Union of India and Ors. v. B. Dev, (1998] 7 SCC 691, this Court E
upheld the plea of Union of India that in terms of the provisions of CCS
(Pension) Rules, 1972, in the event a gross misconduct or negligence
committed by the employer during the period of his service is proved, entire
amount of pension or a part thereof can be directed to be withheld. Therein,
however, the question which arose for consideration was as to whether in
absence of any pecuniary loss, Rule 9 of the CCS (Pension) Rules could be F
t invoked or not. Such a question does not arise for consideration in the present
case.

In Official Liquidator, Supreme Bank Ltd. v. P.A. Tendolkar (Dead) By
L.Rs., (1973] 3 SCR 364, the question which arose for consideration was as
to whether a director having regard.to the provisions of Section 235 of the G
Companies Act, committed acts of misfeasance. The said decision ex facie
has no application in the present case. Therein, this Court was concerned
with a case where the director was held to be not merely cognizant of but
· guilty of commission of fraud in the conduct of the business of a company
even though no specific act of dishonesty was proved against him personally. H
706 SUPREME COURT REPORTS [2006] 2 S.C.R.

A The duties of a Managing Director are provided for in the Companies Act as
also Articles of Association of the Company. He, thus, holds a position of
trust vis-a-vis the shareholders of the company. In that case all the directors
were found to have committed acts of fraud. The court took recourse to the
provisions of Section 45H of the Companies Act wherein special provisions
B for assessing damages against delinquent directors have been laid down.

Reliance has also been placed on M.S. Grewal and Anr v. Deep Chand
Sood and Ors., [2001] 8 SCC 151 wherein in a case where severa! school
children died of drowning due to negligence on the part of the teachers; this
Court, having regard to the provisions of the Fatal Accidents Act, 1855,
C opined that the school is vicariously liable for the acts of negligence of the
teachers.

In Jay Laxmi Salt Works (P) Ltd. v. State of Gujarat [1994] 4 SCC 1,
this Court again was considering a case under tortious law held that 'tort'
dictionarily means "breach of duty leading to damag,e".
D Negligence has further been defined to mean 'failure to do statutory duty or
otherwise giving rise to damage'.

Negligence in the performance of a duty under a contract of employment
may give rise to a disciplinary proceeding but as at present advised, in a case
of this nature, we are of the opinion that the same would not give rise to a
E cause of action for recovery of money for the goods lost as in the disciplinary
proceeding itself recovery of money from the delinquent can be directed by
way of punishment.

In Jay Laxmi Salt Works (supra), this Court observed:

F ".. .In Dunlop v. Woollahra Municipal Council14 it was held that
without malice the claim for misfeasance could not be accepted. Non-
feasance on the other hand is omission to discharge duty. But the
omission to give rise to action in torts must be impressed with some
characteristic, namely, malice or bad faith. The expressions
'malfeasance', 'misfeasance' and 'non-feasance' would, therefore,
G apply in those limited cases where the State or its officers are liable
not only for breach of care and duty but ii must be activated (sic
actuated) with malice or bad faith. The defective planning in
construction of a bundh, therefore, may be negligence, mistake,
omission but to say that it can only be either malfeasance, misfeasance .
'
H and non-feasance is not correct..."
PUNJAB STATE CIVIL SUPPLIES CO,RP, v. SIKANDER SINGH [SINHA, J,] 707

In Poonam Verma v. Ashwin Patel and Ors., [1996] 4 SCC'332, this A·
Court was concerned with negligence of medical practitioners giving rise to
a cause of action under the provisions of Consumer Protection Act.

We are, therefore, of the opinion that in view of the findings arrived at
by the High Court, the suit filed by the Appellant herein being not maintainable
have rightly been dismissed. B
So far as the second appeal preferred by the Defendant No. 2 being
,,,,, RSA No. 2232 of 1998 is concerned, it appears, that no substantial question
of law had been framed by the High Court as was mandatorily required to
be done in terms of Section l 00 of the Code of Civil Procedure. We have
noticed hereinbefore that the Defendant No. 2 filed a suit questioning the c
order imposing punishment of removal or dismissal from his service. The
said suit was dismissed. The appeal preferred by the Defendant No. 2 was
also dismissed. In the second appeal, indisputably, the High Court was
obligated to formulate a substantial question of law. The High Court proceeded
to allow the appeal preferred by the Defendant No. 2 only on the premise that D
1
the dereliction of duty vis-a-vis supervisory control is not attributable to him.
• The effect of the judgment in the civil suits filed by the Corporation would
~
1 require consideration in the light of the findings arrived at in the disciplinary
proceedings.

The High Court failed to consider that the ques~ion of negligence in a E
departmental proceedings and a suit for recovery of fuoney must ?e viewed
differently. In a disciplinary proceeding, the provisions of the Evidence Act
are not applicable unlike in a civil suit. In the suit filed by the Defendant
No.2, the only question which arose for consideration was different from the
issues which arose in the civil suit of the Corporation. The scope and ambit
F
of the suit filed by the Respondent No. 2 herein questioning the order of
t dismissal from services was limited.

The civil court could interfere with the said order in the event, inter
alia, it was found that the order of dismissal by way of punishment has been
imposed in violation of the procedures laid down in the statutory rules or in G
violation of the principles of natural justice or suffered from illegalities or
procedural irregularities were committed by the enquiry officer or the
-~ disciplinary authority in holding the departmental proceedings. In view of the
fact that the suit of the Defendant No. 2 was dismissed and the appeal preferred
' thereagainst had also been dismissed, it, was obligatory on the part of the
"f.
. High Court to formulate a substantial question of law. Without fonnulating H

1
708 SUPREME COURT REPORTS [2006) 2 S.C.R.

A such substantial question of law in a case of this nature the High Court could
not have set aside the concurrent findings of two courts.

R. V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P.
Temple and Anr., (2003] 8 SCC 752 whereupon reliance has been placed by
the learned counsel for the Respondent, has no application in the instant case.
B Therein, this Court although held that a substantial question of law was
required to be framed but in view of the fact that on merit it was found that
no substantial question of Jaw arose for consideration refused to remit the
matter back holding:

"The offshoot of the above discussion is that no question of law
c much less a substantial question of law arose in the case worth being
gone into by the High Court in exercise of its second appellate
jurisdiction under Section l 00 CPC. The High Court was bound by
the findings of fact arrived at by the two comts below and should not
have entered into the exercise of reappreciating and evaluating the
D evidence. The findings of facts arrived at by the courts below did not
suffer from any perversity. There was no non-reading or misreading
of the evidence. A high degree of preponderance of probability proving
title to the suit property was raised in favom of the appellant and the
courts below rightly concluded the burden of proof raised on the
plaintiff having been discharged while the onus shifting on the
E defendant remaining undischarged"

For the reasons aforementioned, the impugned judgment cannot be
sustained. It is set aside accordingly and the matter is remitted to the High
Court for consideration of the matter afresh in accordance with law.

F For the reasons aforementioned, Civil Appeal Nos. 6271 and 6273 of
2003 are dismissed and Civil Appeal No. 6269 of 2003 is allowed. No costs. t
K.G. Appeal dismissed.