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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL No.10942   OF 2014   [Arising out of SLP (Civil) No. 4648 of 2008]

G.M. (OPERATIONS) S.B.I & ANR.               .. APPELLANT(S)

VERSUS

R. PERIYASAMY               ..RESPONDENT(S)

JUDGMENT

S. A. BOBDE, J.

Leave granted.

2. The appellant, General Manager of the State Bank  

of India has preferred this appeal against the Judgment and  

Final Order dated 30.08.2007 passed by the High Court of  

Judicature at Madras in Writ Appeal No. of 2375 of 1999.  By  1

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the impugned  Judgment  the  High  Court  dismissed  the  

appellant’s  Writ  Appeal  and  confirmed  the  finding  and  

Judgment  of  the  learned  Single  Judge  by  which  the  

respondent’s  Writ  Petition  was  allowed  and  the  orders  

dismissing him from service were set aside.

3. The respondent  –  Periyasamy,  was  serving  as  a  

Permanent  Cash  Officer  at  the  Dharmapuri  Branch  of  the  

State Bank of India in 1986.  In a departmental enquiry, he  

was charged with being accountable for a shortage detected  

in  the  currency  chest  in  his  joint  custody  along with  one  

Ganesan.   By the second charge, he was charged with not  

adhering  to  the  laid  down instructions  regarding  currency  

chest  transactions  and  for  committing  lapses  in  the  

maintenance of  the  currency chest  register.   By the third  

charge, he was charged with excessive outside borrowings in  

violation of Rule 41(i) of the State Bank of India (Supervising  

Staff) Service Rules.

4.  An enquiry was duly conducted.  The charged officer,  

the respondent, was given an opportunity to defend himself  

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and an Inquiry Report dated 03.11.1986 was submitted to  

the  disciplinary  authority.   The  disciplinary  authority  

considered the entire report and after discussing the same  

came to the conclusion that there was a preponderance of  

the probability that the respondent had been surreptitiously  

removing  currency  notes  from the  chest  over  a  period  of  

time,  the  shortage  being  Rs.  1,25,000/-.   The  disciplinary  

authority  also  took  note  of  the  fact  that  he  was  lending  

money to others, even without a pro-note indicating that he  

had  large  amounts  of  cash.   The  disciplinary  authority,  

therefore,  recommended  the  dismissal  of  the  respondent  

from the service of the Bank in terms of Rule 49(h) of the  

State  Bank  of  India  (Supervising  Staff)  Rules  by  an  order  

dated 27th July, 1989.  Thereafter, the Chief General Manager  

considered the Inquiry Report  and the recommendation of  

the disciplinary authority and concurred with the views of the  

disciplinary authority.  Against the dismissal, the respondent  

preferred an appeal  under  the Service Rules  of  the Bank.  

However,  the  appeal  was  also  turned  down  by  the  order  

dated 14.05.1990. Against the said orders, the respondent  

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preferred a Writ Petition before the Madras High Court.  As  

observed  earlier,  the  learned  Single  Judge  allowed  the  

petition and the Division Bench dismissed the appeal against  

the petition.  Hence, the Bank has preferred this appeal.

5. While  the  respondent  was  working  as  a  Cash  

Officer, at the Dharmapuri Branch with Ganesan, the branch-

accountant, as a joint custodian, the Branch inspection took  

place between 20.02.1986 to 05.04.1986.  The respondent  

had  been  working  as  the  Cash  Officer  from  16.11.1985.  

Certain  irregularities  were  found  in  the  inspection.   As  a  

result of the irregularities, instructions were given to follow  

the dual locking system for the storage bins where cash was  

stored  and  for  the  dividing  doors  with  effect  from  

05.04.1986.  On that very night, the respondent met with an  

accident.  The strong room keys which were supposed to be  

in the physical possession of the respondent were found in  

his Cupboard in the Branch. From 07.04.1986 to 09.04.1986,  

one  Swaminathan  officiated  as  the  Cash  Officer.   From  

10.04.1986 to 11.04.1986, one N Krishnan officiated as the  

Cash Officer.   From 12.04.1986 to 17.04.1986,  again,  Shri  4

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Swaminathan officiated as the Cash Officer.  According to the  

appellant, there was no transfer of notes from the operative  

bins of the bank to the storage bins and there was no cash  

withdrawal  from  the  storage  bins  between  05.04.1986  to  

14.04.1986.  On 15.4.1986, a cash shortage of Rs.40,000/-  

was noticed by the officiating Cash Officer.  Therefore, the  

verification  of  the  entire  currency  chest  was  conducted,  

which showed a total cash shortage of            Rs.1,25,000/-.  

An internal investigation was conducted wherein it was found  

that  the  shortage  in  cash  had  taken  place  between  

16.11.1985  and  05.04.1986  when  the  respondent  and  

Ganesan were joint custodians.   Show cause notices were  

issued  to  the  respondent  and  Ganesan.   Apparently,  the  

other joint custodian, Ganesan has also been punished but  

he has not challenged his punishment.  In the reply to the  

show cause notice, the respondent admitted various lapses  

on his part regarding the maintenance of the currency chest  

books.  In particular, the respondent stated in his reply that  

perhaps the shortage of Rs. 1,25,000/- escaped his attention  

due  to  various  reasons  and  was  thus  unfortunate.  The  

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respondent sought permission to peruse the relevant books  

and registers at the Dharmapuri branch and was allowed to  

do so.  The Inquiring Officer eventually submitted a report  

and held the respondent guilty of charges as stated earlier.  

The  following  are  the  important  features  of  the  Inquiry  

Report:

a)   When  the  branch  inspection  was  concluded  on  

05.04.1986, it was noticed that during the tenure of the  

respondent  as  the  permanent  Cash  Officer  of  the  

Branch, several currency storage bins inside the branch  

strong-room were not locked with dual pad locks and  

some  were  kept  open  when  they  were  not  being  

operated upon.   

b) Shortages were detected in the note bundles by the  

respondent.  Upon further inspection, shortages in three  

more  sections  from the  bundles  last  handled  by  the  

respondent, were also discovered.   

c) The two employees, who acted as Cash Officers after  

the charged officials, i.e. the respondent and Ganesan  

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exited  on  05.04.1985,  had  performed  their  duties,  

during the period 05.04.1986 to 14.04.1986 when the  

storage strong room was locked with dual pad locks and  

they had functioned in the presence of the permanent  

Accountant of the Branch.

d) Unlike in the case of acting Cash Officers, when the  

respondent  used  to  function  as  Cash  Officer,  the  

Accountant  Shri  Ganesan was in  the habit  of  leaving  

him alone inside the Strong Room while he attended to  

his  desk  work  outside.   The  significance  of  this  last  

finding  is  that  the  shortages  were  found  to  have  

occurred  between  16.11.1985  to  5.4.1986  when  the  

respondent worked as the Cash Officer of the Branch  

and not from 05.04.1986 to 15.04.1986, when others  

had  acted  as  Cash  Officers  for  the  reasons  stated  

hereinbefore.  The respondent was also convicted of the  

other two relatively minor charges.   

6.   The learned Single Judge,  at the instance of the  

respondent,  went  into  the  entire  matter  in  tedious  detail.  

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The  Single  Judge  considered  the  entire  evidence,  even  

reproduced  it  in  parts,  and  upon  re-appreciation  of  the  

evidence,  virtually  disagreed  with  the  findings  of  facts  

recorded  by  the  Inquiry  Officer  and  set  aside  the  

respondent’s dismissal.

7.  Shri Vikas Singh, the learned senior counsel for the  

appellant submitted that both, the learned Single Judge as  

well  as  the  Division  Bench,  in  confirming the  order,  have  

violated  the  well  settled  parameters  of  the  scope  of  the  

Jurisdiction  of  the  High  Court  under  Article  226  of  the  

Constitution of India in such matters.  Shri Singh submitted  

that  the  High  Court  embarked  on  the  unusual  and  

unwarranted  exercise  of  re-appreciating  the  evidence  and  

reversed the well considered findings of fact recorded by the  

Inquiry Officer. The learned counsel for the appellant brought  

to  our  notice the very  first  decision,  which authoritatively  

settled  the  law  on  this  point  in  the  State  of  Andhra  

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Pradesh and others vs. Shri Rama Rao1, where this Court  

observed as follows:

“This  report  was  considered  by  the  authority   competent  to  impose  punishment  and  a   provisional  conclusion  that  the  respondent   merited punishment of dismissal for the charges   held  established  by  the  report  was  recorded.  A   copy of the report of the Enquiry Officer was sent   to  the  respondent  and  he  was  called  upon  to   submit  his  representation  against  the  action   proposed  to  be  taken  in  regard  to  him.  The   respondent  submitted  his  representation  which   was considered by the Deputy Inspector General   of  Police,  Northern  Range,  Waltair.  That  Officer   referred to the evidence of witnesses for the State  about the arrest of Durgalu on March 5, 1954, and   the handing over of Durgalu to the respondent on   the same day. He observed that the evidence of   Durgalu that  after  he was arrested on March 5:   1954,  he  had  made  good  his  escape  and  was   again  arrested  on  March  8,  1954,  could  not  be   accepted.  Holding  that  the  charge  against  the  respondent was serious and had on the evidence   

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AIR 1963 SC 1723 9

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been  adequately  proved,  in  his  view  the  only  punishment which the respondent deserved was   of dismissal from the police force.”

8. In State Bank of Bikaner and Jaipur Vs. Nemi  

Chand Nalwaya2, this Court observed as follows:-

“7. It is now well settled that the courts will not act   as an appellate court and reassess the evidence   led in the domestic enquiry, nor interfere on the   ground  that  another  view  is  possible  on  the  material on record. If the enquiry has been fairly   and properly held and the findings are based on   evidence,  the  question  of  adequacy  of  the  evidence or the reliable nature of the evidence will   not be grounds for interfering with the findings in   departmental enquiries. Therefore, courts will not   interfere  with  findings  of  fact  recorded  in   departmental  enquiries,  except  where  such  findings are based on no evidence or where they   are  clearly  perverse.  The  test  to  find  out   perversity  is  to  see  whether  a  tribunal  acting   reasonably could have arrived at such conclusion   

2

(2011) 4 SCC 584 10

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or finding, on the material on record. The courts   will  however  interfere  with  the  findings  in   disciplinary matters, if principles of natural justice   or statutory regulations have been violated or if   the order is found to be arbitrary, capricious, mala   fide  or  based  on  extraneous  considerations.   (Vide B.C. Chaturvedi v. Union of India : (1995) 6  SCC 749, Union of India v. G. Ganayutham : (1997)  7  SCC  463,  Bank  of  India  v.  Degala   Suryanarayana : (1999) 5 SCC 76 and High Court   of  Judicature  at  Bombay  v.  ShashiKant  S  Patil   (2000) 1 SCC 416).”

It is not necessary to multiply authorities on this  

point.  Suffice it  to  say that  the law is  well  settled in  this  

regard.

9. It is not really necessary to deal with the judgment  

of the learned Single Judge since that has merged with the  

judgment  of  the  Division  Bench.   However,  some  

observations  are  necessary.   The  learned  Single  Judge  

committed  an  error  in  approaching  the  issue  by  asking  

whether  the  findings  have  been  arrived  on  acceptable  

evidence or not and coming to the conclusion that there was  

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no acceptable evidence, and that in any case the evidence  

was not sufficient.  In doing so, the learned Single Judge lost  

sight of the fact that the permissible enquiry was whether  

there is no evidence on which the enquiry officer could have  

arrived at the findings or whether there was any perversity  

in the findings. Whether the evidence was acceptable or not,  

was  a  wrong  question,  unless  it  raised  a  question  of  

admissibility.  Also, the learned Single Judge was not entitled  

to  go  into  the  question  of  the  adequacy  of  evidence and  

come to the conclusion that the evidence was not sufficient  

to hold the respondent guilty.   

10. It  is  interesting  to  note  that  the  learned  Single  

Judge went to the extent of observing that the concept of  

preponderance of probabilities is alien to domestic enquiries.  

On the contrary, it is well known that the standard of proof  

that must be employed in domestic enquiries is in fact that  

of the preponderance of probabilities.   In  Union of India  

Vs.  Sardar Bahadur3,  this  Court  held  that  a disciplinary  

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(1972) 4 SCC 618 12

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proceeding is not a criminal trial and thus, the standard of  

proof required is that of preponderance of probabilities and  

not proof beyond reasonable doubt.  This view was upheld by  

this  Court  in  State Bank of  India & ors.  Vs.  Ramesh  

Dinkar Punde4.  More recently, in State Bank of India Vs.  

Narendra  Kumar  Pandey5,  this  Court  observed  that  a  

disciplinary  authority  is  expected  to  prove  the  charges  

leveled  against  a  bank-officer  on  the  preponderance  of  

probabilities  and  not  on  proof  beyond  reasonable  doubt.  

Further, in Union Bank of India Vs. Vishwa Mohan6, this  

Court was confronted with a case which was similar to the  

present  one.   The  respondent  therein  was  also  a  bank  

employee, who was unable to demonstrate to the Court as to  

how prejudice had been caused to him due to non-supply of  

the inquiry authorities report/findings in his case.  This Court  

4

(2006) 7 SCC 212 5

(2013) 2 SCC 740 6

(1998) 4 SCC 310 13

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held  that  in  the  banking  business  absolute  devotion,  

diligence,  integrity and honesty needs to be preserved by  

every bank employee and in particular the bank officer.  If  

this  were  not  to  be  observed,  the  Court  held  that  the  

confidence of the public/depositors would be impaired.  Thus  

in that case the Court set-aside the order of the High Court  

and upheld the dismissal of the bank employee, rejecting the  

ground  that  any  prejudice  had  been  caused  to  him  on  

account  of  non-furnishing  of  the  inquiry  report/findings  to  

him.   

While dealing with the question as to whether a  

person with doubtful integrity ought to be allowed to work in  

a Government Department, this Court in Commissioner of  

Police New Delhi  & Anr.  Vs.  Mehar Singh7,  held  that  

while the standard of proof in a criminal case is proof beyond  

all reasonable doubt, the proof in a departmental proceeding  

is  merely  the  preponderance  of  probabilities.   The  Court  

observed  that  quite  often  criminal  cases  end  in  acquittal  

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(2013) 7 SCC 685 14

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because witnesses turn hostile and therefore, such acquittals  

are not acquittals on merit.  An acquittal based on benefit of  

doubt would not stand on par with a clean acquittal on merit  

after a full-fledged trial, where there is no indication of the  

witnesses being won over.  The long standing view on this  

subject was settled by this Court in  R.P. Kapur Vs. Union  

of  India8,  whereby  it  was  held  that  a  departmental  

proceeding can proceed even though a person is acquitted  

when  the  acquittal  is  other  than  honourable.   We  are  in  

agreement with this view.

In administrative law, it is a settled principle that the  

onus of proof rests upon the party alleging the invalidity of  

an order9.  In other words, there is a presumption that the  

decision or executive order is properly and validly made, a  

presumption expressed in the maxim  omnia praesumuntur  

8

AIR 1964 SC 787 9

Minister of National Revenue v. Wright’s Canadian Ropes Ltd. (1947) AC 109 at 122;  Associated Provincial Picture Houses Ltd. v. Wednesbury Cpn. (1948) 1 KB 223 at 228; Fawcett  Properties Ltd. v. Buckingham County Council (1959) Ch. 543 at 575, affirmed (1961) AC 636.  

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rite esse acta which means ‘all things are presumed to be  

done in due form10.’   

11. The Division Bench, in appeal, apparently found it  

fit to rely on an additional affidavit filed for the first time by  

the  respondent  in  his  Writ  Petition,  referring  to  the  letter  

dated 30.12.1987 by which the respondent is purported to  

have sought the production of certain documents.  It is not  

disputed that the respondent had not at any stage earlier  

made  any  grievance  that  he  had  written  a  letter  dated  

30.12.1987  calling  upon  the  bank  to  produce  certain  

documents  for  his  perusal  and  which  was  denied.   It  is  

further  not  in  dispute that  there is  no record of  the bank  

having received the letter and there is no proof for it.  The  

bank has denied receiving the letter and according to the  

bank they had received a letter dated 28.12.1987 and they  

had replied by their letter dated 14.01.1988. In their reply,  

there  was  no  reference  to  the  letter  dated  30.12.1987  

because  they  had  not  received  it.  We  find  that  in  the  

10

Point of Ayr Collieries Ltd. v. Lloyd – George (1943) 2 All ER 546.  16

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absence  of  proof  that  any  such  letter  demanding  certain  

documents was received by the bank, it was not permissible  

for the High Court to proceed to draw an inference that there  

was a failure of natural  justice in the bank having denied  

certain  documents.   Thus  it  may  be  said,  that  an  

administrative  authority  such  as  the  Appellant,  cannot  be  

put to proof of the facts or conditions on which the validity of  

its order must depend, unless the Respondent can produce  

evidence  which  will  shift  the  burden  of  proof  on  the  

shoulders of the Appellant. How much evidence is required  

for  this  purpose will  always depend on the nature of that  

particular case. In Potato Marketing Board v. Merricks11,  

it was held that if an order has an apparent fault on the face  

of  it,  the  burden  is  easily  transferred.  However,  if  the  

grounds  of  attack  are  bad-faith  or  unreasonableness,  the  

Plaintiff’s task is heavier.

12.  On  the  question  of  shortage  of  money,  the  

Division  Bench  merely  upheld  the  findings  of  the  learned  

11

(1958) 2 QB 316 at 331; Cannock Chase DC v. Kelly (1978) 1 WLR 1.   17

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Single Judge that there was no clinching evidence in support  

of the charges.  The Division Bench approved the findings of  

the Single Judge that the inquiry report that the shortage of  

cash  occurred  only  between  16.11.1985  and  05.04.1986,  

when the respondent was a joint custodian, was based on  

surmise and conjecture.  The Division Bench did not care to  

advert to the evidence.  That evidence rightly relied on by  

the enquiry officer which established that the shortage did  

occur  between  16.11.1985  and  05.04.1986.  In  fact  the  

inquiring officer has given cogent reasons for rendering the  

findings  that  the  shortage  could  not  have  occurred  after  

05.04.1986  upto  the  discovery  of  15.04.1986,  when  two  

acting cashiers had functioned.  Moreover, the observation  

that there is no clinching evidence in support of the charges  

is another way of saying that the evidence is insufficient or  

inadequate, which is not permissible.  It bears repetition that  

sufficiency or  adequacy of  evidence is  not  the ground on  

which the findings of  facts  may be set-aside by the High  

Court  under  Article  226.   The  justification  offered  by  the  

Division  Bench  that  the  learned  Single  Judge  had  to  

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undertake  the  exercise  of  analysing  the  findings  of  the  

enquiry  officer  because  the  appellants  had  deprived  the  

respondent  of  his  livelihood  is  wholly  untenable.  A  

transgression  of  jurisdiction  cannot  be  justified  on  the  

ground of consequences, as has been done.  Moreover, the  

reliance  by  the  Division  Bench  on  Mathura  Prasad  Vs.  

Union of India & Ors.12  is entirely misplaced, since that  

case arose in an entirely different set of circumstances.  We  

also find it difficult to understand the justification offered by  

the Division Bench that there was no failure on the part of  

the respondent to observe utmost devotion to duty because  

the  case  was  not  one  of  misappropriation  but  only  of  a  

shortage of money.  The Division Bench has itself stated the  

main reason why its order cannot be upheld in the following  

words, “on reappreciation of the entire material  placed on  

record, we do not find any reason to interfere with the well  

considered and merited order passed by the learned Single  

Judge.”   

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(2007) 1 SCC 437 19

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13. We accordingly set-aside the impugned order and  

dismiss the writ petition of the respondent.   

14. Having regard to the circumstances of the case,  

we find it appropriate to direct the appellant to pay an adhoc  

sum of Rs.3,00,000/- to the respondent who has retired long  

ago and has drawn pension  of  which he will  be  deprived  

hereafter.  Appeal disposed off as allowed.   

…….................………..J.  [J. CHELAMESWAR]

       ..........………………………J.                [S.A. BOBDE]

New Delhi, December 10, 2014

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