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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.  8263  OF 2012

(Arising out of SLP (C) No. 16667/2011)

Chairman, LIC of India & Ors.                  …Appellants

Versus

A. Masilamani             …Respondent  

J U D G M E N T

Dr. B.S. CHAUHAN, J.

Leave granted.

This appeal has been preferred against the impugned judgment  

and order dated 10.1.2011, passed by the High Court of Judicature at  

Madras in Writ Appeal No. 7 of 2011, by way of which, the Division  

Bench affirmed the judgment and order dated 17.2.2010, passed by  

the learned Single Judge in Writ Petition No.11152 of 2002, by way  

of  which,  the  disciplinary  proceedings  initiated  by  the  appellants  

against the respondent have been quashed.  

2. Facts and circumstances giving rise to this appeal are as under:

A. The respondent was working with the appellant-Corporation as  

a Higher Grade Assistant at its Namakkal Branch. He had applied for,

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and obtained, a housing loan on 20.6.1991 from the India Housing  

Finance & Development Ltd., Salem, for the purpose of construction  

of his house to the extent of 1095 sq.ft., and had also applied to the  

appellant-Corporation  for  a  housing  loan,  under  the  Corporation’s  

Individual Employees Housing Scheme for the purpose of completing  

construction of the said house. An amount to the tune of Rs.1,30,000/-  

was outstanding, against the loan availed by the respondent from the  

India  Housing  Finance  &  Development  Ltd.,  as  also  a  sum   of  

Rs.48,000/- required for completion of the said construction.  The said  

loan  was  sanctioned  after  completing  all  requisite  formalities.  

However, it came to the  notice of the appellant-Corporation that there  

had  been  certain  irregularities  and  deviations  with  respect  to  the  

construction of the said house, and that the loan had been obtained  

upon non-disclosure of facts in entirety. Thus, a charge sheet dated  

6.1.1998 was issued to the respondent, for violating the provisions of  

Regulations 20, 21, 27 and 39(1) of the Life Insurance Corporation of  

India  (Staff)  Regulations,  1960  (hereinafter  referred  to  as,  the  

‘Regulations 1960’).  

B. The respondent submitted his reply to the said charges, denying  

all of them, vide reply dated 30.1.1998. The Disciplinary Authority,  

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however,  was  not  satisfied  with  the  explanation  furnished  by  the  

respondent and therefore, proceeded to conduct an enquiry, in relation  

to  which,  the  Enquiry  Officer  submitted  enquiry  report  dated  

27.1.1999. The Disciplinary Authority served upon the respondent, a  

copy of the said enquiry report, alongwith a show-cause notice dated  

26.4.1999  giving  him a  period  of  15  days  to  reply,  to  which  the  

respondent furnished his reply dated 17.5.1999.  

C. The Disciplinary Authority, after considering the reply and the  

enquiry report, imposed a penalty of reduction in the basic pay of the  

respondent,  to  the  minimum  amount  specified  in  the  time  scale  

applicable to him, in terms of Regulation 39(1)(d) of the Regulations,  

1960, as had been proposed by it in the aforementioned show cause  

notice, vide order dated 31.5.1999.  

D. Aggrieved,  the  respondent  preferred  an  appeal  under  

Regulation 40 of the Regulations, 1960, which was dismissed by the  

Appellate  Authority,  vide  order  dated  11.4.2000.  Thereafter,  the  

respondent  preferred  a  Memorial  to  the  Chairman,  Life  Insurance  

Corporation of  India,  in  Bombay,  which was dismissed  vide order  

dated 20.9.2001.  

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E. Aggrieved,  the  respondent  preferred  a  writ  petition  for  the  

purpose  of  quashing  of  enquiry  proceedings,  the  imposition  of  

penalty,  and  also  for  re-imbursement  of  the  amount  that  had  been  

deducted from his salary,  including all  attendant benefits.  The said  

writ  petition was allowed by the learned Single  Judge of  the High  

Court, vide order dated 17.2.2010, observing that the witnesses to the  

case, in the process of Departmental Enquiry, had been examined in  

violation  of  the  statutory  rules  applicable  herein,  as  well  as  in  

violation of the principles of natural justice.  The delinquent was not  

accorded adequate opportunity to cross-examine the witnesses.  The  

Appellate  Authority  also  failed  to  consider  whether  the  procedure  

followed  by  the  Enquiry  Officer,  as  well  as  that  followed  by  the  

Disciplinary Authority, satisfied the requirements of Regulation 46(2)

(a) of the Regulations, 1960. This is because, mere concurrence of the  

Appellate  Authority,  with  the  findings  recorded  by  the  Enquiry  

Officer,  without provision of adequate reasoning,  cannot be said to  

amount  to  adequate  application  of  judicial  mind  by  the  Appellate  

Authority, for the purpose of imposing the said punishment.

F. Aggrieved,  the  appellant-Corporation  filed  an  appeal,  which  

was  dismissed by the Division Bench.  

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Hence, this appeal.

3. Mr.  Kailash  Vasudev,  learned senior  counsel,  alongwith Ms.  

Indra Sawhney, Adv. appearing for the appellants, has submitted that  

the  High  Court  has  exceeded  its  jurisdiction  by  quashing  the  

disciplinary proceedings, as well as the punishment imposed, stating  

that  the  same  does  not  fall  within  the  scope  of  judicial  review.  

Moreover, the decision to not remand the case for reconsideration at  

such  a  belated  stage,  could  also  not  be  justified.  Therefore,  the  

judgment and order of the High Court, are liable to be set aside.  

4. Per  contra,  Mr.  V.  Ramasubramanian,  learned  counsel  

appearing for the respondent, has opposed the appeal, contending that  

the High Court had taken note of every fact, and if after doing so, the  

court  had  come  to  the  conclusion  that  the  said  disciplinary  

proceedings, had in fact, been conducted in violation of the principles  

of natural justice and applicable statutory rules, then no interference is  

warranted. The fact that the appellant was refused an opportunity, to  

complete the said enquiry  de novo, on the ground of delay, is fully  

justified in law. Thus, no interference is called for, and the said appeal  

is liable to be dismissed.  

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5. We have considered the rival submissions made by the learned  

counsel for the parties, and perused the record.  

It may be pertinent to refer to the relevant statutory provisions  

involved herein:

Regulation 39(1) of the Regulations 1960 reads as under:  

“39(1). Without prejudice to the provisions of other  

regulations, (any one or more of) “the following penalties  

for  good  and  sufficient  reasons,  and  as  hereinafter  

provided,  be  imposed  (by  the  disciplinary  authority  

specified in Schedule-I)” on the employee who commits  

a  breach  of  regulations  of  the  Corporation,  or  who  

display  negligence,  inefficiency  or  indolence  or  who  

knowingly  does  anything detrimental  to  the  interest  of  

the Corporation,  or  conflicting with the  instructions  or  

who commits a breach of discipline, or is guilty of any  

other act prejudicial to good conduct -   

(a) ………….

(b) ………….

(c) ………….

(d) reduction to a lower service, or post, or to a lower  

time scale, or to a lower stage in a time-scale.”

Regulation 46(2) of the Regulations 1960 read as under:

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“In case of an appeal against the order imposing  

any  of  the  penalties  specified  in  Regulation  39,  the  

appellate authority shall consider-

(a) Whether  the  procedure  prescribed  in  these  

Regulations  has  been complied with,  and if  not,  

whether  such  non-compliance  has  resulted  in  

failure of justice;

(b) Whether the findings are justified; and

(c) Whether  the  penalty  imposed  is  excessive,  

adequate or inadequate, and pass orders ……  

                     xxxx                                xxxx                                xxxx ”

6. The charges framed against the respondent are as under:  

(i) That in your letter dated 13.5.1994 requesting for  

release  of  Rs.26,000/-  as  second  instalment  of  

housing  loan  under  M.L.  No.  7803003  you  had  

willfully  omitted  to  bring  to  the  notice  of  the  

Corporation that you had constructed the rear side  

of  the house (comprising of  kitchen,  store,  toilet  

and reading room) measuring 385 sq.ft.

(ii) That your above action tantamounts to breach of  

agreement.  

(iii) That you submitted a letter dated 20.6.1994 giving  

false information that you had completed the house  

in  all  aspects  whereas  by  your  letters  dated  

10.11.94 and 29.11.94 you had informed us that  

the rear side of the house was not constructed. It  

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was found that even as on 2.9.1997 the work to  

complete the construction was not commenced.  

(iv) That  you  had  drawn  housing  loan  in  excess  by  

giving false statement as mentioned above.  

(v) That you are putting the premises to commercial  

use  without  the  knowledge  and  approval  of  the  

Corporation.

(vi) That  you  are  carrying  on  manufacturing  of  Jute  

bags  and Cotton floor  mats  business  in  the  said  

premises  without  the  knowledge  of  the  

Corporation.  

7. In the  present  case,  the  High  Court  after  reappreciating  the  

entire evidence available on record, came to the conclusion that in the  

course  of  enquiry  proceedings,  certain  witnesses  had  not  been  

examined  in  the  presence  of  the  delinquent  respondent,  and  that  

hence, no proper opportunity was given to him to cross-examine such  

witnesses.    Moreover,  the  documents  relied  upon by the  Enquiry  

Officer, were not properly  proved by any witness and ultimately, it  

was held that the findings of the Enquiry Officer stood vitiated, for  

non-compliance  with  mandatory  requirements  of  the  regulations  

applicable herein, as well as for violating of the principles of natural  

justice.  The court further held that the Appellate Authority had not  

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applied its mind to the case, and had failed to consider the case as  

required under Regulation 46(2), of the Regulations, 1960.  Thus, in  

light  of  the  aforementioned  observations,  the  court  set  aside  the  

punishment imposed upon the respondent, and also refused to give the  

appellant any opportunity, to continue the enquiry from the point that  

it stood vitiated, consequently therefore, denying any opportunity to  

prove  the  documents  relied  upon,  as  also  denying  the  respondent  

adequate opportunity to cross-examine the concerned witnesses etc.,  

only on the ground that a long time had now passed.   

8. In  view  of  the  issues  raised  by  the  learned  counsel  for  the  

parties, the following questions arise for our consideration:

i) When  a  court/tribunal  sets  aside  the  order  of  

punishment  imposed  in  a  disciplinary  proceeding  on  

technical  grounds,  i.e.,  non-observance  of  statutory  

provisions, or for violation of the principles of natural  

justice, then whether the superior court, must provide  

opportunity to the disciplinary authority, to take up and  

complete  the  proceedings,  from  the  point  that  they  

stood vitiated and;

ii) If  the  answer  to  question  no.1  is,  that  such  fresh  

opportunity  should  be  given,  then  whether  the  same  

may be denied on the ground of delay in initiation, or in  

conclusion of the said disciplinary proceedings.   

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9. It is a settled legal proposition, that once the Court sets aside an  

order of punishment, on the ground that the enquiry was not properly  

conducted, the Court cannot reinstate the employee. It must remit the  

concerned  case  to  the  disciplinary  authority,  for  it  to  conduct  the  

enquiry from the point that it stood vitiated, and conclude the same.  

(Vide:  Managing  Director,  ECIL,  Hyderabad  etc.etc.  v.  B.  

Karunakar  etc.etc.  AIR  1994  SC  1074; Hiran  Mayee  

Bhattacharyya v. Secretary, S.M. School for Girls & Ors., (2002)  

10 SCC 293; U.P. State Spinning C. Ltd. v. R.S. Pandey & Anr.,  

(2005)  8  SCC  264; and  Union  of  India  v.  Y.S.  Sandhu,  Ex-

Inspector AIR 2009 SC 161).

10. The  second  question  involved  herein,  is  also  no  longer  res  

integra.   

Whether or not the disciplinary authority should be given an  

opportunity, to complete the enquiry afresh from the point that it stood  

vitiated, depends upon the gravity of delinquency involved.  Thus, the  

court must examine, the magnitude of misconduct alleged against the  

delinquent employee. It is in view of this, that courts/tribunals, are not  

competent  to  quash  the  charge-sheet  and  related  disciplinary  

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proceedings, before the same are concluded, on the aforementioned  

grounds.  

The  court/tribunal  should  not  generally  set  aside  the  

departmental enquiry, and quash the charges on the ground of delay in  

initiation of disciplinary proceedings, as such a power is  de hors the  

limitation  of  judicial  review.   In  the  event  that,  the  court/tribunal  

exercises such power, it exceeds its power of judicial review at the  

very threshold. Therefore, a charge-sheet or show cause notice, issued  

in  the  course  of  disciplinary  proceedings,  cannot  ordinarily  be  

quashed by court.   The same principle is  applicable,  in relation to  

there being a delay in conclusion of disciplinary proceedings.   The  

facts and circumstances of the case in question, have to be examined,  

taking into consideration the gravity/magnitude of charges involved  

therein.  The essence of the matter is that the court must take into  

consideration, all relevant facts and to balance and weigh the same, so  

as  to  determine,  if  it  is  infact  in  the  interest  of  clean  and  honest  

administration,  that  the  judicial  proceedings  are  allowed  to  be  

terminated, only on the ground of delay in their conclusion.  (Vide:  

State of U.P. v. Brahm Datt Sharma & Anr., AIR 1987 SC 943;  

State  of  Madhya Pradesh v.  Bani  Singh & Anr.,  AIR 1990 SC  

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1308; Union of India & Anr. v. Ashok Kacker, 1995 Supp (1) SCC  

180; Secretary to Government, Prohibition & Excise Department  

v. L. Srinivasan, (1996) 3 SCC 157; State of Andhra Pradesh v. N.  

Radhakishan, AIR 1998 SC 1833; M.V. Bijlani v. Union of India &  

Ors.,  AIR  2006  SC  3475;  Union  of  India  & Anr.  v.  Kunisetty  

Satyanarayana, AIR 2007 SC 906; and The Secretary, Ministry of  

Defence & Ors. v. Prabash Chandra Mirdha, AIR 2012 SC 2250).

11. The  word  “consider”,  is  of  great  significance.  Its  dictionary  

meaning of the same is, “to think over”, “to regard as”,  or “deem to  

be”.  

Hence, there is a clear connotation to the effect that, there must  

be active application of mind.  In other words, the term “consider”  

postulates  consideration  of  all  relevant  aspects  of  a  matter.   Thus,  

formation of opinion by the statutory authority, should reflect intense  

application of mind with reference to the material available on record.  

The order of  the authority  itself,  should reveal  such application of  

mind.   The  appellate  authority  cannot  simply  adopt  the  language  

employed  by  the  disciplinary  authority,  and  proceed  to  affirm  its  

order. (Vide: Director, Marketing, Indian Oil Corpn. Ltd. & Anr.  

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v. Santosh Kumar, (2006) 11 SCC 147; and Bhikhubhai Vithlabhai  

Patel & Ors. v. State of Gujarat & Anr.,  AIR 2008 SC 1771).

12. The instant case requires to be considered in the light of the  

aforesaid settled legal propositions.

After hearing the counsel for the parties, we are of the view that  

the impugned judgment and order dated 10.1.2011, in Writ Appeal  

No. 7 of 2011, as well as the order of the learned Single Judge dated  

17.2.2010,  passed  in  Writ  Petition  No.  11152  of  2002,  cannot  be  

sustained in the eyes of law and are therefore hereby, set aside.  The  

present appeal is allowed.  The matter is remitted to the disciplinary  

authority to enable it to take a fresh decision, taking into consideration  

the gravity of the charges involved, as with respect to whether it may  

still be required to hold a de novo enquiry, from the stage that it stood  

vitiated, i.e., after issuance of charge-sheet.  

The disciplinary authority while  taking such a  decision  must  

bear in mind that charges are merely technical as the loan was taken  

for construction of a residential premises and the said loan was used  

effectually to construct the premises as per sanctioned plan and only  

then the premises was put to commercial use.  

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In  the  event  the  authority  takes  a  view,  that  the  facts  and  

circumstances  of  the  case  require  a  fresh  enquiry,  it  may  proceed  

accordingly and conclude the said enquiry, most expeditiously.

………………………………..J.  (Dr. B.S. CHAUHAN)

    ………………………………..J.  (JAGDISH SINGH KHEHAR)

New Delhi,  November 23, 2012

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