2006 Supreme(SC) 330

2006(3) Supreme 459
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
S.B. Sinha and Dalveer Bhandari, JJ.
Narinder Mohan Arya—Appellant
versus
United India Insurance Co. Ltd. & Ors.—Respondents
Civil Appeal No. 7645 of 2004
Decided on 5-4-2006
Counsel for the Parties :
For the Appellant : Puneet Balli, Satinder S. Gulati, Dr. Kailash Chand, Advocates.
For the Respondents : Sudhir Kumar Gupta, P.K. Seth, Advocates.

IMPORTANT POINT
Despite limited jurisdiction, a civil court would be entitled to interfere in a case where report of the Enquiry Officer was based on no evidence.

Headnote:SERVICE LAW—General Insurance (Conduct, Discipline & Appeal) Rules, 1975—Order of dismissal from service—Appellant was Inspector in Respondent Insurance Co.—He issued four cover notes against goods to be transported through railway and by road and cover notes were despatched to divisional office from the place he was posted—In between Cotton bales despatched by insured firm caught fire—In disciplinary proceedings against appellant on allegation of antedating one cover note for Rs. 1 lakh, Enquiry Officer found him guilty of charge and he was removed from service—Departmental appeal was dismissed—Insured firm filed recovery suit against Insurance Co. impleading appellant as party—Suit was decreed and decree was upheld in appeal and became final—Writ filed by appellant was dismissed— Appeal— Findings of Enquiry Officer were not liable to be interfered with so long it were supported by some material on record—However self same issue fell for consideration before competent Civil Court and Court found that Insurance Co. failed to prove purported forgery—Appellate Authority while disposing of appeal was required to apply his mind with regard to factors enumerated in Rule but it did not apply its mind as Judgment of Civil Court being inter parties was relevant and fact that respondent had accepted said Judgment and acted upon it but it were not considered—Enquiry Officer could not base his findings on mere hypothesis —Impugned Judgment could not be sustained and matter would have been remitted to disciplinary authority—However in view that proceedings related back to year 1976, appellant had suffered at lot—Appellant to be reinstated in service with 50% of back wages.

       Held : Ordinarily, we would not have referred to the findings of the Enquiry Officer. He was entitled to draw his own inference and so long as the inference drawn by him is supported by some materials on record, it is well settled that a Court of judicial review would not interfere therewith. We have further noticed hereinbefore marked features of this case which make this case stand apart from other cases. The self-same issue fall for consideration before a competent Civil Court. In the Civil Court a hand writing expert was examined who was of the opinion that instead and place of altering the despatch register from 23rd to 22nd it was really the other way round, namely, it was originally 22nd but the same had been altered to 23rd. Before the Civil Court also both Mr. A.R. Sethi and Mr. D.D. Jain were examined. Some of the witnesses on behalf of the respondent were also examined. The Civil Court held :

       “If the original entry had been 23/10, then the figure `3 would have been written as written in the next serial number and it only shows that the original figure was 22. An effort has been made to convert it into 23. So, it is just possible that defendant No.1 after taking into possession the despatch register might have tried to convert it into 23 just to create confusion.”

       As regard the purported forgery committed by the appellant herein the Civil Court observed that respondent No. 1 miserably failed to prove the same.(Paras 14 to 16)

       It is, however, beyond any controversy that when a crucial finding like forgery was arrived at on an evidence which is non est in the eyes of law, the civil court would have jurisdiction to interfere in the matter.(Para 20)

       In our opinion the learned Single Judge and consequently the Division Bench of the High Court did not pose unto themselves the correct question. The matter can be viewed from two angles. Despite limited jurisdiction a civil court, it was entitled to interfere in a case where the report of the Enquiry Officer is based on no evidence. In a suit filed by a delinquent employee in a civil court as also a writ court, in the event the findings arrived at in the departmental proceedings are questioned before it should keep in mind the following: (1) the enquiry officer is not permitted to collect any material from outside sources during the conduct of the enquiry. [See State of Assam & Anr. V. Mahendra Kumar Das & Ors. [(1970) 1 SCC 709 : AIR 1970 SC 1255]. (2) In a domestic enquiry fairness in the procedure is a part of the principles of natural justice [See Khem Chand V. Union of India & Ors., AIR 1958 SC 300 and State of Uttar Pradesh v. Om Prakash Gupta, (1969) 3 SCC 775]. (3) Exercise of discretionary power involve two elements – (i) Objective and (ii) subjective and existence of the exercise of an objective element is a condition precedent for exercise of the subjective element. [See K.L. Tripathi V. State Bank of India & Ors. [(1984) 1 SCC 43 : AIR 1984 SC 273]. (4) It is not possible to lay down any rigid rules of the principles of natural justice which depends on the facts and circumstances of each case but the concept of fair play in action is the basis. [See Sawai Singh V. State of Rajasthan [AIR 1986 SC 995] (5) The enquiry officer is not permitted to travel beyond the charges and any punishment imposed on the basis of a finding which was not the subject matter of the charges is wholly illegal. [See Director (Inspection & quality Control) Export Inspection Council of India & Ors. Vs. Kalyan Kumar Mitra & Ors. [1987 (2) CLJ 344]. (6) Suspicion or presumption cannot take the place of proof even in a domestic enquiry. The writ court is entitled to interfere with the findings of the fact of any tribunal or authority in certain circumstances. [See Central Bank of India Ltd. V. Prakash Chand Jain, AIR 1969 SC 983, Kuldeep Singh v. Commissioner of Police and Others, (1999) 2 SCC 10].(Para 26)

       The appellate authority, therefore, while disposing of the appeal is required to apply his mind with regard to the factors enumerated in sub-rule 2 of Rule 37 of the Rules. The judgment of the civil court being inter parties was relevant. The conduct of the appellant as noticed by the civil court was also relevant. The fact that the respondent has accepted the said judgment and acted upon it would be a relevant fact. The authority considering the memorial could have justifiably came to a different conclusion having regard to the findings of the civil court. But, it did apply its mind. It could have for one reason or the other refused to take the subsequent event into consideration, but as he had a discretion in the matter, he was bound to consider the said question. He was required to show that he applied his mind to the relevant facts. He could not have without expressing his mind simply ignored the same. An appellate order if it is in agreement with that of the disciplinary authority may not be a speaking order but the authority passing the same must show that there had been proper application of mind on his part as regard the compliance of the requirements of law while exercising his jurisdiction under Rule 37 of the Rules.(Paras 32 and 33)

       The order of the appellate authority demonstrates total non-application of mind. The appellate authority, when the rules require application of mind on several factors and serious contentions have been raised, was bound to assign reasons so as enable the writ court to ascertain as to whether he had applied his mind to the relevant factors which the statute requires him to do. The expression ‘consider’ is of some significance. In the context of the rules, the appellate authority was required to see as to whether (i) the procedure laid down in the rules was complied with; (ii) the Enquiry Officer was justified in arriving at the finding that the delinquent officer was guilty of the misconduct alleged against him; and (iii) whether penalty imposed by the disciplinary authority was excessive.(Para 36)

       We may not be understood to have laid down a law that in all such circumstances the decision of the civil court or the criminal court would be binding on the disciplinary authorities as this Court in a large number of decisions points point that the same would depend upon other factors as well. See e.g. Krishnakali Tea Estate V. Akhil Bharatiya Chah Mazdoor Sangh & Anr. [2004 (8) SCC 200] and Manager, Reserve Bank of India Bangalore V. S. Mani & Ors. [2005(5) SCC 100]. Each case is, therefore, required to be considered on its own facts.(Para 41)

       The Judgment and order of the learned Single Judge suffers from several infirmities. He had observed that ‘the disadvantages of an employer as such acts are committed in secrecy and in conspiracy with the person affected by the accident’. No such finding has been arrived at even in the disciplinary proceedings nor any charge was made out as against the appellant in that behalf. He had no occasion to have his say thereupon. Indisputably, the writ court will bear in mind the distinction between some evidence or no evidence but the question which was required to be posed and necessary should have been as to whether some evidence adduced would lead to the conclusion as regard the guilt of the delinquent officer or not. The evidence adduced on behalf of the management must have nexus with the charges. The Enquiry Officer cannot base his findings on mere hypothesis. Mere ipso dixit on his part cannot be a substitute of evidence. The findings of the learned Single Judge to the effect that ‘it is established with the conscience (sic) of the Court reasonably formulated by an ‘Enquiry Officer then in the eventuality’ may not be fully correct inasmuch as the Court while exercising its power of judicial review should also apply its mind as to whether sufficient material had been brought on record to sustain the findings. The conscience of a court may not have much role to play. It is unfortunate that the learned Single Judge did not at all deliberate on the contentions raised by the appellant. Discussion on the materials available on record for the purpose of applying the legal principles was imperative. The Division Bench of the High Court also committed the same error.(Paras 44 and 45)

       For the foregoing reasons the impugned judgments cannot be sustained which are set aside accordingly. Although the consequence of setting aside of the said orders would have been to remit the matter back to the disciplinary authority for consideration of the matter afresh on merit, but having regard to the fact that the disciplinary proceedings were initiated against the appellant as far back in 1976, we refrain ourselves from doing so. He indisputably, have suffered a lot. However, the question which arises is what relief should be granted to the appellant. The appellant shall be reinstated in service. We, however, while directing reinstatement of the appellant, keeping in view of the fact that no work had been taken from him, direct that only 50% of the back wages shall be payable. The appeal is allowed with the abovementioned directions.(Para 49)