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PETITIONER: M. GOPALA KRISHNA NAIDU

       Vs.

RESPONDENT: STATE OF MADHYA PRADESH

DATE OF JUDGMENT: 24/08/1967

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. SHAH, J.C. SIKRI, S.M.

CITATION:  1968 AIR  240            1968 SCR  (1) 355  CITATOR INFO :  F          1972 SC2472  (13,15,16)  APR        1985 SC1416  (5,107)  RF         1986 SC 555  (6)  R          1987 SC2257  (16,17,19)

ACT: Government  Service--Fundamental Rule r 54--Emoluments  pay- able  on  re--instatement after  suspension--Opportunity  to show,  cause whether necessary before passing  orders  under Rule and deciding which clause of the rule is applicable  to the case--Natural Justice.

HEADNOTE: The appellant was an Overseer in the Public Works Department of  the Central Provinces and Berar Government.  In 1947  he was  suspended  from  service and prosecuted  under  s.  161 I.P.C.  Ultimately,  on  orders from  the  High  Court,  the prosecution was dropped.  In a departmental enquiry also the appellant  was exonerated, By an order dated December  1960, the Government held that the suspension of the appellant and the’  departmental  enquiry  against him  "were  not  wholly unjustified".   The order then directed that  the  appellant should be reinstated in service with effect from the date of the  order  and retired from the date,  he,  having  already attained  superannuation age on September 5, 1952  and  that the entire period of absence from duty should be treated  as period  spent  on  duty under F.R.  54(5)  for  purposes  of pension  only,  but that he should not be  allowed  any  pay beyond what he had actually received or what was allowed  to him,  by way of subsistence allowance during the  period  of his  suspension.  The appellant filed a petition under  Art. 226  of  the  Constitution contending  that  F.  Rule  54(2) governed  his  case and not F. Rule 54(5).  The  High  Court decided against him but granted him certificate to appeal to this  Court.   It was contended on behalf of  the  appellant that  before  deciding which rule applied to  his  case  the Government should have given him an opportunity to be heard. The respondent urged that in passing a consequential order a hearing is not necessary. Held:  An  order  passed  under F R.  54  is  not  always  a consequential   order  nor  is  such  order  necessarily   a

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continuation  of the departmental proceeding  taken  against the employee. [359E-F] Consideration  under F.R. 54 depending as it does  on  facts and circumstances in their entirety, passing an order on the basis  of  factual finding arrived at from  such  facts  and circumstances and such an order resulting in pecuniary  loss to  the Government servant must be held to be  an  objective rather  than a subjective function.  The very nature of  the function implies the duty to act judicially.  In such a case if an opportunity to show cause against the action  proposed is  not afforded, as admittedly it was not done in the  pre- sent case, the order is liable to be struck down as  invalid on the ground that it was one in breach of the principles of natural justice. State of Orissa v. Dr. (Miss) Binapani Devi and Ors.  [1967] 2 S.C.R. 625, relied on. [359H; 360A-B] V.  R. Gokhale v. State of Maharashtra, I.L.R.  [1963]  Bom. 537, approved.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2376 of 1966. 355 356 Appeal from the judgment and order dated January 18, 1963 of the Madhya Pradesh High Court in Miscellaneous Petition  NO. 267 of 1962. R.V.S.  Mani,  E.C.  Agarwala  and  P.C.  Agarwala,.for  the appellant. B. Sen, M.N. Shroff for I.N. Shroff for the respondent. The Judgment of the Court was delivered by. Shelat,  J.  Prior to December 17, 1947  the  appellant  was serving as an Overseer in the Public Works Department of the Central  Provinces  and Berar Government.  On  December  17, 1947  he  was suspended from service  and  prosecuted  under section  .161 of the Penal Code.  The trial resulted in  his conviction  but that was set aside in appeal on  the  ground that  no proper sanction for prosecution was  obtained.   He was  again  prosecuted on the same charge  but  the  Special Judge trying him quashed the chargesheet on the ground  that the  investigation  had not been carried out by  the  proper authorities.  In revision the High Court of Nagpur held that the Special Judge was in error in so holding but recommended that the prosecution should not be proceeded with as  nearly 10  years  had  gone by since it was  launched  against  the appellant.  Following the recommendation the prosecution was dropped  but  a departmental inquiry was held  on  the  same charges.  The Inquiry Officer found the appellant not guilty but the Government disagreed with that finding and served  a notice to show cause why he should not be dismissed.  By  an order  dated December 5, 1960 the Government held  that  the charges  against  the  appellant  were  not  proved   beyond reasonable doubt.  It also held that the suspension and  the departmental  inquiry  "were not wholly  unjustified".   The order then directed that the appellant should be  reinstated in  service  with  effect from the date  of  the  order  and retired   from  that,  date,  he  having  already   attained superannuation age on September 5, 1952 and that the  entire period  of  absence from duty should be  treated  as  period spent on duty under F.R. 54(5) for purposes of pension only, but that he should not be allowed any pay beyond what he had actually  received  or  what was allowed to him  by  way  of subsistence allowance during the period of his suspension. On a representation made by him against the said order  hav-

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ing been rejected the appellant filed a petition under  Art. 226 of the Constitution in the High Court of Madhya  Pradesh for  quashing the said order and for an order directing  the Government  to  treat  the period of absence  from  duty  as period  spent  on duty under cl. 2 of the  said  Fundamental Rule  and  to revise the pension payable to him  under  that clause.   The High Court dismissed the petition but  granted certificate to file this appeal and that is how this  appeal has come up before us. 357 Fundamental Rule 54 on the interpretation of which this appeal depends is as follows: -               "(1)  When a Government servant who  has  been               dismissed, removed or suspended is reinstated;               the   authority   competent   to   order   the               reinstatement   shall  consider  and  make   a               specific order-,               (a) Regarding the pay and allowance to be paid               to  the Government servant for the  period  of               his absence from               duty; and               (b)  whether or not the said period  shall  be               treated as a period spent on duty-,               (2) Where the authority ’Mentioned in sub-rule               (1) is of opinion that the Government  servant               has  been fully exonerated or in the  case  of               suspension,  that it was  wholly  unjustified,               the Government servant shall be given the               full pay and allowances to which he would have               been  entitled,  had he  not  been  dismissed,               removed or suspended as the case may be.               (3)In  other  cases,  the  Government  servant               shall be given such proportion of such pay and               allowances  as  such competent  authority  may               prescribe.Provided   that   the   payment   of               allowances under clause (2)or clause (3) shall               be, subject to all other conditions under               which such allowances are admissible. Provided               other  that  such proportion of such  pay  and               allowances   ’-all  not  be  less   than   the               subsistence  and other  allowances  admissible               under Rule 53.               (4)  In a case falling under clause  (2),  the               period of absence from by shall be treated as               a period spent on duty for all Purposes.               (5)  In  a case falling under clause  (3)  the               period of absence               from  duty shall  not be treated as  a  period               spent on duty,unless such competent  authority               specifically  directs  that  it  shall  be  so               treated for any specified purpose.               Provided  that  if the Government  servant  so               desired,   such authority may direct that  the               period of absence    from   duty   shall    be               converted  into  leave  of any  kind  due  and               admissible to the, Government servant." On behalf of the appellant two points were urged before the High  Court; (1) that before passing the impugned order  the appellant ought to have been given a reasonable  opportunity to show   cause against the action proposed and (2) that  it was clause 2 and not clause 5 which applied to his case. The High Court rejected both the contentions and, as  aforesaid, dismissed the petition. 358 Counsel  for  the appellant canvassed the  same  contentions

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before  us. Mr. Sen on behalf of the State. however,  argued that  F.R. 54 does not in express terms lay down a  duty  on the  part  of the authority to give an opportunity  to  show cause to the government employee and therefore the  question would be whether the Rule imposed such a duty by  necessary implication.   He urged that the Rule cannot be said to  lay down  such  duty by implications inasmuch  as  the  impugned order  is  only a consequential order.  That it  was  passed following a departmental inquiry held against the  appellant during  the  course of which opportunity to show  cause  was already afforded.  He contended that the only duty laid down by  FR. 54 was that the Government should, consider  whether the appellant was fully exonerated and in case of suspension whether such suspension was wholly unjustified and that once the  authority formed the opinion that it was not so cls.  3 and 5 would apply.  The Government having formed the opinion that  the  suspension  was not wholly  unjustified  clans  5 applied  and  the  impugned  order  was  not  liable  to  be challenged. The  first question which requires consideration is  whether there  was  a duty on the competent authority to  afford  an opportunity  to  the  appellant to show  cause  before  that authority  formed  the opinion as to whether  he  was  fully exonerated   and   whether   his   suspension   was   wholly unjustified.   Under F.R. 54 where a Government  servant  is reinstated,  the  authority  has  to  consider  and  make  a specific  order (i) regarding pay and allowances payable  to him for the period of his absence from duty and (ii) whether such  period  of absence should be treated as one  spent  on duty.   The  consideration  of these  questions  depends  on whether  on  the  facts and circumstances of  the  case  the Government servant had been fully exonerated and in case  of pension whether it was wholly unjustified.  If the authority forms such an opinion the Government servant is entitled  to full pay and allowances which he would have been entitled to had  the order of dismissal, removal or suspension,  as  the case  may be, not been passed.  Where the  authority  cannot form  such  an opinion the Government servant may  be  given such  proportion of pay an allowances as the  authority  may prescribe.   In the former case the period of  absence  from duty  has  to  be treated as period spent on  duty  for  all purposes  and  in the latter case such period is not  to  be treated as period spent on duty.  But the authority has  the power  in  suitable  cases to direct  that  such  period  of absence  shall be treated as period spent on duty  in  which case  the government servant would be entitled to  full  pay and allowances. It  is  true that the order under FR. 54 in a sense  a  con- sequential order in that it would be passed aft an order  of reinstatement   is  made.   But  the  fact  that  it  is   a consequential order does not determine the question  whether the  government  servant has to be given an  opportunity  to show cause or not.  It is also true 359 that  in.  a  case where reinstatement is  ordered  after  a departmental inquiry the government servant would Ordinarily have  had an opportunity, to show: cause.  In such  a  case, the  authority  no doubt ,would have before him  the  entire record  including  the explanation given by  the  government servant  from which all the facts and circumstances  of  the case  would  be before the authority and from which  he  can form the opinion as to whether he has been fully  exonerated or not and in case of suspension whether such suspension was wholly unjustified or not.  In such a case the order  passed under  a rule such as the present Fundamental Rule might  be

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said  to  be a consquential order following  a  departmental inquiry.  But there are, three classes of cases as laid down by  the  proviso in Art. 311 where  a  departmental  inquiry would  not be held, viz., (a) where a person  is  dismissed, removed  or reduced in rank on the ground of  conduct  which has  led to his conviction on a criminal charge,  (b)  where the  authority empowered. to dismiss or remove person or  to reduce him in rank is satisfied for reasons to be record  in writing that it is not reasonably practicable to hold  such an  inquiry; and (c) where the President or the Governor  as the  case  may  be is satisfied, that  in  the  interest  of security  of  the  State it is not expedient  to  hold  such inquiry.   Since there would be no inquiry in these  classes of  cases  the  authority  would not  have  before  him  any explanation   by the’ government servant.  The authority  in such cages would have to consider and pass the’ order merely on  such  facts  which might be placed  before  him  by  the department concerned.  The order in such a case Would be ex- parte  without  the authority having the other side  of  the picture.  In such cases the order that such authority  would pass  would  not  be  a  consequential  order  as  where   a departmental  inquiry has been held.  Therefore,  aft  order passed   under   Fundamental  Rule  45  is  not   always   a consequential order nor is such order a continuation of  the departmental proceeding taken against the employee. It  is true as Mr. Sen pointed out that F.R. 54 does not  in express terms lay down that the authority shall give to  the employee  concerned the opportunity to show cause before  he passes the order.  Even so, the question is whether the rule casts  such  a duty on the authority  by  implication.   The order as to whether a given case falls under cl. 2 or cl.  5 of  the Fundamental Rule must depend on the  examination  by the authority of all the facts and circumstances of the case and.  his  forming  the opinion  therefrom  of  two  factual findings;  whether the employee was fully exonerated and  in case  of  suspension  whether  it  was  wholly  unjustified. Besides,  an  order passed under this rule  would  obviously affect  the government servant adversely if it is  one  made under cls. 3 and 5. Consideration under this rule  depending as  it  does on facts and circumstances in  their  entirety, passing an order on the basis of factual finding arrived  at from  such  facts  and  circumstances  and  such  an   order resulting  in pecuniary loss to the government servant  must be  held  to  be  an  objective  rather  than  a  subjective function. 360 The  very  nature of the function implies the  duty  to  act judicially.  In such a case if an opportunity to show  cause against the action, proposed is not afforded, as  admittedly it was not done in the present case, the order is liable  to be  struck down as invalid on the ground that it is  one  in breach of the principles of natural justice. In  the  State  of Orissa v. Dr. (Miss)  Binapani  Devi  and others(1)  this Court held that an order fixing the date  of birth   of  the  government  servant  concerned  there   and declaring  that  she should be deemed to have retired  on  a particular  date  on  the basis of the  date  so  determined without  giving  an opportunity to show  cause  against  the action   proposed  was  invalid  on  the  ground  that   the determination was in violation of the principles of  natural justice.  It was there observed: -               "The  State  was  undoubtedly  not  precluded,               merely  because of the acceptance of the  date               of  birth  of  the  first  respondent  in  the               service  register, from holding an inquiry  if

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             there  existed sufficient grounds for  holding               such  enquiry  and for refixing  her  date  of               birth.  But the decision of the State could be               based  upon  the  result of an  enquiry  in  a               manner  consonant  with the basic  concept  of               justice.   An  order  by  the  State  to   the               prejudice  of  a person in derogation  of  his               vested  rights may be made only in  accordance               with the basic rules of justice and  fairplay.               The deciding authority, it is true, is not  in               the position of a Judge called upon to  decide               an  action  between  contesting  parties,  and               strict  compliance with the forms of  judicial               procedure  may  not be insisted upon.   He  is               however  under  a  duty  to  give  the  person               against whom an enquiry is held an opportunity               to  set  up  his version  or  defence  and  an               opportunity  to correct or to  controvert  any               evidence  in the possession of  the  authority               which is sought to be relied upon to his  pre-               judice." We find that the High Court of Maharashtra has also taken in V. R. Gokhale v. State of Maharashtra(2) the same view which we  are inclined to take of the nature of function under  R. 152 of the Bombay Civil Service Rules, 1959, a rule in terms identical to those of F.R. 54 before us. In  our view, F.R. 54 contemplates a duty to act in  accord- ance  with the basic concept of justice and  fairplay.   The authority  therefore had to afford a reasonable  opportunity to  the appellant to show cause why cls. 3 and 5 should  not be  applied and that having not been done the order must  be held to be invalid. (1) [1967] 2 S.C.R. 625. (2) I.L.R. [1963] Bom, 537. 361 The  appeal  is allowed and the High Court’s  order  is  set aside.  The competent authority is directed to consider  the question de novo after giving to the appellant a  reasonable opportunity  to  show  cause  against  the  action  proposed against him.  The respondent will pay to the appellant costs of  this  appeal as also the costs of the  petition  in  the petition in the High   Court. G.C              Appeal allowed. 362