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1996(3) Supreme 511
SUPREME COURT OF INDIA
B.P. Jeevan Reddy and K.S. Paripoonan, JJ.
State Bank of Patiala & Ors. -Appellants
versus
S.K. Sharma -Respondent
Civil Appeal No. 5129 of 1996
{Arising out of SLP (C) No. 17475 of 1995)
Decided on 27-3-1996
Held : (1) An order passed imposing a punishment on an employee consequent upon a disciplinary/departmental enquiry in violation of the rules/regulations/statutory provisions governing such enquiries should not be set aside automatically. The Court or the Tribunal should enquire whether (a) the provision violated is of a substantive nature or (b) whether it is procedural in character.
(2) A substantive provision has normally to be complied with as explained hereinbefore and the theory of substantial compliance or the test of prejudice would not be applicable in such a case.
(3) In the case of violation of a procedural provision, the position is this procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under no notice , no opportunity and no hearing categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced, appropriate orders have to be made to repair and remedy the prejudice including setting aside the enquiry and/or the order of punishment. If no prejudice is established to have resulted therefrom, it is obvious, no interference is called for.In this connection, it may be remembered that there may be certain procedural provisions which are of a fundamental character, whose violation is by itself proof of prejudice. The Court may not insist on proof of prejudice in such cases. As explained in the body of the judgment, take a case where there is a provision expressly providing that after the evidence of the employer/government is over, the employee shall be given an opportunity to lead defence in his evidence, and in a given case, the enquiry officer does not give that opportunity inspite of the delinquent officer/employee asking for it. The prejudice is self-evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. The principle stated under (4) hereinbelow is only another way of looking at the same aspect as is dealt with herein and not a different or distinct principle.
(4)(a) In the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it may, the order passed in violation of such a provision can be set aside only where such violation has occasioned prejudice to the delinquent employee.
(b) In the case of violation of a procedural provision, which is of a mandatory Character, it has to be ascertained whether the provision is conceived in the interest of the person proceeded against or in public interest. If it is found to be the former, then it-must be seen whether the delinquent officer has waived the said requirement, either expressly or by his conduct. If he is found to have waived it, then the order of punishment cannot be set aside on the ground of said violation. If, on the other hand, it is found that the delinquent officer/employee has not it or that the provision could not be waived by him, then the Court or Tribunal should make appropriate directions (include the setting aside of the order of punishment), keeping in mind the approach adopted by the Constitution Bench in B. Karunakar. The ultimate test is always the same, viz., test of prejudice or the test of fair hearing, as it may be called.
(5) Where the enquiry is not governed by any rules/regulations/statutory provisions and the only obligation is to observe the principles of natural justice - or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action - the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem] and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between "no opportunity" and no adequate opportunity, i.e., between "no notice"/" no hearing" and "no fair hearing". (a) In the case of former, the order passed would undoubtedly be invalid (one may call it "void" or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule (audi alteram partem.) (b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice; in other words, what the Court to Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/ employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. (It is made clear that this principle (No. 5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.)
(6) While applying the rule of audi alteram partem (the primary principle of natural justice) the Court/Tribunal/ Authority must always bear in mind the ultimate and over-riding objective underlying the said rule, viz., to ensure a fair hearing and to ensure that there is no failure of justice. It is this objective which should guide them in applying the rule to varying situations that arise before them.
(7) There may be situations where the interests of state or public interest may call for a curtailing of the rule of audi alteram partem. In such situations, the Court may have to balance public/State interest with the requirement of natural justice and arrive at an appropriate decision. (Para 18)
(ii) Service Law-State Bank of Patiala (Officers) Service Regulations, 1979-Regulation 68(x) (b)(iii)-Violation of-Respondent was working as Manager of appellant Bank-Charge of temporary misappropriation against respondent-Enquiry-Report submitted holding charges established-Order of removal from service-Challenged-Ground of non-furnishing of copies of statement of witnesses and documents-A list of documents/ witnesses was furnished to respondent before commencement of enquiry -However, copies of documents and statements recorded during preliminary enquiry not supplied-Half an hour before commencement of enquiry proceedings, respondent perused documents and statements of witnesses-Whether it can be held that there is a violation of Regulation 68 ?-(No)-Substantial compliance-No prejudice resulted to respondent-Enquiry no vitiated.
Held : Though the copies of the statements of two witnesses (Kaur Singh, Patwari and Balwant Singh) were not furnished, the respondent was permitted to peruse-them and take notes therefrom more than three days prior to their examination. Of the two witnesses, Balwant Singh was not examined and only Kaur Singh was examined. The respondent did not raise any objection during the enquiry that the non-furnishing of the copies of the statements is disabling him or has disabled him, as the case may be, from effectively cross-examining the witnesses or to defend himself. The Trial Court has not found that any prejudice has resulted from the said violation. The Appellate Court has no doubt said that it has prejudiced the respondent s case but except merely mentioning the same, it has not specified in what manner and in what sense was the respondent prejudiced in his defence. The High Court, of course, has not referred to the aspect of prejudice at all. (Para 19)
For the above reasons, we hold that no prejudice has resulted to the respondent on account of not furnishing him the copies of the statements of witnesses. We are satisfied that on account of the said violation, it cannot be said that the respondent did not have a fair hearing or that the disciplinary enquiry against him was not a fair enquiry. Para 20)
Key Points: - Point 1 (!) - Point 2 (!) - Point 3 (!) - Point 4 (!) - Point 5 (!) - Point 6 (!) - Point 7 (!) - Point 8 (!) - Point 9 (!) - Point 10 (!)
JUDGMENT
B.P. Jeevan Reddy J.-Leave granted. Heard counsel for the parties.
2. This appeal prefered against the judgment and decree of the Punjab and Haryana High Court, dismissing the second appeal filed by the appellant raises certain basic questions concerning natural justice in the context of disciplinary proceedings.
3. A disciplinary enquiry was held against the respondent in respect of two charges. They are :
"Charge No. 1
That he did not deposit the sum of Rs.10,000/- handed over to him by Sh.Balwant Singh in December 1985, in the crop loan account of Sh. Jarnail Singh S/o Sh. Lahra Singh. Later on the entire amount of Rs. 11,517=50 outstanding in the account was deposited by. someone on the 22nd March 1986 under the signature of Sh. Balwant Singh. He thus utilised the amount of Rs. 10,000/- for approximately 3 months for his own advantage.
Charge No. II
That he, in contravention of Regulation 50(4) of the State Bank of Patiala (Officers ) Service Regulations 1979, issued an undated letter in his own handwriting addressed to the Tehsildar,Bhatinda for revocation of Mutation on the land mortgaged to the Bank even when the crop loan account of Shri Jarnail Singh was not adjusted. He thus jeopardised the interests of the Bank."
4. At the relevant time, the respondent was working as the Manager of Kot Fatta branch of the appellant-Bank. The charge against the respondent, in short, is one of temporary misappropriation. One Jarnail Singh had taken a loan of Rupees ten thousand from the Bank. After Jarnail Singh s death, his son Balwant Singh came and handed over a sum of Rupees ten thousand to the respondent in December, 1985 in discharge of the said loan. In February, 1986,the respondent was transferred to another branch. In March, Balwant Singh went to the Bank and discovered that the amount paid by him to the respondent was not credited to his/his father s account. Soon thereafter, a sum of Rs.11,517.50p was deposited in the Bank in the name of Balwant Singh. The appellant-Bank s case is that having received the amount from Balwant Singh in December, 1985, the respondent did not credit the said amount into the Bank account until March, 1986, though he issued a letter addressed to Tehsildar, Bhatinda in December, 1985 itself to the effect that since the crop loan amount has been adjusted, the entry regarding mortgage of land of Jarnail Singh in favour of the Bank be revoked.
5. Before ordering a regular oral enquiry, the Bank had directed Sri K. J. Wadhan and Sri P. N. Garg to conduct a preliminary enquiry. The said officers examined witnesses including Balwant Singh and the Patwari of the village, Sri. Kaur Singh, and also gathered necessary documentary evidence. It is on the basis of the material so gathered and the preliminary report they submitted that the regular oral enquiry was ordered. In the enquiry, six witnesses (PWs. 1 to 6) were examined on behalf of the Bank and three witnesses (DWs. 1 to 3) on behalf of the respondent. The Bank examined Sri K.J. Wadhan and Sri P.N. Garg who had conducted the preliminary enquiry and recorded the statements of Balwant Singh among others. The Patwari, Kaur Singh, was examined as PW-5. The other three witnesses, PW.3, 4 and 6 are the employees of the Bank who spoke to the various aspects of the Bank s case. Balwant Singh who was the complainant did not appear as a witness at the regular enquiry inspite of several attempts made to procure his presence, though his statement had been recorded during the preliminary enquiry.
6. At the conclusion of the enquiry, a report was submitted by the enquiry officer holding both the charges established. The competent authority accepted the report and ordered the removal of the respondent from the service. An appeal and a review submitted by the respondent were dismissed. The respondent thereupon instituted a suit in the court of learned Sub-Judge, IInd Class, Bhatinda for a declaration that the order of removal is void and illegal and for a declar
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