Full Judgment Text
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PETITIONER:
RADHEY SHYAM GUPTA
Vs.
RESPONDENT:
U.P. STATE AGRO INDUSTRIES CORPORATION LTD. & ANR.
DATE OF JUDGMENT: 15/12/1998
BENCH:
K.VENKATASWAMI, & M. JAGANNADHA RAO.
ACT:
HEADNOTE:
JUDGMENT:
JUDGMENT
--------
M. JAGANNADHA RAO. J.
--------------------
Leave granted.
This appeal is preferred by the appellant
questioning the judgment of the High Court of Allahabad
dated 10.12.97 (Lucknow Bench) which reversed the Judgment
of the Administrative Tribunal III, Lucknow in claim No. 686
of TIII of 1977 dated 3.12.80.
The appellant was working in the respondent
Corporation as Senior Accountant from 27.7.1970. On
17.7.1973, he was appointed as Branch Manager and posted at
the Meerut Division of the respondent Corporation and
transferred to various places. He was posted at Faizabad as
Branch Manager on 3.10.1975 and while he was working there,
he received a letter dated 12.1.1976 from the Managing
Director on 15.1.1976 alleging that one person by name Jai
Chandra Lal complained that the appellant had fraudulently
taken Rs. 2000/- from him and that the appellant should
therefore offer his explanation. The appellant denied the
allegation and submitted his explanation on 22.1.1976 was
submitted by one Sri Ram Pal Singh, General Manager
(Fertiliser) without issuing any Charge Memo or giving
hearing. Copy of the report was also not given to the
appellant. Thereafter, on 23.1.1976, a simple order of
termination was passed stating that the appellant had been
appointed as Branch Manager by order dated 17.7.1973, and
Condition No.3 of the appointment order provided that the
services of the appellant could be terminated at any time
after giving one month’s notice or one month’s day in lieu
thereof and that his services were being terminated with
immediate effect in terms of the aforementioned Condition
No. 3 of the appointment order. It was stated that the
appellant could obtain one month’s day from the General
Manager (Fertiliser), Lucknow.
It was the appellant’s case before the
Administrative Tribunal, Lucknow, that though the
termination order appeared to be innocuous, it was still
punitive in nature inasmuch as it was based on an experts
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report of inquiry by the said Ram Pal Singh and that the
allegation of accepting a bribe in a sum of Rs. 2000/- was
not merely the motive but the very foundation of the order
of termination. The appellant also raised a plea of
malafides against the said Shri Ram Pal Singh who allegedly
bore a grudge against the appellant as the appellant while
working at Meerut in 1973-74 had made certain serious
complaints against one Balbir Singh Chauhan, Assistant Sales
Officer-I - who was a close friend of the said Shri Ram Pal
Singh. In fact, soon after the appellant complained against
Balbir Singh, a letter of transfer is said to have been
engineered and the appellant was transferred to Varanasi on
9.5.74. Various details have been given to prove malafides.
The Administrative Tribunal, Lucknow in its order
dated 31.12.80 accepted the appellant’s contention and
allowed the appellant’s application and quashed the
termination order declaring it to be violative of principles
of natural Justice and hence viod. It also held that the
inquiry report of Shri Ram Pal Singh was a malafide one. It
was however stated that the respondents would be at liberty
to initiate regular inquiry if they so desired and deal with
the appellant’s case in accordance with law.
Aggrieved by the said judgment, the respondent
Corporation filed Writ Petition No. 1591 of 1981 and the
same was allowed by the High Court on 10.12.97 holding that
though an inquiry was conducted by Shri Ram Pal Singh and a
report was given against the appellant, the same was
conducted "to assess the work" of the appellant as it was
decided to dispense with his temporary service in terms of
Condition No.3 of the order of appointment, which permitted
such termination on payment of one month’s salary or after
giving one month’s notice. That was why a simple order of
termination was passed and it did not cause any stigma
inasmuch as it did not refer to any disciplinary inquiry.
There was "sufficient material" to indicate the
unsatisfactory work and conduct of the appellant. The High
Court referred to various decisions relied upon by the
appellant and said that they did not apply. It however held
that the ruling of this Court in State of U.P. vs. Kaushal
Kishore Shukla (1991(1) SCC 691) was in point, that
whenever, the competent authority was satisfied that the
work and conduct of a temporary employee was not
satisfactory, it could pass a simple order of termination
and such an order could not be treated as one of punishment.
The High Court also referred to Triveni Shanker Saxena vs.
State of U.P. [1992 Suppl.(1) SCC 524] and State of U.P.
vs. Km. Premlata Misra [1994 (4) SCC 189]. The High Court
held as follows:
"In view of the law laid down by the Hon’ble Supreme
Court, we are of the opinion that the temporary
services of the respondent No.1 have not been
terminated by way of punishment founded on any
misconduct but on the other hand, the competent
authority has found that the respondent No.1 was not
fit to be continued in services on account of
unsatisfactory work and conduct. There is no
material to establish that the respondent No.1 had
outstanding or meritorious service record."
It further observed:
"Further in view of the law laid down by Hon’ble
Supreme Court, even if some parte preliminary
inquiry has been conducted or disciplinary inquiry
was initiated to inquire into some misconduct, it is
the potion of the competent authority to withdraw
the disciplinary proceedings and take the action of
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termination of service under the terms of
appointment and the same would not be by way of
punishment."
One this reasoning, the Writ Petition of the
Corporation was allowed, the order of the Tribunal was set
aside and the termination order was upheld.
Aggrieved by the Judgment of the High Court, the
appellant has preferred this appeal. It is contended by the
learned senior counsel for the appellant Sri M.L. Verma
that the High Court had assumed that the inquiry was a
preliminary inquiry report but it was in fact a final one
which gave findings as to the quilt of the appellant in
regard to the allegation of receiving a bribed of Rs.
2000/- and the said finding was arrived at by examining
witnesses behind the back of the appellant and therefore
there was a clear violation of principles of natural
justice. In other words, the findings in the inquiry report
were the ’foundation’ for the termination. This was not a
case where some allegations against the appellant were the
’motive’. It was permissible for the Court to go behind the
order and find out if it was punitive in nature. It was
also argued that the High Court was in error in not going
into the question of malafides even though the Tribunal had
held that the inquiry report was vitiated by malafides.
On the other hand, learned counsel for the
respondent, Sri J.M. Khanna made a vehement submission that
the termination was the result of a preliminary inquiry and
it was always permissible to rely on such an inquiry and
pass a simple order termination by giving a one month’s
notice or giving one month’s pay in lieu thereof. He
contended that it was not permissible for the Court to look
into the report given by Sri Ram Pal Singh to the General
Manager as the same was confidential in nature. The Court
could not go behind the order.
On the basis of the above contention, the following
point arises for consideration:
Whether the report of Sri Ram Pal Singh was a
preliminary report and whether it was the motive or the
foundation for the termination order and whether it was
permissible to go behind the order?
On this point, the question is whether the contents
of the report dated 22.1.76 of Sri Ram Pal Singh against the
appellant were the motive or foundation for the termination
order dated 23.1.76 issued by the General Manager?
Now, there are two lines of cases decided by this
Court which deal with the question in issue. In certain
cases of temporary servants and probationers, this Court has
taken the view that if the experts inquiry or report are the
motive for the termination order, then the termination is
not to be called punitive merely because principles of
natural justice have not been followed. On the other hand.
there is another line of cases where this Court has held
that the facts revealed in the inquiry are not the motive
but the foundation for the termination of the services of
the temporary servant of natural justice have not been
followed, and such orders are to be declared void. This
Court has held that for finding out whether a given case
falls within either of these two categories, it is
permissible for the High Court or Administrative Tribunal to
go behind the order and look into the record of the
proceedings, the antecedent and attendant circumstances
culminating in the order of termination.
In what situations the allrgations of misconduct
will be the motive and in what cases they will be the
foundation, it is argued, is not clear enough.
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In fact, Krishna Iyer, J. his characteristic style
described the words ’form’ substance, motive and foundation
as the face of an inscrutable sohink, baffling lawyers and
judges alike. [See Samsher Singh vs. State of Punjab 1974
(2) SCC 831 (at 889)]. According to him, the need in this
branch of law is to lay down a simple test which can be
grasped by the administrator or Civil servant without much
subtlety.
De Smith says, as to procedural fairness where
preliminary inquiries are conducted (See 5th Ed., 1995 (page
491, para 10.027) that the question of "proximity between
investigation and act or decision" depends on the degree of
proximity so far as the person affected claiming a right of
hearing is concerned. He says:
"Thus, a person empowered or required to conduct a
preliminary investigation with a view to
recommending or deciding whether a formal inquiry or
hearing (which may lead to a binding and adverse
decision) should take place, is not normally under
any obligation to comply with rules of fairness
(Beetham vs. Trinided Cement Co. 1960 A.C.. 132;
Medical Board of Queens Land vs Byme College of
Physicians, ex P Samuels (1996) 58 D.L.R.(2ND) 622;
Re; Drummoyne M.C. (1962). S.R. (N.S.W.) 193.
But he may be placed under such an obligation if his
investigation is an integral part of a process which
may terminate in action adverse to the interest of a
person claiming to be heard before him. (Wiseman
vs. Borneman 1971 AC 297). Re:All General Canada
and Canadian Tabacoo Manufacturers’ Council (1986)
26.D.L.R (4th) 677."
The above principles stated in De Smith are, as we
shall presently see, very close to what is laid down in
Samsher Singh’s case and other cases decided by this Court.
It is, therefore, necessary to refer to the
development of the law in this branch between 1958 to 1974
in the first phase - a development which was noticed by
Krishna Iyer, J. in the above case and also by E.S.
Venkataramiah,J. (as the then was) in Anoop Jaiswal vs.
Government of India (1984 (2) SCC 369).
There are atleast seven Constitution Bench Judgments
and & Judgment of seven Judges of this Court on this issue.
It will be seen that form stage to stage the law has been
developed.
The first decision of the Constitution Bench was in
Parshottam Lal Dhingra vs. Union of India [AIR 1958 SC
826]. There a twin test was laid down - whether the order
in terms of the appointment gave a right to terminate and
whether the order was punitive in nature. If misconduct was
motive, the order was not punitive but if it was the
foundation it was punitive. In that case, the employee was
working in a higher post in an officiating capacity and that
appointment was terminated and he was reduced in rank. S.R.
Das, C.J. stated (para 28) (p49) that misconduct,
negligence, inefficiency or other disqualification might be
the motive or the inducing factor which influenced the
Government to take action under the terms of the contract of
employment or the specific service rule, and the motive was
irrelevant. But if the termination was ’founded’ on
misconduct, negligence, inefficiency or other
disqualification, it would have to be treated as a
punishment. It was also held that the use of the word
’termination’ or ’discharge’ was not conclusive. In spite
of the use of such innocuous expressions, the Court could
still hold it be punitive. On the facts of the case the
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termination of the officiating appointment was based upon
certain adverse remarks and it was held that it was not by
way of punishment.
Next came the decision of the Constitution Bench in
State of Bihar vs. Gopi Kishore Prasad [AIR 1960 SC 689].
Here a test of ’inquiry’ was laid down. That was a case
probationer. The Government had come to the conclusion, on
inquiry, that the respondent was unsuitable for the post
held on probation. Because of the inquiry, Sinha, C.J.
held this to be "clearly by way of punishment." Termination
(without notice) but after holding an inquiry into the
alleged misconduct or inefficiency or some similar reason
would be punitive. Government could not, "brand him
dishonest and incompetent without inquiry." If it did so, it
would be by way of punishment, but not if the position "was
that he was found unsuitable’, without holding an inquiry.
Both Dhingra and Gopi Kishore Prasad were decided when the
law in this branch was just developing.
However Shah,J. (as he then was) in State of Orissa
vs. Ram Narayan Das [1961 (1) SCR 606] gave a new dimension
to the legal principles. That case also related to a
probationer but was governed by Rule 55-B of the Civil
Services (Classification, Control and Appeal) Rules which
was a special provision and which stated that "where it is
proposed to terminate the employment of a probationer,
whether during or at the and of the period of probation, for
any specific fault or on account of his unsuitability for
the service, the probationer shall be apprised of the
grounds of such proposal and given an opportunity for show
cause against it, before orders are passed by the authority
competent to terminate the employment." if the test of
’industry’ laid down by Sinha, CJ was to be applied, every
termination of a probationer made by following the rule and
conducting an inquiry would become punitive. The ’industry
test’ (as pointed out by Krishna Iyer, J. in Samsher
Singh’s case broken down. A new test had to invented.
Therefore Shah, J. (as he then was) laid down a new test
which required that one should look into "object or purpose
or the inquiry" and not merely hold the termination to be
punitive merely because of an antecedent industry. J.C.
Shah, J (as he then was) said:
"Whether it amounts for an order of dismissal
depends upon the nature of the inquiry, if any, the
proceedings taken therein and the substance of the
final orders passed on such inquiry."
The learned Judge pointed out that the employed
being a probationer, "the inquiry against the respondent was
for ascertaining whether he was fit to be confirmed." His
Lordship pointed out that this inquiry was not of the same
nature as an inquiry into charges of misconduct, negligence,
inefficiency or other disqualification. On the facts of
thee case, the termination of a probationer was upheld
inasmuch as the purpose of the inquiry was to find out if
the employee could be confirmed. The purpose of the inquiry
was not to find out if he was guilty of any misconduct,
negligence, inefficiency or other disqualification.
We then come to the third case decided by the
Constitution Bench in Madan Gopal vs State of Punjab (AIR
1963 SC 5312. Here Shah, J. (as he then was), applied the
same principle laid down earlier by him out in this case he
held the order was punitive. That was a case of a temporary
employee. There was a report of the Settlement Officer
about the ’misconduct’ of the employee and the termination
was based on the said report. It was, therefore, held that
though the order of termination was an order simpliciter
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still the Court could go behind the same and further if thee
foundation was the finding as to misconduct, then the order
was punitive. The termination order was quashed, even
though the employee participated therein because the
statutory procedure for a regular departmental inquiry was
not followed. Emphasis was again made on the "purpose of
the inquiry". The distinction between the earlier case and
this case was that while in Ram Narayan Das’ Case, the
inquiry was made to find out if the probationer could be
continued and confirmed and was, therefore, not punitive,
the position in the Madan Gopal’s case was that the inquiry
by the Settlement Officer was to find out if the employee
was guilty of misconduct. In fact the termination order was
based on the inquiry held behind his back and was held to be
punitive. In Ravindra Chandra vs. Union of India (AIR 1963
SC 1552), being a case of a probationer to whom Rule 55-B of
the Central Rules applied, Wanchoo J. (as he then was)
upheld the order on the ground that the limited purpose of
the inquiry was to find out whether he could be ’retained or
not’ in the service. In other words, the inquiry was not
with a view to see if the employee had misconducted in his
duties. This case was similar to Ram Narayan Das case.
The theory of ’object of the inquiry’ was further
emphasised by the Constitution Bench in Jagdish Mitter vs.
Union of India. [AIR 1964 SC 449]. That was a case of a
temporary employee. The discharge from service was by way
of an order ’simpliciter’. But there, an inquiry was held
and the termination order was based on it as it stated on
its face that it was ’found undesirable’ to retain the
employee and hence his services were being terminated. The
order was held to be punitive on its face and was quashed.
Gajendragadkar, J. (as he then was) discussed the earlier
cases and held that in every case the purpose of the inquiry
was crucial. If the inquiry was held ’only for the purpose
of deciding whether the temporary servant should be
continued or not, it could not be treated as punitive and
that the motive operating in the mind of the authority was
not relevant. But "the from in which the order terminating
the service is expressed will not be decisive." It was held
that "what the Court will have to examine in each case would
be, having regard to the material facts existing upto the
time of discharge, is the order of discharge in substance
one of dismissal". Therefore, the ’form’ was not of
importance but the ’substance’ was.
Finally, we come to the seventh case, Champaklal
Chimanlal Shah vs. Union of India [AIR 1964 SC 1854], a
case strongly relied upon by the learned counsel for the
respondent, Shri J.M. Khanna. Here, it was the case of a
preliminary inquiry which was intended to find out if a
prima facia case was made cut to start a regular
departmental inquiry. The question was whether a termination
order passed soon after the completion of the preliminary
inquiry could be treated as punitive. Wanchoo, J. (as he
then was) held that it could not be as held. Once the
preliminary inquiry was over, it was open to the employer
not to make a regular inquiry for proving the quilt of the
employee. The employer could stop at that stage and pass a
simple order of termination. The facts as gathered or
revealed in the preliminary inquiry would be the motive and
not the ’foundation’ since there was no inquiry as to their
correctness made. The order could not be quashed as being
punitive.
We finally come to the seven Judge Judgment rendered
in Samsher Singh vs. State of Punjab [1974 (2) SCC 831] to
which we made a brief reference at the beginning of this
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Judgment. The case concerned two Judicial Officers. So far
as the termination order passed against Sri Ishwar Chand
Aggarwal was concerned, it was quashed holding it to be
punitive as it was based on the report of an Inquiry Officer
appointed by the Director of Vigilance. The Inquiry Officer
recorded statements of witnesses behind the back of the
officer and definitive findings therein were the basis for
the termination. It was not a preliminary inquiry. A.N.Ray,
C.J. held that the object of the said inquiry was (see p
055) (para 79 and 80)
"to ascertain the truth of the allegation of
misconduct. Neither the report nor the statements
recorded by the Enquiry Officer reached the
appellant. The Inquiry Officer gave his findings of
misconduct. ... The order of termination was
because of the recommendation in the report.
The order of termination of the services of
Ishwar Chand Aggarwal is clearly by way of
punishment in the facts and circumstances of the
case.... The form of the order is not decisive as
to whether the order is by way of punishment. Even
an innocupusly worded order terminating the service
may, in the facts and circumstances of the case
establish that an inquiry into allegation of serious
and grave character of misconduct involving stigma
has been made in infraction of Article 311. In such
a case, the simplicity of the form of the order will
not give any sanctity. That is exactly what has
happened in the case of Ishwar Chand Aggarwal. The
order of termination is illegal and must be set
aside."
A.N.Ray, C.J.. wrote the opinion for himself and
five other learned Judges, Krishna Iyer, J. wrote a separate
but concurring Judgment where he referred to the new
dimension to the law given by Shah, J. (as he than was) in
the sixties. The learned Judge said that the words ’form’,
’substance’, ’motive’ and ’foundation’ were baffling and the
need of the hour was a simple test.
If there was any difficulty as to what was ’motive’
or ’foundation’ even after Shamsher Singh’s case, the said
doubts, is our opinion, where removed in Gujarat Steel Tubes
vs. Gujarat Steel Tubes Mazdoor Sangh (1980 (2) SCC 593)
again by Krishna Iyer, J. No doubt. it is a Labour matter
but the distinction so far as what is ’motive’ or
’foundation’ is common to Labour cases and cases of
employees in government or public sector. The learned Judge
again referred to the criticism by Shri Tripathi in this
branch of law as to what was ’motive’ or what was
’foundation’, a criticism to which reference was made in
Samsher Singh’s case. The clarification given by the
learned Judge is, in our opinion, very instructive, It reads
as follows (at page 616-617):
"Masters and servants cannot be permitted to play
hide and seek with the law of dismissals and the
plain and proper criteria are not to be misdirected
by terminological cover-ups or by appeal to psygnic
by terminological cover-ups or by appeal to psycnic
reason for the order, whether disclosed or
undisclosed. The Court will find out from other
proceedings or documents connected with the formal
order of termination what the true ground for the
termination is. If thus scrutinised, the order has
a punitive flavour in cause or consequence, it is
dismissal. If it falls short of this test, it
cannot be called a punishment. To put if slightly
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differently, a termination effected because the
master is satisfied of the misconduct and of the
consequent desirability of terminating the service
of the delinquent servant, it is a dismissal, even
if he had the right in law to terminate with an
innocent order under the standing order or
otherwise. Whether, in such a case the grounds are
recorded in a different proceedings from the formal
order does not detract from is nature. Nor the fact
that, after being satisfied of the quilt, the master
abandons the enquiry and proceeds to terminate.
Given an alleged misconduct and a live nexus between
it and the termination of service the conclusion is
dismissal, even if full benefits as on simple
termination, are given and non-inqurious terminology
is used.
On the contrary, even if there is suspicion of
misconduct the master may say that he does not wish
to bother about it and may not go into his quilt but
may feel like not keeping a man he is not happy
with. He may not like to investigate nor take the
risk of continuing a dubious servant. Then it is
not dismissal but termination simpliciter, if no
injurious record of reasons or punitive peculary
cut-back on his full terminal benefits is found.
For, in fact, misconduct is not then the moving
factor in the discharge. We need not chase other
hypothetical situations here.
In other words, it will be a case of motive if the
master, after gathering some prima facie facts, does not
really wise to go into their truth out besides merely not to
continue a dubious employee. The master does not want to
decide or to direct a decision about the truth of the
allegations, but if he conducts an inquiry only for purpose
proving the misconduct and the employee is not heard, it is
a case where the inquiry is the foundation and the
termination will be bad.
Subsequent to the above cases, there have been a
number of other cases where the above principles have been
applied. We shall refer to a few of them where some more
principles have been discussed. In State of U.P. vs. Ram
Chandra Trivedi {1997 (1) SCR 462] the employee’s service
were terminated as he allowed some other employee to
impersonate him in an examination. The order was innocuous
put the case was preceded by an inquiry and it was held that
the petitioner in his pleadings had not made out a case for
calling for departmental records to examine if it was a case
of punishment. That was how this case was explained by
Pathak, J. (as he then was) in State of Maharashtra vs.
S.R. Saboji [1971 (4) SCC 466]. In Anoop Jaiswal vs.
Government of India [1984 (2) SCC 369] it was held while
quashing the order of termination, that it was open to the
Court to go behind the order and find out if the
report/recommendation of the superior authority was a
camouflage and if that was the basis or foundation for the
order the report/recommendation, then it should be read
along with the order for the purpose of determining the true
character of termination. If on a reading of the two
together, the Court reached the conclusion that the alleged
finding of misconduct was the cause or basis of the order,
and that but for the report containing such a finding, the
order would not and could not have been passed, the
termination order would have to fall to the ground as having
been passed without the officer being afforded a reasonable
opportunity. It was also held that it was wrong to presume
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that an order would be punitive only if a regular inquiry
was conducted exparte or behind the back of the officer.
Even if it was not a regular inquiry, any other inquiry
where evidence was taken and findings were arrived behind
the back of the officer, would make the subsequent
termination bad. Vankataramiah, J. (as he then was)
pointed out in the above case the shift in the law as
brought about by Samsher Singh’s case.
So far as Triveni Shankar Saxena vs. State of U.P.
[1992 Suppl. (1) SCC 524] and State of U.P. vs. Prem Lata
Motors, [1994 (4) SCC 189], relied upon by the High Court
are concerned, in the former case, the termination order was
a simple order which did not cast any stigma and there were
several adverse entries in his confidential reports. The
termination was as per rules. In the latter case the
employee’s superiors complained that the employee was not
regular in her work, and was in the habit of leaving office
during office hours. A simple order of termination
appointment. There was no prior inquiry. In both these
cases, the termination orders were upheld.
We shall now refer to a different type of cases
where a departmental inquiry was started, then dropped and a
simple order of termination was passed. In State of Punjab
vs. Sukh Raj Bahadur [1968 (3) SCR 234], the charge memo
was served, reply given and at that stage itself, the
proceedings were dropped and a termination order was passed.
The High Court felt that the ’object of departmental
inquiry, being to punish the employee, the order of
termination must be treated as punitive. This was not
accepted by a three Judge Bench consisting of Justice Shah
(as he then was) who had laid down in Madan Gopal’s case
(AIR 1963 SC 531) the principle of ’object of the inquiry’.
This court reversed the High Court Judgment and held that
neither Madan Gopal’s case nor Jagdish Mitter’s case (AIR
1964 SC 449) applied. This was because in the case before
them the inquiry did not go beyond the stage of the
explanation. No findings were given and no inquiry report
was submitted as in the above two cases. In that case (i.e.
Sukh Raj Bahadur) this Court felt that the decision in A.G.
Benjamin vs. Union of India (Civil Appeal No. (341 of 1966
dated 13.12.1966) (SC) was more direct. In Benjamin’s case,
a charge memo was issued, explanation was received and an
Enquiry Officer was also appointed but before the inquiry
could be completed, the proceedings were dropped stating
that: ’departmental proceedings will take a much longer
time and we are not sure whether after going through all the
formalities, we will be able to deal with the accused in the
way he deserves." There also, the order was held not to be
punitive. Following the above case, this court in Sukh Raj
Bahadur’s case stated that the position before them was
similar to what happened in Benjamin’s case and concluded as
follows:
"the departmental inquiry did not proceed beyond the
stage of submission of a chargesheet followed by the
respondent’s explanation thereto. The inquiry was
not preceded with, there were no sittings of any
inquiry officer, no evidence recorded and no
conclusion arrived at in the inquiry."
The underlined words are very important and
demarcate the line of distinction. If the inquiry officer
held no sittings, did not take evidence nor record any
conclusions and if at that stage the inquiry was dropped and
a simple order of termination was, passed, the same would
not be punitive.
In Nepali Singh vs. State of U.P. (1988 (3) SCC 370)
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a three Judge Bench held the order to be punitive as it was
passed after issuing a charge memo, a reply received, even
though no evidence was adduced and no findings were given.
But in a latter three Judge Bench case in State of U.P. vs.
Kaushal Kishore Shukla, [1991 (1) SCC 691], Nepali Singh’s
case was not followed as being a judgment rendered per
incuriam as it did not consider Champak Lal’s case (AIR 1964
SC 1854). Of course, the above case, i.e. Kaushal Kishore
Shukla’s case was one where there was an adverse entry and
only a preliminary report and then a simple order of
termination was issued. That order was upheld. Similarly, in
Commission of Food & Civil Supply vs. P.C. Saxena [1994 (5)
SCC 177]. the facts were that the departmental inquiry was
started and dropped and this Court held the order not to be
punitive.
It will be noticed from the above decisions that the
termination of the services of a temporary servant or one on
probation, on the basis of adverse entries or on the basis
of an assessment that his work is not satisfactory will not
be punitive inasmuch as the above facts are merely the
motive and not the foundation. The reason why they are the
motive is that the assessment is not done with the object of
finding out any misconduct on the part of the Officer, as
stated by Shah, J. (as he then was) in Ram Narayan Das’s
case. It is done only with a view to decide whether he is
to be retained or continued in service. The position is not
different even if a preliminary inquiry is held because the
purpose of a preliminary inquiry is to find out if there is
prima facie evidence or material to initiate a regular
departmental inquiry. It has been so decided in
Champaklal’s case. The purpose of the preliminary inquiry
is not to find out misconduct on the part of the Officer and
if a termination follows without giving an opportunity, it
will not be bad. Even in a case where a regular
departmental inquiry is started, a charge memo issued, reply
obtained, and an enquiry Officer is appointed - if at that
point of time, the inquiry is dropped and a simple notice of
termination is passed, thee same will not be punitive
because the enquiry Officer has not recorded evidence nor
given any findings on the charges. That is what is held in
Sukh Raj Bahadur’s case and in Benjamin’s case. In the
latter case, the departmental inquiry was stopped because
the employer was not sure of establishing the quilt of the
employee. In all these cases the allegations against the
employee merely raised a cloud on his conduct and as pointed
by Krishna Iyer, J. in Gujrat Steel Tubes case, the
employer was entitled to say that he would not continue an
employee against whom allegations were made the truth of
which the employer was not interested to ascertain. In
fact, the employer, by opting to pass a simple order of
termination as permitted by the terms of appointment or as
permitted by the rules was conferring a benefit on the
employee by passing a simple order of termination so that
the employee would not suffer from any stigma which would
attach to the rest of his career if a dismissal or other
punitive order was passed. The above are all examples where
the allegations whose truth has not been found, and were
merely the motive.
But in cases where the termination is preceded by an
inquiry 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 principles of natural justice inasmuch as the
purpose of the inquiry is to find out the truth of the
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allegations with a view to punish him and not merely to
gather evidence for a future regular departmental inquiry.
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 feels that there is a
mere cloud against the employees conduct but are cases where
the employer has virtually accepted the definitive and clear
findings of the Inquiry 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
termination. That is why the misconduct is the foundation
and not merely the motive, in such cases.
Coming now to the facts of the case before us, the
inquiry officer, Sri R.P. Singh examined witnesses and in
his report dated 22.1.76 has said: "I conclude that Sri R.P.
Gupta took a sum of Rs.2000/- from Sri Jai Chandra Lal,
thereafter referring to certain facts said they ’go to prove
the correctness of the complaint". Not only that, he
concluded "I therefore suggest that service of Shri R.S.
Gupta may be terminated and one month salary may be given to
him in lied of the notice". The very next day, the impugned
simple order of termination followed.
In our view, it is an absolutely clear case where
the inquiry officer examined witnesses, recorded their
statements and gave a clear finding of the appellant
accepting a bribe and even recommended his termination. All
these were done behind the back of the appellant. The
Managing Director passed the termination order the very next
day. It cannot in the above circumstances be stated, by any
stretch of inspection that the report is a preliminary
inquiry report. It’s findings are definitive. It is not a
preliminary report where some facts are gathered and a
recommendation is made for a regular departmental inquiry.
In view of the principles laid down in the cases referred to
above, this case is an obvious case where the report and its
findings are the foundation of the termination order and not
merely the motive. The Tribunal was right in its conclusion.
The High Court was in grave error in treating such a report
as a preliminary report.
For all the above reasons, we set aside the High
Court’s Judgment and restore the Tribunal’s order. There
will be no order as to costs.