Full Judgment Text
2025 INSC 814
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(Arising out of SLP (C) No. 8840 of 2022)
NARESH KUMAR SINHA APPELLANT (S)
VERSUS
STATE OF BIHAR & ORS. RESPONDENT(S)
J U D G M E N T
J.K. MAHESHWARI, J.
1) Leave granted.
2) The appellant assails the order dated 17.05.2019
passed by the Division Bench of the High Court of
Judicature at Patna dismissing the Letters Patent
Appeal No.379 of 2018. In the LPA, the order passed
in C.W.J.C. No. 15852 of 2006 dated 20.02.2018 was
challenged wherein the order of termination dated
21.11.2005, was in question. As such, by the orders
impugned, interference in the order of termination of
service of appellant had been declined.
Signature Not Verified
Digitally signed by
NIDHI AHUJA
Date: 2025.07.10
17:09:41 IST
Reason:
3) The facts shorn of details are that in furtherance
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to an advertisement dated 22.06.1981, appellant was
appointed as clerk vide order dated 24.06.1989, and
posted at S.M.T. High School, Vaishali, Bihar. He
submitted his joining on 04.07.1989 which was
initially resisted by headmaster but later he was
allowed to join and he performed his duty.
Thereafter, on transfer to other schools, he worked
for more than one and a half decade. On 19.09.2005,
the District Education Officer, Patna issued a show
cause notice, alleging that his appointment was
forged and vide order dated 21.11.2005, his services
were terminated without following the due process
of law. Appeal filed against such termination was
also rejected vide order dated 13.10.2006.
4) Being dissatisfied, Writ Petition was filed
which was dismissed. During pendency of the writ
petition, learned Single Judge vide order dated
27.07.2011 sought report with respect to the
genuineness of the appointment order. The same was
filed along with an affidavit, inter alia, stating
that the original file of appointment could not be
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traced, but the file relating to transfer of newly
appointed clerks in 10+2 secondary schools has been
traced out. It was said that the order of appointment
was issued in violation of the terms of Circular
No.16440 dated 02.12.1980 of the Personnel and
Administrative Reforms Department. Learned Single
Judge while dismissing the writ petition and relying
on those averments held that the order of appointment
could have been issued at the level of the Directorate
and not at the level of Deputy Director, Human
Resources Development Department (in short “DDHRD” ).
As such, appointment of the appellant was issued by
an incompetent authority and was illegal. Further,
with reference to dispatch number of the order, it
was observed that the register was relating to
transfer of clerks which also does not tally. Thus,
the contention of appellant with respect to issuance
of appointment by the same dispatch was not accepted,
because it will not make the appointment of the
appellant genuine. As such, learned Single Judge
refused to interfere and dismissed the writ petition.
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5) Aggrieved by such dismissal, the appellant filed
the impugned LPA before the Division Bench, which was
also dismissed relying on the same report and
affidavit, wherein the Division Bench held that the
appointment of appellant was not issued at the
appropriate level by the Department, hence, found to
be forged. Accordingly, the Division Bench maintained
the order of learned Single Judge.
6) In the counter affidavit filed by the State, it
is inter-alia stated that the DDHRD was incompetent
to appoint Class III employees in the schools. Thus,
when the order of appointment was not issued by the
competent authority, appellant had illegally occupied
the post and he cannot claim equity after committing
such fraud. Further, in the case of fraud or forgery,
plea of violation of the principle of natural justice
is not tenable. It is said that the appellant and one
Sanjay Kumar Sinha were said to be appointed by the
then DDHRD issuing different orders of appointment
dated 24.06.1989; however, while verifying, the
Section Officer has denied issuance of such orders.
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On the said pretext, while examining the orders of
transfers of 36 clerks, it was found that 12 were
appointed before 02.10.1980, 2 were appointed on
recommendation of Bihar Public Service Commission and
11 were appointed on compassionate ground. Remaining
11 including appellant and one more were also found
to be transferred. In the said context, dispatch
register was examined, but the same was not tallied.
As per the directions of the High Court, when enquiry
was conducted, the original file of the appointment
was not made available and only a part of file
relating to transfer was produced before the
Principal Secretary. Based on this, it was said that
the order of appointment, if any, dispatched along
with transfer orders, cannot be recognized as valid.
Hence, any interference in the order of termination
is not warranted.
7) In the impugned judgment, the order of learned
Single Judge was maintained, refusing to interfere
with the order of termination of appellant, by merely
relying upon the report submitted by the Principal
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Secretary, Human Resources Development Department. As
per the said report, it was specified that the
appointment ought to be issued at the directorate
level and not at the deputy director/DDHRD level. It
is also said that the dispatch number tallies with
the register to dispatch the transfer order, and not
with the register to dispatch the appointment order,
therefore, the appointment appears to be forged. With
these allegations, it is said the appointment of
appellant was forged and fabricated, therefore,
principle of natural justice would not attract.
8) From the proceedings of this case, it appears
that after filing of counter affidavit and rejoinder,
with an intent to lift the veil on the allegations,
vide order dated 22.01.2024, a direction to produce
the original records pertaining to the appointment
and working of the appellant was issued. Even after
granting repeated opportunities, respondents have not
produced the record. Later, vide order dated
12.02.2025, while granting further time, this Court
observed as under:
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“In the facts of the case, we deem it appropriate
that the record be traced and produced. In the
interest of justice, we grant six weeks’ further
time to produce the record failing which drawing
adverse inference, appropriate orders will be
passed.”
In reference to the above order, during hearing,
learned counsel of the State submitted that the record
is not traceable, as such the Court may proceed in
the matter.
9) After having heard learned counsel for the
parties and on perusal of the counter affidavit, it
is luculent that the respondents have not disputed
the issuance of the advertisement, in furtherance to
which the appellant was appointed. In absence of any
specific denial, it may be concluded that appointment
of appellant was after following the due process of
law. On submitting joining, he was allowed to perform
his duties, later, transferred to Devipad Choudhary
Shaheed Asmarak (Millar) School and other schools
where he served for more than a decade. Surprisingly,
after serving for more than 16 years, a show cause
notice dated 19.09.2005 was issued questioning the
genuineness of his appointment order. On him filing
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a reply, without holding any enquiry into the
allegations of fraud and sans the procedure as
prescribed, the service of the appellant was
terminated which led to the present litigation.
10) After bestowing our consideration to the facts,
it is clear that the appointment of appellant was in
furtherance to the advertisement published in
Aryabrata newspaper dated 22.06.1981 and the order
was issued on 24.06.1989 by the Government of Bihar,
Human Resource Development Department with signature
of Additional Director and its communication was made
by the DDHRD. The appellant was permitted to join,
and later he was transferred at different places. At
the time of issuing show cause notice, he was posted
as clerk at Parvati Higher Secondary School, Bikram,
Patna and while passing the order of termination, he
was posted as clerk at Urehan Girls Higher Secondary
School, Bihta, Patna. The show cause notice and the
order of termination were initiated from the office
of the District Education Officer, Patna and by that
time he had served the department for more than 16
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years.
11) Further, it is noted that the show cause notice
was issued in reference to L.P.A. No. 527/05 and
letter No. 769 dated 23.07.2005 of Director,
Secondary Education, Bihar, Patna. The context of the
above referred LPA and the letter has not been placed
for perusal. In this show cause notice, an explanation
was sought from appellant based on information
furnished by the DDHRD regarding non-issuance of the
appointment from the directorate, that why he should
not be terminated from the service. On furnishing the
explanation on 27.09.2005, the order of termination
was passed inter-alia stating that the appointment of
the appellant was issued by the DDHRD and the
appointment has not been issued from the secretariat.
In addition to referring the office letter, it was
said the directorate has not issued the appointment
order, so it is forged by the appellant. In the order
of termination, the directions of the department’s
letter No. 17127 dated 12.06.1981 has also been
referred whereby it is admitted that appointment of
Class-III posts can be made at the district level
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following the directions contained in letter No. 3/R-
1-103/73-7605 and 16440 dated 02.12.1980 of the
Department of Personnel and Administrative Reforms.
12) On analyzing all those documents, the reasons of
termination as mentioned in the order, and the
averments made in counter affidavit, it is clear that
appointment order was issued by Government of Bihar,
Human Resource Development Department, and signed by
Additional Director and not by DDHRD. Thus, on the
face of it, first reason assigned in the order of
termination that the appointment was issued by DDHRD
is incorrect. Moreover, in reference to the letter
No. 994 dated 08.09.2005 of DDHRD, it is said that
the appointment has not been issued at the secretariat
level which is not the defence taken in the counter
affidavit. Further, references made to directions
contained in the departmental letters dated
12.06.1981 and 02.12.1980 are also not germane to the
issue, which merely prescribe that the appointment of
Class-III post can be made at district level,
following the procedure as specified therein. In the
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counter affidavit filed, it has not been stated that
the appointment of the appellant was not made after
following due process of law. From the above
discussions, the reasons assigned in the order of
termination are factually incorrect and based on
extraneous consideration which cannot be accepted.
13) In this regard, stand taken in the counter
affidavit that appointment was issued by the DDHRD
and not from the directorate is not correct. The
perusal of appointment letter clearly indicates that
it was issued by the Government of Bihar, Human
Resource Development Department and signed by the
Additional Director, meaning thereby that the
appointment has been issued either at directorate
level or at Government level and not at the level of
DDHRD. Therefore, findings of the High Court on this
issue are contrary to the record per se illegal.
14) In addition to the above, it is to observe that
order of appointment issued from the office of the
Government of Bihar/directorate cannot be nullified
by an order of the District Education Officer, merely
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by issuing a show cause notice and without following
any procedure.
15) Since the plea of fraud taken by the respondents
has been accepted by the High Court in the order
impugned, the foundation of the said plea requires
consideration. The show cause notice memo dated
19.09.2005 is in reference to L.P.A. No. 527/05 and
letter No. 769 dated 23.07.2005. As per the contents
of the said memo, District Education Officer vide
letter No. 1126 dated 31.08.2005 sought some
information from the DDHRD which was furnished vide
letter no. 994 dated 08.09.2005 indicating that the
appointment memo No. 365 dated 24.06.1989 (wrongly
mentioned as dated 29.06.1989) was not issued from
the directorate. The stand taken before the High Court
and in the report sought is that the said record is
not traceable. This is not the stand of the government
that selection and appointment has not taken place,
further no record of such selection is available. In
such case where the record is not traceable, it would
not ipso facto make the appointment forged or
fabricated. As discussed in para 13, the appointment
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order dated 24.06.1989 was issued at
Government/Directorate level, therefore,
correspondence of the DDHRD for non-issuance of the
memo of appointment without denying the process of
selection and existence of appointment order, is of
no help.
16) The termination order was challenged in writ
petition before the High Court in 2006, which was
decided in 2018. During the pendency of the writ
petition, directions were issued on 27.07.2011 to
place the record regarding appointment. In
furtherance of which, only a report was submitted.
The said report merely refers to the correspondence
of the DDHRD as referred in the show cause memo. On
filing LPA, the report produced pursuant to the order
dated 27.07.2011 has been referred. It is a matter of
prudence that when the allegation of forgery or fraud
has been made by the State Government, it must have
some foundation. Mere correspondence of an officer
alleging non-issuance of appointment memo is not
enough to prove such fraud, in particular when such
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appointment was made in furtherance to an
advertisement, and while terminating the services, it
is said that order of appointment was issued by
incompetent authority, i.e., the DDHRD.
17) Since the termination is based on allegation of
fraud which is accepted by the High Court, it is
necessary to refer when such allegation of fraud can
be substantiated. In this regard, we have to see what
rd
is fraud. As per the Advance Law Lexicon, 3 Edition
2005 by P. Ramanatha Aiyar, “fraud” means and includes
any of the following acts committed by a party to a
contract, or with his connivance, or by his agent,
with intent to deceive another party thereto or his
agent, or to induce him to enter into the contract:-
(1) the suggestion, as a fact, of that which is not
true, by one who does not believe it to be true; (2)
the active concealment of a fact by one having
knowledge or belief of the fact; (3) a promise made
without any intention of performing it; (4) any other
act fitted to deceive; (5) any such act or omission
as the law specially declares to be fraudulent.
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18) In the facts of the present case as discussed
above, no pleading or foundation which includes any
of the ingredients of fraud has been put forth or
substantiated. In the case of Lazarus Estates Ltd.
Vs. Beasley: (1956) 1 QB 702 , the impact of fraud and
its importance has been discussed. Denning, L.J. has
stated as under:
“…No court in this land will allow a person
to keep an advantage which he has obtained by
fraud. No judgment of a court, no order of a
Minister, can be allowed to stand if it has
been obtained by fraud. Fraud unravels
everything. The court is careful not to find
fraud unless it is distinctly pleaded and
proved; but once it is proved, it vitiates
judgments, contracts and all transactions
whatsoever…”
19) This Court has considered the said observations
in the case of Ram Chandra Singh Vs. Savitri Devi and
Others: (2003) 8 SCC 319 , wherein the court discussed
what would constitute fraud:
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“…Fraud is a conduct either by letter or
words, which induces the other person or
authority to take a definite determinative
stand as a response to the conduct of the
former either by word or letter.”
20) In the case of Derry v Peek: (1889) 14 AC 337,
as well, the House of Lords observed that in case of
fraud, actual fraud on part of person must be proved.
It will be said to be proved when it is shown that
any false representation has been made knowingly, or
without belief in its truth, or recklessly, without
caring about its truthfulness or falsity. In this
regard, any false statement made carelessly and
without reasonable ground for believing it to be true
may be evidence of fraud. However, it does not mean
that it would necessarily amount to fraud. Any
statement made with honest belief in its truthfulness
is not fraudulent and would not render the person
liable for a fraudulent act.
21) As discussed in paras 11, 12, 13, 14 and 15
above, any pleading laying any foundation of alleged
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fraud specifying any of the ingredients of fraud has
not been established. It is trite to say that without
any allegation of fraud, merely using word fraud is
not sufficient. In addition, this Court has taken
care to understand whether the allegation of “fraud”
is discernible from the record or not. For effective
adjudication, the original records pertaining to
appointment and working of appellant were called on
22.01.2024 within a period of three weeks. The
government sought more time to produce the said record
on 16.02.2024 but they were not produced. However, on
12.02.2025 while granting last opportunity to produce
the record, it was observed that failure to produce
the records may result in drawing of adverse
inference, and appropriate orders will be passed.
Even then, no records were placed before us for
perusal. It is to observe that direction in this
regard was also issued by the learned Single Judge of
the High Court on 27.07.2011 but except the report of
Principal Secretary and affidavit, nothing was
produced. In the cases where mere allegation of fraud
has been made without any foundation, and then the
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records have been called by the Court to assess such
allegations, it is the earnest duty of the Head of
the Department to produce the same for perusal.
Otherwise in the facts, it was incumbent upon him to
conduct an internal enquiry and to find out whether
the process of selection was carried out or not. It
was also the duty of the Head of the Department to
place such record before the court. In the present
case, if the said record was not traceable, then it
is the duty of the Department to identify who is
responsible for misplacing such record, and an
enquiry in this regard ought to have been conducted
against the defaulting person and report in that
regard should have been placed. In absence thereof,
mere plea of non-traceability of the record is
insufficient. Thus, despite granting multiple
opportunities, which resulted in non-production of
the record, in the above facts, we are constrained to
draw adverse inference against the respondents.
22) In view of the above, in absence of any
foundation of fraud in the pleading or in the counter
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affidavit, we are not inclined to accept such plea of
fraud. Moreover, the reason of termination as
mentioned in the order impugned is also contrary to
the documents placed on record. This is a case wherein
after appointment the appellant has worked for more
than 16 years regularly and was regularly paid salary
by the department, which is a fact. As such, he has
acquired the status of permanent employee.
Thereafter, such issuance of show cause notice by
merely referring to one LPA and the correspondence of
the department regarding non-issuance of appointment
order is improper. Because, a mere correspondence
stating non-issuance is not sufficient to prove an
allegation of fraud and warrant termination from
service. In our view, mere bald statement that the
appointment was based on forged document or on fraud
is not sufficient. In case after such a long time of
service, if the department was of the opinion that
the order of appointment is not available on record,
an enquiry should have been conducted for looking
into the alleged forgery in issuance of the
appointment order. In absence of any such enquiry,
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such allegations of fraud and fabrication leading to
termination are unjustified.
23) As per the discussion made hereinabove, in the
facts and circumstances, an inescapable conclusion is
reached that the order of termination is based on a
reasoning which is per se untenable on fact and
record. The allegation of fraud has not been pleaded
and substantiated. In absence of holding any enquiry
of such allegation, the order of termination is liable
to be quashed. The findings recorded by the learned
Single Judge and the Division Bench are also without
due consideration of the above facts and are not based
on sound reasoning, hence, liable to be set aside.
24) Accordingly, we allow this appeal and set aside
the orders passed by the High Court and quash the
order of termination. Appellant is directed to be
reinstated in service with back wages to the extent
of 50% from the date of termination till his
reinstatement. The appellant would also be entitled
to all the consequential benefits. In light of the
facts, we leave it open to the respondents to take
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proper recourse, if any, against the appellant
following the due process of law.
25) Pending application, if any, shall stand
disposed of.
…………………………………………………………, J.
[ J.K. MAHESHWARI ]
…………………………………………………………, J.
[ ARAVIND KUMAR ]
New Delhi;
April 02, 2025.
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