Pawan Kumar Agarwala vs SBI

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 Signature Not Verified Digitally signed by Vinod Kumar of dismissal to one of reduction of one increment for Date: 2015.12.02 13:16:21 IST Reason:

one year and further directed the appellant to be

reinstated in service with no back wages for the 2

reason that he had already been taking pension for the

period and further clarified 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 3

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

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 4

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

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 5

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

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 6

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

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 7

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

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 8

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 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 9

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 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 10

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 thing to be taken into consideration in the matter of granting writs ". Vide also K. S. Rashid and Son vs. The Income-tax Investigation Commission, 1954 SCR 738 at p.747: (AIR 1954 SC 207 at p. 210)(B). And where such remedy exists, it will be a sound exercise of discretion to refuse to interfere in a petition under Art. 226, unless there are good grounds therefor. None such appears in the present case. On the other hand, the point for determination in this petition whether the respondent was denied a reasonable opportunity to present his case, turns mainly on the question whether he was prevented from cross- examining the witnesses, who gave evidence in support of the charge.

That is a question on which there is a serious dispute, which cannot be satisfactorily decided without taking

evidence. It is not the practice of Courts to decide questions of that character in a writ petition, and it would have been a proper exercise of discretion in the present case if the learned Judges had referred the respondent to a suit.

In this appeal, we should have ourselves adopted that course, and passed the order which the learned Judges should have passed. But we feel pressed by the fact that 11

the order dismissing the respondent having been made on September 16, 1954, an action to set it aside would now be time-barred. As the High Court has gone into the matter on the merits, we propose to dispose of this appeal on a consideration of the merits.

10. Now, it is no doubt true that the evidence of the respondent and his witnesses was not taken in the mode prescribed in the Evidence Act; but that Act has no application to enquiries conducted by tribunals, even though they may be judicial in character. The law requires that such tribunals should observe rules of natural justice in the conduct of the enquiry, and if they do so, their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that, which obtains in a Court of law.

Stating it broadly and without intending it to be exhaustive, it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party, and that no materials should be relied on against him without his being given an opportunity of explaining them.

If these rules are satisfied, the enquiry is not open to attack on the ground that the procedure laid down in the Evidence Act for taking evidence was not strictly followed.”

Learned senior counsel for the appellant

vehemently challenged that the appellant is also

aggrieved of the non-grant of back wages by the

Division Bench and setting aside the grant of 25% back

wages awarded by the learned Single Judge and imposing 12

penalty of reduction of one increment for one year.

The said finding is recorded without there being any

evidence on record. He contended that because pension

amount does not substitute the grant of back wages,

particularly in the absence of any material with the

respondent-Bank, whatsoever, to deny the back wages,

as he was gainfully employed from the date of

dismissal and till passing of the impugned judgment

and order by the learned Single Judge and the Division

Bench. Further the learned Single Judge and the

Division 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 13

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

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 14

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 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 15

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

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 16

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 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, 17

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 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.

18 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 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 19

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 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 20

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

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 21

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 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 22

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:

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.

23 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 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 24

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 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 25

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

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, 26

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 27

ITEM NO.3 COURT NO.11 SECTION XIV

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 7097/2015

(Arising out of impugned final judgment and order dated 26/11/2014 in WA No. 192/2014 passed by the High Court of Gauhati)

GENERAL MANAGER-II & APPOINTING AUTHORITY & ORS. Petitioner(s)

VERSUS

PAWAN KUMAR AGARWALA Respondent(s)

(With appln. (s) for vacating interim order and interim relief and office report)

WITH SLP(C) No. 9833/2015 (With appln.(s) for permission to file additional documents and Interim Relief and Office Report)

Date : 17/11/2015 These petitions were called on for hearing today.

CORAM :

HON'BLE MR. JUSTICE V. GOPALA GOWDA HON'BLE MR. JUSTICE AMITAVA ROY

For Petitioner(s) Mr. Gaurav Agrawal, Adv. SLP(C) 7097/15

SLP(C) 9833/15 Mr. Vijay Hansaria, Sr. Adv.

Mr. Shailesh Madiyal, AOR Mr. Gautam Prabhakar, Adv.

Ms. Sneha K., Adv.

Mr. Avnish Pandey, Adv.

For Respondent(s) Mr. Vijay Hansaria, Sr. Adv. SLP(C) 7097/15 Mr. Shailesh Madiyal, AOR Mr. Gautam Prabhakar, Adv.

Ms. Sneha K., Adv.

Mr. Shailesh Madiyal,Adv.

SLP(C) 9833/15 Mr. Gaurav Agrawal, Adv.

Contd..

28 UPON hearing the counsel the Court made the following O R D E R

S.L.P.(C) No. 7097/2015:

Heard learned counsel for the parties.

The special leave petition is dismissed.

S.L.P.(C) No. 9833/2015:

Heard learned counsel for the parties. Leave granted.

The appeal is allowed in terms of the signed order.

(S. K. RAKHEJA) (MALA KUMARI SHARMA) COURT MASTER COURT MASTER

(Signed reportable Order in Civil Appeal No. 13448/2015 @ SLP (C) No. 9833/2015 is placed on the file)