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SUPREME COURT OF INDIA
Sanjay Karol, Manoj Misra, JJ.
Jai Prakash Saini – Petitioner
Versus
Managing Director, U.P. Cooperative Federation Ltd. & Ors. – Respondents
Civil Appeal No. 4130 of 2026 (Arising out of SLP (C) No. 2900 of 2020)
Decided On : 01-04-2026
(A) Service Law – Dismissal – [Rule 84 of Employees Service Rules, 1980 of U.P. Cooperative Federation Limited] – There is no categorical admission of charge by appellant – Departmental charge-sheet is not a plaint that an evasive reply thereto may amount to admission – In a departmental enquiry, unless charge is admitted, burden to prove charge lies on employer/department – There was no admission of guilt qua charge – Department had not produced any witness in enquiry even though charges levelled upon appellant were denied by him – Enquiry stood vitiated – Once enquiry stood vitiated, consequential order of punishment/ recovery cannot be sustained – Impugned judgment and order of High Court set aside – Order of dismissal and consequential recovery also set aside – Federation given liberty to hold de novo enquiry – In case de novo enquiry is held, other service benefits including arrears of salary as well as benefits of continuity in service shall depend on outcome of enquiry. (Paras 14 and 18)
(B) Service Law – Departmental Enquiry – Unless charged employee accepts his guilt in clear terms, enquiry on charges drawn against him would have to be held – In enquiry, employer /department would have to take steps first to lead evidence against the workmen / delinquent charged and give an opportunity to him to cross examine those witnesses – Only thereafter, workmen / delinquent shall be asked whether he wants to lead any evidence and/ or submit an explanation about evidence led against him – Even in a case based solely on documentary evidence, unless relied upon documents are admitted by charged employee, witness would have to be examined to prove those documents and when so examined, witness would have to be tendered for cross-examination. (Para 17)
Facts of the case:
Present appeal impugns judgment and order of High Court dated 12.04.2019 whereby writ petition of appellant impugning order dated 30.11.2015 dismissing him from service and directing recovery of Rs.9,53,433 has been dismissed.
Findings of Court:
In case Federation chooses to hold an enquiry, it shall reinstate appellant and place him under suspension till completion of enquiry and during this period pay suspension allowance as may be payable in accordance with law.
Result : Appeal allowed.
Key Points: - The appeal challenges the High Court's dismissal of a writ petition against the employee's dismissal and recovery of Rs.9,53,433 for alleged paddy shortages and embezzlement (!) (!) . - The employee denied charges in replies to charge-sheet and supplementary charge-sheet, but no witnesses were examined by the department during the enquiry (!) (!) . - Rule 84 of 1980 Service Rules (similar to Regulation 85 of 1975 Regulations) requires serving charge-sheet, opportunity for explanation, defence witnesses, cross-examination, and personal hearing if desired (!) (!) (!) . - A departmental charge-sheet is not a plaint; evasive replies do not amount to admission, and unless guilt is clearly admitted, the employer bears the burden to prove charges (!) (!) . - In enquiry, employer must first lead evidence (including witnesses to prove documents if not admitted) and offer cross-examination; only then delinquent leads defence (!) (!) . - No oral enquiry held with witness examination despite denial of charges, violating principles of natural justice and service rules, vitiating the enquiry (!) (!) . - Supreme Court set aside High Court judgment, employee's dismissal, and recovery; permitted de novo enquiry within 6 months (!) . - If de novo enquiry held, employee reinstated under suspension with allowance; outcomes determine back wages and continuity benefits (!) . - Appeal allowed, no costs ordered (!) (!) .
JUDGMENT :
MANOJ MISRA, J.
1. Leave granted.
2. This appeal impugns the judgment and order of the High Court1[The High Court of Judicature at Allahabad, Lucknow Bench] dated 12.04.2019 whereby the writ petition2[Service Bench No.12353 of 2016] of the appellant impugning the order dated 30.11.2015 dismissing him from service and directing recovery of Rs.9,53,433 has been dismissed.
3. The appellant was employed in U.P. Cooperative Federation Limited3[The Federation] and, at the relevant time, posted as the in-charge of paddy procurement centre. He was served a charge-sheet alleging, inter alia, that as the in-charge of the centre he had purchased 1946.60 quintals of paddy from farmers for delivery to M/s Pashupati Nath Food Agro (for short, M/s Pashupati Nath) for de-husking, but delivery was short by 1093.60 quintals. During pendency of the enquiry on the said charge-sheet, a supplementary charge-sheet was served upon the appellant alleging that he had embezzled Rs. 2,00,850 by showing purchases of 5000 sacks of de-husked paddy for storage. The charges were found proved in the enquiry. As a result, the appellant was dismissed from service and a direction to recover the amount was issued.
4. The order of dismissal/ recovery was challenged before the High Court, inter alia, on the ground that the enquiry was de-hors the extant rules and violated the principles of natural justice. It was pleaded that no oral enquiry was held, no date, place and time of enquiry was fixed, and no witness was examined to prove the charges.
5. In the counter affidavit to the writ petition, the respondents accepted that the service conditions of the writ petitioner (i.e., the appellant herein) were governed by the provisions of U.P. Cooperative Societies Act, 19654[1965 Act] as well as U.P. Cooperative Societies Employees Service Regulations, 19755[1975 Regulations] and Employees Service Rules, 1980 of U.P. Cooperative Federation Limited6[1980 Service Rules]. It was highlighted that there existed material on record to indicate that the appellant had embezzled the amount sought to be recovered from him. Further, the appellant was provided ample opportunity of hearing in the enquiry. Therefore, there was no violation of the principles of natural justice.
6. By the impugned order, the High Court dismissed the writ petition of the appellant. Reasons for the dismissal of the writ petition are found in paragraphs 19 to 26 of the impugned judgment which are reproduced below:
20. The petitioner had submitted his reply dated 11.11.2013 to the charge-sheet and reply dated 03.01.2014 to the supplementary charge-sheet denying the charges made against him. The Enquiry Officer thereafter proceeded to hold the enquiry. The Enquiry Officer concluded the enquiry and submitted the enquiry report dated 23.01.2014. The perusal of enquiry report indicates that after submission of reply to the charge-sheet as well as supplementary charge-sheet the Enquiry Officer had fixed the date for holding oral enquiry and in this regard oral enquiry was held on 16.01.2014. The Enquiry Officer considering the charge-sheet, evidence relied in support of the charges, reply as well as evidence relied in defence and the relevant records and thereafter came to conclusion that the charges levelled against the petitioner have been found proved and he is guilty of the alleged misconduct.
21. It is to be noted that the petitioner did not make any request for producing any defence witness during enquiry nor any request to cross-examine any person whose letter or
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