Managing Director, Ecil, Hyderabad vs B. Karunakar

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1993 Supreme(SC) 906

SUPREME COURT OF INDIA
M. N. VENKATACHALIAH, C.J.I., P.B. SAWANT, K. RAMASWAMY, S. MOHAN AND B. P. JEEVAN REDDY, JJ.
Managing Director, ECIL, Hyderabad, etc. etc., Appellants
Versus
B. Karunakar, etc. etc., Respondent.
Civil Appeal No. 3056 of 1991 with SLP (Civil) Nos. 4273 of 1986, 6232, 8735, 10174, 16275, 17186, 17484, 18262, 20035 of 1991, 89, 6587, 7252, 8147, 8642, 9885, 10589, 10790, 11641, 12265, 12456, 12531, 12727, 12948, 13577, 13695, 13815 and 16477 of 1992, 2414 and 5296 of 1993 AND C. A. Nos. 4504 of 1990, 2935, 3742-43, 3747, 3750-52, 4072, 4083-85, 4148, 4421-23 and 4482 of 1991, 302, 1063, 1116, 2408 and 4630 of 1992 AND 611 and 662-63 of 1993, D/- 1-10-1993.
Advocates appeared
Mr. V.C. Mahajan, Mr. N. N. Goswamy, Dr. Anand Prakash, Mr. J. R. Murthy, Mr. V. R. Reddy, Mr. Altaf Ahmed and Mr. K. T. S. Tulsi, Addl. Solicitor Generwals, Mr. K. T. S. Tulsi, Addl. Solicitor Generals, Mr. H. N. Salve, Mr. P. P.Rao, Mr. G. Ramaswamy, Dr. N. M.Ghatate, Mr. A. K. Ganguly, Mr. S. S. Javali, Mr. P. K. Goswamy, Mr. M. N. Bhatkal, Mr. Arun Jaitley, Mr. K. Madhva Reddy, Mr. A. S. Nambir, Ms. Indira Jaising andMr. Govinda Mukhoty, Sr. Advocates, Ms. Indu Goswami, Mr. R.P. Shrivastava, Mr. V. K. Verma, Mr. B.K. Prasad, Mr.S. N. Terdol, Ms. Sushma Suri, Mr. Vimal Dave, Mr. Sushil Kumar Jain, Mr. A. V. Rangam, Mr. Kailash Vasdev, Mr. Uma Dutta, Mr. Ashok Bhan, Ms. Anil Katiyar, Mr. B. Y. Kulkarni, Mr. S. K. Agnihotiri, Mr. Kirit Rawal, Mr. Rajan Karanjawala, Mrs. Manik Karanjawala, Mr. P.K. Mullick, Mr. T. V. S. N. Chari, Mr. Atul K. Bandhu, Mr. S. D. Kelkar, Mr. A. Ranganathan, Mr. B. Mohammed Ali, Mr. G.K. Bansal, Mr. R. K. Mehta, Mr. Anil Chptra, Mr. S. K. Mehta, Mr. Dhruv Mehta, Mr. Aman Vachher, Mr. P. Nasimhan, Mr. V. G. Pragasam, Mr. G. Nageswara Reddys, Ms. Kusum Chaudhary, Ms. Lira Goswami, Ms. Alpana Poddar, Mr. S. Atreya, Mr. A.P. Dhamijia, Mr. S. K. Jain,Mr. B. Rajeshwar Rao, Mr. Pawan K. Bahl, Mr. T.C.Sharma, Mr. Manoj Prasad, Mr. S. N. Sikka, Ms. Kitty Kumarmangalam, Mr. P. Parmeswaran, Mr. Hemant Sharma, Mr. Maninder Singh, Ms. Rachna Gupta, Mr. S. R. Bhat, Mr. Balbir Singh Gupta, Mr. R. Mohan, Mr. Jitender Sharma, Mr. R. K. Kapoor, Mr. B. R. Kapoor, Mr. Anis Ahmed Khan, Mr. B. V. Balram Das, Mr. B. Parthasarthy, Mr. B.P. Tanna, Ms. Mahrook N. Kaarewala, Mr. Mukul Mudgal, Mr. H. S. Parihar, Mr. A.Mariaputtam (for Arputham Aruna & Co)., Mr. H. M. Singh, Ms. H. Wahi, Mr. H. K. Puri, Mr. D.P. Mukherjee, Mr. H. A. Raichura, Mr. S. A. Syed, Mr. D. M. Nargolkar, Ms. Sarla Chandra, Ms. J. Janani, Aparna Bhat, Mr. M. N. Shroff, Mr. K. K. Gupta, Mr. Raj Kumar Gupta, Mr. P. C. Kapoor, Mrs. Lalitha Kaushik, Ms. Sheela Goel, Mr. R.K. Kaukal, Mr. S. K. Gupta, Mr. P. R. Seetharaman, Mr. M. A. Chinnasami, Mr. Kuldip Parihar, Mr. S.R. Barot, 1080 Mr. Anil Srivastava, Mr. M. N. Johari, Mr. H. S. Munjral Advocates with them for the appearing parties.

Advocates:
A.K.GANGULY, A.K.SRIVASTAVA, A.MARIAPUTHAM, A.P.Dhamija, A.RANGANADHAM CHETTY, A.S.NAMBIYAR, A.V.RANGAM, ALPANA PODDAR, Altaf Ahmed, AMAN VACHHER, ANAND PARKASH, Anil Chopra, ANIL KATIYAR, ANIS AHMED, APARNA BHAT, ARUN JAITLEY, ASHOK BHAN, ATUI K.BANDHU, B.K.PRASAD, B.MOHMMED ALI, B.P.TANNA, B.PARTHASARTHY, B.R.KAPUR, B.RAJESHVAR RAO, B.S.Gupta, B.V.BALARAM DAS, B.Y.Kulkarni, C.V.SUBBA RAO, D.M.Nargolkar, D.P.MUKHERJI, Dhruv Mehta, G.K.BANSAL, G.NAGESVARA REDDY, G.RAMASVAMY, GOBINDA MUKHOTY, H.A.RAICHURA, H.K.PURI, H.M.SINGH, H.S.MUNJRAL, H.S.PARIHAR, H.VAHI, HARISH N.SLAVE, HEMANT SHARMA, INDIRA JAISINGH, INDU GOSWAMI, J.R.MURTHY, JITENDRA SHARMA, K.K.GUPTA, K.Madhava Reddy, K.T.S.Tulsi, KAILASH VASUDEV, KIRIT RAVAL, KITTY KUMARAMANGALAM, KULDIP PARIHAR, Kusum Chaudhary, LALITA KAUSHIK, LIRA GOSVAMI, M.A.CHINNASWAMY, M.N.BHATKAL, M.N.SHROFF, MAHRUK N.KERAVALA, MANIK KARANJAVALA, MANINDER SINGH, MANOJ PRASAD, Mukul Mudgal, N.M.GHATATE, N.N.GOSWAMY, N.N.JOHARI, P.C.KAPUR, P.K.GOSWAMI, P.K.MULLICK, P.Narasimhan, P.P.Rao, P.R.SITHARAMAN, PAVAN BAHL, R.K.KAPOOR, R.K.KAUKAL, R.K.MEHTA, R.MOHAN, R.P.Srivastava, RACHNA GUPTA, RAIAN KARANJAVALA, RAJ GUPTA, S.A.SYED, S.Atreya, S.D.KELKAR, S.JANANI, S.K.AGNIHOTRI, S.K.JAIN, S.K.MEHTA, S.N.SIKKA, S.N.TERDAL, S.R.BAROT, S.R.Bhatt, S.S.JAVALI, Saria Chandra, SHILA GOEL, SUDHIR GUPTA, SUSHIL JAIN, SUSHMA SURI, T.C.SHARMA, T.V.S.N.Chari, Uma Datta, V.C.MAHAJAN, V.G.PRAGASAM, V.K.VARMA, V.R.REDDY, V.SHEKHAR, VIMAL DAVE

Headnote:
Constitution of India, 1950 - Article 311(2) - Government of India Act, 1935 – Section 240(3) - Civil Services Classification Rules, 1920 - Government of India Act, 1919 - Section 96B (2) - Public Servants (Inquiries) Act, 1850 - Section 25 - Civil Services (Classification, Control and Appeal) Rules – Rule 55 - Delinquent employee – Inquiry - Disciplinary authority - Law on subject has developed along two paths. viz., statute and the principles of natural justice – Court may first refer to statutory development of law - It is not necessary to refer to law prior to Public Servants (Inquiries) Act, 1850 which for first time made uniform law regulating inquiries into behaviour of public servants who were not removable from their appointments without sanction of Government - It provided for a formal and public inquiry into imputations of misbehviour against public servant - Either Government, if it thought fit conducted prosecution or left it to accuser to conduct it after requiring him to furnish reasonable security - Evidence in support of it and any evidence which accused may adduce in his defence had to be recorded in his presence and his defence had to be taken down in writing - Each of charges framed had to be discussed and finding had to be recorded on each charge - However, there was no provision made in Rules for hearing the delinquent officer against action proposed to be taken on basis of finding arrived at in inquiry -Held, argued that unless party to instant case is given benefit of new decision, there will be no incentive for him to raise correctness of the old decision - Finally they say that if new rule is not applied in instant case, overruling will be obiter only - Cross and Harris in their Precedent in English Law, have also argued on same lines to give benefit to party in overruling case - P. S. Atiyah and R. S. Summers in their Form and Substance in Anglo-American Law, at page 146 also stated that: if litigants who persuade court to overrule a bad precedent are not themselves accorded benefit of the new law would they have sufficient incentive to litigate such cases so that bad law is not perpetuated - It is therefore, argued to extend the benefit to successful party in the case - Contention of counsel for employees/Govt. Servants that denial of ratio to pending matters offend Art. 14 is devoid of substance - It is seen that placing reliance on existing law till date , employers treated that under law they, had no obligation to supply a copy of enquiry report before imposing penalty - Reversing orders and directing to proceed from that stage would be a needless heavy burden on administration and at times encourage delinquent to abuse office till final orders are passed - Accordingly Court hold that ratio in Mohd. Ramzan Khans case (AIR 1991 SC 471) would apply prospectively from date of judgment only to cases in which decisions are taken and orders made from that date - Order accordingly.

Judgement Key Points

The core legal point in this judgement concerns the entitlement of a delinquent employee to receive a copy of the inquiry report before the disciplinary authority arrives at its conclusion regarding guilt or innocence and the subsequent imposition of punishment. The judgement emphasizes that the right to receive the inquiry report is an essential component of the reasonable opportunity and principles of natural justice mandated by constitutional provisions, particularly Article 311(2). The non-supply of the inquiry report to the employee is regarded as a violation of these principles, leading to prejudice and injustice, especially when the report influences the disciplinary decision.

The ratio decendi of the judgement is that when the inquiry officer is other than the disciplinary authority, the employee has a constitutional and statutory right to be furnished with a copy of the inquiry report before the disciplinary authority makes its decision on guilt and punishment. This right is a fundamental part of the fair hearing and natural justice, and its denial invalidates the disciplinary proceedings. Furthermore, the law laid down in this case is to be applied prospectively, meaning it governs only those cases where the order or decision is made after the judgement, and does not affect past final orders or pending proceedings that were initiated prior to this ruling.

Judgment

SAWANT, J. (for himself and for M. N. Venkatachaliah, C.J.I. and S. Mohan and B. P. Jeevan Reddy, JJ.):- This group of matters is at the instance of various parties, viz., Union of India, Public Sector Corporations, Public Sector Banks, State Governments and two private parties. By an order dated 5th August, 1991 in Managing Director, Electronic Corporation of India v. B. Karunakar (1992) 3 JT (SC) 605, a three Judge Bench of this Court referred that matter to the Chief Justice for being placed before a larger Bench, for the Bench found a conflict in the two decisions of this Court, viz., Kailash Chander Asthana v. State of U. P. (1988) 3 SCC 600 and Union of India v. Mohd. Ramzan Khan (1991) 1 SCC 588 both delivered by the Benches of three learned Judges. Civil Appeal No. 3056 of 1991 arising out of SLP (Civil) No. 12103 of 1991 along with the other matters in which the same question of law is in issue, has, therefore, been referred to this Bench.

2. The basic question of law which arises in these matters is whether the report of the Inquiry Officer/authority who/which is appointed by the disciplinary authority to hold an inquiry into the charges against the delinquent employee is required to be furnished to the employee to enable him to make proper representation to the disciplinary authority before such authority arrives at its own finding with regard to the guilt or otherwise of the employee and the punishment, if any, to be awarded to him. This question in turn gives rise to the following incidental questions:

(i) Whether the report should be furnished to the employee even when the statutory rules laying down the procedure for holding the disciplinary inquiry are silent on the subject or are against it?

(ii) Whether the report of the Inquiry Officer is required to be furnished to the delinquent employee even when the punish-ment imposed is other than the major punishment of dismissal, removal or reduction in rank?

(iii) Whether the obligation to furnish the report is only when the employee asks for the same or whether it exists even otherwise?

(iv) Whether the law laid down in Mohd. Ramzan Khans case (AIR 1991 SC 471) (supra) will apply to all establishments- Government and non-Government, public and private sector undertakings?

(v) What is the effect of the non-furnishing of the report on the order of punishment and what relief should be granted to the employee in such cases?

(vi) From what date the law requiring furnishing of the report should come into operation?

(vii) Since the decision in Ramzan Khans case (AIR 1991 SC 471) (supra) has made the law laid down there prospective in operation, i.e., applicable to the orders of punishment passed after 20th November, 1990 on which day the said decision was delivered, this question in turn also raises another question, viz., what was the law prevailing prior to 20th November, 1990?

3. In order to appreciate fully the significance of the basic question, it is necessary to refer briefly to the genesis of the law on the subject of furnishing the report of the Inquiry Officer/authority to the delinquent employee. In this country, the law on the subject has developed along two paths. viz., the statute and the principles of natural justice. We may first refer to the statutory development of the law. It is not necessary to refer to the law prior to the Public Servants (Inquiries) Act, 1850 which for the first time made uniform the law regulating inquiries into the behaviour of public servants who were not removable from their appointments without the sanction of the Government. It provided for a formal and public inquiry into the imputations of misbehviour against the public servant. Either the Government, if it thought fit conducted the prosecution or left it to the accuser to conduct it after requiring him to furnish reasonable security. The Act also provided that the inquiry may be committed either to the Court, Board or any other authority to which the accused public servant wa