UNION OF INDIA THR. SECRETARY & ORS. versus UDAI BHAN SINGH on 21 November 2019

[2019] 17 S.C.R. 527

UNION OF INDIA THR. SECRETARY & ORS.

v.

UDAI BHAN SINGH

(Civil Appeal No. 9303 of 2013)

NOVEMBER 21, 2019

[DR. DHANANJAYA Y CHANDRACHUD ANDAJAY RASTOGI, JJ.]

Service Law: Reinstatement – Respondent functioning asPostal Assistant – Charge of misconduct – Authorising paymentsof commission under the NSC Scheme to agents who were foundto be fake – Charges were essentially based on the failure to verifythe bills which had been submitted by so-called NSC agents andthe failure to make entries of payment in the ledger – Receipts werefound to be prepared in the names of fake agents as a result ofwhich payment of NSC commission in the amount of Rs.6.65 lakhswas wrongfully made – Inquiry officer found that charges wereproved/partially proved against respondent – DisciplinaryAuthority awarded penalty of reduction of pay of five years –Appellate Authority ordered dismissal from service – However,Tribunal set aside both the orders and restored the proceedings tothe Disciplinary Authority with liberty to issue notice to show causeto respondent and after allowing him opportunity of submittingrepresentation to arrive at final decision – After order of Tribunal,a notice to show cause was issued to respondent – DisciplinaryAuthority found that charges were proved against the respondentwhich warranted dismissal from service – The said findings wereupheld by Appellate Authority – Tribunal dismissed OA byrespondent – However, High Court directed reinstatement ofrespondent on the ground of violation of principle of naturaljustice and vitiation of inquiry by delay following an earlier orderof remand of Tribunal – High Court held that there was a failureon the part of the inquiry officer to provide documents to therespondent during the course of disciplinary inquiry and thatnotice was issued by Disciplinary Authority nearly eight yearsfollowing the first order of Tribunal – Appeal by employer-UOI –Held: Tribunal, while dealing with the submission, came to theconclusion that the respondent was attempting to take undue

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Aadvantage of the non availability of cash receipts but the paymentcould be verified from other records and documents which weremaintained in the Head Post Office – High Court merely observedthat the respondent was not provided the documents which wererelied upon – High Court did not consider which documents werenot supplied, the relevance of those documents to the charge ofBmisconduct and the prejudice, if any, that resulted to the respondentby the non availability of the relevant documents – Even in thepleadings of the respondent, the plea that there was a failure tosupply documents was vague and there was no reference to whichspecific document ought to have been made available – TribunalCrestored the proceedings back to the Disciplinary Authority toenable the appellants to issue a fresh notice to show cause to therespondent and to arrive at a conclusion on the nature of themisconduct, if any, after furnishing an opportunity to therespondent of making a representation – Neither was the inquiryrequired to be held afresh nor was fresh evidence to be recordedD– After the order of the Tribunal, a notice to show cause was issuedto the respondent after eight years – But respondent had beenreinstated following the order of the Tribunal setting aside thedisciplinary action, pending the conclusion of the process by theDisciplinary Authority – Therefore, the delay on the part of theEDisciplinary Authority in issuing a show cause notice in the firstinstance and in passing a final order thereafter was not a matterof any prejudice to the respondent – For the said reasons, the HighCourt was in error in interfering with the exercise of the disciplinaryjurisdiction of the appellants – The misconduct was proved – Thepenalty imposed cannot be held to be disproportionate or arbitraryF– High Court erred in setting aside the punishment and orderingreinstatement with back wages and continuity of service.

Allowing the appeal, the Court

Allowing the appeal, the Court

HELD: 1. According to the Tribunal, the non availability Gof a particular document on the record did not make anydifference to the charge of misconduct which was established byother materials which were available on the record. The HighCourt merely observed that the respondent was not providedthe documents which were relied upon and that there was anerror apparent on the face of the record in the order of theHTribunal. The High Court did not consider which documents were not supplied, the relevance of those documents to thecharge of misconduct and the prejudice, if any, that resulted tothe respondent by the non availability of the relevant documents.In fact, in the pleadings of the respondent, the plea that therewas a failure to supply documents was vague and there was noreference to which specific document ought to have been madeavailable. Without analyzing this aspect of the case, the HighCourt interfered with the disciplinary jurisdiction of the appellanton a vague plea that documents were not supplied. High Courtought to have enquired into the question of prejudice. [Para 13][536-D-F]

2. The aspect of delay must be considered in the contextof the admitted facts. The inquiry had been concluded by theinquiry officer. Evidence was recorded during the course of theinquiry. The order of the disciplinary authority holding that allthe three charges had been proved was without issuing a noticeto the respondent on the reasons for disagreement with thereport of the inquiry officer. The appellate authority enhancedthe punishment without indicating adequate reasons. TheTribunal restored the proceedings back to the disciplinaryauthority to enable the appellants to issue a fresh notice to showcause to the respondent and to arrive at a conclusion on thenature of the misconduct, if any, after furnishing an opportunityto the respondent of making a representation. Neither was theinquiry required to be held afresh nor was fresh evidence to berecorded. After the order of the tribunal, a notice to show causewas issued to the respondent after eight years. But it mustequally be noted that the respondent had been reinstatedfollowing the order of the tribunal setting aside the disciplinaryaction, pending the conclusion of the process by the disciplinaryauthority. Hence, the delay on the part of the disciplinaryauthority in issuing a show cause notice in the first instance andin passing a final order thereafter is not a matter of any prejudiceto the respondent. In the present case, the appellants havenot condoned the lapse on the part of the respondent. The delaywas not a matter of prejudice. For the said reasons, the HighCourt was in error in interfering with the exercise of thedisciplinary jurisdiction of the appellants. The misconduct wasproved. The penalty which has been imposed cannot be held to AB

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Abe disproportionate or arbitrary. The High Court was in errorin setting aside the punishment and ordering reinstatement withback wages and continuity of service. [Paras 14, 16, 17] [536-H; 537-A-C; 538-D-E]

State of Madhya Pradesh v. Bani Singh and AnotherB1990 (Supp) SCC 738 ; State of Punjab and Others v.Chaman Lal Goyal (1995) 2 SCC 570 : [1995] 1 SCR695 ; State of A.P. v. N. Radhakrishan (1998) 4 SCC154 : [1998] 2 SCR 693 ; Secretary, Forest Departmentand Others v. Abdur Rasul Chowdhury (2009) 7 SCC305 ; Government of Andhra Pradesh and Others v.CV. Appala Swamy (2007) 14 SCC 49 : [2007] 2 SCR 19– referred to.

ECIVIL APPELLATE JURISDICTION : Civil Appeal No. 9303of 2013.

From the Judgment and Order dated 01.05.2012 of the HighCourt of Judicature at Allahabad in CMWP No. 40964 of 2009.

FMs. Kiran Suri, Sr. Adv., Merusagar Samantaray, Sachin Sharma,Ms. Smita Choudhury, Gurmeet Singh Makker, Ms. Aishwarya Kumar,Advs. for the Appellants.

S. D. Singh, Ms. Bharti Tyagi, Mrs. Surabhi Shukla, Ram KripalSingh, Dhiraj Kumar, Jitender Singh, Advs. for the Respondent.GThe Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

1. This appeal arises from a judgment of a Division Bench ofthe High Court of Judicature at Allahabad dated 1 May 2012. WhileHallowing the writ petition filed by the respondent raising a challenge to an order of the Central Administrative Tribunal[1], the High Court cameto the conclusion that (i) there was a violation of the principles of naturaljustice in that the appellants failed to provide relevant documents to therespondent during the course of the departmental inquiry; and (ii) theinquiry was vitiated by delay, following an earlier order of remand ofthe Tribunal. On these two counts, the High Court interfered with thepunishment of dismissal imposed on the respondent and directedreinstatement with full backwages and consequential benefits. TheUnion of India is in appeal.

2. On 13 December 1978, the respondent was appointed as aPostal Assistant in the Head Post Office at Allahabad. A charge-sheetwas issued to him on 31 August 1988. There were four articles ofcharge pertaining to the conduct of the respondent during the periodfrom 15 July 1985 until 10 February 1986 when he was functioning asa Miscellaneous P.A. at the Allahabad Head Office.

3. The charge of misconduct relates to the appellant authorisingpayments of commission under the National Savings Certificate Schemeto agents who were found to be fake. Article-I of the charges was inthe following terms:

“Shri Udai Bhan Singh while working as Misc. Asstt. AllahabadHO during the period from 15.07.1985 to 10.02.1986 did not verifythe commission bills submitted by NSC Agents properly and didnot make entries of payment in ledger of NS Agents. He alsodid not watch the following particularised irregular and forgedNSC commission bills to fake agents. He also managed to preparemoney receipts on the number of fake agents and managed theirpayment. This resulted fraudulent payments of NS commissionto the tune of Rs.6,65,693.60 to the following fake agents”

The names of 79 fake agents to whom fraudulent payments ofcommission were allegedly made were thereafter elucidated. ArticleII of the charges was in the following terms:

“That the said Shri Udai Bhan Singh while functioning as Misc.PA Allahabad HO during the period from 15.07.1985 to10.02.1986 managed to prepare three following particularizedmoney paid receipts in duplicate and managed their payment at 1 “Tribunal”

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AAllahabad HO as well as at Allahabad City PO on the followingdate by using the two copy of each.”

A tabulated chart below the charge contained details. Article IIIwas as follows:

“That the said Shri Udai Bhan Singh while functioning as Misc.BAsstt. Allahabad RO during the period from 15.07.1985 to10.02.1986 did not submit prepare schedule of commission paidto authorised agents for sale of NSCs and did not submit theschedule with the voucher and bills to the Audit office thoughAccount branch of Allahabad HO and did not tally the amountCof NS commission with those of HO summary and HO cash bookin r/o commission paid to the fake authorized NS Agents shownin Article No.1 and put the department into a loss of Rs.6,65,63.60.By his above acts he contravened the provisions of rule 543(10)(b) of P&T Man. Vol.VI Part II.”

D4. An inquiry officer was appointed to inquire into the charges.The inquiry officer submitted a report dated 18 July 1990. The inquiryofficer found that the first charge was proved to the following extent:

“Shri Udai Bhan Singh is not fully proved but it is proved to theextent that he had helped to put in loss to the department byviolating the rules for tallying the account putting his initial in tokenEof checking against every payment of commission bill, submissionof vouchers and schedule to audit office even though he wasfully aware with the rules.”

The second head of charge was held to be partially proved whilethe third charge was held to be proved.F

5. Upon receipt of the inquiry report, the disciplinary authorityawarded a penalty on 31 August 1990 of a reduction of pay for a periodof five years with consequential loss of annual increments. Therespondent filed an appeal before the appellate authority. The appellateauthority issued a notice of enhancement of punishment. The appellateGauthority by its order dated 9 March 1992 came to the conclusion thatthe charge against the respondent was proved and that it warrantedhis dismissal from service.

6. Aggrieved by the order of the appellate authority, the respondentinstituted proceedings before the Central Administrative Tribunal at theHAllahabad Bench. By a judgment and order dated 3 July 1992, the Tribunal set aside both the original order dated 31 August 1990 as wellas the order of the appellate authority dated 9 March 1992. Theproceedings were restored back to the disciplinary authority with libertyto issue a notice to show cause to the respondent and, after allowinghim an opportunity of submitting a representation to arrive at a freshdecision.

7. After the order of the Tribunal, a notice to show cause wasissued to the respondent by the disciplinary authority on 12 September2000. The disciplinary authority, by an order dated 2 July 200, agreedwith the inquiry officer that the first and second articles of charge werepartly proved while the third charge was fully established. Thedisciplinary authority came to the conclusion that the charges whichwere proved against the respondent would warrant dismissal fromservice. An appeal against the order of the disciplinary authority wasdismissed by the appellate authority on 28 November 2008.

8. On 18 May 2009, the Central Administrative Tribunal dismissedOA No.151 of 2009 instituted by the respondent. That led to theinstitution of proceedings before the High Court of Judicature atAllahabad. By its impugned judgment and order, the Division Bench ofthe High Court interfered with the order of the disciplinary authorityand came to the conclusion that there was a violation of the principlesof natural justice. The High Court held that there was a failure on thepart of the inquiry officer to provide documents to the respondent duringthe course of the disciplinary inquiry. The High Court was also of theview that a notice was issued by the disciplinary authority, followingthe first order of the Tribunal, nearly eight years thereafter and therewas a violation of “Rule 27 of the Central Administrative Tribunal, Rulesregarding execution of its orders”. On these grounds, the High Courtset aside the order of penalty imposed on the respondent and directedhis reinstatement with full back wages and consequential benefits.

9. Ms.Kiran Suri, learned Senior Counsel appearing on behalfof the appellants submitted that the High Court was in error ininterfering with the exercise of the disciplinary jurisdiction on both thegrounds which have weighed with it. Insofar as the non production ofdocuments is concerned, it was urged on behalf of the appellants thatthe ground has been correctly assessed both by the appellate authorityand by the Tribunal. Ms.Suri submitted that there has been a nonapplication of mind by the High Court. The provisions of Rule 27 ofthe Central Administrative Tribunal Rules have no bearing on the issue.

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AThat apart, it is urged that it was found by the appellate authority andby the Tribunal that the charges of misconduct were establishedindependently. The respondent failed to indicate before the High Courtwhich specific documents ought to have been supplied or the prejudice,if any, that was caused. Moreover, it has emerged during the courseof the proceedings that the receipts were not available for inspectionBsince it was the respondent who was in charge of maintaining them atthe relevant time. On the aspect of delay it is urged that this is not acase where there was any delay in the initiation of the disciplinaryinquiry. Ms.Suri submitted that the Tribunal had in the first instanceremanded the proceedings to the disciplinary authority and theCrespondent was reinstated in service during the pendency of the furtherproceedings. It was urged that delay by itself in the present case willnot result in the invalidation of the disciplinary proceedings; delay hasto be assessed in each case having regard to the prejudice which iscaused to the charge-sheeted employee. In the present case, it issubmitted, evidence had already been recorded prior to the remand, theDdocumentary evidence was filed and the only ground on which theTribunal found fault with the disciplinary authority was that it hadfurnished no reasons for differing with the conclusion which was arrivedat by the inquiry officer. Ms.Suri submitted that after the Tribunalrendered its decision in the first instance, the proceedings were at largebefore the disciplinary authority. On remand, the disciplinary authorityEagreed with the findings of the inquiry officer, but it came to theconclusion that having regard to the misconduct which was proved, thepenalty of dismissal from service was warranted. Hence, it is submittedthat no prejudice has been caused to the respondent as a result of thedelay which was occasioned on account of the issuance of a showFcause notice and in the conclusion of the proceedings after the orderof the Tribunal. In this context, Ms.Suri relied upon decisions of thisCourt to which we will turn during the course of this judgment.

10. On the other hand, it has been urged on behalf of therespondent by Mr.S.D. Singh, learned counsel that (i) the respondentGspecifically raised the ground of non production of documents duringthe course of the disciplinary proceedings; (ii) the charge against therespondent did not indicate any defalcation of funds or loss caused tothe department; (iii) after the order of the Tribunal in 1992, a notice toshow cause was issued to him eight years later and it was only after afurther delay of eight years that a final order was passed by theHdisciplinary authority. On these grounds, it was submitted that it was not open to the appellant to proceed against the respondent after a lapseof time. Moreover, it was urged that in the absence of documents beingmade available to the respondent, he was handicapped in preparationof his defence and there was a breach of the principles of natural justice.

11. The rival submissions fall for consideration.

12. The charges against the respondent were essentially basedon the failure to verify the bills which had been submitted by so-calledNSC agents and the failure to make entries of payment in the ledger.There was a charge that the respondent did not supervise the processas a result of which payments were made to NSC agents who werefound to be fake. Receipts were found to be prepared in the names offake agents as a result of which payment of NSC commission in theamount of Rs.6.65 lakhs was wrongfully made. The inquiry officer inthe course of the disciplinary inquiry found the first and second headsof charge to be partially proved while the third charge was held to befully proved. The disciplinary authority, however, came to the conclusionthat all the three charges were fully proved and, in consequence,directed a penalty of reduction in scale for a period of five years witha consequential loss of increments. There was evidently a failure onthe part of the disciplinary authority to give a notice to the charge-sheeted employee before differing with the findings of the inquiry officeron the first and second heads of charge which had been held to bepartially proved. When the respondent filed an appeal, the appellateauthority issued a notice of enhancement which eventually resulted inan order of dismissal from service. In this backdrop, the Tribunal by itsjudgment dated 3 July 1992 set aside the order of the appellate authorityas well as the order of the disciplinary authority and remanded theproceedings back to the disciplinary authority. The disciplinary authoritywas directed to issue a fresh notice to the respondent before it cameto a conclusion in the matter. It was following the order of the Tribunalthat a notice was issued to the respondent. While issuing its notice on22 September 2000, the disciplinary authority did not propose to differwith the findings of the inquiry officer on the charges of misconduct.The disciplinary authority held that the first and second articles of chargewere partially proved and the third was fully proved in terms of thefindings of the inquiry officer. However, the disciplinary authority cameto the conclusion that the charges which were proved against therespondent were serious enough to warrant a punishment of dismissal.Following the order of the Tribunal in the first instance, the disciplinary A

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Aauthority was at liberty to take a fresh view of the matter after issuinga notice to show cause and furnishing an opportunity of making arepresentation to the respondent. This, the disciplinary authority didby issuing a notice which furnished to the respondent an opportunity tosubmit his response.B13. This leads us to the issue as to whether there was a breachof the principles of natural justice. The submission found favour withthe High Court in the impugned judgment. The question as to whetherthere was a failure of natural justice was dealt with by the disciplinaryauthority. Thereafter,the issue was considered by the appellateauthority. The Tribunal, while dealing with the submission, came to theCconclusion that the respondent was attempting to take undue advantageof the non availability of cash receipts but the payment could be verifiedfrom other records and documents which were maintained in the HeadPost Office. In other words, according to the Tribunal, the non availabilityof a particular document on the record did not make any difference tothe charge of misconduct which was established by other materialsDwhich were available on the record. The High Court merely observedthat the respondent was not provided the documents which were reliedupon and that there was an error apparent on the face of the record inthe order of the Tribunal. The High Court did not consider whichdocuments were not supplied, the relevance of those documents to theEcharge of misconduct and the prejudice, if any, that resulted to therespondent by the non availability of the relevant documents.. In fact,in the pleadings of the respondent, the plea that there was a failure tosupply documents was vague and there was no reference to whichspecific document ought to have been made available. Without analyzingthis aspect of the case, the High Court interfered with the disciplinaryFjurisdiction of the appellant on a vague plea that documents were notsupplied. The High Court ought to have enquired into the question ofprejudice. There is also substance in the submission which has beenurged by Ms.Suri, learned Senior Counsel with regard to the erroneousreference to Rule 27 of the Central Administrative Tribunal Rules. Rule27 has no bearing at all on the controversy in the present case. SectionG27 of the Administrative Tribunals Act 1985 deals with execution ofthe orders of the Tribunal.

14. The aspect of delay must be considered in the context ofthe admitted facts. The inquiry had been concluded by the inquiry officer.Evidence was recorded during the course of the inquiry. The order ofHthe disciplinary authority holding that all the three charges had been proved was without issuing a notice to the respondent on the reasonsfor disagreement with the report of the inquiry officer. The appellateauthority enhanced the punishment without indicating adequate reasons.The Tribunal restored the proceedings back to the disciplinary authorityto enable the appellants to issue a fresh notice to show cause to therespondent and to arrive at a conclusion on the nature of themisconduct, if any, after furnishing an opportunity to the respondent ofmaking a representation. Neither was the inquiry required to be heldafresh nor was fresh evidence to be recorded. After the order of thetribunal, a notice to show cause was issued to the respondent after eightyears. But it must equally be noted that the respondent had beenreinstated following the order of the tribunal setting aside the disciplinaryaction, pending the conclusion of the process by the disciplinaryauthority. Hence, the delay on the part of the disciplinary authority inissuing a show cause notice in the first instance and in passing a finalorder thereafter is not a matter of any prejudice to the respondent.

15. Now, it is well settled that the aspect of delay has to be dealtwith on the facts of each case. In the decision of this Court in Stateof Madhya Pradesh vs. Bani Singh and Another[2], the irregularities,which were the subject matter of an inquiry related to 1975-1977.Hence this Court held that it was not reasonable that the departmenthad taken more than twelve years to initiate a disciplinary proceedingdespite being aware of the irregularities. That was a case where therewas an unexplained delay in the initiation of disciplinary proceedings.Subsequently, the position of law has been clarified by the decisions ofthis Court in State of Punjab and Others vs. Chaman Lal Goyal[3],State of A.P. vs. N.Radhakishan[4]and Secretary, ForestDepartment and Others vs. Abdur Rasul Chowdhury[5].In Government of Andhra Pradesh and Others vs. V.AppalaSwamy[6], this Court after referring to the earlier decisions held thus:

“12..So far as the question of delay in concluding thedepartmental proceedings as against a delinquent officer isconcerned, in our opinion, no hard-and-fast rule can be laid downtherefor. Each case must be determined on its own facts. The 2 1990 (Supp) SCC 738

3 (1995) 2 SCC 570

4 (1998) 4 SCC 154

5 (2009) 7 SCC 305

6 (2007) 14 SCC 49

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Aprinciples upon which a proceeding can be directed to be quashedon the ground of delay are:

(1) where by reason of the delay, the employer condoned thelapses on the part of the employee:

(2) where the delay caused prejudice to the employee.

BSuch a case of prejudice, however, is to be made out by theemployee before the inquiry officer.

13. This aspect of the matter is now squarely covered by thedecisions of this Court in Secy. to Govt., Prohibition & ExciseDeptt. v. L. Srinivisan;[7] P.D.Agrawal v. State Bank ofIndia[8]; Registrar, Coop. Societies v. Sachindra NathPandey[9].”

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16. In the present case, the appellants have not condoned thelapse on the part of the respondent. The delay was not a matter ofprejudice.D

17. For the above reasons, we have come to the conclusion thatthe High Court was in error in interfering with the exercise of thedisciplinary jurisdiction of the appellants. The misconduct was proved.The penalty which has been imposed cannot be held to bedisproportionate or arbitrary. The High Court was in error in settingEaside the punishment and ordering reinstatement with back wages andcontinuity of service.

18. Accordingly, we allow the appeal and set aside the impugnedjudgment and order of the High Court dated 1 May 2012. We affirmthe judgment of the Central Administrative Tribunal dismissing theFOriginal Application filed by the respondent and uphold the finding andpenalty imposed in the disciplinary proceedings. Since the respondentwas reinstated following the first order of the Tribunal dated 3 July 1992,no recovery shall be made from him for the period for which he hasworked and during which salary has been paid to him. There shall beno order as to costs.G

Devika Gujral

Appeal allowed.

7 (1996) 3 SCC 157

8 (2006) 8 SCC 776

H9 (1995) 3 SCC 134