Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 7416/2010   

ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO.  12823 OF 2008

Punjab National Bank & Ors.                            …Appellants

            Versus

K.K. Verma                               …Respondent

J U D G M E N T

Gokhale J.

1.     Leave granted.

2.     This  appeal  by  the  appellant  Bank  seeks  to  challenge  the  

judgment and order dated 31.1.2008 rendered by Division Bench of the Punjab  

and Haryana High Court dismissing LPA No. 17 of 2008 filed by the appellant  

Bank with costs.  The impugned judgment was rendered in an appeal arising  

out of the judgment dated 26.11.2007 by a Single Judge of that court whereby  

the Learned Single Judge had allowed the Writ Petition No. 2756 of 1986 filed  

by the respondent challenging his removal from service by the order of the  

appellant dated 17.4.1985.

1

3. The two impugned judgments have interfered with the order of  

removal on the ground of not furnishing the respondent a copy of the inquiry  

report before issuing the order of punishment and thereby not affording him an  

appropriate opportunity to defend resulting into denial of principles of natural  

justice causing him great prejudice. The appellant Bank has raised the question  

in this appeal as to whether the respondent was entitled either in law or as per  

the rules governing his service conditions to a copy of the inquiry report before  

issuance of the order of punishment.    

4. Short facts leading to the appeal are as follows:

The respondent  was  working  as  a  Manager  of  appellant’s  branch  at  

Jallianwalan  Bagh,  Amritsar.   He  was  served  with  a  Charge  Sheet  dated  

12.8.1983  which  contained  in  all  four  charges.   They  were  principally  as  

follows:

(1.) He connived with the borrowers and showed undue favour to them  

by  throwing  bank’s  norms  to  winds.   In  that,  amongst  others  

particulars,  it  was  alleged  that  when  he  has  on  leave  from  

09.02.1982 to 17.02.1982,  he visited the office to issue the bank  

guarantee in the favour of Income Tax Officer, Amritsar on behalf of  

M/s Des Raj Aggarwal & Co.

2

(2.) The second charge was that he submitted wrong information to the  

authorities  thereby  concealed  the  factual  state  of  affairs  of  the  

branch from the authorities.

(3.) The  third  charge  was  that  he  allowed  unauthorized  facilities  to  

various  parties  during  the  period  of  credit  squeeze  for  which  his  

powers had been withdrawn.

(4.) The fourth charge consisting of three parts reads as follows:

(i) He misused his official position to secure undue benefit for himself.  

He was given a  personal  allowance of  Rs.  147/-  per  month from  

01.07.1979 at the time of fitment of the salary under PNB Officer  

Employees (Service) Regulations,  1979, which was to be adjusted  

out of annual grades increment @ 1/3rd of the increment of the year.  

He did not allow the person concerned to make any adjustment from  

the increments released in his favour.

(ii) He  was  sanctioned  a  refundable  loan  by  the  Trustees  of  the  

Provident Fund against his Provident Fund in 1973.  He did not pay  

instalments.  The balance as on 30.6.1981 was 5291/-.

(iii)The Regional  Office,  Amritsar  sanctioned  a  consumer  loan  of  Rs.  

5000/-  to  Shri  Verma  for  purchase  of  fridge.   He  showed  the  

purchase  of  the  said  item  from  M/s  Electronics  Services  Centre  

having cash credit limits with the Branch without actually purchasing  

3

the fridge.  The firm M/s Electronics Service Centre is not dealing in  

refrigerators/fridges.  The amount of fridge was paid cash through a  

cash order at the counter.

5. The respondent denied these allegations.  According to him they  

were vague and general in nature.  At the highest they may be considered as  

procedural  lapses/minor  irregularities  during  the  discharge  of  duties.   They  

would  certainly  not  amount  to  moral  turpitude,  requiring  a  departmental  

enquiry for a major penalty.

6. A regular  departmental  inquiry  was  held  thereafter  into  those  

allegations in terms of the Punjab National Bank Officers Employees (Discipline  

and  Appeal)  Regulations  1977,  framed  under  Section  19  of  the  Banking  

Companies (Acquisition and Transfer of Undertaking Act) 1970.   The inquiry  

officer submitted his report dated 7.2.1985 returning a finding that the first  

three charges were established but not the fourth one.  

7. As can be seen from the earlier narration, Charge No. 4 was in  

three parts.  The first part of this charge was that the respondent used his  

official position to secure undue benefit for himself.  In that it is alleged that he  

was given a personal allowance of Rs. 147/- from 01.07.1979 which was to be  

adjusted out of annual grades increment at one-third of the increment of the  

year.   The  respondent  did  not  allow  the  person  concerned  to  make  any  

4

adjustment from the increments released in his favour.  As far as this aspect is  

concerned the inquiry officer held as follows:-

Non-adjustment of the personal allowance

Mr. Verma was given a personal allowance of Rs. 147/- per month with  

effect from 01.07.1979 i.e. at the time of fitment of salary under the PCT which  

was to be adjusted out of the annual graded increment at the rate 1/3rd of the  

increment of the year but did not adjust as per the above norms.

This fact cannot be proved as he can never give such things in writing  

for not deducting 1/3rd of the graded increment.  He might have verbally asked  

the Establishment Clerk not to adjust, but here it is doubtful and the benefit of  

this should go to Mr. Verma.

The salary bill is sent every month for post audit to Regional Manager  

Office and it should have been pointed out by the Regional Officer of this lapse,  

whereas  it  was  pointed  out  on  29.05.1981,  followed by  reminders  of  date  

17.07.1981, 08.09.1981, and finally on 21.4.1982 exhibit page 32 which was  

duly deposited by Verma in three instalments with the kind permission of the  

R.M. Amritsar exhibit page 31.

8. The second part of this Charge No. 4 was that the respondent  

was sanctioned a refundable loan from the Provident Fund Department but he  

did not pay the instalments and the balance as on 30.6.1983 was Rs. 6381/-.  

The  inquiry  officer  held  that  this  charge  was  proved.   (This  is  however  a  

situation  of  not  refunding  a  small  portion  of  the  advance  which  could  be  

adjusted later on).

5

9. The third part of charge No. 4 was that the respondent had taken  

consumer loan of Rs. 5000/- for purchasing a refrigerator.  It was alleged that  

he  had  purchased  the  item from M/s  Electronic  Service  Centre  which  was  

having cash credit limits with the Bank.  Infact he had not purchased the fridge  

and that firm was not dealing with refrigerators at all.  The inquiry officer held  

that the respondent came from a well to do family and was financially of good  

means.  He is living in a bungalow owned by himself and it was difficult to  

believe that he was not already having any refrigerator.  He, therefore, held  

that no refrigerator was purchased by him from that concern.

10. The disciplinary authority vide its order dated 30.3.1985 accepted  

the  finding  of  the  inquiry  officer  in  respect  of  the  first  three  charges  but  

differed with its finding on charge No. 4.  He was of the view that the charges  

were serious and therefore decided to impose the major penalty of removal of  

respondent from service.  In the said order, as regards Charge No. 4 (i) the  

Disciplinary Authority observed as follows:-

“As regards the findings of Enquiry Officer with regard   to non-deduction and adjustment of 1/3rd of the graded increment  towards personal allowance, I do not agree with him that there is   nothing on record which could show that Shri Verma had instructed   the Establishment Clerk not to adjust this part of increment towards   personal allowance.  Shri Verma must have been signing salary bill   as  a final  signatory  and if  deductions  were not  adjusted towards   adjustment of personal allowance he could point out to the office.  It   shows,  he  intentionally  did  not  permit  this  adjustment  to  get  personal benefit.”

6

11. The  impugned  order  of  removal  passed  by  the  disciplinary  

authority reads as follows:-

“Punjab National Bank Zonal Office Chandigarh.

Ref:ZO:DAC:                 Dated 17.4.1985

Shri K.K. Verma, 215-Green Avanue, Amritsar

Reg: Departmental Enquiry against you – chargesheet Dated 12.8.83.

You  were  served  with  chargesheet  dated  12.8.83  for  the  serious  irregularities/lapses  committed  by  you  while  working  as  manager,  BO:  Jallianwala Bagh, Amritsar.  To know the truth of imputations of lapses on your  part, enquiry proceedings were initiated against you in terms of PNB Officer  employees (D & A) Regulations, 1977 (Clause-6) and for this purpose Shri A.L.  Pahwa, Manager, BC:Akali Market, Amritsar, was appointed as Enquiry Officer  and Shri A.K. Aggarwal, Manager PF Deptt., HO, New Delhi was appointed as  Presenting  Officer.   The  Enquiry  officer  has  since  submitted  his  report  alongwith relevant records of the proceedings in the above matter.  I have  carefully gone through the report alongwith the entire record of the enquiry  proceedings and agree with the findings of the Enquiry Officer and hold you  guilty of the aforesaid serious irregularities/lapses.

Keeping in  view the  above,  I  decide to  impose upon you the major  penalty of your removal from the service of the Bank with immediate effect.

A copy of the detailed orders passed by the undersigned in regard to the  above matter alongwith a copy of the Enquiry report is enclosed herewith.

Sd/- Disciplinary Authority

   Deputy General Manager”

7

12. The respondent thereafter preferred a Departmental appeal and  

then a review petition, both of which came to be rejected.  Being aggrieved by  

that order, the respondent filed the above referred Writ Petition to a Single  

Judge of the Punjab and Haryana High Court who allowed that Writ Petition.  

The  learned  Single  Judge set  aside  the  order  of  removal.   He has  further  

observed that it will be open to the competent authority to decide the question  

of  proposed  punishment  after  following  principles  of  natural  justice  by  

furnishing  the  respondent  a  copy  of  the  enquiry  report  and  affording  him  

opportunity  of  hearing  in  the  context  of  proposed  punishment.   As  stated  

above, the appeal filed by the appellants herein from that judgment also came  

to be dismissed.  Being aggrieved by both these judgments, the appellant has  

filed the present appeal by special leave.  The main submission of the appellant  

has been that the appellant was not required to give a copy of the inquiry  

report  prior  to  the  decision  of  the  disciplinary  authority,  and  the  order  of  

removal could not be interfered on that ground.

13. Now, what is material to note is, that the respondent was not  

furnished  with  a  copy  of  the  inquiry  report,  and  the  disciplinary  authority  

straightforward passed the order of removal which has been quoted earlier.  

The  report  of  the  inquiry  officer  and the  detailed  order  of  the  Disciplinary  

Authority  became  available  to  the  respondent  only  alongwith  the  order  of  

removal, and he did not have any opportunity to make his submissions on that  

report to defend the charges anytime prior to the punishment of removal being  

8

decided and imposed.  It was therefore, canvassed on behalf of the respondent  

before the Learned Single Judge that the action of the appellant was violative  

of principles of natural justice.  He had not been furnished with the copy of the  

report any time prior to his removal and it was particularly necessary when the  

disciplinary authority had ultimately differed with the finding on Charge No. 4  

rendered by the inquiry officer  which  became known only  after  the inquiry  

report  and  the  detailed  order  of  the  Disciplinary  Authority  was  received  

alongwith  the  removal  order.   He  would  have  made  submissions  on  his  

innocence and would have pointed out to the disciplinary authority that even  

the first three charges were not established.  There is no dispute with respect  

to the fact that the inquiry report was not furnished to the respondent earlier.  

The Learned Single Judge had specifically asked the appellant whether they  

had furnished a copy of the inquiry report to the respondent and he recorded  

in this order that they could not produce any material from the concerned file  

to show that a copy of the report had been furnished to the respondent.  That  

apart, the Division Bench also held that the order of removal was a mechanical  

order passed without going into the findings referred in the report, (which were  

in favour of the respondent at least on charge No. 4) and without explaining as  

to why the disciplinary authority had differed from the inquiry officer on Charge  

No. 4.

14. It  was  canvassed  on  behalf  of  the  appellant  that  it  was  not  

mandatory for them to furnish the inquiry report, which had become necessary  

9

only after the judgment of the Apex Court dated 20.11.1990 rendered in the  

case of  Union of India vs. Mohd. Ramzan Khan [1991 (1) SCC 588].  

The judgment in Mohd. Ramzan (supra) would not apply to the present case  

since  the  order  of  removal  in  the  present  case  was  passed  prior  to  this  

judgment on 17.4.1985 and the judgment in Mohd. Ramzan itself declared that  

the law declared therein was to be applied as a prospective one.  This plea was  

raised  by  the  appellant  before  the  Division  Bench  but  it  was  turned  down  

holding that the principles of natural justice were always there to protect the  

right of hearing to be provided to the delinquent official, before awarding him  

the  punishment,  and  that  the  judgment  in  Mohd.  Ramzan  Khan  had  only  

recognized this position and made it mandatory.

15. The learned counsel  for the appellant  pressed into service the  

following observations in para 33 of the Judgment of the Constitution Bench in  

Managing  Director,  ECIL,  Hyderabad  and Ors.  versus  B.  Karunakar  

and Ors.  reported in 1993 (4) SCC 727.    

“…….. It is for the first time in Mohd. Ramzan Khan   case that this court laid down the law.  That decision made the law  laid  down  there  prospective  in  operation  i.e.  applicable  to  the  orders of punishment passed after November 20, 1990.  The law  laid down was not applicable to the orders of punishment passed   before  that  date  notwithstanding  the  fact  that  the  proceedings   arising out of  the same were pending in courts after that date.   The  said  proceedings  had  to  be  decided  according  to  the  law  prevalent prior to the said date which did not require the authority   to supply a copy of the enquiry officer’s report to the employee.   The only exception to this was where the service rules with regard   to  the disciplinary  proceedings themselves made it  obligatory  to   supply a copy of the report to the employee.”  (emphasis supplied)

1

16. The counsel for the respondent on the other hand submitted that  

the right to receive the inquiry report  and to make submissions thereon to  

prove one’s innocence was always available to the employees of Government  

and Public Bodies.  All that the judgment in Mohd. Ramzan Khan’s case did was  

to remove the doubts which arose due to the changes brought into Article  

311(2) by the 42nd Constitutional amendments. The judgment made the law  

declared prospective only to avoid the difficulties that would arise in inquiries  

held prior thereto.   

17. In this connection, it is to be noted that as far as the right of an  

employee  to  represent  against  the  adverse  findings  in  an  inquiry  report  is  

concerned, the same is referrable to Article 311(2) of the Constitution of India.  

Article 311 (2) in the original Constitution read as follows:-

“311. (2) No such person as aforesaid shall be dismissed or   removed or reduced in rank until he has been given a reasonable   opportunity of showing cause against the action proposed to be   taken in regard to him.”

The  import  of  this  provision  was  explained  by  a  Constitution  

Bench of this Court in Khem Chand v. Union of India [AIR 1958 SC 300].  

It held that it included both the opportunities to an employee, namely to deny  

one’s guilt and establish innocence, which he can, only if he is informed about  

the charges and the imputations in support, and secondly an opportunity to  

make a representation on the proposed punishment.

1

18. The Fifteenth Amendment to the Constitution w.e.f 6th October,  

1963 amended Article 311 (2), and further clarified the position in this behalf.  

The amended Article 311 (2) reads as follows:-

“311. (2) No such person as aforesaid shall be dismissed or  removed or reduced in rank except after an enquiry in which he  has  been  informed  of  the  charges  against  him  and  given  a  reasonable opportunity of being heard in respect of those charges   and where it is proposed, after such inquiry, to impose on him any   such penalty, until he has been given a reasonable opportunity of   making representation on the penalty proposed, but only on the  basis of the evidence adduced during such inquiry.”

The import of this change was explained by another Constitution  

Bench in Union of India v. H.C. Goel [AIR 1964 SC 364] which in terms  

noted  that  it  is  well  settled  that  the  public  servant  who is  entitled  to  the  

protection of Article 311, must get two opportunities to defend himself.  First,  

to defend the charge against him and prove his innocence, which opportunity is  

to be given by giving him the report against him, and then a second notice  

when the government decides provisionally about the proposed punishment, as  

to why the same should not be imposed.

19. The 42nd Amendment effected in 1976 once again amended sub-

article 311 (2) as follows:-

“311. (2) No such person as aforesaid shall be dismissed or  removed or reduced in rank except after an enquiry 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   

1

not  be necessary to  give such person any opportunity  of  making   representation on the penalty proposed:”

20. In Mohd. Ramzan Khan’s case (supra) the Court was concerned  

with  the  question  as  to  whether  the  42nd Amendment  brought  about  any  

change in the matter of supply of a copy of the report which is a part of the  

first stage, and the effect of non-supply thereof on the punishment proposed.  

The  Court  considered  the  various  judgments  on  this  aspect  and  held  in  

paragraph 18 of the judgment as follows:-

“We make it  clear  that  wherever  there has been an  Inquiry  Officer  and  he  has  furnished  a  report  to  the  disciplinary   authority  at  the  conclusion  of  the  inquiry  holding  the  delinquent  guilty of all or any of the charges with proposal for any particular   punishment or not, the delinquent is entitled to a copy of such report   and will also be entitled to make a representation against it, if he so   desires, and non-furnishing of the report would amount to violation  of rules of natural justice and make the final order liable to challenge  hereafter.” (emphasis supplied)

It  is  only  with  a  view not  to  affect  the  inquiries  which  were  

conducted in the meanwhile that the Court held that those inquiries will not be  

affected, and though it was only declaring the law, the propositions laid down  

therein will apply prospectively.  This was basically to protect the actions which  

were  taken  during  the  interregnum  i.e  after  the  42nd Amendment  became  

effective until it was explained as above in this judgment.  

21. Counsel for the appellant submitted that appellant’s action was  

protected  since  the  impugned  order  of  removal  was  passed  during  this  

interregnum.  On the other hand, the counsel for the respondent pointed out  

that  though the  observations  in  Karunakar  (extracted above)  explained  the  

1

prospective application of the propositions in Mohd. Ramzan Khan, it also made  

it  clear  that  where  the  service  rules  themselves  made it  obligatory,  it  was  

necessary to furnish a copy of the inquiry report to the employee.   In this  

connection, counsel for the respondent pressed into service regulation 7 (2)  

and regulation 9 of  the above referred service regulations under which the  

inquiry was held.  (Regulation 8 is about minor penalties with which we are not  

concerned in this matter). These two regulations read as follows:-

7. Action on the Inquiry Report:

(1) The Disciplinary Authority, if  it  is  not itself the Inquiry Authority   may, for reasons to be recorded by it in writing, remit the case to   the Inquiring Authority for fresh or further inquiry and report and  the Inquiring Authority shall thereupon proceed to hold the further   inquiry according to the provisions of Regulation 6 as far as may   be.

(2) The Disciplinary Authority shall, if it disagrees with the findings of the   Inquiring Authority on any article of charge, record its reasons for such   disagreement  and  record  its  own  findings  on  such  charge,  if  the   evidence on record is sufficient for the purpose.

(3) If the Disciplinary Authority, having regard to its findings on all or any   of the articles of charge is of the opinion that any of the penalties   specified  in  the  regulation  4  should  be  imposed  on  the  officer   employee it shall, notwithstanding anything contained in regulation 8,   make an order imposing such penalty.

(4) If the Disciplinary Authority, having regard to its findings on all or any   of the articles of charge, is of the opinion that no penalty is called for,  it may pass an order exonerating the officer employee concerned.

9. Communication of orders

Orders made by the Disciplinary Authority under Regulation 7 or   Regulation  8  shall  be  communicated  to  the  officer  employee   concerned, who shall  also be supplied with a copy of the report of   inquiry, if any.”

1

22. Regulation 7 thus, speaks of four kinds of orders to be passed by  

the Disciplinary Authority after receiving the report of the inquiry.  (1) Order  

once  again  remitting  the  case  to  the  inquiry  officer,  (2)  Order  recording  

disagreement with the inquiry officer, (3) Order imposing a penalty and (4) an  

order exonerating the employee.  Regulation 7 (2) makes it clear that where  

the disciplinary authority disagrees with the findings of the inquiry officer on  

any  article  of  charge,  it  must  record  its  reasons  for  such  disagreement.  

Regulation 9 provides that the orders made by the disciplinary authority under  

article 7 have to be communicated to the officer / employee concerned.  He is  

also to be supplied with a copy of the report of the inquiry, if any.  The counsel  

for  the  respondent  submitted  with  much  force  that  both  these  regulations  

when read together provide that when the disciplinary authority was differing  

with the inquiry officer, the report of the inquiry officer must be furnished to  

the employee before the decision on penalty was arrived at.   

23.  Regulation 7 (2) requires the Disciplinary Authority to record its  

reasons for disagreement wherever it disagrees with the findings of the inquiry  

officer.  Regulation 9 provides for communicating to the employee concerned,  

the orders passed under Regulation 7, apart from providing him with a copy of  

the inquiry report.  These regulations will have to be read as laid down only  

with a view to provide an opportunity to the employee to represent against the  

findings to the extent they are adverse to him. Then only they will become  

meaningful.  The  service  regulations  of  the  appellant  are  concerning  the  

1

discipline and conduct in a nationalized bank which is an instrumentality of the  

state.  The instrumentalities of the state have always been expected to act in  

fairness,  and  following  the  principles  of  natural  justice  has  always  been  

considered as a minimum expectation in that behalf.  The above regulations  

will, therefore, have to be read as containing the requirement to furnish a copy  

of the inquiry report and the order of the Disciplinary Authority recording its  

disagreement therewith to the employee prior to any decision on the penalty  

being arrived at.  That will secure to the delinquent employee an opportunity to  

make his submissions on the adverse findings and to prove his innocence.   

24. The interpretation of regulation 7 (2) of the appellant bank is no  

longer res integra.  In Punjab National Bank v. Kunj Behari Misra [1998  

(7) SCC 84]  this very question came up before this Court.  Two Assistant  

Managers at the Lucknow Branch of the appellant bank viz. Kunj Behari Misra  

and S.P. Goel were charged for misconduct, when shortage of Rs. 1 lakh was  

detected in the branch on 10.11.1981.  The inquiry officer held Mr. Misra guilty  

of only one out of the six charges viz. that he had not signed the concerned  

register at the relevant time.  He exonerated Mr. Goel of all the charges.  The  

disciplinary authority reversed the findings of the inquiry officer and held that  

the  charges  were  proved.   By  his  orders  dated  12.12.83  and 15.12.83  he  

directed proportionate recovery of Rs. 1 lakh from both the officers.

25. In  that  case  also  the  appellant  bank  canvassed  the  same  

submission  viz.  that  since  the  inquiry  was  during  the  period  prior  to  the  

1

judgment in Mohd. Ramzan Khan (supra) the appellant was not required to  

give the inquiry report or the report of the disciplinary authority differing with  

the inquiry officer.   The very regulation 7 (2) came up for consideration.  A  

bench of three judges of this Court held that the requirement to give these  

reports to the employee will have to be read into regulation 7 (2).  The Court  

referred to and relied upon an earlier judgment of the constitution bench in  

State of Assam vs. Vimal Kumar Pandit [AIR 1963 SC 1612] and para  

26 of Karunakar (supra) and specifically ruled in para 19 as follows:-

“19. The result of the aforesaid discussion would be that the  principles of natural justice have to be read into Regulation 7(2). As   a result thereof, whenever the disciplinary authority disagrees with  the enquiry authority on any article of charge, then before it records  its own findings on such charge, it must record its tentative reasons   for  such  disagreement  and  give  to  the  delinquent  officer  an   opportunity to represent before it records its findings. The report of   the enquiry officer containing its findings will have to be conveyed  and the delinquent officer will have an opportunity to persuade the   disciplinary  authority  to  accept  the  favourable  conclusion  of  the  enquiry officer. The principles of natural justice, as we have already  observed, require the authority which has to take a final decision and   can impose a penalty, to give an opportunity to the officer charged  of  misconduct  to  file  a  representation  before  the  disciplinary  authority  records  its  findings  on  the  charges  framed  against  the   officer.”

26. Apart  from this,  as  seen from the legal  position enunciated in  

para  33  of  Karunakar  (supra),  earlier  extracted,  it  is  clear  that  where  the  

service rules with regard to the disciplinary proceedings themselves made it  

obligatory to supply a copy of the report to the employees, it would act as an  

exception.   The direction that the judgment in Mohd. Ramzan Khan will not  

apply retrospectively, will not cover such service regulations and the concerned  

1

employers will  have to continue to give a copy of the inquiry report to the  

delinquent employees, as provided in their service regulations.  

27. The counsel for the appellant relied upon the judgment of this  

Court in National Fertilizers Ltd. and Anr. v. P.K. Khanna [AIR 2005 SC  

3742]  where  the  disciplinary  rules  were  pari-materia to  the  rules  in  the  

present case as can be seen from para 10 of that judgment.  Counsel relied on  

para 13 of the judgment which reads as follows:-

“As far as the second question is concerned, neither   the decision in Karunakar nor Rule 33 quoted earlier postulate that   the delinquent employee should be given an opportunity to show  cause  after  the  finding  of  guilt  as  to  the  quantum  of  the  punishment.  The Rules envisage the passing of an order by the  Disciplinary  Authority  not  only  finding  the delinquent  guilty,  but   also imposing punishment  after the delinquent has been given a  copy of the Enquiry report and had an opportunity of challenging   the same.”  (emphasis supplied)

This paragraph make it clear that there is no second opportunity  

available to the delinquent employee after the finding of guilt on the quantum  

of punishment.  At the same time, the second sentence of this para clearly  

states  that  a  copy  of  the  inquiry  report  is  to  be  given  to  the  delinquent  

employee prior to the decision of the disciplinary authority for providing him  

with an opportunity to challenge the report.  It is also material to note from  

this judgment that since the employee had contended in that case, that the  

Disciplinary Authority had not considered his objections correctly,  this Court  

directed  the  Appellate  Authority  (and  not  the  Disciplinary  Authority)  to  

reconsider the objections of the respondent.

1

28. This being the position, in the instant case it  is  clear that the  

appellant  had  not  followed  their  own  regulations  which  clearly  require  the  

disciplinary authority to record the reasons where it differed from the inquiry  

officer.  The regulations also clearly lay down that a copy of the inquiry report  

and the order of disagreement are to be provided to the employee.  In the  

present case, we are concerned with the stage where the Disciplinary Authority  

differs with the inquiry officer on his findings.  This is prior to arriving at the  

guilt of the employee.  His right to receive the report and defend at that stage  

before the guilt is established is very much recognized as seen above.  Counsel  

for the appellant submitted that Constitution Bench has held in Union of India  

&  Anr.  v.  Tulsiram  Patel  [1985  (3)  SCC  398]  that  after  the  42nd  

Amendment, the employees are not entitled in law to be heard in the matter of  

penalty.    In  Karunakar’s  case  (supra),   another  Constitution  Bench  has  

referred to Tulsiram Patel in paragraph 4 and then explained the legal position  

in this behalf in paragraph 7 as follows:-

“While the right to represent against the findings in   the report is part of the reasonable opportunity available during the   first stage of the inquiry viz., before the disciplinary authority takes   into  consideration  the  findings  in  the  report,  the  right  to  show  cause against the penalty proposed belongs to the second stage  when the disciplinary authority has considered the findings in the  report and has come to the conclusion with regard to the guilt of   the employee and proposes to award penalty on the basis of its   conclusions.  The first right is the right to prove innocence.  The  second right is to plead for either no penalty or a lesser penalty   although the conclusion regarding the guilt is accepted.  It is the  second right exercisable at the second stage which was taken away   by the 42nd Amendment.”

1

Thus, the right to represent against the findings in the inquiry  

report to prove one’s innocence is distinct from the right to represent against  

the proposed penalty.   It  is only the second right to represent  against  the  

proposed penalty which is taken away by the 42nd Amendment.  The right to  

represent against the findings in the report is not disturbed in any way.  In  

fact, any denial thereof will make the final order vulnerable.

29. Counsel for the respondent relied upon the judgment in State of  

Maharashtra v. B.K. Takkamore & Ors. [AIR 1967 SC 1353] to submit  

that if the impugned order can be sustained excluding the disputed charge, this  

Court should not interfere.  In our view, it is not possible for us to pre-judge  

the issue in the present case.  As seen from the order of Disciplinary Authority  

quoted  above,  the  appellant  has  considered  it  to  be  a  serious  charge and  

therefore  the  respondent  ought  to  have  been  given  the  opportunity  to  

challenge the adverse finding of  the Disciplinary  Authority  where it  differed  

from the inquiry officer to establish his innocence.

30. It  was  then  submitted  that  non  supply  of  inquiry  report  is  

inconsequential  if  the employee does not show as to how he is  prejudiced  

thereby.   Karunakar (supra),  S.K. Singh v. Central Bank of India and  

Ors.  [1996 (6) SCC 415] and Haryana Financial Corporation and Anr.  

v. Kailash Chandra Ahuja [2008 (9) SCC 31] were relied upon in support.  

There cannot be any grievance with respect to the proposition.  In the present  

case however,  we are concerned with a  situation where the finding of  the  

2

inquiry officer on a charge has been reversed by the Disciplinary Authority,  

which was not the case in any of the three cases.  Besides, by not giving the  

inquiry  report  and  the  adverse  order  of  the  disciplinary  authority,  the  

respondent was denied the opportunity to represent before the finding of guilt  

was arrived at and thereby he was certainly prejudiced.

31. Thus, there is no error on the part of the learned Single Judge in  

interfering with the order of removal of the respondent from the service.  The  

Court was ultimately dealing with the removal of an employee from his service  

which is a very serious matter.  The regulations are, therefore, required to be  

followed in letter as well as in spirit.  The Learned Single Judge was, therefore,  

right in directing the appellant to furnish the respondent a copy of the inquiry  

report, and afford him opportunity of hearing. The Learned Division Bench was  

equally right in leaving the order of the Learned Single Judge undisturbed.   In  

our view, there is no reason to take a different view from the one taken by the  

learned judges of the High Court.   

32. In the circumstances, though in principle, we uphold the order of  

the learned Single Judge, we modify the same to a limited extent by observing  

that the respondent is to be given a copy of the report of the Inquiry Officer  

and the detailed order of the Disciplinary Authority differing therewith, basically  

to afford him the opportunity to explain his position with respect to the charges  

and prove his  innocence.   The Learned Single  Judge has  directed that  the  

competent authority will keep in mind that the respondent is out of job since  

2

1985 and in that context it should also consider the factor of the service put in  

by him.  We may also add that the competent authority may as well consider  

that when the respondent was removed, his date of retirement viz. 30.9.1987  

was round the corner.  We however, make it clear that it is for the competent  

authority to consider these aspects, when he takes steps in accordance with  

the impugned judgments which we confirm with the modification as above.   

33. The appeal is disposed of accordingly.  The Interim order stands  

vacated.  There will no order as to costs.

…………..……………………..J.  ( R.V. Raveendran )   

 …………………………………..J.  ( H.L. Gokhale  )

New Delhi

Dated : September 7, 2010

2