TaxTMI 
TaxTMI 
1996 (3) TMI 526
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.... Charge No.II 'That hes in contravention of Regulation 50(4) of the State Bank of Patiala (Officers') Service Regulations 1979, issued an undated letter in, his own handwriting addressed to the Tehsildars Bhatinda for revocation of Mutation on the land mortgaged to the Bank even when the crop loan account of Shri Jarnail Singh was not adjusted. He thus jeopardized the interests of the Bank'." At the relevant time, the respondent was working as the Manager of Kot Fatta branch Of the appellant-Bank. The charge against the respondent, in short. is one of temporary misappropriation. One Jarnail Singh had taken a loan of Rupees ten thousand from the Bank. After Jarnail Singh's death, his son, Balwant Singh, came and handed over a sum of Rupees ten thousand to the respondent in Decembers 1985 in discharge of the said loan. In February, 1986, the respondent was transferred to another branch. In March, Balwant Singh went to the Bank and discovered that the amount paid by him to the respondent was not credited to his/his father's account. Soon thereafter, a sum of Rs.11,517.50p was deposited in the Bank in the name of Balwant Singh. The appellant Bank's case is that hav....
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....ntiff was not meted out by the learned counsel for the defendants in, his written arguments", the Trial Court held the allegation established. It found that the said failure to supply is violative of Regulation 68(X)(b)(iii) of the State Bank of Patiala (Officers') Service Regulations, 1979 and on that basis, decreed the suit. On appeal, the judgment and the decree of the Trial Court was affirmed. The Appellate Court found the following facts: during the course of enquiry, the presenting officer filed a provisional list of documents/ witnesses (P-2) on June 2,1987. The list contained nine documents including the statements of Kaur Singh, Patwari, and Balwant Singh, complainant. The said documents were marked as P-3 to P-11. Though a copy of the list of documents/statements was supplied to the respondent- plaintiff, copies of the documents P-3 to P-11 were not supplied to him. He was however, advised , examine and take notes of the said documents/ statements. This opportunity was given only half an hour before the commencement of the enquiry proceedings. The Appellate Court found that in the above circumstances, there was a clear violation of Regulation 68 which has prejudiciall....
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....ich he did. Balwant Singh was not examined at the regular enquiry. The other witness who was examined during the preliminary enquiry, Kaur Singh, Patwari, was examined at the regular enquiry. The question is whether on the above facts, it can be held that there is a violation of Regulation 68 and whether the violation, if any, vitiates the enquiry. Regulation 68 insofar as is relevant, reads thus: " (a) The inquiring authority shall where the officer does not admit all or any of the articles of charge furnish to such officer a list of documents by which and a list of witnesses by whom, the articles (b) The inquiring authority shall also record an order that the officer may for the purpose of preparing his defence: i) Inspect and take notes of the document listed within five days of the order or within such further time not exceeding five days as the inquiring authority may allow: ii) submit a list of documents and witnesses that he wants for enquiry. iii) be supplied with copies of statements of witnesses, if any, recorded earlier and the Inquiring Authority shall furnish such copies not later than three days before the commencement of the examination of the witnesse....
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.... authority. The sub- clause incorporates a facet of the principle of natural justice. It is designed to provide an adequate opportunity to the delinquent office- to cross-examine the witnesses effectively and thereby defend himself properly. It is relevant to note in this behalf that neither the enquiry officers' report nor the judgment of the Trial Court, Appellate Court or High Court say that the respondent had protested at the relevant time that he was denied of an adequate opportunity to cross-examine the witnesses effectively or to defend himself properly on account of non- supply of the statements of witnesses. The Appellate Court, on the contrary, has recorded that when he was advised to peruse, examine and take note; from the documents including the statements of witnesses [Kaur Singh and Balwant Singh], the only objection raised by the respondent was that "the documents marked Exh.P-6, P-10 and P-11 were only photostat copies and not originals and should not be considered or marked exhibits". [Exhs. P-6, P-10 and P-11 are documents other than the statements of witnesses, i.e., of Kaur Singh and Balwant Singh.] Moreover, as pointed out above, the examination of witnesse....
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....opinion, the test in such cases should be one of prejudice, as would be later explained in this judgment. But this statement is subject to a rider. The regulations may contain certain substantive provisions, e.g., who is the authority competent to impose a particular punishment on a particular employee/officer. Such provisions must be strictly complied with. But there may be any number of procedural provisions which stand on a different footing. We must hasten to add that even among procedural provisions, there may be some provisions which are of a fundamental nature in the case of which the theory of substantial compliance may not be applicable For examples take a case where a rule expressly provides that the delinquent officer/employee shall be given an opportunity to produce evidence/material in support evidence of the other side. If no such opportunity is given at all inspite of a request therefor, lt will be difficult to say that the enquiry is not vitiated. But in respect of many procedural provisions it would be possible to apply the theory of substantial compliance or the test of prejudices as the case may be. The position can be stated in the following words: Regulations w....
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....ciples of natural justice is void and that was expressly decided in Wood v. Woad (1874) LR 9 Ex.190. I see no reason to doubt these authorities. The body with the power to decide cannot lawfully proceed to make a decision until it has afforded to the person affected a proper opportunity to state his case." It must, however, be remembered that was a case where the appellant-chief constable was dismissed without notice and without enquiry. He was tried and acquitted on a criminal charge of conspiracy to obstruct the course of justice. Two other police constables who were tried alongwith him were convicted. While acquitting the appellant, the learned Judge commented adversely at more than one place upon the leadership qualities of the chief constable suggesting that he was found wanting in that respect. Thereupon the Brighton Watch Committee, without giving any notice or hearing to him dismissed him from service. The violation was thus of a fundamental nature. It was a case of total violation of the principle of natural justice*. There could not be a greater violation of natural justice than that. We may now consider the decision of the Privy Council in M.Vasudevan Pillai v. City C....
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....e does so in a manner not warranted by the contract he must pay damages for breach of contract So the question in a pure case of master and servant does not at all depend on whether the master has heard-the servant in his own defence; it depends on whether the facts emerging at the trial prove breach of contract But this kind of case can resemble dismissal from an office where the body employing the man is under some statutory or other restriction as to the kind of contract which it can make with its servants, or the grounds on which it can dismiss them." On the facts of the appeal before them, the Privy Council held, in the first instance, that at the stage of the deputy president asking questions and the head of the department supplying him information, the principles of natural justice had no application Alternately, they held that even if the said principles did apply, even then it must be held that the said violation was cured by what happened before the Establishments Committee [i.e., on appeal] Since there was a re-hearing before the Establishments Committee and evidence was called de novo and also because no grievance was made with to the proceedings before the Establish....
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....g in United Kingdom, the appellant was given a notice proposing to deport him. The appellant's solicitors lodged a notice of appeal and informed the appellants on his correct address, of the action taken by them. When the solicitors were notified of the date of hearing, they wrote to the appellant informing him of the date of hearing, but this letter was sent on the old address. The appellant did not receive it. The solicitors, finding no response from the appellants took no steps in the matter and the appeal was dismissed. The solicitors again wrote to the appellant but on the old address again. When sought to be deported, the appellant applied for judicial review of the deportation order on the ground of absence of notice; to him. The High Court and the Court of Appeal upheld his plea holding that notwithstanding absence of fault by the Tribunals there had been a breach of the principle of audi alteram partem, which constituted a fundamental flaw in the decision- making since the fault lay entirely with the appellant's solicitors there was a clear case for quashing the Tribunal's decision. On appeal to the House of Lords, the decision of High Court and Court of Appeal....
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....one. By the notice dated March 19, 1969, the service off the teacher was terminated with effect from April 24, 1969. The House of Lords held that the concerned teacher was denied by the education authority, which employed him, the hearing to which he was entitled. It was further found that the hearing to be afforded would not be a useless formality, as there was an arguable case for the teacher. Nonetheless, it was observed by Lord Reid [at P.1283]: " ""...... it was argued that to have afforded a hearing to the appellant before dismissing him would have been a useless formality because whatever he might have said could have made no difference. If that could be clearly demonstrated it might be a good answer. Lord Guest [at P.1291] not only agreed with the above statement but also applied the test of prejudice. He observed: "A great many arguments might have been put forward but forward but if none of them had any chance of success then I can see no good reason why the respondents should have given the appellant a hearing, nor can I see that he was prejudiced in any way. " Lord Wilberforce too....
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....he Constitution Bench, had this to say: "If an inferior court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior court's sense of fair play, the superior court may, we thinks quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance, even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to its it confirmed what ex-facie was a nullity for reasons aforementioned." In Janakinath Sarangi v. State of Orissa [1969 (3) S.C.C.392], Hidayatullah,CJ. [speaking for the Bench comprising himself and G.K.Mitter,J.] made the following pertinent observations: "From this material it is argued that the principles of natural justice were violated because the right of the appellant to have his own evidence recorded was denied to him and further that the material which was gathered behind his back was used in determini....
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.... The Government, however, without any notice to the appellant, passed final orders on 4th December, 1976, allowing the two review petitions filed by the village societies and set aside the order of the Registrar dated 10th December, 1975..... The short question that arises for decision is whether the order of the Government in revision which was passed under section 77 of the Act is invalid for non-compliance with section 77(2) which provides that no order rejudicial to any person shall be passed under subsection (1) unless such person has been given an opportunity of making his representation. It is submitted that the Government did not afford any opportunity to the appellant for making representation before it. The High Court rejected this plea on the ground that from a perusal of the voluntary application filed by the appellant it was clear that the appellant had anyhow met with the points urged by the respondents in their revision petition before the Government. We are, however, unable to accept the view of the High Court as correct." Similarly, S.L. Kapoor's case was one where a Municipal Committee was superseded even without a notice to the committee, again a case like....
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..... The concept of fair play in action must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified of given some information is in doubt, or if the version or the statement of the person who has testified, is, in dispute, right of cross-examination must inevitable form part of fair play in action but where there is no lis regarding the facts but certain explanation of the circumstances there is no requirement of cross examination to be fulfilled to justify fair play in action. When on the question of facts there was no dispute, no real prejudice has been caused to a party aggrieved by an order, by absence of any formal opportunity of cross -examination per se does not invalidate or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version of the credibility of the statement. The party who does not want to controvert the veracity of the evidence from or testimony gathered behind his back cannot expect to succeed in any subsequent demand that there was no opportunity of cross-ex....
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.... (3) S.C.R.179). Liberty to the authority/management to proceed with the inquiry, by placing the employee under suspension and continuing the inquiry form the stage of furnishing him with the report ****** (Emphasis added) To the same effect is the decision of another Constitution Bench in C.B. Gautam v. Union of India & Ors. (1993 (1) S.C.C.78), a case arising under Chapter XX-C of the income Tax Act. At pages 110-111, the following observations are relevant: "This brings us to the question of relief. We find that the order of compulsory purchase under Section 269-UD(1) of the income Tax Act which was served on the petitioner in the night of December 15, 1986, has been made without any show- cause notice being served on the petitioner and without the petitioner or other affected parties having been given any opportunity to show cause against an order of compulsory purchase nor were the reasons for the said order set out in the order or communicated to the petitioner or other concerned parties with the order. In view of what we have stated earlier the order is clearly bad in law and is set aside." ....
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....The decisions cited above make one thing clear, viz., principles of natural justice cannot be to reduced to any hard and fast formulae. As said in Russell c. Duke of Norfolk [1949 (1) All.E.R.109] way back in 1949, these principle cannot be put in a straight-jacket. Their applicability depends upon the context and the facts and circumstances of each case. [See Mahender Singh Gill v. Chief Election commissioner (1978 (2) S.C.R.272)]. The objective is to ensure a fair hearing, a fair deal, to the person whose rights are going to be affected. [See A.K.Roy v. Union of India 1982 (1) S.C.C.271) and Swadeshi Cotton Mills v. Union (1981 (1) S.C.C.664)]. As pointed out by this Court in A.K.Kraipak L Ors. v. Union d India & Ors. (1969 (2) S.C.C.262), the dividing line between quasi-judicial function and administrative function [affecting the rights of a party] has become quite thin and almost indistinguishable a fact also emphasized by House of Lords in C.C.C.U. v. Civil Service Union [supra] where the principles of natural justice and a fair hearing were treated as synonymous. Whichever the Cases it is from the standpoint of fair hearing - applying the test of prejudice, as it may be calle....
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....a facet of natural justice or of a rule incorporating such facet, the order passed is altogether void and ought to be set aside without further enquiry. In our opinion, the approach and test adopted in B. Karunkar should govern all cases where the complaint is not that there was no hearing [no notice, no opportunity and no hearing] but one of not affording a proper hearing [i.e., adequate or a full hearing] or of violation of a procedural rule or requirement governing the enquiry; the complaint should be examined on the touch-stone of prejudice as aforesaid. The matter can be looked at from the angle of justice or of natural justice also. The object of the principles of natural justice - which are now understood as synonymous with the obligation to provide a fair hearing is to ensure that justice is done, that there is no failure of justice and that every person whose rights are going to be affected by the proposed action gets a fair hearing. The said objective can be tested with reference to sub-clause (iii) concerned herein. It says that copies of statements of witnesses should be furnished to the delinquent officer "not later than three days before the commencement of the exa....
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....said of s.35 of the Act, which is really intended to protect the interests of a judgment-debtor and to see that a larger extent of his property than is necessary to discharge the debt is not sold. Many situations may be visualized when the judgment-debtor does not seek to take advantage of the benefit conferred on him under s.35 of the Act." The principle of the above decision was applied by this Court in Krishan Lal State of Jammu & Kashmir [1994 (4) S.C.C.422) in the case of an express statutory provision governing a disciplinary enquiry. It was a case where the employee was dismissed without supplying him a copy of the enquiry officer's report as required by Section 17(5) of the Jammu and Kashmir (Government Servants) Prevention of Corruption Act, 1962. This was treated as mandatory. The question was how should the said complaint be dealt with. This Court held: "Let it now be seen whether the requirement of giving copy of the proceeding of the inquiry mandated by Section 17(5) of the Act is one which is for the benefit of the individual concerned or serves a public purpose. If it be forme....
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....ould waive it. From his conduct, the respondent must be deemed to have waived it. This is an aspect which must be borne in mind while examining a complaint of non-observance of procedural rules governing such enquiries. It is trite to remember that, af a rule, all such procedure; rules are designed to afford a full and proper opportunity to the delinquent officer/employee to defend himself and are, therefore, conceived in his interest. Hence, whether mandatory or directory, they would normally be conceived in his interest only. Now, coming back to the illustration given by us in the preceding paragraph, would setting aside the punishment and the entire enquiry on the ground of aforesaid violation of sub-clause (iii) be in the interests of justice or would it be its negation? In our respectful opinion, it would be the latter. Justice means justice between both the parties. The interests of justice equally demand that the guilty should be punished and that technicalities and irregularities which do not occasion failure of justice are not allowed to defeat the ends of justice. Principles of natural justice are but the means to achieve the ends of justice. They cannot be perverted t....
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....nce, and in a given case, the enquiry officer does not give that opportunity inspite of the delinquent officer/employee asking for it. The prejudice is self- evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. The principle stated under (4) herein below is only another way of looking at the same aspect as is dealt with herein and not a different or distinct principle. (4)(a) In the case of a procedural provision which is not of a mandatory characters the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it mays the order passed in violation of such a provision can be set aside only where such violation has occasioned prejudice to the delinquent employee. (b) In the case of violation of a procedural provisional which is of a mandatory character, it has to be ascertained whether the provision is conceived in the interest of the person proceeded against or in public....