Transcript Service Jurisprudence Overview

Service Jurisprudence
for
HR Professionals
Dr. J. K. Verma
M.Sc., Ph.D., M.B.M., B.L.
Advocate, Patna High Court
Service Jurisprudence
Introduction
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Jurisprudence : Service jurisprudence; corporate jurisprudence;
industrial jurisprudence
 Service (employment) – Elements – Kinds
 Recruitment – rules and requirements in
different services
 Leave, Lien
 Determination of employment
 Discipline – need and ways and means to
infuse, maintain and enforce.
 Disciplinary or departmental proceeding –
Departmental or domestic enquiry – in different
employments like Government, PSU, and industrial
 Punishment
 Natural justice
 Judicial Review
 Labour laws – courts’ interpretations
Service or Employment
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Employer-employee relationship or master-servant relationship :
started as personal service. (Roman Law – the servant had no
right).
An employer is a person or body who:
a) Owns or manages an establishment and in case of manager is
responsible to the owner for the supervision and control of the
industrial establishment;
b) Employs persons (pays wages);
c) Exercises Supervision and control of employees.
An employee is:
A person who is employed to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward.
The essential requirement is ‘to work for wages at monthly rate’.
A servant acts under the direct control and supervision of his master,
and is bound to conform to all reasonable orders given to him in the
course of his work.
Government servant/ workman: retirement age [FR 56(a)/(b)]
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Contract for service or contract of service.
In ‘contract for service’, the master dictates what is to be done and
not the mode or manner of doing it. Such contract does not result in
master-servant relationship.
In ‘contract of service’ the master not only requires what is to be
done but also how it is to be done. This cannot be done unless the
service is closely watched and constant guidance and control is
exercised. Such contracts generally result in employer-employee
relationship. Cassidy v. Ministry of Health, (1951) 1 All ER 574 There
must be an offer and an acceptance. Sultan Sadik v. Sanjay Raj
Subba, (2004) 2 SCC 377. Statutory provisions/ Contract Act.
In the peculiar case of Gottumukkala Appala Narasimha Raju v.
National Insurance Co. Ltd. (2007) 13 SCC 446 in the matter of
compensation under Workmen’s Compensation Act, 1923, a person
died in an accident while driving tractor belonging to his wife.
Compensation was claimed from the insurer company on the ground
that the deceased driver was an employee of the owner, his wife.
Although the Commissioner under the Act awarded compensation
from the insurer, the High Court set it aside. The Supreme Court, in
absence of any documentary evidence to establish master-servant
relationship, rejected the appeal.
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Ingredients of employer-employee relationship were laid down by
the House of Lords 6 decades before in Short v. J.W. Henderson
Ltd. (1946) 174 Law Times 417 (see Union Public Service
Commission v. Girish Jayanti Lal Vaghela. (2006) 2 SCC 482: AIR
2006 SC 1165).
These are:
(a) the master’s power of selection of his servant;
(b) the master’s responsibility of payment of wages or other
remuneration;
(c) the master’s right of suspension or dismissal; and
(d) the master’s right to control the method of doing the work.
There is no dispute regarding the first three ingredients. Questions
have arisen however with respect to scope and ambit of the power
of control and supervision. In determining the relationship of
employer and employee, no doubt, “control” is one of the important
tests but is not to be taken as the sole test. The real test should be
whether the person was fully integrated into the employer’s concern
or remained apart from and independent of it. The other factors
which may be relevant are — who has the power to select and
dismiss, to pay remuneration, deduct insurance contributions,
organise the work, supply tools and materials and what are the
“mutual obligations” between them. Ram Singh v. Union Territory,
Chandigarh. (2004) 1 SCC 126
If the provisions of the contract as a whole are inconsistent
with its being a contract of service, it will be some other kind
of contract and the person doing the work will not be a
servant. Three ingredients, therefore are: (i) employer — one
who employs i.e. engages the services of other persons; (ii)
employee — one who works for another for hire; and (iii)
contract of employment — control and supervision of the
employer. Workmen of Nilgiri Coop. Mkt. Society Ltd. v. State
of T.N. (2004) 3 SCC 514
S. 2(9)(ii), Employees’ State Insurance Act, 1948 – When the
employee is put to work under the eye and gaze of the
principal employer, or his agent, where he can be watched
secretly, accidentally, or occasionally, while the work is in
progress, so as to scrutinize the quality thereof and to detect
faults therein, as also put to timely remedial measures by
directions given, finally leading to the satisfactory completion
and acceptance of the work, that would be supervision. It is
the consistency of vigil. C.E.S.C. Ltd. v. Subhash Chandra
Bose, (1992) 1 SCC 441
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Kinds of employment –
Government or public governed by statutory rules;
Industrial governed by Labour Laws; and
Private governed purely by contract.
A government servant is a person who holds a civil post under the
Union or State Government. It may be noted however that under
sub-rule (iii) a person in the service of a local or other authority
whose services are temporarily placed at the disposal of the Central
Government also gets the status of a government servant. UPSC v.
Girija Jayantilal Vaghela, (2006) 2 SCC 482
In public employment, master-servant relationship is severed by
removal, termination or dismissal. In industrial employment on the
pother hand, the order (of dismissal or discharge) remains in an
inchoate state till the employer obtains order of approval from the
Tribunal u/s 33(2)(b) of the I.D. Act, 1947. T.N. State Transport
Corpn. v. Neethivilangan, Kumbakonam (2001) 9 SCC 99
Rule governing service conditions in different employments –
Articles 309 and 310 of the Constitution of India; Service Rules
made under Proviso to Article 309, Standing Orders certified under
Industrial Employment (Standing Orders) Act, 1946
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309. Subject to the provisions of this Constitution, Acts of the
appropriate Legislature may regulate the recruitment, and conditions
of service of persons appointed, to public services and posts in
connection with the affairs of the Union or of any State:
Provided that it shall be competent for the President or such person
as he may direct in the case of services and posts in connection with
the affairs of the Union, and for the Governor of a State or such
person as he may direct in the case of services and posts in
connection with the affairs of the State, to make rules regulating the
recruitment, and the conditions of service of persons appointed, to
such services and posts until provision in that behalf is made by or
under an Act of the appropriate Legislature under this article, and
any rules so made shall have effect subject to the provisions of any
such Act.
In the English system the pleasure doctrine was prevalent in regard
to government service. The legacy continues. Article 310 of the
Constitution of India provides that person shall continue in
government service till the pleasure of the President or the
Governor, as the case may be. Article 310 reads:
310. (1) Except as expressly provided by this Constitution, every person
who is a member of a defence service or of a civil service of the Union or of
an all-India service or holds any post connected with defence or any civil
post under the Union holds office during the pleasure of the President, and
every person who is a member of a civil service of a State or holds any civil
post under a State holds office during the pleasure of the Governor of the
State.*
The appointment letters or the offers of appointment normally begin with
“President / Governor (as the case may be) is pleased to appoint….” The
Supreme Court held in State of Bihar v. Abdul Majid. AIR 1954 SC 245 that
this pleasure was subject to restrictions imposed by the statutes (Rules
framed u/Art. 309 and provisions of Article 311).
Relevance of Article 310.
Pleasure of the President or the Governor is not his personal one, it is that
of the Council of Ministers.
Status and rights of employees under service rules:
The employee has a right to serve till the age of retirement unless
terminated/removed or dismissed in accordance with the rules and
procedures.
The employee has the protection of Article 311 of the Constitution of India
against arbitrary/ biased/ mala fide/ prejudiced
removal/termination/dismissal or reduction in rank.
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The employee can directly approach a High Court under its writ
jurisdiction (under Article 226 of the Constitution) against arbitrary/
illegal/ unjustified dismissal/removal/termination or reduction in rank.
Under Labour Laws:
Protection of Standing Orders/ I.D. Act, 1947 against arbitrary
termination/discharge/retrenchment/unfair labour practice.
Workman : Whether an employee is a workman or not is to be
decided not on the basis of the grades in which they are placed but
on the basis of their duties, responsibilities and powers (Mukand Ltd.
v. Mukand Staff & Officers' Assn., (2004) 10 SCC 460)
It would not be correct to contend that merely because the employee
had not been performing any managerial or supervisory duties, ipso
facto he would be a workman. Sonepat Co-operative Sugar Mills
Ltd. v. Ajit Singh, (2005) 3 SCC 232 A professional can never be
termed as a workman under any law. Muir Mills Unit of N. T. C. (U.
P.) Ltd. v. Swayam Prakash Srivastava, AIR 2007 SC 519 : (2007) 1
SCC 491
Principal Employer; immediate employer.
An independent contractor is entirely independent of any control or
interference and merely undertakes to produce a specified result,
employing his own means to produce that result. An agent is not
subject to the direct control and supervision of the principal. (see
Superintendent of Post Offices v. P.K. Rajamma, (1977) 3 SCC 94 :
1977 SCC (L&S) 374)
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The employees of the intermediate employer are not employees of
the principal employer.
The employer governed by labour laws is obliged to follow the
labour welfare obligations caste on him by labour legislations based
on Articles 38, 39, 42, 43 and 43-A of the Constitution. These
provisions are:
38. (1) The State shall strive to promote the welfare of the people by
securing and protecting as effectively as it may a social order in
which justice, social, economic and political, shall inform all the
institutions of the national life.
(2) The State shall, in particular, strive to minimize the inequalities in
income, and endeavour to eliminate inequalities in status, facilities
and opportunities, not only amongst individuals but also amongst
groups of people residing in different areas or engaged in different
vocations.
39. The State shall, in particular, direct its policy towards securing—
(a) that the citizens, men and women equally, have the right to an
adequate means of livelihood;
(b) that the ownership and control of the material resources of the
community are so distributed as best to subserve the common good;
(c) that the operation of the economic system does not result in the
concentration of wealth and means of production to the common
detriment;
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(d) that there is equal pay for equal work for both men and women;
42. The State shall make provision for securing just and humane
conditions of work and for maternity relief.
43. The State shall endeavour to secure, by suitable legislation or
economic organisation or in any other way, to all workers,
agricultural, industrial or otherwise, work, a living wage, conditions
of work ensuring a decent standard of life and full enjoyment of
leisure and social and cultural opportunities and, in particular, the
State shall endeavour to promote cottage industries on an individual
or co-operative basis in rural areas.
43A. The State shall take steps, by suitable legislation or in any
other way, to secure the participation of workers in the management
of undertakings, establishments or other organisations engaged in
any industry.
In order to avoid complying with these obligations many employers
in public as well as private sector apply myriad devices. One such
device is ostensibly outsourcing the labour force through an
intermediate contractor. It was held that ‘the presence of
intermediate contractors with whom alone the workers have
immediate or direct relationship ex contractu is of no consequence
and the Management is the real employer and not the immediate
contractor. Hussainbhai, Calicut v. Alath Factory Thezhilali Union,
Kozhikode, (1978) 4 SCC 257
Where the Bank had constituted a committee of the staff to run the
canteen which was responsible only for day-to-day running thereof,
it was held that the Bank could not be absolved of its responsibility
as the employer of the canteen employees. Indian Overseas Bank v.
I.O.B. Staff Canteen Workers' Union, (2000) 4 SCC 245; Steel
Authority of India Ltd. v. National Union Waterfront Workers.: (2001)
7 SCC 1 : 2001 SCC (L&S) 1121
The contract labour are indeed the employees of the principal
employer where :
(i) contract labour is engaged in or in connection with the work of
an establishment and employment of contract labour is
prohibited;
(ii) the contract was found to be a sham and nominal, rather a
camouflage, in which case the contract labour working in the
establishment of the principal employer were held, in fact and in
reality, the employees of the principal employer himself; and
(iii) in discharge of a statutory obligation of maintaining a canteen
in an establishment the principal employer availed the services of
a contractor – the contract labour would indeed be the
employees of the principal employer.
Recruitment
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Constitutional guarantee of equality before law – Articles 14 and 16 of the
Constitution in Government employment – Requirement of acting fairly and
impartially
Constitution of India
Article 14. The State shall not deny to any person equality before the law or
the equal protection of the laws within the territory of India.
Article 16. (1) There shall be equality of opportunity for all citizens in
matters relating to employment or appointment to any office under the
State.
(2) No citizen shall, on grounds only of religion, race, caste, sex, descent,
place of birth, residence or any of them, be ineligible for, or discriminated
against in respect of, any employment or office under the State.
(3) Nothing in this article shall prevent Parliament from making any law
prescribing, in regard to a class or classes of employment or appointment to
an office under the Government of, or any local or other authority within, a
State or Union territory, any requirement as to residence within that State or
Union territory prior to such employment or appointment.
(4) Nothing in this article shall prevent the State from making any
provision for the reservation of appointments or posts in favour of any
backward class of citizens which, in the opinion of the State, is not
adequately represented in the services under the State.
(4A) Nothing in this article shall prevent the State from making any provision
for reservation in matters of promotion, with consequential seniority, to any
class or classes of posts in the services under the State in favour of the
Scheduled Castes and the Scheduled Tribes which, in the opinion of the
State, are not adequately represented in the services under the State.
(4B) Nothing in this article shall prevent the State from considering any
unfilled vacancies of a year which are reserved for being filled up in that
year in accordance with any provision for reservation made under clause (4)
or clause (4A) as a separate class of vacancies to be filled up in any
succeeding year or years and such class of vacancies shall not be
considered together with the vacancies of the year in which they are being
filled up for determining the ceiling of fifty per cent. reservation on total
number of vacancies of that year.
(5) Nothing in this article shall affect the operation of any law which provides
that the incumbent of an office in connection with the affairs of any religious
or denominational institution or any member of the governing body thereof
shall be a person professing a particular religion or belonging to a particular
denomination.
Articles 14 and 16 are also known as equality provisions. Equality is one
aspect of Natural justice, the other being Equity. It is often said that where
there is no legal provision, equity prevails. Compliance with principles of
Natural Justice is hallmark of government service, particularly departmental
enquiry.
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Employment Exchanges (Compulsory Notification of Vacancies) Act,
1959
Does not apply to
Agricultural labour, domestic labour, less than 3 months tenure,
unskilled work, promotional posts, surplus staff, vacancies to be
filled through competitive exams., or on recommendations by UPSC
or PSC, and vacancy with wages less than `60.
Returns
Recruitment rules – different cadres/levels; skilled/unskilled;
professional/general – promotions and
Recruitment to a career and fixed tenure recruitments
Illegal appointment and irregular appointment
Regularisation
Compassionate appointment
Ad hoc appointment
Daily wagers – Organized and unorganized sector
Determination of employment
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Retirement or superannuation
Pre-mature retirement –
at the instance of employee : Voluntary retirement, resignation
at the instance of the employer : termination, compulsory
retirement,
Voluntary retirement schemes
CENTRAL CIVIL SERVICES (TEMPORARY SERVICE) RULES, 1965
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5.
Termination of temporary service.
(1) (a)
The services of a temporary Government servant shall be
liable to termination at any time by a notice in writing given either by the
Government servant to the appointing authority or by the appointing
authority to the Government servant;
(b)
the period of such notice shall be one month.
Provided that the services of any such Government servant may
be terminated forthwith and on such termination, the Government
servant shall be entitled to claim a sum equivalent to the amount of his
pay plus allowances for the period of the notice at the same rates at
which he was drawing them immediately before the termination of his
services, or as the case may be, for the period by which such notice
falls short of one month.
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6. Termination of temporary service on account of physical
unfitness.
Notwithstanding anything contained in rule 5, the services of a
temporary Government servant may be terminated at any time
without notice on his being declared physically unfit for continuance
in service by an authority who would have been competent to
declare him as permanently incapacitated for service had his
appointment been permanent.
By way of punishment :
Termination, removal, dismissal, compulsory retirement
Dismissal, removal, termination and compulsory retirement puts an
end to the relationship of employer and employee; but in case of
suspension, reduction in rank or reversion, the relationship of
employer and employee continues. Public Services Tribunal Bar
Assn. v. State of U.P., (2003) 4 SCC 104 Similarly, the master and
servant relationship is not severed on retirement. It continues even
thereafter for grant of retiral benefits. U.P. State Sugar Corpn. Ltd. v.
Kamal Swaroop Tondon, (2008) 2 SCC 41
Discipline
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Definition and need
Efficiency of the administration of the Industrial undertakings is very
vital and relevant consideration. Production must continue, services
must be maintained and run. Efficacy of the services can be ensured
only if manned by disciplined employees or workers. Discipline,
decency and order will have to be maintained. Employees should
have sense of participation and involvement and necessarily sense
of security. Delhi Transport Corpn. v. D.T.C. Mazdoor Congress,
1991 Supp (1) SCC 600 For smooth functioning, every employer
depends upon a disciplined employees’ force. Indian Rly.
Construction Co. Ltd. v. Ajay Kumar, (2003) 4 SCC 579
Earlier only the interest of the workmen was sought to be protected
with the avowed object of fast industrial growth of the country.
Because of this discipline at the workplace/industrial undertakings
received a setback. The current trend of the Supreme Court is that
in view of the change in economic policy of the country, it may not
now be proper to allow the employees to break the discipline with
impunity. Hombe Gowda Edn. Trust v. State of Karnataka (2006) 1
SCC 430
Departmental Proceeding
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Article 21 of the Constitution reads as under:
21. No person shall be deprived of his life or personal liberty
except according to procedure established by law.
It was held that right to life does not only mean animal
existence, it includes means of livelihood. It implies that
dismissing and employee arbitrarily or without following the
rules and procedures amounts to depriving him of his
livelihood in violation of the procedure established by law.
Such actions would be unconstitutional and cannot be
sustained. Such procedure must be fair, just and reasonable.
Olga Tellis v. Bombay Municipal Corpn. (1985) 3 SCC 545
Articles 309 and 311 provide the framework for and require
framing of rules defining conduct and misconduct; and for
procedure to be followed in departmental enquiries in case of
misconduct; and imposing punishments proportionate to the
misconduct.
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Scope : State – Article 12 Constitution of India
12. In this Part, unless the context otherwise requires, “the State’’
includes the Government and Parliament of India and the
Government and the Legislature of each of the States and all local
or other authorities within the territory of India or under the control of
the Government of India. The State is required to act fairly and
reasonably.
The employees of the State are Government or civil servants.
Therefore all service rules and government actions must conform to
Articles 14, 16, 309 and 311 and the relevant procedures must
conform to principles of natural justice.
The State, as defined in Article 12, is thus comprehended to include
bodies created for the purpose of promoting the educational and
economic interests of the people.
The Courts have expanded the scope of the expression ‘State’
within the meaning of Article 12 to include Public Sector
undertakings/ Enterprises and other organisations. The criteria for
an organisation to be deemed to State are (Pradeep Kumar Biswas v.
Indian Institute of Chemical Biology, (2002) 5 SCC 111) :
(1) Where the entire share capital of the corporation is held by
Government.
 (2) Where the financial assistance of the State is so much as to meet
almost entire expenditure of the corporation.
 (3) Whether the corporation enjoys monopoly status which is Stateconferred or State-protected.
 (4) Existence of deep and pervasive State control.
 (5) Whether the functions of the corporation are of public importance
and closely related to governmental functions.
 (6) If a department of Government is transferred to a corporation.
Departmental Proceeding – why?
Departmental proceeding is needed to maintain discipline in the service
and efficiency of public service. Hindustan Petroleum Corpn. Ltd. v.
Sarvesh Berry, (2005) 10 SCC 471
If an act or omission of an employee reflects upon his character,
reputation, integrity or devotion to duty or is an unbecoming act,
certainly the employer can take action against him. Indian Rly.
Construction Co. Ltd. v. Ajay Kumar, (2003) 4 SCC 79.
 There is no distinction between ‘departmental proceeding’ and
‘disciplinary proceeding’. Punjab National Bank v. M.L. Kalra, (2008) 3
SCC 494
 Departmental Proceeding starts with a departmental enquiry and
culminates with punishment or exoneration of the employee charged.
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EXTRACTS FROM CCS (CONDUCT) RULES, 1964
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3. General
(1) Every Government servant shall at all times-(i) maintain absolute integrity;
(ii) maintain devotion to duty; and
(iii) do nothing which is unbecoming of a Government servant.
3A. Promptness and Courtesy
No Government servant shall
(a) in the performance of his official duties, act in a discourteous manner;
(b) in his official dealings with the public or otherwise adopt dilatory
tactics or willfully cause delays in disposal of the work assigned to him.
3B. Observance of Government's policies
Every Government servant shall, at all times(i) act in accordance with the Government's policies regarding age of
marriage, preservation of environment, protection of wildlife and cultural
heritage;
(ii) observe the Government's policies regarding prevention of crime
against women.
3C. Prohibition of sexual harassment of working women
(1) No Government servant shall indulge in any act of sexual harassment
of any women at her work place.
(2) Every Government servant who is incharge of a work place shall take
appropriate steps to prevent sexual harassment to any woman at such work
place.
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4. Employment of near relatives of Govt. servants in companies or
firms
5. Taking part in politics and elections
6. Joining of associations by Government servants
No Government servant shall join or continue to be a member
of, an association the objects or activities of which are prejudicial to
the interests of the sovereignty and integrity of India, or public order
or morality.
7. Demonstration and strikes
8. Connection with press or other media
9. Criticism of Government
10. Evidence before Committee or any other authority
11. Communication of Official Information
12. Subscriptions
No Government servant shall, except with the previous
sanction of the Government or of the prescribed authority, ask for or
accept contributions to, or otherwise associate himself with the
raising of, any funds or other collections in cash or in kind in
pursuance of any object whatsoever.
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13. Gifts
(1) Save as provided in these rules, no Government servant shall
accept, or permit any member of his family or any other person
acting on his behalf to accept, any gift.
13-A. Dowry
14. Public demonstrations in honour of Government servants
15. Private trade or employment
16. Investment, lending and borrowing
17. Insolvency and habitual indebtedness
18. Movable, immovable and valuable property
18-A. Restrictions in relation to acquisition and disposal of
immovable property outside India and transactions with foreigners,
etc.
19. Vindication of acts and character of Government servant
20. Canvassing of non-official or other outside influence
No Government servant shall bring or attempt to bring any
political or other outside influence to bear upon any superior
authority to further his interests in respect of matters pertaining to
his service under Government.
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21. Restriction regarding marriage
(1) No Government servant shall enter into, or contract, a marriage
with a person having a spouse living; and
(2) No Government servant having a spouse living, shall enter into, or
contract, a marriage with any person:
Provided that the Central Government may permit a Government
servant to enter into, or contract, any such marriage as is referred to in
clause (1) or clause (2), if it is satisfied that (a) such marriage is permissible under the personal law applicable
to such Government servant and the other party to the marriage; and
(b) there are other grounds for so doing.
(3) A Government servant who has married or marries a person other
than of Indian nationality shall forthwith intimate the fact to the
Government.
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22. Consumption of intoxicating drinks and drugs
22-A. Prohibition regarding employment of children below 14 years
of age.
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Constitution of India – Article 311
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311. (1) No person who is a member of a civil service of the Union or an allIndia service or a civil service of a State or holds a civil post under the
Union or a State shall be dismissed or removed by an authority subordinate
to that by which he was appointed.
(2) No such person as aforesaid shall be dismissed or removed or
reduced in rank except after an inquiry in which he has been informed of the
charges against him and given a reasonable opportunity of being heard in
respect of those charges.
Provided that where it is proposed after such inquiry, to impose upon
him any such penalty, such penalty may be imposed on the basis of the
evidence adduced during such inquiry and it shall not be necessary to give
such person any opportunity of making representation on the penalty
proposed:
Provided further that this clause shall not apply—
(a) where a person is dismissed or removed or reduced in rank on the
ground of conduct which has led to his conviction on a criminal charge; or
(b) where the authority empowered to dismiss or remove a person or
to reduce him in rank is satisfied that for some reason, to be recorded by
that authority in writing, it is not reasonably practicable to hold such inquiry;
or
(c) where the President or the Governor, as the case may be, is
satisfied that in the interest of the security of the State it is not expedient to
hold such inquiry.
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(3) If, in respect of any such person as aforesaid, a question arises
whether it is reasonably practicable to hold such inquiry as is
referred to in clause (2), the decision thereon of the authority
empowered to dismiss or remove such person or to reduce him in
rank shall be final.
Simply put, the proceeding is initiated by appointment of Inquiry
officer and the presenting officer (the disciplinary, appellate,
reviewing and accepting authorities are normally prescribed in
service rules); issue of charge sheet, followed by depositions and
evidences of the prosecution and the defence, submission of
enquiry report, consideration thereof and imposition of punishment
by the disciplinary authority. The employee has a right to appeal and
review and on being unsuccessful, to approach the Administrative
Tribunal and the Court of law.
Departmental proceedings are initiated if information about an
employee’s corruption, malpractice or misconduct comes to the
notice of the disciplinary authority. The Vigilance Manual
enumerates 11 sources :
(a) Complaints received from employees of the organisation or
from the public;
(b) Departmental inspection reports and stock verification surveys;
(c) Scrutiny of annual property statements;
(d) Scrutiny of transactions reported under the Conduct Rules;
(e) Reports of irregularities in accounts detected in the routine
audit of accounts; e.g. tampering with records, over-payments,
misappropriation of money or materials etc.;
(f) Audit reports on Government accounts and on the accounts of
public undertakings and other corporate bodies etc.;
(g) Reports of Parliamentary Committees like the Estimates
Committee, Public Accounts Committee and the Committee on
Public Undertakings;
(h) Proceedings of two Houses of Parliament;
(i) Complaints and allegations appearing in the press etc.;
(j) Source information, if received verbally from an identifiable
source, to be reduced in writing; and
(k) Intelligence gathered by agencies like CBI, local bodies etc.
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Preliminary enquiry
When an allegation of misconduct or corrupt practices is brought to
notice or becomes known during course of routine working, a
preliminary enquiry is held to decide whether the fact(s) prima facie
constitute misdemeanour for which major punishment can be
imposed. If it is so, departmental enquiry is ordered. If the facts
warrant only minor punishment, a show cause or explanation is
asked for and departmental enquiry is dispensed with, being not
necessary.
Suo motu : (b) to (f) : internal sources.
Anonymous complaint not cognizable.
Pseudonymous complaint : before taking cognizance of such
complaints the Chief Vigilance Officer of the department or
organisation concerned should obtain specific orders from the Head
of the Department. A copy of all such complaints shall first be made
available to the officer concerned for his comments, and only
thereafter further action should be taken. Precaution should be
taken to take into custody all relevant documents. ITAT v. V.K.
Agarwal, (1999) 1 SCC 16
By far the most common source is a complaint by an employee or
anybody as mentioned in (a) above.


In case of a signed complaint the disciplinary authority may straightway
proceed to initiate preliminary enquiry to ascertain whether a prima facie
case is made out against the official or not.
Minor penalties
(i) Censure;
(ii) Withholding of promotion;
(iii) Recovery of pay – pecuniary loss to the Govt.;
(iii)(a) Reduction to a lower stage in the time scale of pay by one stage for
period not exceeding three years without cumulative effect, not affecting
pension;
(iv) Withholding of increment – without cumulative effect.
Major penalties
(v) Reduction in time scale of pay with ….. Increment;
(vi) Reduction in time scale of pay … promotion, seniority;
(vii) Compulsory retirement;
(viii) Removal from service;
(ix) Dismissal;
In minor penalty it is not necessary to follow detailed and lengthy procedure
laid down for imposition of major penalties. There is charge and its denial.
The proceedings can be instituted by issuing notice. U.P. State Sugar
Corpn. Ltd. v. Kamal Swaroop Tondon, (2008) 2 SCC 41 Even in a case
where the procedure for imposition of a major penalty is followed, having
regard to the facts and circumstances of a case, minor penalty can be
imposed.
An amalgam of minor and major penalties in the same order is not
permissible. Union of India v. S.C. Parashar, (2006) 3 SCC 167
The procedural requirements of a departmental enquiry (A. Sudhakar v.
Postmaster General, (2006) 4 SCC 348) are:
(i) opportunity to the officer concerned to deny his guilt and establish
his innocence which means he must be told that what the charges against
him are and the allegations on which such charges are based;
(ii) he must be given a reasonable opportunity to cross-examine the
witnesses produced against him and examine himself or other witnesses on
his behalf; and
(iii) he must be given opportunity to show cause that the proposed
punishment would not be proper punishment to inflict which means that the
tentative determination of the competent authority to inflict one of the three
punishments must be communicated to him.
Strict rules of evidence do not apply to departmental enquiry. Naresh
Govind Vaze v. Govt. of Maharashtra, (2008) 1 SCC 514 penalty can be
imposed on the delinquent officer on a finding recorded on the basis of
“preponderance of probability”. Mazdoor Sangh v. Usha Breco Ltd., (2008) 5
SCC 554
Section 58 of the Evidence Act, 1872 (charges having been admitted are
not required to be proved) is applicable to departmental enquiries. V.S.P. v.
Goparaju Sri Prabhakara Hari Babu, (2008) 5 SCC 569
Before initiating the proceeding, the delinquent may be suspended with or
without transfer. He shall be entitled to subsistence allowance – Non-coopn.


Procedures for conducting departmental enquiries (Rule-14, CCS
(CCA) Rules, 1965)
Departmental proceeding is taken to be initiated with issue of charge
sheet. However where the employee is suspended in contemplation
of departmental proceeding, issue of charge sheet will not be the
precondition.
i) Issue of charge-sheet by the Disciplinary Authority to the
delinquent comprising the following and asking him to file his written
statement and if he wishes to be heard in person –
a) imputation of misconduct giving all relevant facts
b) Articles of charges
c) list of documents, witnesses by which charges are proposed
to be sustained.
ii) If the written statement is not acceptable, D.A. to record reasons
for his opinion and order enquiry by appointing Inquiry Officer and
Presenting Officer.
As far as possible the D.A. should make the enquiry himself.
Immediate superior of the delinquent should not be made I.O.
I.O. should be senior in rank than the delinquent.
Delinquent may challenge appointment of a particular I.O. on
ground of bias – stay of the proceedings.
iii) I.O. to intimate the delinquent of the time, date and place of enquiry
as also whether he wants to inspect or have copy of any document
and to give list of documents and witnesses in his defence.
Continued non-appearance of delinquent will result in ex parte
enquiry.
iv) The enquiry being domestic, the delinquent is supposed to plead his
case himself. However he may take assistance of any other
employee or even a retired govt. servant (limitation of 7 cases) or an
employee under suspension’ but not by Union representative or a
legal practitioner. Kalindi v. Tata Locomotive & Engg. Co. Ltd.,
(1960) 3 SCR 407 : AIR 1960 SC 914
v) At the outset the I.O. shall ask the delinquent if he pleads guilty or
wants the enquiry. In case of pleading guilty, it shall be recorded and
authenticated by the delinquent, P.O. and the I.O.
vi) If the delinquent demands certain documents the I.O. shall cause
them to be supplied. Documents, if irrelevant, may be denied after
recording reasons. Prejudice.
vii) First the P.O. shall present the department's case supported by
documents, statements and wiriness.
viii) After the department’s case if closed the delinquent shall present
his case in similar manner.
ix) The P.O. and the delinquent may cross-examine each other’s
witnesses.
x) The deliberations shall be recorded daily and signed by the I.O.,
P.O. and the delinquent.
xi) Inquiry report to be drawn on conclusion of the enquiry and to
contain :
a) Case of the department,
b) Case of the delinquent,
c) Assessment of evidence in respect of each article of charge.
d) Finding on each Article of charge.
xii) The report along with the written statement of the delinquent,
oral and/or documentary evidence to be forwarded to the D.A.
Action on Enquiry report
xiii) D.A., if not satisfied (reasons to be recorded) may remit the
matter to I.O. for further enquiry.
xiv) D.A. shall send the Enquiry report to the delinquent for his
submission. (Done generally if not agreeing with the findings of
exoneration – reasons to be recorded. Not required if no prejudice to
the delinquent.)
xv) Imposition of penalty after considering the delinquent’s
submissions.





The order should be speaking one – well reasoned.
The enquiry and the punishment cannot travel beyond the
charges.
Even if all charges are not proved, punishment can be imposed
on the basis of even one charge proved – but proportionate to the
gravity of the charge proved.
Past bad record, if not part of the charges, cannot be considered for
imposing penalty.
Disciplinary proceedings, if not concluded, should be closed on
death of the delinquent.
Dismissal cannot be ordered with retrospective effect.
Common proceeding – in case of more than one charged persons.
Continuance of criminal and departmental proceedings
simultaneously or desirability of staying departmental proceedings if
both proceedings are based on same facts and evidence was
considered by the Supreme Court in Capt. M. Paul Anthony v.
Bharat Gold Mines Ltd., (1999) 3 SCC 679 : AIR 1999 SC 1416 (see
also State Bank of India v. R.B. Sharma, (2004) 7 SCC 27 : AIR
2004 SC 4144). The circumstances and fact situations whereupon
departmental proceeding may be stayed in view of criminal
proceeding are :
(i) Departmental proceedings and proceedings in a criminal
case can proceed simultaneously as there is no bar in their being
conducted simultaneously, though separately.

(ii) If the departmental proceedings and the criminal case are
based on identical and similar set of facts and the charge in the
criminal case against the delinquent employee is of a grave nature
involving complicated questions of law and fact, it would be
desirable to stay the departmental proceedings till the conclusion of
the criminal case.
This is so because the criminal cases take a longer time and if the
defence evidence is disclosed in departmental proceeding it may
prejudice the employee in the criminal proceeding.
(iv) … due regard has to be given to the fact that the
departmental proceedings cannot be unduly delayed.
(v) If the criminal case does not proceed or its disposal is being
unduly delayed, the departmental proceedings, even if they were
stayed on account of the pendency of the criminal case, can be
resumed and proceeded with so as to conclude them at an early
date, so that if the employee is found not guilty his honour may be
vindicated and in case he is found guilty, the administration may get
rid of him at the earliest.
Inordinate delay in issuing the charge memo, or initiating the
departmental enquiry, vitiates the entire proceeding. U.P. SRTC v.
Mitthu Singh, (2006) 7 SCC 180
In a case the disciplinary proceeding was
initiated five years after the appellant handed
over charge, and he did not have any
documents in his possession at the time of
enquiry. The enquiry officer thereafter took
seven years to complete the enquiry. The
Appellate Authority also took seven years in
disposing the appeal. The enquiry was held
into the allegations which did not form part of
the charge-sheet. The bias of the enquiry
officer, though raised by the delinquent, was
not gone into. Therefore the enquiry and
punishment based thereupon was held to be
vitiated and invalid. M.V. Bijlani v. Union of
India, (2006) 5 SCC 88
Charge sheet


Departmental enquiry is a consequence of the decision to
initiate departmental proceeding and charge-sheet is precondition to departmental enquiry.
Competent authority – Disciplinary authority :
For punishment : appointing authority or superior authority. A.
Sudhakar v. Post Master General, (2006) 4 SCC 348.
For issuing charge sheet : even lower than appointing
authority, if authorised. However punishment can only be
imposed by the appointing authority or higher. State of U.P. v.
Chadrapal Singh, (2003) 4 SCC 670.
Validity of charge sheet has to be challenged before the
I.O. and not before the High Court.
In case of deputation, borrowing organisation can issue
charge sheet and even pass suspension orders.
If head of the office is designated as disciplinary
authority, the designation of the person working as such is
immaterial. If normally a G.M. is head of the office, but at
relevant time the A.G.M. is posted as head of the office, he
will be the competent authority. Himachal RTC v. Kewal
Krishan, (1997) 9 SCC 19.

Precondition – Normally charge sheet is issued after show cause
notice is issued and the reply is not found satisfactory. Departmental
proceeding commences with issue of charge sheet. UCO Bank v.
Rajinder Lal Capoor, (2008) 5 SCC 257 : AIR 2008 SC 1831 But it is
not mandatory in all circumstances. Charge sheet can be issued
directly even without a show cause. Firestone Tyre and Rubber Co.
Ltd. v. Workman, AIR 1968 SC 236. When the proceeding was initiated
by suspension, service of charge sheet is not precondition, State of M.P. v.
L. P. Tiwari, (1994) 4 SCC 468



Clarity – The charges should be specific, definite and giving details
of the incident which formed the basis of charges. No enquiry can be
sustained on vague charges. Union of India v. Gyan Chand Chattar,
(2009) 12 SCC 78
However, vagueness will not be fatal if not causing prejudice to
the delinquent. State of A.P. v. Chemalapati Ganeswara Rao, AIR
1963 SC 150 It is desirable to give specific name of the misconduct.
[‘strike’ instead of ‘stopping work in concert’ and ‘disobedience’
instead of ‘disregard or non-performance of orders’)
Form – There is no specific form of charge sheet. It may even be a
simple letter. But the show cause cannot be treated as charge sheet.
National Aviation Co. of India Ltd. v. S.M.K. Khan, (2009) 5 SCC
732. However, it is the content and not the form that matters. State
Bank of Bikaner and Jaipur v. Prabhu Dayal Grover, (1995) 6 SCC
279.
Contents – Should contain all facts making up the charge(s). Birichh
Bhuian v. State of Bihar, AIR 1963 SC 1120.
Each incident is separate charge. Date and time of the
incident should be mentioned. Chittaranjan Das v.State of W.B.,
AIR 1963 SC 1696. While mentioning time care should be taken
to add ‘about’. However there are exceptions. State of U.P. v.
Mohd. Sharif, (1982) 2 SCC 376.
Content of an explanation submitted by the delinquent in
reply to show cause can be made a charge. Food Corporation of
India v. J. Jambulkar, (1998) 9 SCC 440.
Charge once enquired into cannot be made subject matter of
another enquiry. This will amount to double jeopardy
(contravention of Article 20(2)). Union of India v. Kunisetty
Satyanarayana, (2006) 12 SCC 28.
Omission to mention section or rule is not fatal. Indian Drugs
& Pharmaceuticals Ltd. v. R.K.Shewaramani, (2005) 6 SCC 76.
If the charge is based on offending language then the actual
words used should be mentioned. However in case of many
persons charged together, it may not be practicable. Balram
Khanna v. Moti Ram, (1971) 3 SCC 399.
In case of ‘habitual’ misconduct, the word habitual should be
mentioned. Laxmi Devi Sugar Mills Ltd. v. Nand Kishore Singh,
AIR 1957 SC 7.

The charge sheet should be in a language easily
comprehensible by the delinquent. Charge sheet in normal official
language is not fatal if not prejudicial to the delinquent. Harikishan v.
State of Maharashtra, AIR 1962 SC 911.
Use of abbreviations such as ‘etc.’ should be avoided.
The language of the charge sheet should not show predetermined mind. Powari Tea Estate v. Barkataki, (1965) 2 LLJ 102
(SC).
In case of disobedience, name and designation of the
concerned superior officer should be given.
In case of theft, details of the stolen property should be given.
In case of misappropriation, the amount should be given.
Incase of ‘deception’ the manner of committing the misconduct
should also be mentioned.
It is not necessary to mention the penalty proposed in the
charge sheet; but if a penalty is mentioned, more severe penalty
cannot be imposed. Even if the penalty was mentioned in the charge
sheet, second show cause on quantum of penalty on the basis of
the enquiry report has to be issued. Khem Chand v. Union of India,
AIR1958 SC 300.
Amendment of charge – Disciplinary authority is competent and not
the IO


Time to reply charge – Reasonable time should be given. Local or
outstation.
Service of charge sheet –
There is difference between ‘issue’ of charge-sheet by its dispatch
and the actual ‘service’ of charge-sheet. Delhi Development
Authority v. H.C. Khurana, (1993) 3 SCC 196
Personal service – “There is, however, danger of false reports of
service. It is required to be adequately guarded.” Salem Advocate
Bar Assocn. v. Union of India, (2005) 6 SCC 344
By post – presumptions.
Certificate of posting
Registered post –
If not returned unserved, there is presumption of service.
If returned with endorsement ‘refused’ : presumption of service.
If returned with endorsement ‘left’ or ‘addressee not found’ : no
service. This is commonly used to avoid service. In that case
‘substituted service’ by publication in newspaper is resorted to.
Substituted service – Publication in newspaper – There were two
local daily newspapers widely circulated. High Court directed
substituted service of summons by publishing in one of the
newspapers. However publication in the other newspaper was held
to be immaterial. Basant Singh v. Roman Catholic Mission, (2002) 7
SCC 531
Courier
E-mail
Appointment of I.O. –
appointment of Enquiry Officer comes into play only after the
explanation is filed to the charge sheet and decision is to be taken
by the Disciplinary Authority to conduct further enquiry. In a case
where the Enquiry Officer was straightaway appointed and he had
himself framed the charges the enquiry was held to be contrary to
the rules and hence vitiated. V. Padmanabham v. Govt. of A. P., AIR
2009 SC2416
Functions and powers of I.O. –
The enquiry officer has no authority to propose the quantum of
punishment. Maharashtra State Seeds Corpn. Ltd. v. Hariprasad
Drupadrao Jadhao, (2006) 3 SCC 690.
A departmental proceeding being a quasi-judicial proceeding, the
enquiry officer has a duty to arrive at a finding upon taking into
consideration the materials brought on record by the parties. Roop
Singh Negi v. Punjab National Bank, (2009) 2 SCC 570
Enquiry officer is bound to consider the evidence of all witnesses
examined by the delinquent. Union of India v. K.A. Kittu, (2001) 1
SCC 65


The charge against a delinquent should not be deemed to be proved
by weakness of the defence.
Minor discrepancies in the evidence should be ignored. Damodar v.
State of Rajasthan, (2004) 12 SCC 336
The enquiry officer need not decide what should be the appropriate
penalty
When the enquiry officer recorded in his report that the officer has
no right to continue in the government service and he has to be
dismissed from service with immediate effect, it was held that it was
an infirmity of the report and that he exceeded his limits. State of
Uttaranchal v. Kharak Singh, (2008) 8 SCC 236
Enquiry officer should not give a finding outside the scope of the
charge
When the employee was proceeded against for not properly
maintaining the stock register but was enquired and penalized for
misutilisation or misappropriation of the stock, the proceeding was
held to be vitiated. M.V. Bijlani v. Union of India, (2006) 5 SCC 88
Appeal :
Order against which no appeal lies –
i) Made by the President
ii) Order of interlocutory nature
iii) Order of I.O. made during the course of enquiry

Orders against which appeal lies –
i) Suspension
ii) Penalty
iii) Enhancement of penalty
iv) Order imposing financial loss
v) Order affecting career of the delinquent
vi) Reversion
vii) Reducing/withholding pension
viii) Determination of subsistence allowance/
pay etc. during suspension
Appeal to be filed within 45 days of the order.
Appeal to be individual.
Natural Justice
Principles of natural justice are those rules which have been laid
down by the courts as being the minimum protection of the rights of
the individual against the arbitrary procedure that may be adopted
by a judicial, quasi-judicial and administrative authority while making
an order affecting those rights. The classic exposition of Sir Edward
Coke of natural justice requires to “vocate, interrogate and
adjudicate”. Natural justice supplies the omissions of a formulated
law. Canara Bank v. V.K. Awasthy, (2005) 6 SCC 321.
The Supreme Court, in Syndicate Bank v. General Secy. Syndicate
Bank Staff Assn., (2000) 5 SCC 65 cautioned that undue reliance on
the principles of natural justice may lead to miscarriage of justice.
In a case where doctrine of necessity is applicable compliance with
the principles of natural justice would be excluded. State of U.P. v.
Sheo Shanker Lal Srivastava, (2006) 3 SCC 276
The principles of natural justice are an integral part of the guarantee
of equality assured by Article 14. Therefore any law made or action
taken by an employer must be fair, just and reasonable. D.K. Yadav
v. J.M.A. Industries Ltd., (1993) 3 SCC 259
It is also now well settled that principles of natural justice and duty to
act in a just, fair and reasonable manner have to be read in the
Certified Standing Orders which have statutory force. Syndicate
Bank v. General Secy. Syndicate Bank Staff Assn., (2000) 5 SCC 65
Basically there are 2 principles of natural justice :
(i) no one shall be a judge in his own cause (nemo judex in causa
sua or nemo debet esse judex propria causa); and
(ii) no one shall be condemned unheard (audi alteram partem or
hear the other side).
 The first principle consists of the rule against bias or interest and is
based on three maxims:
(i) No man shall be a judge in his own cause;
(ii) Justice should not only be done, but manifestly and undoubtedly
be seen to be done; and
(iii) Judges, like Caesar's wife should be above suspicion.
The Judge should be impartial and neutral and must be free from bias.
If the Judge is subject to bias in favour of or against either party to
the dispute or is in a position that a bias can be assumed, he is
disqualified to act as a Judge, and the proceedings will be vitiated.
Bias – quasi-judicial enquiries must be held in good faith, without bias
and not arbitrarily or unreasonably. Dev Dutt v. Union of India,
(2008) 8 SCC 725
Bias means ‘a predisposition of mind to decide for or against one
party without proper regard to the true merits of the dispute’.
Secretary to Govt. Transport Deptt. V. Munnuswamy Mudaliar, 1988
Supp SCC 651: AIR 1988 SC 2232. see also Kumaon Mandal Vikas
Nigam Ltd. v. Girija Shankar Pant, (2001) 1 SCC 182: AIR 2001 SC
24 To constitute ‘bias’ there must be reasonable apprehension of
that predisposition and the reasonable apprehension must be based
on cogent materials. Larsen and Toubro Ltd. v. Fertilizer and
Chemicals Travancore Ltd., (2008) 1 SCC 252 : AIR 2008 SC 465
It is not only the actual bias but also the real likelihood of bias that is
material. J. Mohapatra & Co. v. State of Orissa, (1984) 4 SCC 103:
AIR 1984 SC 1572.
Pecuniary bias – Any pecuniary interest in the subject matter, however
small, disqualifies person from adjudicating. [Halsbury’s Laws of
England, (4th Edn., Vol. I. See also Manak Lal v. Prem Chand, AIR
1957 SC 425: 1957 SCR 575; Visakapatanam Coop. Motor
Transport Ltd. v. G. Bangaruaju, AIR 1953 Mad 709.]
Personal bias – Factors like relationship, friendship, business
association, personal grudge enmity, grievance or
professional rivalry etc. may give rise to personal bias.
Kumaon Mandal Vikas Nigam Ltd. v. Girija Shankar Pant,
(2001) 1 SCC 182: AIR 201 SC 24 P.D. Dinakaran’s case.
Official bias – official bias, departmental bias, policy bias or bias as to
subject matter may arise when a judge or an adjudicator has a
general interest in the subject matter of lis.
Departmental enquiries are generally conducted by officers of the
employer and it cannot be presumed that such officer would be
biased in favour of the management. South Indian Cashew
Factories Workers' Union v. Kerala State Cashew Development
Corpn. Ltd., (2006) 5 SCC 201; Biecco Lawrie Limited v. State of
West Bengal, (2009) 2 SCC (L&S) 729
When the examination-in-chief of the department’s witness was
conducted by the enquiry officer himself and the questions posed by
him were leading questions; the enquiry was held to be vitiated.
Moni Shankar v. Union of India, (2008) 3 SCC 484
Mala fides –
The allegations of mala fide are to be substantiated beyond doubt.
M.V. Thimmaiah v. UPSC, (2008) 2 SCC 119
Malice – Malice in the legal sense imports (1) the absence of all
elements of justification, excuse or recognized mitigation, and (2)
the presence of either (a) an actual intent to cause the particular
harm which is produced or harm of the same general nature, or (b)
the wanton and willful doing of an act with awareness of a plain and
strong likelihood that such harm may result. West Bengal State
Electricity Board v. Dilip Kumar Ray, (2007) 14 SCC 568


A workman indulging in commission of a criminal offence should not
be spared only because he happens to be a union leader. A union
leader does not enjoy immunity from being proceeded with in a case
of misconduct. Mazdoor Sangh v. Usha Breco Ltd., (2008) 5 SCC
554
The second principle of natural justice requires that the delinquent
must be given a fair hearing. It implies that the delinquent has a right
to –
adequate notice
present his case and produce evidence
rebut adverse evidence
no evidence behind his back
supply of enquiry report before punishment
speaking orders
independent exercise of decision making power
Speaking order – It is now well established that recording of
speaking order is an important facet of natural justice. Obligation to
give reasons not only introduces clarity but it also excludes or, at
any rate, minimises chances of arbitrariness; and the higher forum
can test the correctness of those reasons. Charan Singh v. Healing
Touch Hospital, (2000) 7 SCC 668; State of Haryana v. Ramesh
Kumar, (2008) 11 SCC 435 The law relating to speaking orders may
be summed up as follows:
(1) Where a statute requires recording of reasons in support of
the order, it imposes an obligation on the adjudicating authority and
the reasons must be recorded by the authority. Raipur Development
Authority v. Chokhamal, (1989) 2 SCC 721: AIR 1990 SC 1426
(2) Even when the statute does not lay down expressly the
requirement of recording reasons, the same may be inferred from
the fats and circumstances of the case. Institute of Chartered
Accountants of India v. L. K. Ratna, (1986) SCC 1669: AIR 1987 SC
71
(3) Mere fact that the proceedings ere treated as confidential
does not dispense with the requirement of recording reasons.
Harinagar Sugar Mills v. Shyam Sunder, AIR 1961 SC 1669: (1962)
2 SCR 487
(4) If the order is subject to appeal or revision (including
Special Leave Petition under Article 136 of he Constitution), the
necessity of recording reasons is greater as without reasons the
appellate or revisional authority cannot exercise its power effectively
inasmuch as it has no material on which it may determine whether
the facts were correctly ascertained, law was properly applied and
the decision was just and based on legal, relevant and existing
grounds. Failure to disclose reasons amounts to depriving the party
of the right of appeal or revision. Mahabir Prasad v. State of U.P.,
(1970) 1 SCC 764: AIR 1970 SC 1302
(5) Even fair play in action requires that an adjudicating
authority should record reasons in support of orders passed by it.
(6) There is no prescribed form and the reasons recorded need
not be detailed or elaborate but relevant reasons must be recorded.
S.N. Mukherjee v. Union of India, (1990) 4 SCC 594: AIR 1990 SC
1984
(7) Although an order of affirmation need not contain as
elaborate reasons as an order of reversal, but that does not mean
that the order of affirmation need not contain any reasons
whatsoever. Rani Lakshmi Bai Kshetriya Gramin Bank v. Jagdish
Sharan Varshney, (2009) 4 SCC 240.
(8) Reasons must be recorded by the appellate authority while
reversing an order of the subordinate authority. S.N. Mukherjee v.
Union of India, (1990) 4 SCC 594: AIR 1990 SC 1984
(9) Non recording of reasons does not always vitiate the order.
Maharashtra State Board of Education v. K.S. Gandhi, (1991) 2 SCC
716
(10) Even where the reasons are not communicated to the
aggrieved party in public interest, nonetheless they must be in
existence. Shrilekha Vidyarthy v. State of U.P., (1991) 1 SCC 212:
AIR 1991 SC 537
With the passage of time a third element, namely, of procedural
reasonableness was introduced because the main objective of the
requirement of rule of natural justice is to promote justice and
prevent its miscarriage. Biecco Lawrie Limited v. State of West
Bengal, (2009) 2 SCC (L&S) 729; Asit Kumar Kar v. State of W.B.,
(2009) 2 SCC 703
Thus principles of natural justice are not required to be complied
with when it will lead to an empty formality. Karnataka SRTC v. S.G.
Kotturappa, (2005) 3 SCC 409
In certain cases requirement of compliance with principles of natural
justice may be excluded statutorily as in Article 311(2) Proviso.
Similarly Sections 25-F, 2-FF, 25-FFF of the ID Act by necessary
implication exclude the application of principles of natural justice.
If only one conclusion is possible in the facts of the case and the
administrative authority has arrived at that conclusion, it does not
matter if there has been violation of the principles of natural justice.
M.C. Mehta v. Union of India, (1999) 6 SCC 237
Indicative principles of departmental proceedings vis-à-vis principles of
natural justice are:
 (1) An order passed imposing a punishment on an employee
consequent upon a disciplinary/departmental enquiry in violation of
the rules/regulations/statutory provisions governing such enquiries
should not be set aside automatically.





(2) A substantive provision has normally to be complied with …
(3) The complaint of violation of procedural provision should be
examined from the point of view of prejudice, viz., whether such
violation has prejudiced the delinquent officer/employee in
defending himself properly and effectively. … If no prejudice is
established to have resulted there from, no interference is called for.
(4)(a) In the case of a procedural provision which is not of a
mandatory character, … the order passed in violation of such a
provision can be set aside only where such violation has occasioned
prejudice to the delinquent employee.
(b) In the case of violation of a procedural provision, which is of a
mandatory character, If the employee has waived his right, then the
order of punishment cannot be set aside on the ground of its
violation. The ultimate test is always the same, viz., test of prejudice
or the test of fair hearing, as it may be called.
(5) A distinction must be made between “no opportunity” and no
adequate opportunity, i.e., between “no notice”/“no hearing” and “no
fair hearing”. (a) In the case of former, the order passed would
undoubtedly be invalid ... In such cases, normally, liberty will be
reserved for the Authority to take proceedings afresh ... (b) But in the
latter case, the effect of violation (of a facet of the rule of audi
alteram partem) has to be examined from the standpoint of
prejudice; …
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(6) Fair hearing and justice is to be insured.
(7) Court may have to balance public/State interest with the
requirement of natural justice.
The principles of natural justice demand that an application for
summoning a witness by the delinquent officer should be considered
by the enquiry officer. It was obligatory on the part of the enquiry
officer to pass an order in the said application. He could not refuse
to consider the same. Union of India v. Prakash Kumar Tandon,
(2009) 2 SCC 541; M.V. Bijlani v. Union of India (2006) 5 SCC 88.
Where material prosecution witnesses were not examined in a
departmental enquiry, it was held that this amounted to violation of
the principles of natural justice and the whole proceeding was held
to be vitiated. Hardwari Lal v. State of U.P., (1999) 8 SCC 582
In the landmark judgment in Union of India v. Mohd. Ramzan
Khan, (1991) 1 SCC 588 the Supreme Court observed that nonsupply of the report of the inquiry officer to the delinquent,
particularly when it finds him guilty, affects rules of natural justice
and vitiates the proceeding. Not allowing inspection of documents
which were not relevant to defence of the delinquent does not
prejudice him and the enquiry cannot be held vitiated on this
account. State of Rajasthan v. S.K. Dutt Sharma, 1993 Supp (4)
SCC 61
Supply of the enquiry report is part and parcel of
natural justice. However unless the delinquent is
able to show that non-supply of report has
resulted in prejudice or miscarriage of justice, an
order of punishment cannot be held to be
vitiated. Managing Director, ECIL, Hyderabad v.
B. Karunakar, (1993) 4 SCC 727; Haryana
Financial Corpn. v. Kailash Chandra Ahuja,
(2008) 9 SCC 31
When a charge sheet contains 2 charges
and one is dependent on the other then if the
main charge fails, the dependent charge cannot
be enquired into. Canara Bank v. Swapan
Kumar Pani, (2006) 3 SCC 251.
Judicial Review
In a matter of disciplinary proceedings the High Court exercises a
limited power. Maharashtra State Seeds Corpn. Ltd. v. Hariprasad
Drupadrao Jadhao, (2006) 3 SCC 690
If the enquiry is fair and proper, in the absence of any allegations of
victimisation or unfair labour practice, the (Labour) Court has no
power to interfere with the punishment imposed. South Indian
Cashew Factories Workers' Union v. Kerala State Cashew
Development Corpn. Ltd., (2006) 5 SCC 201
Normally, when disciplinary proceedings have been initiated and finding
of fact has been recorded in such inquiry, it cannot be interfered with
unless such finding is based on “no evidence” or is perverse, or is
such that no reasonable man in the circumstances of the case would
have reached such finding. Coimbatore District Central Coop. Bank
v. Employees Assn., (2007) 4 SCC 669
The High Court does not act as an appellate authority. Its jurisdiction is
circumscribed by limits of judicial review to correct errors of law or
procedural errors leading to manifest injustice or violation of
principles of natural justice. Lalit Popli v. Canara Bank, (2003) 3
SCC 583
Wednesbury Principles : [Associated Provincial Picture Houses Ltd.
v. Wednesbury Corpn., [1947] EWCA Civ 1 : (1948) 1 KB 223 :
(1947) 2 AER 680 (CA)] :
Scope of judicial review is limited to the deficiency in the decisionmaking process and not the decision Ram Saran v. IG of Police,
CRPF, (2006) 2 SCC 541
Interference was not permissible unless one or the other of the
following conditions was satisfied,
(i) the order was contrary to law, or
(ii) relevant factors were not considered, or irrelevant factors were
considered; or
(iii) the decision was one which no reasonable person could have
taken.
Thus the Court’s concern should be (Tata Cellular v. Union of India,
(1994) 6 SCC 651) : Whether
1. a decision-making authority exceeded its powers?
2. committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have
reached or,
5. abused its powers.
Broadly speaking, the grounds upon which an administrative action
is subject to control by judicial review can be classified as under
(Ganesh Bank of Kurundwad Ltd. v. Union of India, (2006) 10 SCC
645):
(i) Illegality : This means the decision-maker must understand
correctly the law that regulates his decision-making power and must
give effect to it.
(ii) Irrationality, namely, Wednesbury un-reasonableness.
(iii) Procedural impropriety.
Thus the scope of judicial review was confined to determination as to
whether the decision making process suffered from illegality,
procedural irregularity or irrationality.
Doctrine of Proportionality
Now it is not enough that a decision should be made reasonably, the
decision should also not be disproportionate to he gravity of the
misconduct or the offence. See Moni Shankar v. Union of India,
(2008) 3 SCC 484
Under the principle, the court will see that the legislature and the
administrative authority “maintain a proper balance between the
adverse effects which the legislation or the administrative order may
have on the rights, liberties or interests of persons keeping in mind
the purpose which they were intended to serve”. The legislature and
the administrative authority are, however, given an area of discretion
or a range of choices but as to whether the choice made infringes
the rights excessively or not is for the court to see.
Even if the delinquent does not file a show-cause, the disciplinary
authority is required to consider the materials brought on record by
the parties before him afresh. See Haryana Financial Corpn. v.
Kailash Chandra Ahuja,(2008) 9 SCC 31
When the delinquent did not cross-examine the only witness and only
asked for few days’ time to do so without giving an reason for the
same, rejection of the request was upheld further holding that the
statements of the said witness, therefore, having not been
controverted would be deemed to be admitted. State of U.P. v. Sheo
Shanker Lal Srivastava, (2006) 3 SCC 276
Even if no inquiry has been held by the employer or the inquiry held is
found to be defective, the Tribunal had to give an opportunity to the
employer and employee to adduce evidence before it. Amrit
Vanaspati Co. Ltd. v. Khem Chand, (2006) 6 SCC 325
 Where an authority had earlier taken a decision, he is disqualified to
sit in appeal against his own decision. Thus when the disciplinary
proceedings were initiated at the instance of the then Commissioner
of Income Tax and the appeal preferred by the appellant was heard
by the very same officer, now in a senior capacity, the whole
proceedings was held to be vitiated. Suman Bala v. Union of India,
(2005) 12 SCC 388
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Where the delinquent flouted the order of transfer and deliberately
remained absent from the duty without leave for over six months and
indulged in the practice of browbeating the superior officers and
using intemperate language; all these acts were held to be gross
misconduct for which the penalty of dismissal was not held to be
disproportionate. Tushar D. Bhatt v. State of Gujarat, (2009) 11 SCC
678
An appointment secured on the basis of false caste certificate is
non-est in the eyes of law. Such a person cannot invoke Article 311
of the Constitution to challenge his dismissal/removal from service.
R. Vishwanatha Pillai v. State of Kerala, (2004) 2 SCC 105
It is well settled that the inquiry officer and disciplinary authority are
the sole judges of facts. Adequacy and reliability of the evidence is
not a matter that can be canvassed before a High Court in a writ
proceeding under Article 226 of the Constitution. South Bengal State
Transport Corpn. v. Sapan Kumar Mitra, (2006) 2 SCC 584
it was held in Ganga Yamuna Gramin Bank v. Devi Sahai, (2009) 11
SCC 266 that even if some irregularity has occurred in conducting
the enquiry but the delinquent is not prejudiced by the same, it will
not vitiate the enquiry.
it was held in Ganga Yamuna Gramin Bank v. Devi Sahai, (2009) 11
SCC 266 that even if some irregularity has occurred in conducting
the enquiry but the delinquent is not prejudiced by the same, it will
not vitiate the enquiry.
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Unfair labour practice
Where a company termed its employees
as trainees and denied employer-employee
relationship to avoid rigours of labour laws,
it was held that it would be impossible to
believe that the entire production activity
was being carried on with none other than
the so-called trainees. Trambak Rubber
Industries Ltd. v. Nashik Workers Union,
(2003) 6 SCC 416
The practice of continuing daily wagers for
long periods with artificial beaks is unfair
labour practice. Regional Manager, SBI v.
Mahatma Mishra, (2006) 13 SCC 727