Supreme Court of India
SARV U.P. GRAMIN BANKversusMANOJ KUMAR SINHA
- Citation
- 2010 INSC 90
- Decided
- 9 February 2010
- Disposal
- Appeal(s) allowed
- Bench
- B SUDERSHAN REDDY
Holding
Non‑supply of the enquiry report does not automatically vitiate a disciplinary order; the employee must show prejudice, which was not established, and the punishment was not disproportionate, so the High Court’s quashing of the order is set aside.
Summary
The respondent, a bank employee, was found guilty of financial irregularities, fraud and misappropriation and was punished with a reduction of pay after a departmental enquiry. The High Court set aside the punishment on the ground that the enquiry report had not been served to the employee, alleging a breach of natural justice. The Supreme Court examined the enquiry record, finding that the employee had been given ample opportunity to present his defence, that the enquiry was conducted in accordance with natural justice, and that no prejudice was shown from the non‑supply of the report. It held that non‑supply of the report does not ipso facto invalidate the disciplinary order; the employee must prove prejudice, which he failed to do, and the punishment was not disproportionate to the gravity of the charges. Consequently, the High Court’s order was set aside and the appeal was allowed.
Issues considered
- Whether the failure to serve the enquiry report to the employee violates the principles of natural justice and vitiates the disciplinary order.
- Whether the employee must demonstrate actual prejudice caused by the non‑supply of the report to have the order set aside.
- Whether the punishment of reduction of pay was proportionate to the proved misconduct.
- Whether the High Court erred in quashing the disciplinary orders without a finding of prejudice.
Legislation cited
Subjects
service lawdisciplinary actionnatural justiceaudi alteram partemprejudicereduction of paybank employee misconductprocedural fairness
Judgment
[2010] 2 S.C.R. 512
. ~A SARV U.P. GRAMIN BANK
v.
MANOJ KUMAR SINHA
(Civil Appeal No. 1639 of 2010)
FEBRUARY 09, 2010
B
[B. SUDERSHAN REDDY AND SURINDER SINGH
NIJJAR, JJ.]
Service Law - Misconduct - Punishment - Bank
C employee - Found guilty of charges ol misappropriation, fraud
and financial irregularities - Disciplinary Authority imposed
punishment of "reduction of pay" - Order upheld by appellate
authority - High Court allowed the writ petition of employee
on ground that he had not been served with the enquiry report
D - Justification of - Held: Not justified - Order: of punishment
· was not vitiated since no prejudice was shown to have been
of
caused to respondent-employee by non-supply the enquiry
report - In any event, considering the gravity of the charges
proved, the punishment imposed was lenient finough -
E Administrative Law - Natural justice.
Respondent, a bank employee, allegedly committed
various acts of omission and commissions relating to
financial irregularities, fraud and misappropriation.
F Departmental enquiry was held whereafter, taking into
consideration the enquiry report, the Disc.iplinary
Authority imposed the punishment of "reduction of pay"
after giving an opportunity of personal hearing to the
respondent.
G Respondent challenged the order of the Disciplinary
Authority, but the order was upheld by the appellate
authority (i.e. the Board of Directors of the Bank).
Respondent filed writ petition. The High Court held that
since a copy of the enquiry report had not been served
H 512
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 513
on the respondent, the action of the appellant-bank was A
violative of the principles of natural justice, and
accordingly allowed the writ petition. Hence the present
appeal.
Allowing the appeal, the Court B
HELD:1.1. The plea of the respondent before the High
Court that no proceedings had taken place in the enquiry
is clearly false and belied by the contents of the enquiry
report. From the perusal of the enquiry report, it become
apparent that the respondent has incorrectly stated that C
no date was fixed by the enquiry officer and straightaway
the show cause notices were issued. This apart, it is also
noticed in the enquiry report that for proving the charges ·
levelled against the respondent in the charge sheet, the
presenting officer tendered management exhibits. The D
Branch Manager, appeared as a witness. It is also
recorded that the respondent himself presented his
defence and upon completion of the evidence the
presenting officer and the respondent were granted time
for giving their respective briefs. Thereafter there is a E
detailed discussion of the evidence given on behalf of the
Bank as well as the respondent. Respondent did not
make any protest before the enquiry officer of not being
permitted to cross examine the witness. Thus the enquiry
proceedings have been conducted in accordance with F
the principles of natural justice. In case the respondent
felt genuinely aggrieved he would have raised the issue
at the earliest possible stage. [Paras 25 and 26] [526-0-
H; 527-A-B-E-F]
1.2. The charges which have been proved against G
the respondent are all pertaining to financial irregularities,
fraud and misappropriation. At the personal hearing, the
respondent had clearly stated that efforts have been
made l>y him for effecting recovery. He had also offered
that the amounts may be adjusted from other loan H
514 SUPREME COURT REPORTS [2010] 2 S.C.R.
A accounts which were found to be not feasible. The issue
with regard to the non-supply of the enquiry report is
raised for the first time in appeal. Even at that stage the
appellant does not state as to what prejudice was caused
by the non-supply of the enquiry report. He also did not
B seek any adjournment of the personal hearing on the
ground that he be supplied the enquiry report. [Para 25]
[527~B-D]
1.3. At the time when the plea was raised before the
C High Court that the impugned orders are vitiated on
account of the non-supply of enquiry report, it would
have been appropriate for the High Court to examine the
averments made in the writ petition. A perusal of the writ
petition would show that the petitioner has failed to lay
any foundation to establish that any prejudice has been
D caused by the non-supply of the enquiry Mport. No.
prejudice was actually caused to the respondent. There
was no failure of justice in the facts and circumstances
of this case by non-supply of the enquiry report to the
respondent. The punishment imposed on the respondent
E cannot be said to be disproportionate to the gravity of the
charges proved against the respondent. The charges
related to the conduct of the respondent in a financial
institutiOn whereby taking advantage of the official
position he attempted to procure unlawful pecuniary
F benefits for himself. The charges related to
misappropriation, fraud and irregularities with regard to
the maintenance of accounts. He had been siphoning off
money belonging to the account holders. He was holding
a position of trust in the Bank, which he betrayed. The
G Bank has already been sympathetic and lenient enough.
[Paras 27, 31 and 32] [527-F-H; 528-A; 535-C-F]
ECIL I(. B.K. Arunakar, (1993) 4 SCC 727· - followed.
Haryana Financial Corp. and Anr. v. Kai/ash Chandra
H
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 515
Ahuja, (2008) 9 SCC 31 - relied on. A
Union of India v. Mohd. Ramzan Khan, (1991) 1 SCC
588 and Kai/ash Chandra Asthana v. State of UP. 1988 (3)
sec 600, referred to.
Case Law Reference: B
(1991) 1 sec 588 Para 2 referred to
(1993) 4 sec 121 Para 11 followed
(2008) 9 sec 31 Para 11 relied on c
1988 (3) sec 600 Para 28 referred to
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1639 of 2010.
D
From the Judgment & Order dated 16.9.2008 of the High
Court of Judicature at Allahabad sitting at Lucknow in Writ
Petition No. 1753 (S/B) of 2002.
Dhruv Mehta, Yashraj Singh Deora, Mohit Abraham and
T.S. Sabarish (for K.L. Mehta & Co.) for the Appellant. E
Sunil Kumar Jain, Aneesh Mittal, A.K. Soni and Jaya
Tomar for the Respondent.
The Judgment of the Court was delivered by
F
SURINDER SINGH NIJJAR, J. 1. Leave granted.
2. Sarv U.P. Gramin Bank has filed this appeal against the
judgment and order dated 16.9.2008 of the High Court of U.P.
(Lucknow Bench) in Writ Petition No.1753 (SB) of 2002. By the G
aforesaid judgment the High Court relying upon judgment of this
Court in Union of India vs. Mohd. Ramzan Khan (1991) 1 SCC
588 quashed the impugned orders dated 3.4.2000, annexure
P-4; 3.4.2002, annexure P-5 and 9.9.2002 annexure P-6 to the
writ petition with consequential benefits. Libefty has been 1--;
10
516 ' SUPREME COURT REPORTS [201 O] 2 S.C.R. -·
A granted to the Bank to serve fresh show cause notice along with
copy of the enquiry report on the writ petitioner (respondent
herein) and to pass fresh orders in accordance with law.
3. We may notice here the essential facts leading to the
B passing of the aforesaid judgment/order of the High Court. The
writ petitioner (hereinafter referred to as the respondent) joined
Devi Pattan Kshetria Gramin Bank, Gonda (now Sarva U.P.
Gramin Bank) as an officer. He was served with two charge
sheets dated 9.11.2000 and 8.3.2001 for various acts of
omissions and commissions while working at branches
C Khorhansa and Mahrajganj, Trai district Gonda respectively. He
was suspended by Order dated 1.3.2001. Respondent
submitted reply to the chargesheet. He denied the charges
mentioned therein. Thereafter two separate departme.ntal
enquiries were held, in which the respondent fully participated.
D On 19.5.2001 the Enquiry Officer submitted the enquiry report
with regard to chargesheet dated 9.11.2000. Charge No.1 has
been split up into Charge 1-A and Charge 1-B respectively.
Charge No.1-A has been held to be proved whereas Charge
1-8 has been held to be partially proved. Similarly Charges
E No.2 to 3 have been split up into two parts each, i.e., Charges
2-A, 2-B; 3-A and 3-B. Here also Charge 2-A has been held
to be proved, Charge 2-B is held to be partially proved; Charge
3-A is said to be proved, 3-B is held to be partially proved.
. '
F · 4. In chargesheet dated 8.3.2001, the Enquiry Officer in
its report dated 13.5.2001 also found the same to be proved.
The disciplinary authority examined the Enquiry reports and all
the relevant documents forming part of the enquiries. Agreeing
with the findings of the Enquiry Officer the Disciplinary Authority
issued two show cause notices to the respondent proposing
G the punishment of reduction of pay by six stages permanently.
5. Thereafter the respondent was given an opportunity for
a personal hearing by disciplinary authority on each of the
Enquiry Reports. Taking into consideration the explanation given
\ H by the respondent, the disciplinary authority passed two orders
(
I·
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 517
[SURINDER SINGH NIJJAR, J.]
on 3.4.2001 imposing the punishment of "reduction of pay by A
six stages permanently" and "reduction of pay by four stages"
in relation to charge sheets 9.11.2000 and 8.3.2001
respectively.
6. The appeals filed by the respondent against the B
aforesaid orders of punishment were dismissed by the Board
of Directors of the Bank in its meeting dated 4.9.2002. The
decision of the Board was comrnunicated to the respondent
vide letter dated 9.9.2002.
7. The respondent, therefore, filed writ petition challenging C
the orders dated 3.4.2002 and 9.9.2003. The Division Bench
of the High Court allowed the writ petition only on the ground
that since a copy of the enquiry report was not served on the
respondent; the action of the petitioner Bank is violative of the
principles of natural justice in view of the judgment of the case D
in Mohd. Ramzan Khan case (supra). It is observed by the
High Court as follows:
"Sri. Virendra Misra learned counsel for the respondents
Bank has not placed any material on record to show that E
the enquiry report was served on the petitioner. Sri
Virendera Misra further argued that the regular enquiry was
conducted in which the petitioner had participated.
However, the copy of show cause (Annexure-2) which had
been served on the petitioner, does not indicate that the
F
enquiry report was served alongwith show cause notice.
Accordingly to learned counsel for the petitioner, the
enquiry officer has not fixed any date, time and place of
the enquiry and the petitioner was not allowed to cross
examine the witness. However learned counsel for the
petitioner submits that straight way after reply to the show G
cause notices the punishment order was passed hence it
is violative of principles of natural justice.
The submission of learned counsel for the petitioner is that
non service of enquiry report is violative of principles of H
518 SUPREME COURT REPORTS [2010] 2 S.C.R.
A . natural justice in view of judgment of Hon'ble Supreme
Court in the case, reported in 1991 Vol.1 SCC 588 Union
of India Vs. Mohammad Ramzan Khan service of show
cause notice is a p~rt and parcel of proceedings. It is
settled law passed in Ramza.n Khan case (supra).
B Accordingly, the impugned order seems to be substantially
illegal. The appeal preferred by the petitioner against the
order of punishment, was also dismissed by an order
dated 9.9.2002 (Annexure-6).
In vie"Y of the settled proposition of law, the writ petition
c deserves and is hereby allowed. A writ in the nature of
• certiorari is issued quashing the impugned orders dated
3.4.2002 (Annexure-4), 3.4.2002 (Annexure-5) and
9.9.2002 (Annexure-6) with consequential benefits .
.However, liberty is given to the respondents to serve fresh
D show cause notice alongwith copy of the enquiry report
forthwith by giving reasonable time to the petitioner to
submit the response and thereafter pass fresh orders in
accordance with law."
E 8. The Bank has questioned the legality of the aforesaid
judgment of the High court on a number of grounds. Primarily
it is argued that the High· Court committed a serious error in
not examining the issue as to whether any prejudice has been
caused to the respondent by non-supply of the enquiry reports.
F It is further the submission of the learned counsel for the
petitioner Bank that it was incumbent on the respondent to
plead and establish before the High Court the prejudice that
has been suffered by him. According. to the learned counsel the
respondent had substantially raised only two grounds in the writ
G petition. First ground is in paragraph 5 of the writ petition
wherein the respondent had made an assertion as follows:
"That separately a Chargesheet was issued to the
petitioner against which the petitioner has submitted his
reply, denying the charges mentioned therein, and
H thereafter no other proceedings took place in the said
,. ....
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 519
[SURINDER SINGH NIJJAR, J.]
enquiry, but on the basis of the petitioner's reply the said A
enquiry was said to have been concluded & straight away
the Show Cause Notices were issued to the petitioner, ,
even without supplying a coy of any enquiry-report, if
submitted in the matter."
B
9. According to the learned counsel, this ground pertains
to the procedural irregularities in conducting the d~partmental
enquiries. The claim is that since the respondent has been
denied opportunity to cross examine the witnesses, there is a
breach of rules of natural justice. Respondent claims denial of C
reasonable opportunity to defend himself, in the enquiry
proceedings.
10. The second ground is with regard to the non-supply of
the enquiry reports which is pleaded in paragraph 9 of the
petition as follows: D
"It is also submitted that in the circumstances not only
t.he enquiry has been conducted against the petitioner in
a most illegal & arbitrary manner, but the order of the
punishment has also been passed illegally and withoY.t E
following the norms and procedure prescribed under the
law and as declared by the Apex Court through its so
many decisions on the question of supplying the 'Copy of
the enquiry report to the delinquent-employee before
awarding any puni$hment to him," -
F
11. According to the learned counsel, the Division Bench
erred in such circumstance in quashing the orders of
punishment as well as the order of the appellate authority without
enquiring into the question whether any prejudice has been
caused to the respondent. According to the learned counsel, G
the respondent was found guilty of charges of fraud and
misappropriation. In normal course in such cases punishment
of dismissal from service would be imposed. The Board has,
however, imposed a much lesser punishment. Therefore, the
writ petition ought to have been dismissed by the High Court. H
f
520 SUPREME COURT REPORTS [2010] 2 S.C.R.
A 12. Learned counsel relied on judgments of this Court in
ECIL vs. B.K Arunakar (1993) 4 SCC 727; and in Haryana
Financial Corp. and Anr. vs. Kai/ash Chandra Ahuja 2008 (9)
sec 31. According to the learned counsel even if copy of the
enquiry report is not given, it was necessary for the High Court
s to record a finding as to what prejudice had been caused to
the respondent. Mere non-supply of the Enquiry Report would
not justify quashing of the entire disciplinary proceedings. The
writ petition is completely silent as to what prejudice has been
caused to the respondent. The respondent did not raise the
c issue at the personal hearings. He only mentioned it in the
memorandums of appeal. Even then he did not specify as to
what prejudice has been caused to him. Therefore, the High
Court has passed a wholly erroneous order contrary to the law
laid down by this Court.
D 13. Learned counsel for the respondent, however,
submitted that entire amount which has been misappropriated
has been recovered, therefore the punishment imposed on the
respondent was wholly unjustified. Relying on the judgment of
Mohd. Ramzan Khan (supra) learned counsel has submitted
E that prejudice has to be presumed as the respondent has been
denied reasonable opportunity by non-supply of the enquiry
report.
14. We have considered the submissions made by the
F learned counsel for the parties. When the matter came up for
initial hearing we passed the following order:
"Learned counsel for the petitioner submits that the
judgment of the High Court is contrary to the decision of
this Court in Managing Director, ECIL vs. B. Karunakar, ·
G 1993 (4) SCC 727 and decision in Haryana Financial
Corporation and another vs. Kai/ash Chandra Ahuja,
2008(9) SCC 31. Instead of sending the matter back to
the High Court we are of the view that an opportunity
whether there was any prejudice on account of the inquiry
H
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 521
[SURINDER SINGH NIJJAR, J.]
report not being furnished along with the· show cause A
notice, may be given to the respondent before us.
Accordingly, we direct the respondent to show cause
whether any_ prejudice was caused by non-receipt of
inquiry report along with show cause notice issued by the
Bank. Call after four weeks." B
This course has been adopted by us to avoid the matter being
remanded back to the High Court or the Disciplinary Authority.
( 15. Pursuant to the aforesaid order, the respondent has
filed an additional counter affidavit, in which he has emphasized C
the desirability of remanding the matter back to the disciplinary
authority for re-determination of the matter. He has emphasized
that failure to supply the enquiry report to the delinquent
deprives him of making a proper representation to the
disciplinary authority, before that authority arrives at its own D
findings with regard to the guilt or otherwise of an employee.
This admittedly not having been done, clearly the respondent
was prejudiced in submitting his defence.
16. Even if this Court concludes not to remand the matter E
back to the disciplinary authority, at least it has to be remanded
back to the High Court. He has stated that a number of points
were raised before the High Court which have not been
considered on merits, as the High Court decided the writ
petition only on the ground of non-furnishing of the enquiry
F
report. Since the Enquiry Officer and the disciplinary authority
had concluded that some of the charges have been partially
proved and others completely proved it was necessary to
supply the findings of the enquiry reports. Only on knowing the
reasoning of the Enquiry Officer, could the iespondent give an
effective explanation. It is further pointed out that with regard G
to the charges relating to Maharajganj, the entire amount has
been recovered. This fact is noticed by the disciplinary authority.
But quite illegally, it still proceeded to impose punishment, on
the ground of proved misconduct. Since the disciplinary
authority arrived at the decision on the basis of charges which H
522 SUPREME COURT REPORTS [201 O] 2 $.C.R.
A were partially/completely proved it was not possible to defend,
during personal hearings. According to the respondent, this was
stated _Q_y him at the personal hearing, but it was ignored. In fact
the disciplinary authority was adamant to punish the respondent.
All these issues could have been highlighted if the High Court
B had decided the writ petition on merits. Therefore, matter needs
to be remanded back to the High Court for a decision on
merits, on all the issues raised by the respondent.
17. In our opinion, the aforesaid grievances of the
C respondent are without any factual basis. The petitioner has
place!d on the record of this Court the translated copy of the
chargesheet dated 9.11.2000 and 8.3.2001; reply of the
respondent dated 13.12.2000 to the chargesheet dated
9.11.2000 and reply dated nil to chargesheet dated 8.3.2001,
translated copy of the enquiry report 19.5.2001, translated copy
D of the personal hearing proceedings on 20.7.2001 and
1.4.2002 and translated copy of the appeal dated 17.5.2003.
18. In the counter affidavit filed by the petitioner Bank in
the High Court, the allegations made in the writ petition have
E been denied. It is stated that as the replies submitted by
respondent were not found to be satisfactory, departmental
proceedings were initiated_ against him. It is further stated that
"the entire enquiry proceedings were attended by petitioner. He
was given full opportunity of being heard and a copy of the
F enquiry report and show cause notice regarding proposed ·
punishment was also· proved in compliance of principles of
natural justice. The entire proceedings were held fairly, properly
i.n which the petitioner also participated." In paragraph 7 it is
also stated that "the orders were passed after taking into
G consideration the reply submitted and the views expressed by
the petitioner. After considering overall facts, circumstances,
material on record, findings of the enquiry officer as also the
defence taken by the petitioner the order of punishment dated
3.4.2002 was passed." Similarly, in paragraph 8 the Bank
H stated that "the petitioner had filed two appeals to the Appellate
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 523
[SURINDER SINGH NIJJAR, J.]
Authority against the final order dated 3.4.2002. It is specifically A
and categorically denied that the appellate authority i.e. the
Board of Devi Pattan Kshetria Gramin Bank dismissed the
appeal without considering the grounds taken by the petitioner.
This allegation is wholly misconceived and without any basis.
In fact the Board of Directors the appellate authority after taking B
into account overall facts and grqunds taken by the petitioner
in the memo of appeals dismissed the appeal."
19. These averments are borne out by conduct of the
respondent at personal hearings on 30.7.2001 and 1.4.2002. C
In the proceeding on 30.7.2001 the respondent was asked by
the Chairman of the Bank whether he had anything to say with
regard to the proposed punishment. The respondent replied as
follows:
"In the charge sheet dated 9.11.2000 all out efforts D
were made by me to remove the deficiencies mentioned
in the charge-sheet dated 9.11.2000. Efforts were made
for the recovery also. I request to you that in the accounts
FDR and in the Savings accounts, where money is there,
those may be adjusted in the loan accounts. By me, efforts E
shall be made in future also for recovery in the accounts.
You are requested that in case in future, accounts are
regularized, then kindly reconsider on the proposed
penalty."
20. Pursuant to the aforesaid request of the respondent,
F
the Chairman discussed the matters with the Branch Manager,
Khorhansa over the telephone. The Branch Manager, however,
informed that the amount could not be adjusted as "the self
accounts of the debtors not being there; that of the relation,
husband, wife etc. about which order was given to them for G
furnishing the written details.
In future not merely in the regularization of account-rather
the interest of the bank may be completely safe, or complete
recovery be made, on this item also in today's date no H
524 SUPREME COURT REPORTS [2010] 2 S.C.R.
A assurance can be given. The personal hearing concludes with
the following remark."
"During the course of the personal hearing no such
concrete matters/documents etc. came to limelight, on the basis
thereof, we propose punishment could be re-considered. Hence
8
the punishment proposed is confirmed."
21. Again in the personal hearing on 1.4.2002 in the head
· office at 4 p.m., the Chairman asked the respondent whether
he had anything to say with regard to the proposed punishment
C in the chargesheet dated 8.3.2001. The respondent merely
stated "you are requested that kindly lessen up the proposed
punishment showing sympathy. To this the Chairman replied,
that "your acts are to be observed in Vigilance view in regard
to the above case/chargesheet. In our view, what other
D punishment than this could be lesser punishment? We have
already shown you so much sympathy". To this the respondent
merely replied that "Whatever decision is taken by·you, is fine."
The hearing is concluded with the observation "during the
course of personal hearing, no such strong evidence and fact
E have been produced on the basis of which proposed
punishment could be reconsidered. Thus proposed punishment
is confirmed. No additional amount is to be paid for suspension
period."
22. The aforesaid exchange between the Chairman of the
F Bank and the respondent makes it abundantly clear that
grievances of respondent were addressed with an open mind.
He did not make any protest about being handicapped by non-
supply of the Enquiry Report.
G 23. In the appeal filed by the respondent against the order
dated 3.4.2002, it is stated that whatever is stated in the appeal
was also stated by him during the course of enquiry
proceedings. He has further stated that the presenting officer
has not produced any evidence in regard to the facts in his
H presentation. Facts could not be deemed proved merely on
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 525
[SURINDER SINGH NIJJAR, J.]
presentation. The respondent emphasized that necessary A
postings were made in all the registers as per rule. Entire
amount was deposited in the branch along with interest. Thus
any sort of financial or social loss has not been suffered by the
banks nor it is going to occur in the future. It was emphasized
by the respondent that the entire amount was deposited before B
the date of suspension. Therefore, no amount has been
misappropriated. According to the respondent, it was just
procedural irregularity which has been rectified in time. The
justification of procedural irregularity is reiterated by the
respondent time and again. After concluding the appeal on c
merits respondent also highlighted the following facts:
"Report of Enquiry Officer has not been given and,
therefore, I have not got the opportunity to state
everything during the course of my personal
hearing. D
No witness has been produced during the course
of enquiry proceedings.
Presenting Officer has stated so many things E
without any documentary evidence.
Entire amount with interest has been deposited
before the date of suspension. Any sort of financial
or social loss has not been suffered by the Bank
nor it going to occur in future. F
I have given my full cooperation in the enquiry
proceedings. Date of my personal hearing was
fixed for 10.08.2001 vide letter dated 04.08.2001,
but Disciplinary Authority without any strong reason G
while showing only unavoidable circumstances,
postponed the date fixed for my personal hearing
and it was fixed for 01.04.2002 vide letter dated
23.03.2002 which led to extension of my
suspension period and I suffered mental and
H
526 SUPREME COURT REPORTS [2010] 2 S.C.R.
A financial hardships."
24. In the appeal against the Order dated 3.4.2002 relating
to chargesheet 9.11.2000, the respondent again stated as
follows:
B "The punishment has been given on the complete/partly
proved charges.
Punishment has been given on the ba$iS of possibility. It
has not been intimated as to what is the grounds of the
c possibility.
On which grounds, the Enquiry Officer has proved the
charge completely/partly, its report has not been given to
me, due to which I did not get the opportunity to state my
own complete version, during the course of personal
D
hearing."
25. From the perusal of the enquiry report, it become
apparent that following dates were fixed for the enquiry
proceedings: 21.1.2001, 29.1.2001, 3.2.2001, 24..2.2001,
E 7.3.2001, 21.3.2001, 11.4.2001 and 21.4.2001. Thus the
petitioner has incorrectly stated that no date was fixed by the
enquiry officer and straightaway the show cause notices were
.... issued. This apart, it is also noticed in the enquiry report that
for proving the charges levelled against the respondent in
F charge sheet dated 9.11.2000 the presenting officer tendered·
management exhibits ME-1 to ME-13. The branch Manager,
Shri K.P. Singh, appeared as MW-1. It is also recorded that
the respondent himself presented his defence and in the form
of defence side evidence DE-1 and DE-2. Upon completion
G of the evidence the presenting officer and the respondent were
granted time upto 30.4.2001 for giving their respective briefs.
Thereafter there is a detailed discussion of the evidence given
on behalf of the Bank as well as the respondent. Respondent
did not make any protest before the enquiry officer of not being
H permitted to cross examine the witness. We have no hesitation ·
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 527
[SURINDER SINGH NIJJAR, J.]
in coming to the conclusion that the enquiry proceedings have A
been conducted in accordance with the principles of natural
justice. We are of the opinion that these grievances have been
subsequently aired just to influence the proceedings in Court.
In case the respondent felt genuinely aggrieved he would have
raised the issue at the earliest possible stage. The charges B
which have been proved against the respondent are all
pertaining to financial irregularities fraud and misappropriation.
At the personal hearing the respondent had clearly stated that
efforts have been made by him for effecting recovery. He had
also offered that the amounts may be adjusted from other loan c
accounts which were found to be .riot feasible. The issue with
regard to the non-supply of the enquiry report is raised for the
first time in appeal. Even at that stage the appellant does not
state as to what prejudice was caused by the non-supply of the
enquiry report. He also did not seek any adjournment of the
0
personal hearing on the ground that he be supplied the enquiry
report.
26. It appears that without taking into cansiderati~n the
aforesaid facts and circumstances and without scrutinizing the
counter affidavit filed by the petitioner Bank, the High Court E
accepted that non-supply of the enquiry report has rer}dered the
orders of punishment dated 3.4.2002 and the orders and
appeal n_oest ~nd void. The plea of the respondent before the
High Court that no proceedings had taken place in the enquiry
is clearly false which is belied by the contents of the enquiry F
report.
27. At the time when the plea was raised before the High
Court that the impugned orders are vitiated on account of the
non-supply of enquiry report, it would have been appropriate. G'
for the High Court to examine the averments made in the writ
petition. A perusal of the writ petition would show that the
petitioner has failed to lay any foundation to establish that any
prejudice has been caused by the non-supply of the enquiry
report. In the case of ECIL (supra) a constitution bench of this
H
528 SUPREME COURT REPORTS [2010] 2 S.C.R.
A Court reiterated the ratio of law in Mohd. Ramzan Khan case
(supra) as follows:
"As held by this Court in Union of India v. Mohd. Ramzan
Khan, when the inquiring authority and the disciplinary
authority are not one and the same and the disciplinary
B
authority appoints an inquiring authority to inquire into
charges levelled against a delinquent officer who holds
inquiry, finds him guilty and submits a report to that effect
to the disciplinary authority, a copy of such report is
required to be supplied by the disciplinary authority to the
c delinquent employee before an order of punishment is
imposed on him. It was also held that non-supply of report
of the inquiry officer to a delinquent employee would be
violative of principles of natural justice. The Court observed
that after the Constitution (Forty-second Amendment) Act;
D 1976, second opportunity contemplated by Article 311 (2)
of the Constitution had been abolished, but principles of
natural justice and fair play required supply of adverse
material to the delinquent who was likely to be affected by
such material. Non-supply of report of the inquiry officer to
E the delinquent would constitute infringement of the doctrine
of natural justice."
28. The ECIL matter was placed before the Constitution
Bench as the attention of the Court was invited to a three-Judge
F Bench decision of this Court in Kai/ash Chandra Asthana vs.
State of U.P. 1988 (3) sec 600 wherein it was held that non-
supply of the report would not ipso facto vitiate the order of
punishment in the absence of prejudice to the delinquent. Upon
a detailed consideration of the entire case law this court laid
G down certain principles which are as follows:
"18. In this view of the matter, the Court dismissed the writ
petition. It would thus be clear that the contention before
this Court in that case was that the copy of the report of
the inquiring authority was necessary to show cause at the
H second stage, i.e., against the penalty proposed. That was
SARV U.P. GRAMIN .BANK v. MANOJ KUMAR SINHA 529
[SURINDER SINGH NIJJAR, J.]
also how the contention was understood by this Court. The A
contention was not and at least it was not understood to
mean by this Court, that a copy of the report was
necessary to prove the innocence of the employee before
the disciplinary authority arrived at its conclusion with
regard to the guilt or otherwise on the basis of the said B
report. Hence, we read nothing in this decision which has
taken a view contrary to the view expressed in E. Bashyan
case by a Bench of two learned Judges or to the view
taken by three learned Judges in Union of India v. Mohd.
Ramzan Khan. c
19. In Mohd. Ramzan Khan case the question squarely fell
for consideration before a Bench of three learned Judges
of this Court, viz., that although on account of the Forty-
second Amendme!Jt of the Constitution, it was no longer
necessary to issue a notice to the delinquent employee to D
show cause against the punishment proposed and,
therefore, to furnish a copy of the enquiry officer's report
along with the notice to make representation against the
penalty, whether it was still necessary to furnish a copy of
the report to him to enable him to make representation E
against the findings recorded against him in the report
before the disciplinary authority took its own decision with
regard to the guilt or otherwise of the employee by taking
into consideration the said report. The Court. held that
whenever the enquiry officer is other than the disciplinary F
authority and the report of the enquiry officer holds the
employee guilty of all or any of the charges with proposal
for any punishment or not, the delinquent employee is
entitled to a copy of the report to enable him to make a
representation tp the disciplinary authority against it and G
the non-furnishing of the report amounts to a violation of
the rules of natural justice. However, after taking this view,
the Court directed that the law laid down there shall have
prospective application and the punishment which is
already imposed shall not be open to challenge on that H
530 SUPREME COURT REPORTS [2010] 2 S.C.R.
A ground. Unfortunately, the Court by mistake allowed all the
appeals which were before it and thus set aside the
disciplinary action in every case, by failing to notice that
the actions in those cases were prior to the said decision.
This anomaly was noticed at a later stage but before the
B final order could be reviewed and rectified, the present
reference was already made, as stated above, by a Bench
of three learned Judges. The anomaly has thus lent another
dimension to the question to be resolved in the present
case.
c 20. The origins of the law can also be traced to the
principles of natural justice, as developed in the following
cases: In .A.K. Kraipak v. Union of India it was held that
the rules of natural justice operate in areas not covered by
any law. They do not supplant the law of the land but
D supplement it. They are not embodied rules and their aim
is to secure justice or to prevent miscarriage of justice. If
that is their purpose, there is no reason why they should
not be made applicable to administrative proceedings
also especially when it is not easy to draw the line that
E demarcates administrative enquiries from quasi-judicial
ones. An unjust decision in an administrative inquiry may
have a more far-reaching effect than a decision in a quasi-
judicial inquiry. It was further observed that the concept of
natural justice has undergone a great deal of change in
F recent years. What particular rule of natural justice should
apply to a given' case must depend to a great extent on
the facts and circumstances of that case, the framework
of the law under which the inquiry is held and the
constitution of the Tribunal or the body of persons
G appointed for that purpose. Whenever a complaint is made
before a Court that some principle of natural justice has
been contravened, the Court has to decide whether the
observance of that rule was necessary for a just decision
on the facts of that case: The rule that inquiry must be held
H in good faith and without bias and .not arbitrarily or
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 531
[SURINDER SINGH NIJJAR, J.]
unreasonably is now included among the principles of A
natural justice.
21. In Chairman, Board of Mining Examination v. Ramjee
the Court has observed that natural justice is not an unruly
horse, no lurking land mine, nor a judicial cure-all. If fairness B
is shown by the decision-maker to the man proceeded
against, the form, features and the fundamentals of such
essential processual propriety bei'ng conditiohed by the
facts and circumstances of each situation, no breach of
natural justice can be complained of. Unnatural expansion
of natural justice, without reference to the administrative C
realities and other factors of a given case, can be
exasperating. The Courts cannot look at law in the abstract
or natural justice as a mere artifact. Nor can they fit into a
rigid mould the concept of reasonable opportunity. If the
totality of circumstances satisfies the Court that the party D
visited with adverse order has not suffered from denial of
reasonable opportunity, the Court will decline to be
punctilious or fanatical as if the rules of natural justice were
sacred scriptures.
E
23. What emerges from the above survey of the law on the
subject is as follows.
24. Since the Government of India Act, 1935 till the Forty-
second Amendment of the Constitution, the Government
servant had always the right to receive the report of the
F
enquiry officer/authority and to represent against the
findings recorded in it when the enquiry office'r/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 G
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 enquiry officer's
report since, as held by the Courts, the right to show cause
against the penalty also implied the right to represent H
532 SUPREME COURT REPORTS · [2010] 2 S.C.R.
A 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 enquiry officer's report
B 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 because as the law stood prior to the Forty-second
Amendment of the Constitution, the two rights arose
c simultaneously only' at the stage when a notice.to show
cause against the proposed penalty was issued. If the
disciplinary authority after considering the enquiry officer's
report had droppe.d 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
D
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 CclJse against the proposed penalty. The right to
receive the report and to represent against the findings
E 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 Forty-second
Amendment of the Constitution dispensed with the
issuance of the notice to show cause against the penalty
F 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
G independent of each other."
29. The aforesaid ratio of law has been reiterated by this
Court in Haryana Financial Corp. and Anr. (supra). This court
again critically examined the entire issue and observed as
H
SARV IJ.P. GRAMIN BANK v. MANOJ KUMAR SINHA 533
[SURINDER SINGH NIJJAR, J.]
follows: A
".21. From the ratio laid down in B. Karunakar1 it is explicitly
r.l~ar that the doctrine of natural justice requires supply of
a copy of the inquiry officer's report to the delinquent if such
inquiry officer is other than the disciplinary authority. It is 8
also clear that n1n-supply of report of the inquiry officer is
in the breach of n,tural justice. But it is equally clear that
failure to supply a report of the inquiry officer to the
delinquent employee would not ipso facto result in the
proceedings being declared null and void and the order
of punishment non est and ineffective. It is for the delinquent C
employee to plead and prove that non-supply of such
report had caused prejudice and resulted in miscarriage
of justice. If he is unable to satisfy the court on that point,
the order of punishment cannot automatically be set aside.
D
22. In the instant case, it is not in dispute by and between
the parties either before the High Court or before us that
a copy of the report of the inquiry officer was not supplied
to the delinquent writ petitioner. While the contention of the
writ petitioner is that since failure to supply the inquiry E
officer's report had resulted in violation of natural justice
and the order was, therefore, liable to be quashed, the
submission on behalf of the Corporation is that no material
whatsoever has been placed nor is a finding recorded by
the High Court that failure to supply the inquiry officer's F
report had resulted in prejudice to the delinquent and the
order of punishment was, therefore, liable to be quashed.
23. The High Court, unfortunately, failed to appreciate and
apply in its proper perspective the ratio laid down in B.
Karunakar1 , though the High Court was conscious of the G
controversy before it. The Court also noted the submission
of the Corporation tha' there was "no whisper'' in the writ
petition showing any prejudice to the delinquent as required
by B. Karunakar 1 , but allowed the writ petition and s~t
aside the order of punishment observing that in such H
534 SUPREME COURT REPORTS [201 O] 2 S.C.R.
A cases, prejudice is "writ large".
24. In our considered view, the High Court was wrong in
making the above observation and virtually in ignoring the
ratio of B. Karunakar1 that prejudice should be shown by
the delinquent. To repeat, in B. Karunakar1 , this Court
B
stated: (SCC p. 757, para 30)
"30. (v) ... Whether in fact, prejudice has been caused to
the employee or not on account of th& denial to him of the
report, has to be considered on the facts and
c circumstances of each case."
25. It is settled law that principles of natural justice have
to be complied with. One of the principles of natural justice
is audi alteram partem (hear the other side). But it is
D equally well settled that the concept of "natural justice" is
not a fixed one. It has meant many things to many writers,
lawyers, jurists and systems of law. It has many colours,
shades, shapes and forms. Rules of natural justice are not
embodied rules and they cannot be imprisoned within the
straitjacket of a rigid formula."
E
30. Thereafter, this .court notices the development of the
principle that prejudice must be proved and not presumed even
in cases where procedural requirements have not been
complied with. The Court notices a number of judgments in
F which the action has not been held ipso facto illegal, unlawful
or void unless it is shown that non-observance had prejudicially
affected the applicant. Ultimately, it is concluded ·as follows:
"44. From the aforesaid decisions, it is clear that though
G supply of report of the inquiry officer is part and par~erof
natural justice and must be furnished to the delinquent
employee, failure to do so would not automatically result
in quashing or setting aside of the order or the order being
declared null and void. For that, the delinquent employee
has to show "prejudice". Unless he is able to show that.
H
SARV U.P. GRAMIN BANK v. MANOJ KUMAR SINHA 535
[SURINDER SINGH NIJJAR, J.]
non-supply of report of the inquiry officer has resulted in ·A
prejudice or miscarriage of justice, an order of punishment
cannot be held to be vitiated.' And whether prejudice had
been caused to the delinquent employee· depends upon
the facts and circumstances of each case and no rule of
universal application can be laid down." B
31. We have examined the factual situation in this case
elaborately to see as to whether any prejudice has been caused
to the respondent. We are unable to accept the submissions
of the learned counsel for the respondent that any prejudice has C
been actually caused. We are of the considered opinion that
there has been no failure of justice in the facts and
circumstances of this case by non-supply of the enquiry report
to the respondent.
32. We are also of the opinion that the punishment D
imposed on the respondent cannot be said to be
disproportionate to the gravity of the charges proved against
the respondent. The charges related to the conduct of the
respondent in a financial institution whereby taking advantage
of the official position he attempted to procure unlawful E
pecuniary benefits for himself. The charges related to
misappropriation, fraud and irregularities with regard to the
maintenance of accounts. He had been siphoning off money
belonging to the account holders. He was holding a position of
trust in the Bank, which he betrayed. We are of the opinion that F
the Chairman has correctly observed at the personal hearing
given to the respondent that the Bank has already been
sympathetic and lenient enough.
33. In view of the abovs, the appeal is allowed. The
judgment of the High Court is set aside. The Writ Petition filed G
by the respondent is dismissed.
8.8.8. Appeal allowed.
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