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REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(s). 13448 OF 2015    (Arising out of S.L.P. (C) No. 9833 of 2015)

  PAWAN KUMAR AGARWALA                ... APPELLANT(S)

        VERSUS

  GENERAL MANAGER-II & APPOINTING AUTH.     STATE BANK OF INDIA & ORS.          ...RESPONDENT(S)

O R D E R

Leave granted.

This appeal by special leave is filed by the  

appellant as he is aggrieved of the judgment and order  

dated 26.11.2014 passed by the Division Bench of the  

Gauhati High Court at Guwahati in Writ Appeal No. 192  

of 2014 holding that there was no negligence on the  

part  of  the  respondent  (appellant  herein)  in  

disbursing the loan and he had taken appropriate steps,  

however, the other Manager of that Branch, who has been  

found guilty and levied with lesser penalty, therefore,  

the  minor  penalty  would  visit  the  respondent  

(appellant herein). Accordingly, the Division Bench of  

the High Court modified the penalty of dismissal to one  

of reduction of one increment for one year and further  

directed the appellant to be reinstated in service with  

no back wages for the reason that he had already been  

taking pension for the period and further clarified

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that  the  period  of  dismissal  and  the  reinstatement  

shall be reckoned as a continuity of service for the  

purpose of pension and, accordingly, partly allowed the  

Writ Appeal preferred by the Bank.

Aggrieved  of  the  aforesaid  portion  of  the  

finding  and  the  order  of  penalty  imposed  by  the  

Division Bench of the High Court by setting aside the  

order of reinstatement with 25% back wages awarded by  

the learned Single Judge of the High Court in the Writ  

Petition  filed  by  the  appellant  questioning  the  

correctness of the impugned  judgment and order, the  

present  appeal  is  filed  by  the  appellant,  urging  

various legal contentions.

Brief facts necessary to appreciate the rival  

legal contentions urged on behalf of the parties to the  

lis  are  that  the  disciplinary  proceedings  were  

initiated against the appellant by issuing chargesheet  

dated 28.10.2004 alleging that he had influenced the  

Branch Manager of Hallydayganj Branch, against whom the  

disciplinary  proceedings  were  initiated  and  upon  

finding him guilty, minor penalty of lesser punishment  

was imposed on him for being negligent in giving the  

loans. In the said proceedings, the appellant herein  

was  Defence  Representative  of  the  said  Manager  Mr.  

Pradeep Kumar Das. The brief allegation contained in  

the chargesheet was that he had influenced the Branch

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Manager of Hallydayganj Branch to sanction cash credit  

facility sans disclosing earlier loan of Abdul Kuddus  

Mondal and, therefore, he had failed to protect the  

interests  of  the  Bank. The  second  charge  was  about  

illegal grant of cash facility. The said charges were  

divided into six allegations, which were extracted in  

the chargesheet. The said charges were denied by the  

appellant herein, therefore, the enquiry officer was  

appointed by the disciplinary authority to enquire into  

the allegations made against him.

The enquiry officer found that allegation Nos.  

1, 2, 4 and 6 are proved, however, allegation No. 3 is  

partly proved and allegation No. 5 is not proved. He  

found  that  the  loan  application  of  the  loanee  was  

written by the appellant herein despite the fact that  

it  was  within  his  knowledge  that  the  borrower  had  

earlier taken loan from his Branch and even then the  

appellant has helped the borrower to borrow more money  

from  the  neighbouring  branch  without  disclosing  the  

earlier transaction with the appellant's Branch.

The disciplinary authority has taken the view  

that charge Nos. 3 and 5 also held to be proved from  

the material on record without giving an opportunity to  

the  appellant  herein  to  show  cause  as  to  why  the  

finding on those charges should not be reversed. The  

disciplinary  authority  forwarded  to  the  appellant

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herein the enquiry report after taking the view that  

charge Nos. 3 and 5 were proved for which the appellant  

submitted a reply on 22.11.2005.

In  the  meantime,  in  the  disciplinary  

proceedings  against  Mr.  Pradeep  Kumar  Das,  Branch  

Manager of Hallydayganj Branch, where the borrower got  

filled up the application through the appellant and  

taken the loan without disclosing the borrowing/loan  

from  the  appellant's  Branch  of  the  Bank,  the  

disciplinary  authority, after  concluding  the  enquiry  

against Mr. Pradeep Kumar Das, awarded penalty of one  

stage lower in the time-scale for a period of one year  

without  cumulative  effect.  The  penalty  was  imposed  

holding that the same will not adversely affect the  

pension  of  the  said  delinquent  Manager  Mr.  Pradeep  

Kumar Das.

On 05.01.2006, the disciplinary authority, not  

accepting the reply submitted by the appellant herein,  

imposed the penalty of reduction of basic pay for 3  

years. The Chief Vigilance Officer (“C.V.O.”) was of  

the view that there was extreme mala fides on the part  

of the appellant as he had acted against the interests  

of the Bank, therefore, the stiff major penalty was  

directed  to  be  imposed  upon  him  vide  Order  dated  

01.02.2006.  Accordingly,  the  Appointing  Authority  

passed the Order dated 24.04.2006 for removal of the

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appellant  from  service.  Against  the  said  order  of  

removal,  the  appellant  filed  an  appeal  before  the  

Appellate Authority, which  came  to be  rejected  vide  

Order dated 18.11.2006 sans examining the merits of the  

case and considering the legal contentions urged in the  

memorandum  of  appeal.  On  07.02.2007, the  respondent-

Bank sanctioned pension and the appellant is drawing  

pension since then.

Aggrieved of the order of the dismissal which  

is affirmed by the Appellate Authority, the appellant  

herein filed a writ petition before the Gauhati High  

Court in the month of March, 2009. The Bank filed its  

affidavit by way of reply in the said writ petition.  

After  hearing  both  the  parties,  the  learned  Single  

Judge  of  the  High  Court  by  Order  dated  04.03.2014  

allowed  the  writ  petition  and  granted  reinstatement  

with all service benefits and payment of back wages to  

the  extent  of  25%.  The  learned  Single  Judge  while  

granting  such  relief  adverted  to  the  rival  legal  

contentions has recorded a finding of fact holding that  

there was unfairness in the enquiry as the list of  

witnesses and the copies of documents were not given to  

the appellant and the finding of the enquiry officer  

was held to be perverse.  

The correctness of the said judgment and order  

of  the  learned  Single  Judge  of  the  High  Court  was

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challenged in the Writ Appeal filed by the respondents  

herein  before  the  Gauhati  High  Court.  The  Division  

Bench of the High Court after considering the rival  

legal contentions substituted the order of the learned  

Single Judge by imposing penalty of reduction of one  

increment for one year and reinstatement without back  

wages since he was already drawing pension. The said  

order passed by the Division Bench of the High Court  

modifying  the  order  of  the  learned  Single  Judge  is  

impugned in this civil appeal by the appellant, urging  

various legal contentions.

It is contended by Mr. Vijay Hansaria, learned  

senior counsel for the appellant, that the finding is  

recorded  by  the  learned  Single  Judge  in  the  order  

passed in writ petition after considering the rival  

legal contentions that the statutory requirements to  

conduct fair and reasonable enquiry, list of witnesses  

and  copies  of  documents  were  not  furnished  to  the  

appellant-officer,  thereby  conducting  the  enquiry  

proceedings  are  vitiated  and  the  findings  recorded  

against the appellant and the charges are perverse.  

The said finding is placed on undisputed fact of non  

furnishing  of  list  of  witnesses  and  copies  of  

documents  which  are  the  statutory  requirements  for  

conduct  of  disciplinary  proceedings.  The  Division

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Bench of the High Court has erroneously set aside the  

same without there being any evidence on record that  

the appellant is negligent and other acts of misconduct  

in discharging his duties and reversed the finding of  

the learned Single Judge in holding that the conduct  

of the enquiry is not fair and reasonable and there is  

non-compliance of the principles of natural justice in  

conducting enquiry thereby  grave prejudice has been  

caused  to  the  appellant  herein.  The  learned  Single  

Judge has also referred to the judgment of this Court  

in the case of State Bank of India and Ors.  vs.  K.P.  

Narayanan Kutty, (2003) 2 SCC 449, while recording such  

a finding holding that the finding of fact recorded by  

the  enquiry  officer  that  the  charges  are  proved  is  

perverse  in  law.  Learned  senior  counsel  further  

contended that the disciplinary authority has to follow  

the  procedural  safeguards  provided  under  the  

disciplinary Regulations. Not considering the reply to  

the chargesheet given to the appellant herein by the  

disciplinary authority, the action that would be taken  

upon  such  disciplinary  proceedings  by  recording  the  

finding by the enquiry officer holding that the charges  

are proved, on the basis of evidence of the witnesses  

whose  names  were  not  notified  to  the  appellant  and  

copies of documents were not furnished to him which  

were relied upon by the enquiry officer, thereby the

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case of the appellant was prejudiced, therefore, the  

same  will  have  serious  civil  consequences  upon  the  

Service Conditions of the appellant, if the minor or  

major penalties are imposed, including the order of  

removal that is passed by the disciplinary authority.  

Therefore, the learned senior counsel submitted that  

the  Division  Bench  without  application  of  mind  and  

assigning valid and cogent reasons, not noticing the  

undisputed facts that list of witnesses and copies of  

documents were not provided to the appellant in the  

enquiry proceeding, it has erroneously set aside the  

order  passed  by  the  learned  Single  Judge,  who  has  

assigned  valid  and  cogent  reasons  in  rendering  the  

finding of fact holding that the enquiry was not fair  

and the same is not in accordance with the statutory  

requirements  of  the  Conduct  and  Disciplinary  

Regulations and in compliance with the principles of  

natural justice. The said conclusion arrived at by the  

learned Single Judge is supported by the judgments of  

this Court rendered in a catena of cases, particularly  

in the case of S. A. Venkataraman vs. U.O.I. and Anr.,  

AIR 1954 SC 375, this Court observed as follows:

“14. As the law stands at present, the only  purpose, for which an  enquiry  under Act 37  of 1850 could be made,  is  to help  the  Government   to   come  to   a  definite  conclusion regarding  the misbehavior of a  public  servant  and  thus  enable  it   to  determine  provisionally  the   punishment

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which  should  be  imposed  upon  him  prior  to  giving  him  a   reasonable  opportunity   of  showing cause, as is required under  article  311(2) of  the  Constitution.  An  enquiry  under this  Act  is not at all compulsory and  it is quite open to the Government to adopt  any other method if it so chooses.  It is a  matter  of  convenience  merely  and  nothing  else. It is against this background  that  we  will  have  to   examine   the   material  provisions   of  the  Public  Servants  (Inquiries), Act  of 1850 and  see whether  from the nature and result of the  enquiry  which  the  Act  contemplates  it  is  at  all  possible to say that the  proceedings taken  or  concluded  under  the  Act  amount   to  prosecution  and  punishment  for  a  criminal  offence.”

 In Union of India  vs. T.R. Varma, AIR 1957 SC  

882,  this  Court  observed  that  if  a  person  whose  services have been wrongfully terminated is entitled  to institute an action to vindicate his rights.

“6.  At the very outset, we have to observe  that a writ petition under  Art. 226 is not  the  appropriate  proceeding  for  adjudication  of disputes like the present. Under the law,  a person whose services have been wrongfully  terminated,  is  entitled  to  institute  an  action to vindicate his rights, and in such  an  action,  the  Court  will  be  competent  to  award all the relief's to which he may be  entitled, including some which would not be  admissible in a writ petition.  

It  is  well-settled  that  when  an  alternative and equally efficacious remedy is  open to a litigant, he should be required to  pursue that remedy and not invoke the special  jurisdiction  of  the  High  Court  to  issue  a  prerogative  writ.  It  is  true  that  the  existence of another remedy does not affect  the  jurisdiction  of  the  Court  to  issue  a  writ;  but,  as  observed  by  this  Court  in  Rashid  Ahmed  vs.  Municipal  Board,  Kairana,  [1950] S.C.R. 566 (AIR 1950 SC 163(A) ”the  existence of an adequate legal remedy is a

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bench  have  not  given  any  reason,  whatsoever,  in  

depriving the back wages and imposing the penalty of  

withholding increment without there being any evidence,  

therefore, the same is contrary to the law laid down by  

this Court in a catena of cases.

Per contra, Mr. Gaurav Agrawal, learned counsel  

appearing for the respondents, sought to justify the  

order passed by the Division Bench of the High Court  

and  submitted  that  the  correctness  of  the  impugned  

judgment and order of the Division Bench is challenged  

on various grounds by filing a Special Leave Petition  

and  further,  alternatively,  contended  that,  even  

assuming  the  Special  Leave  Petition  cannot  be  

entertained  by  this  Court,  even  then  the  Division  

Bench  of  the  High  Court  in  exercise  of  its  

extraordinary  and  supervisory  jurisdiction  has  done  

justice to the parties in imposing minor penalty and  

not granting back wages while awarding reinstatement  

keeping in view that the appellant has been paid the  

pension  since  07.02.2007,  therefore,  he  prayed  for  

dismissal of the Civil Appeal filed by the appellant  

seeking for the reliefs, as stated above.

We have given our thoughtful considerations to  

the rival contentions urged by the learned counsel for  

the parties to the lis and have carefully perused the  

materials  on  the  record  and  examined  the  impugned

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Orders passed by both the learned Single Judge and the  

Division Bench of the High Court.  

The  chargesheet  was  issued  on  28.10.2004  

against the appellant making 6 allegations against him  

and it is undisputed fact that list of witnesses and  

the  copies  of  documents  were  not  furnished  to  the  

appellant.  Further,  the  disciplinary  authority  has  

reversed the findings on charge Nos. 3 and 5 without  

giving an opportunity to the appellant to show cause in  

the matter and, thereafter, the order of removal was  

passed by the Appointing Authority on the advice of the  

C.V.O. vide his opinion dated 01.02.2006 and further it  

is  brought  on  record  that  similarly  placed  person,  

namely,  Mr.  Pradeep  Kumar  Das,  the  Manager  of  

Hallydayganj Branch, who has loaned the loan to one  

Mr. Tapan Kumar Sangma, in his case they have imposed  

lesser punishment of withholding one increment thereby  

making discrimination in differently treating with the  

appellant herein, which is violation of Article 14 of  

the Constitution of India. Further, it is brought to  

our  notice  by  Mr.  Vijay  Hansaria,  learned  senior  

counsel for the appellant that the loan amount lent by  

Mr.  Pradeep  Kumas  Das,  the  Manager  of  Hallydayganj  

Branch, the same has been cleared by Mr. Tapan Kumar  

Sangma  with  interest  by  paying  Rs.  1,61,000/-.  The  

overdraft is beyond the permissible limit is held to be

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not proved. The finding of the learned Single Judge  

while examining the entire enquiry report, on which  

strong reliance is placed by the respondent-Bank, the  

learned Single Judge in exercise of his extraordinary  

and Original Jurisdiction examined the case on merits  

and referred to Rule 68(1)(IX)(a) of the State Bank of  

India  Service  Rules,  wherein  it  mandates  the  

disciplinary authority to furnish the delinquent the  

list  of  documents  through  which  the  charges  are  

proposed to be proved. It is the case of the appellant  

that such a list of witnesses and copies of documents  

were  not  furnished  either  by  the  disciplinary  

authority  or  the  enquiry  officer  which  are  vital  

aspects of the case, based on which the finding is  

recorded  on  the  charges  by  the  enquiry  officer,  

referred to supra, holding that the same are proved  

against the appellant. Further, with regard to lending  

of  loan  in  favour  of  Mr.  Tapan  Kumar  Sangma,  the  

learned Single Judge examined and recorded the finding  

of  fact  stating  that  a  sum  of  Rs.  2,13,595  was  

recovered from the said loanee and  it is stated that  

the Power of Attorney furnished by Abdul Kuddus Mondal  

was never utilized to recover the balance loan due of  

Rs. 15,450/-, which will not be the negligence on the  

part of the appellant, however, it will be negligence  

of those responsible for loan recovery, a small unpaid

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amount had to be written off by the Bank. Further, with  

reference to the opinion/report  Exhibit D-4 furnished  

in  support  of  the  disbursement  of  the  loan  clearly  

disclosed the previous loans of the borrowers from the  

Phulbari Branch but surprisingly neither the enquiry  

officer nor the disciplinary authority or the C.V.O.  

had  taken  note  of  the  said  opinion/report,  which  

establishes the bona fide of the appellant's action in  

rendering assistance to his neighbouring Branch Manager  

to meet the target for disbursal of contract finance by  

the Hallydayganj Branch Manager. Upon the contention  

urged on behalf of the appellant that taking multiple  

loans  is  not  prohibited  in  the  S.B.I.  and  contract  

finance were  sanctioned for the 2 borrowers by the  

Hallydayganj Branch Manager with full knowledge of the  

previous loans taken by them from the Phulbari Branch,  

the learned Single Judge has referred to non-furnishing  

of the control return file of the Branch as well as the  

Bank's Ledger sheets of the  J.N. High School account  

and Mr. Tapan Kumar Sangma accounts to the appellant at  

the  time  of  conducting  enquiry  on  the  charges  to  

defend the case by the appellant effectively, the same  

was projected as cause for  serious prejudice to the  

case  of  the  appellant  as  the  said  documents  

established  that  the  borrowers  had  availed  similar  

overdraft facility earlier and, in any case, this was

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within the permissible discretionary capacity of the  

Manager  of  the  Phulbari  Branch.  The  learned  Single  

Judge  on  the  basis  of  reliance  placed  by  the  

appellants's counsel upon the decision of this Court  

in the case of State Bank of India & Ors. vs. K.P.  

Narayanan Kutty, (supra), wherein it has been held the  

the non compliance of the statutory requirements as  

per  the  aforesaid  rules,  the  action  of  the  

disciplinary  authority  is  inconsistent  with  the  

principles  of  natural  justice  and  the  settled  

principles of service jurisprudence. In the said case,  

while concurring with the decision of this Court in  

the case of  Punjab National Bank vs. Kunj, (1998) 7  SCC 84, para 19 was quoted, which reads as follows:

“19.   The result of the aforesaid discussion  would  be  that  the  principles  of  natural  justice have to be read into Regulation 7(2).  As  a  result  thereof,  whenever  the  disciplinary  authority  disagrees  with  the  enquiry authority on any article of charge,  then before it records its own findings on  such  charge,  it  must  record  its  tentative  reasons for such disagreement and give to the  delinquent  officer  an  opportunity  to  represent before it records its findings. The  report of the enquiry officer containing its  findings  will  have  to  be  conveyed  and  the  delinquent officer will have an opportunity  to  persuade  the  disciplinary  authority  to  accept  the  favourable  conclusion  of  the  enquiry  officer.  The  principles  of  natural  justice, as we have already observed, require  the  authority  which  has  to  take  a  final  decision and can impose a penalty, to give an  opportunity  to  the  officer  charged  of  misconduct  to  file  a  representation  before  the  disciplinary  authority  records  its  findings on the charges framed against the

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officer."

While dealing with the similar fact situation in  William Vincent Vitarelli v. Fred A. Seaton, Secretary  of  the  Interior,  et  al   (359  U.S.  535  (1959),  the  learned Judge observed as follows:  

“An executive agency must be rigorously held  to the standards by which it professes its  action  to  be  judged.  See  Securities  &  Exchange  Commission  v.  Chenery  Corp.,  318  U.S. 80, 87—88, 63 S.Ct. 454, 459, 87 L.Ed.  626.  Accordingly,  if  dismissal  from  employment is based on a defined procedure,  even though generous beyond the requirements  that bind such agency, that procedure must be  scrupulously observed. See Service v. Dulles,  354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2nd 1403.  This  judicially  evolved  rule  of  administrative law is now firmly established  and, if I may add, rightly so. He that takes  the procedural sword shall perish with that  sword.”

The  said  judgment  in  Vitarelli's  case  was  referred  to  by  this  Court  in  R.D.  Shetty  vs.  International Airport Authority, 1979 (3) SCC 489, the  relevant extract of which is quoted hereinunder:

“10……It  is  a  well-settled  rule  of  administrative  law  that  an  executive  authority  must  be  rigorously  held  to  the  standards by which it professes its actions  to be judged and it must scrupulously observe  those standards on pain of invalidation of an  act  in  violation  of  them.  This  rule  was  enunciated  by  Mr.  Justice  Frankfurter  in  Viteralli v. Saton where the learned Judge  said:

‘An executive agency must be rigorously held

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to the standards by which it professes its  action  to  be  judged.  Accordingly,  if  dismissal  from  employment  is  based  on  a  defined  procedure,  even  though  generous  beyond  the  requirements  that  bind  such  agency, that procedure must be scrupulously  observed.  This  judicially  evolved  rule  of  administrative law is now firmly established  and, if I may add, rightly so. He that takes  the procedural sword shall perish with the  sword.’

This  Court  accepted  the  rule  as  valid  and  applicable  in  India  in  A.S.  Ahluwalia  v.  Punjab and in subsequent decision given in  Sukhdev v. Bhagatram, Mathew, J., quoted the  above-referred  observations  of  Mr  Justice  Frankfurter with approval. It may be noted  that this rule, though supportable also as an  emanation  from  Article  14,  does  not  rest  merely on that article. It has an independent  existence apart from Article 14. It is a rule  of  administrative  law  which  has  been  judicially  evolved  as  a  check  against  exercise of arbitrary power by the executive  authority. If we turn to the judgment of Mr  Justice Frankfurter and examine it, we find  that he has not sought to draw support for  the  rule  from  the  equality  clause  of  the  United  States  Constitution,  but  evolved  it  purely as a rule of administrative law. Even  in  England,  the  recent  trend  in  administrative law is in that direction as is  evident from what is stated at pp. 540-41 in  Prof  Wade’s  “Administrative  Law”,  4th  Edn.  There is no reason why we should hesitate to  adopt this rule as a part of our continually  expanding  administrative  law.  Today  with  tremendous  expansion  of  welfare  and  social  service  functions,  increasing  control  of  material  and  economic  resources  and  large  scale assumption of industrial and commercial  activities  by  the  State,  the  power  of  the  executive Government to affect the lives of  the  people  is  steadily  growing.  The  attainment of socio-economic justice being a  conscious  end  of  State  policy,  there  is  a  vast and inevitable increase in the frequency  with  which  ordinary  citizens  come  into  relationship of direct encounter with State  power-holders. This renders it necessary to  structure  and  restrict  the  power  of  the

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executive  Government  so  as  to  prevent  its  arbitrary application or exercise…..”

Further, the learned Single Judge has examined  

the  opinion  sought  for  from  the  C.V.O.  by  the  

disciplinary authority on the penalty to be imposed  

upon the appellant, the C.V.O. has suggested the major  

penalty of removal, the same is inconsistent with the  

norms  applicable  in  the  Bank's  disciplinary  

proceedings.  The  learned  Single  Judge  examined  the  

action of the disciplinary authority in relation to the  

Branch  Manager  Hallydayganj  Branch  that  facilitating  

the second loan to the loanee, Mr. Tapan Kumar Sangma,  

closely known to the said Manager, the same allegation  

has been treated as a minor lapse, but in the context  

of the appellant they have imposed major penalty, which  

is  a  clear  case  of  discrimination.  The  appellant's  

admission with regard to writing the loan applications  

of Abdul Kuddus Mondal and Hasanuzzaman to enable them  

to avail contract finance from the Hallydayganj Branch,  

the  contention  urged  on  behalf  of  the  appellant  is  

examined and held that the said applicants had availed  

loans to the extent of Rs. 10,000/- and Rs. 15,000/-  

respectively from the Phulbari Branch of the S.B.I.,  

projecting that minimal loss and both the loans were  

cleared of, assuming that the disciplinary proceedings  

were  just  and  fair, learned  senior  counsel  for  the

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appellant argued that the minor punishment proposed by  

the disciplinary authority of pay reduction should have  

been  considered  reasonable  in  the  context  of  the  

charges. The learned Single Judge, after considering  

the opinion/report DEX-4, held that the enquiry officer  

did  not  base  his  conclusion  on  any  incriminatory  

materials  and  in  fact  the  report  DEX-4  was  totally  

ignored which would have established the innocence of  

the  delinquent  and  further  held  that  the  enquiry  

officer  conducted  the  enquiry  sans  furnishing  the  

copies of crucial documents and furnishing the list of  

witnesses. It appears to be a case of denial of fair  

opportunity to the delinquent in gross violation of  

the procedural requirements of the Service Rules. That  

finding is based on factual, undisputed facts and in  

conformity with the law, therefore, in our opinion, the  

learned Single Judge has rightly held that the enquiry  

conducted  against  the  appellant  was  unfair  and  the  

findings recorded on the charges are perverse in law.  

While recording such a finding the learned Single Judge  

has also proceeded to hold that the enquiry was found  

to be vitiated for the reason that the then Branch  

Manager Mr. Pradeep Kumar  Das of Hallydayganj Branch  

was  never  examined  in  the  enquiry  and  without  his  

evidence, conclusion on culpability of the delinquent  

on  the  loans  disbursed  by  the  Branch  Manager  of

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Hallydayganj  to  the  loanee  could  not  have  been  

reasonably  reached  by  anyone,  including  the  enquiry  

officer and imposing major penalty on the basis of the  

C.V.O.  without  there  being  any  legal  evidence  on  

record, the enquiry was not properly conducted due to  

non-furnishing the list of witnesses and copies of the  

documents,  therefore,  the  exercise  of  power  on  the  

basis  of  the  C.V.O.'s  opinion  for  removal  of  the  

appellant  from  service  entail  serious  consequences.  

Therefore,  placing  reliance  on  K.P.  Narayanan  Kutty  

(supra), the learned Single Judge held that the action  

taken in accepting the C.V.O.'s view and passing order  

of  removal  is  arbitrary,  unreasonable  and  gross  

violation of Article 14 of the Constitution of India.  

Having said so, the learned Single Judge has set aside  

the order of removal and granted reinstatement of the  

appellant with 25% back wages in the absence of any  

proof to show that he was gainfully employed from the  

date of order of removal till the date of the decision  

rendered by the learned Single Judge and the Division  

Bench  of  the  High  Court,  therefore,  the  same  is  

contrary to the law laid down by this Court in the case  

of Deepali Gundu Surwase  vs.  Kranti Junior Adhyapak  

Mahavidyalaya (D. ED.) & Ors., (2013) 10 SCC 324, para  

38 is quoted hereinunder:

“38.   The propositions which can be culled  out from the aforementioned judgments are:

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i)    In cases of  wrongful  termination  of  service,  reinstatement   with  continuity  of  service and back wages is the normal rule. ii)   The aforesaid rule is subject to the  rider that  while deciding  the issue of back  wages,  the  adjudicating  authority  or  the  Court may take  into consideration the length  of  service  of  the  employee/workman,  the  nature   of  misconduct,   if   any,   found  proved against  the  employee/workman,   the  financial  condition  of  the  employer  and  similar other factors. iii)   Ordinarily,  an  employee  or  workman  whose  services  are  terminated   and  who  is  desirous of getting back wages is required to  either  plead  or  at least make a statement  before  the  adjudicating  authority  or   the  Court  of first instance that he/she was not  gainfully  employed  or   was   employed   on  lesser wages.  If the employer wants to avoid  payment of full  back  wages, then it has to  plead and also  lead  cogent  evidence  to  prove   that   the  employee/workman  was  gainfully  employed  and  was  getting  wages  equal to  the wages he/she was drawing prior  to the termination of service.  This  is  so  because it is settled law that the burden of  proof of the  existence  of  a particular  fact lies on the person who makes a positive  averments about its existence.  It is always  easier  to  prove  a  positive  fact  than   to  prove  a negative fact.   Therefore,  once  the  employee  shows  that  he  was  not  employed, the onus lies on the employer to  specifically   plead   and   prove  that  the  employee was gainfully  employed  and  was  getting  the  same  or substantially similar  emoluments. iv)    The  cases  in  which  the   Labour  Court/Industrial  Tribunal  exercises power  under Section 11-A of the Industrial Disputes  Act,  1947  and  finds that  even  though  the   enquiry   held   against   the  employee/workman    is  consistent  with  the  rules of natural justice and/or  certified  standing orders, if any, but holds that the  punishment  was  disproportionate   to   the  misconduct found proved, then it will have  the discretion not to award full back wages.  However,  if  the  Labour  Court/Industrial  Tribunal finds that the employee or workman

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is not at all guilty of  any  misconduct  or  that   the  employer  had  foisted  a  false  charge,  then  there  will  be  ample  justification for award of full back wages. v)    The cases in which the competent Court  or  Tribunal  finds that  the employer has  acted in gross violation of the  statutory  provisions  and/or the principles of natural  justice  or  is  guilty  of  victimizing  the  employee  or  workman,  then  the  Court  or  Tribunal concerned will be fully justified in  directing payment of full back wages. In such  cases,   the   superior   Courts  should  not  exercise power under Article 226 or 136 of  the  Constitution   and  interfere  with  the  award  passed  by  the  Labour  Court,  etc.,  merely  because  there  is  a  possibility  of  forming  a  different  opinion  on  the  entitlement  of  the  employee/workman  to  get  full back wages or the employer’s obligation  to pay the same.  The Courts must keep in  view that in the cases  of wrongful/illegal  termination  of  service,  the  wrongdoer   is  the   employer  and  the  sufferer  is  the  employee/workman  and  there  is  no  justification  to   give  a  premium  to  the  employer of his wrongdoings by relieving him  of   the   burden  to  pay  to  the  employee/workman his dues in the form of full  back wages. vi)    In a  number of  cases, the  superior  Courts have  interfered  with  the award  of  the  primary  adjudicatory  authority  on the  premise   that finalization of litigation has  taken long time ignoring that in majority of  cases  the  parties  are  not  responsible  for   such    delays.    Lack    of  infrastructure  and  manpower   is   the  principal   cause   for   delay   in   the  disposal  of  cases.  For  this  the  litigants  cannot  be  blamed  or  penalised.  It  would  amount to grave injustice to an employee or  workman if he  is  denied back wages  simply  because  there  is  long  lapse  of  time  between  the termination  of  his  service  and  finality  given   to   the   order   of  reinstatement. The Courts should bear in mind  that in most of these  cases, the employer is  in an  advantageous  position  vis-à-vis  the  employee   or  workman.  He  can  avail  the  services of best legal brain for  prolonging  the agony of the sufferer, i.e., the employee

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or workman, who  can  ill  afford the luxury  of spending money on a  lawyer  with  certain  amount  of  fame. Therefore, in such cases it  would  be  prudent  to  adopt  the  course  suggested  in  Hindustan  Tin  Works  Private  Limited vs. Employees of Hindustan Tin  Works  Private Limited, (1979) 2 SCC 80. vii)  The observation made in J.K. Synthetics  Ltd. v. K.P. Agrawal, (2007) 2 SCC 433  that  on  reinstatement   the   employee/workman  cannot  claim continuity  of service as of  right  is  contrary  to  the  ratio   of  the  judgments  of  three Judge Benches referred  to  hereinabove  and  cannot  be  treated   as  good  law. This part of the judgment is also  against the very concept of reinstatement of  an employee/workman.”

For the reasons stated supra, we have examined  

the case threadbare on the basis of the material placed  

on record and rival legal contentions urged on behalf  

of  the  parties,  we  hold  that  the  finding  of  the  

enquiry officer on the charges is vitiated on account  

of  non-compliance  of  the  statutory  Rules  and   the  

principles  of  natural  justice.  In  the  absence  of  

evidence, the order of reinstatement sans full back  

wages is unjustified in law. At best, the High Court  

should have made deduction of the amount of pension  

received  by  the  appellant  after  awarding  full  back  

wages for the period in question. In not doing so, the  

orders of the learned Single Judge and the Division  

Bench of the High Court are liable to be set aside  

with  regard  to  non-grant  of  full  back  wages.  

Accordingly, we set aside the Orders of the Division

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Bench  imposing  the  penalty  of  reduction  of  one  

increment to the appellant for one year and restore and  

modify  the  order  of  the  learned  Single  Judge  with  

regard to  award of reinstatement with full back wages  

for the period from the date of removal till the date  

of the appellant attaining the age of superannuation,  

on the basis of periodical revisions of salary to the  

appellant herein and deduct the pension amount from  

the back wages payable to the appellant. The same shall  

be paid to the appellant within eight weeks from the  

date of receipt of the copy of this order.

The appeal is allowed in the aforesaid terms,  

directions and observations.

...........................J.                      (V. GOPALA GOWDA)

..........................J.                   (AMITAVA ROY)

 NEW DELHI,   NOVEMBER 17, 2015