Important Point
If the inquiry officer held no sittings, did not take evidence nor record any conclusions and if at that stage the inquiry was dropped and a simple order of termination was, passed, the same would not be punitive; but if termination order is preceded by an inquiry and evidence is received and findings are arrived at behind the back of an employee and on basis of such a report termination order is issued such an order will be violative of natural justice.

Headnote:Service Law-Termination from service-Validity of-Show cause notice alleging that appellant received bribe-Explanation submitted by appellant-Neither disciplinary inquiry nor oral inquiry conducted in presence of appellant-Inquiry Officer examined witnesses and submitted report stating that allegation of bribe stood proved-Very next day simple order of termination passed stating that in terms of conditions of appointment order he could be terminated from service with one month notice or salary in lieu of notice-Appellant’s plea that termination order was punitive and tained with mala fides -Administrative Tribunal holding that termination void as violative of principles of natural justice and inquiry report was mala fide-High Court upholding termination on ground that termination was by simplicitor order and not punitive-Not sustainable-Inquiry report and its findings are foundation of termination order and not merely the motive-Tribunal’s order restored.
       Held: It will be a case of motive if the master, after gathering some prima facie facts, does not really wish to go into their truth but decides merely not to continue a dubious employee. The master does not want to decide or to direct a decision about the truth of the allegations. But if he conducts an inquiry only for purpose of proving the misconduct and the employee is not heard, it is a case where the inquiry is the foundation and the termination will be bad. (Para 27)
       If the inquiry officer held no sittings, did not take evidence nor record any conclusions and if at that stage the inquiry was dropped and a simple order of termination was, passed, the same would not be punitive. (Para 31)
       The termination of the services of a temporary servant or one on probation, on the basis of adverse entries or on the basis of an assessment that his work is not satisfactory will not be punitive inasmuch as the above facts are merely the motive and not the foundation. The reason why they are the motive is that the assessment is not done with the object of finding out any misconduct on the part of the Officer. It is done only with a view to decide whether he is to be retained or continued in service. The position is not different even if a preliminary inquiry is held because the purpose of a preliminary inquiry is to find out if there is prima facie evidence or material to initiate a regular departmental inquiry. The purpose of the preliminary inquiry is not to find out misconduct on the part of the Officer and if a termination follows without giving an opportunity, it will not be bad. Even in a case where a regular departmental inquiry is started, a charge-memo issued, reply obtained, and an enquiry Officer is appointed - if at that point of time, the inquiry is dropped and a simple notice of termination is passed, the same will not be punitive because the enquiry Officer has not recorded evidence nor given any findings on the charges. That is what is held in Sukh Raj Bahadur’s case and in Benjamin’s case. In the latter case, the departmental inquiry was stopped because the employer was not sure of establishing the guilt of the employee. In all these cases the allegations against the employee merely raised a cloud on his conduct and as pointed by Krishna Iyer, J. in Gujarat Steel Tubes case, the employer was entitled to say that he would not continue an employee against whom allegations were made the truth of which the employer was not interested to ascertain. In fact, the employer, by opting to pass a simple order of termination as permitted by the terms of appointment or as permitted by the rules was conferring a benefit on the employee by passing a simple order of termination so that the employee would not suffer from any stigma which would attach to the rest of his career, if a dismissal or other punitive order was passed. The above are all examples where the allegations whose truth has not been found, and were merely the motive. (Para 33)
       But in cases where the termination is preceded by an inquiry and evidence is received and findings as to misconduct of a definitive nature are arrived at behind the back of the Officer and where on the basis of such a report, the termination order is issued, such an order will be violative of principles of natural justice inasmuch as the purpose of the inquiry is to find out the truth of the allegations with a view to punish him and not merely to gather evidence for a future regular departmental inquiry. In such cases, the termination is to be treated as based or founded upon misconduct and will be punitive. These are obviously not cases where the employer feels that there is a mere cloud against the employees’ conduct but are cases where the employer has virtually accepted the definitive and clear findings of the Inquiry Officer, which are all arrived at behind the back of the employee - even though such acceptance of findings is not recorded in the order of termination. That is why the misconduct is the foundation and not merely the motive, in such cases. (Para 34)
       In the instant case the inquiry officer, Sri R.P. Singh examined witnesses and in his report dated 22-1-76 has said: “I conclude that Sri R.P. Gupta took a sum of Rs. 2,000/- from Sri Jai Chandra Lal, thereafter referring to certain facts said they "go to prove the correctness of the complaint”. Not only that he concluded “I therefore suggest that services of Shri R.S. Gupta may be terminated and one month salary may be given to him in lieu of the notice”. The very next day, the impugned simple order of termination followed. (Para 35)
       In our view, it is an absolutely clear case where the inquiry officer examined witnesses, recorded their statements and gave a clear finding of the appellant accepting a bribe and even recommended his termination. All these were done behind the back of the appellant. The Managing Director passed the termination order the very next day. It cannot in the above circumstances be stated, by any stretch of inspection that the report is a preliminary inquiry report. It’s findings are definitive. It is not a preliminary report where some facts are gathered and a recommendation is made for a regular departmental inquiry. In view of the principles laid down in the cases referred to above, this case is an obvious case where the report and its findings are the foundation of the termination order and not merely the motive. The Tribunal was right in its conclusion. The High Court was in grave error in treating such a report as a preliminary report. Tribunal s order restored. (Para 36)

Judgment

M. Jagannadha Rao, J.-Leave granted.

2. This appeal is preferred by the appellant questioning the judgment of the High Court of Allahabad dated 10-12-1997 (Lucknow Bench) which reversed the judgment of the Administrative Tribunal III, Lucknow in claim No. 686 of TIII of 1977 dated 3.12.1980.

3. The appellant was working in the respondent Corporation as Senior Accountant from 27-7-1970. On 17-7-1973, he was appointed as Branch Manager and posted at the Meerut Division of the respondent Corporation and transferred to various places. He was posted at Faizabad as Branch Manager on 3-10-1975 and while he was working there, he received a letter dated 12-1-1976 from the Managing Director on 15-1-1976 alleging that one person by name Jai Chandra Lal complained that the appellant had fraudulently taken Rs. 2000/- from him and that the appellant should therefore offer his explanation. The appellant denied the allegation and submitted his explanation on 22-1-1976. Thereafter no disciplinary inquiry was conducted nor any oral inquiry in the presence of the appellant was conducted. It appears that a report dated 22-1-1976 was submitted by one Sri Ram Pal Singh, General Manager (Fertiliser) without issuing any Charge Memo or giving hearing. Copy of the report was also not given to the appellant. Thereafter, on 23-1-1976, a simple order of termination was passed stating that the appellant had been appointed as Branch Manager by order dated 17-7-1973, and Condition No. 3 of the appointment order provided that the services of the appellant could be terminated at any time after giving one month’s notice or one month’s pay in lieu thereof and that his services were being terminated with immediate effect in terms of the aforementioned Condition No. 3 of the appointment order. It was stated that the appellant could obtain one month’s pay from the General Manager (Fertiliser), Lucknow.

4. It was the appellant’s case before the Administrative Tribunal, Lucknow, that though the termination order appeared to be innocuous, it was still punitive in nature inasmuch as it was based on an exparte report of inquiry by the said Ram Pal Singh and that the allegation of accepting a bribe in a sum of Rs. 2000/- was not merely the motive but the very foundation of the order of termination. The appellant also raised a plea of malafides against the said Shri Ram Pal Singh who allegedly bore a grudge against the appellant as the appellant while working at Meerut in 1973-74 had made certain serious complaints against one Balbir Singh Chauhan, Assistant Sales Officer-I - who was a close friend of the said Shri Ram Pal Singh. In fact, soon after the appellant complained against Balbir Singh, a letter of transfer is said to have been engineered and the appellant was transferred to Varanasi on 9-5-74. Various details have been given to prove malafides.

5. The Administrative Tribunal, Lucknow in its order dated 31-12-80 accepted the appellant’s contention and allowed the appellant’s application and quashed the termination order declaring it to be violative of principles of natural justice and hence void. It also held that the inquiry report of Shri Ram Pal Singh was a malafide one. It was however stated that the respondents would be at liberty to initiate regular inquiry if they so desired and deal with the appellant’s case in accordance with law.

6. Aggrieved by the said judgment, the respondent Corporation filed Writ Petition No. 1591 of 1981 and the same was allowed by the High Court on 10-12-97 holding that though an inquiry was conducted by Shri Ram Pal Singh and a report was given against the appellant, the same was conducted “to assess the work” of the appellant as it was decided to dispense with his temporary service in terms of Condition No. 3 of the order of appointment, which permitted such termination on payment of one month’s salary or after giving one month’s notice. That was why a simple order of termination was passed and it did not ca

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1998 Supreme(SC) 1240

Cases Referred (17)