Union of India Vs. Sardar Bahadur
 INSC 295 (29 October 1971)
Civil Servant--Enquiry--Reliance on
statements of witnesses in a criminal case without calling witnesses--If
Scope of enquiry--Interference by High Court
Punishment imposed on basis that all charges
proved--Finding by Court that only some charges are proceed--Interference with
Civil Services Conduct Rules, r. 13
(5)--'Likely to have official dealings, scope of.
After the respondent (a section officer in
the Ministry of Industry and Commerce) was acquitted in a criminal case an
enquiry under r. 15 of the Central Civil Services (Classification, Control and
Appeal) Rules, 1957, was held against him on the basis of three charges.
Statements of the witnesses in the criminal case were tendered in evidence in
the enquiry without calling the witnesses. The Inquiring Officer rejected those
statements and found that only the third charge was proved and not the first
two. The third charge was that he borrowed a sum of money without obtaining
previous sanction of the Government and placed himself tinder pecuniary
obligation to the lender and thereby contravened r. 13(5) of the Central Civil
Services (Conduct) Rules, 1955. The lender was the representative of a firm
which was an applicant for licences and though the application was made to a
section in which the respondent was not working, it would in due course have to
be dealt with by' the section in which the respondent was working.
The Disciplinary Authority found that all the
charges had been proved and passed an order compulsorily retiring the
respondent from service.
A Single Judge of the High Court quashed the
order and the letters patent appeal filed by the State was dismissed.
In appeal to this Court, it was contended
that the statements rejected by the Inquiring Officer should have been
admitted, that all the three charges should have been held to be proved and
that the order of compulsory retirement was justified.
HELD : (1) Tribunals should observe rules of
natural justice in the conduct of the inquiries, that is, no material can be
relied upon to establish a contested fact unless spoken to by a witness who is
subjected to cross-examination. In the present case, the persons whose
statements were sought to be relied on were in station, but were not produced
for cross examination by the respondent. They should have been recalled, and
tendered for cross-examination by the respondent. The Inquiring Officer was
therefore justified in refusing to receive the statements as evidence.[223 A-D]
M/s. Barailly Electricity Supply Co. Ltd. v. Workmen,  2 S.C.R. 617 at
629 and State of Mysore v. S. S. Makapur,  2 S.C.R. 943, 952, followed.
219 (2)But the interference by the High Court
with respect to the third charge was not justified. [225 F-G] The second part
of r. 13(5) of the Civil Services Conduct Rules forbids a civil servant from
borrowing money from a person with whom he is likely to have official dealings.
The words 'likely to have official dealings'
take within their ambit the possibility of future dealings between the officer
concerned and the person from whom he borrowed the money. In the present case,
even if the applications were dealt with at the initial stage by another
section the respondent should have known, that in due course, the section in
which be was working would have to deal with them. Therefore, when he borrowed
money a few days earlier the respondent contravened the rule. [225 A-C] (3) A
disciplinary proceeding is not a criminal trial and therefore the standard of
proof required is that of preponderance of probability and not proof beyond
reasonable doubt. If the inference that the lender was a person likely to have
official dealings with the respondent was one which a reasonable person would
draw from the proved 'facts of the case, the High Court was wrong in sitting as
a court of appeal over a decision based upon it. The 'Letters Patent Bench had
the same power of dealing with all questions, either of fact or of law arising
in the appeal, as the Single Judge of the High Court. It the enquiry was
properly held the question of adequacy or reliability of the evidence cannot be
canvassed before the High Court. A finding cannot be characterised as per-verse
or unsupported by any relevant materials, if it was a reasonable inference from
proved facts. [225 D-G] State of Andhra Prsdesh v. S. Sree Rama Rao,  3
25, 33, followed.
Jugal Kishore Bhadani v. Union of India,
A.I.R. 1965 Pat.
(4) If the order of the punishing authority
could be supported on any finding as to substantial misdemeanour for which the
particular punishment could be imposed it is not for the court to consider
whether the charge proved alone would have weighed with the authority in
imposing the punishment. Therefore, the punishment of compulsory retirement
imposed was not liable to be quashed even though the first two charges had not
been proved.[226 G-H;227 A-C] State of Orissa v. Bidyabhushan Mahapatra, 
Supp. I S.C.R. 648, 666, followed.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1758 of 1970.
Appeal by special leave from the judgment and
order dated April 20, 1970 of the Delhi High Court in Letters Patent Appeal No.
75-D of 1966.
R. H. Dhebar, P. H. Parekh, S. P. Nayar and
Urmila Kapoor, for the appellant.
Mohan Behari Lal, for the respondent.
The Judgment of the Court was delivered by
Mathew, J. This is an appeal by Special Leave filed by the Union of India from
the judgment in appeal under clause 10 of 220 Letters Patent of the Delhi High
Court confirming the decision of a learned Single Judge allowing Civil Writ No.
716-D of 1964 filed by the Respondent by quashing the order made by the
President on 23rd April, 1963 compulsorily retiring the Respondent from
The Respondent, Shri Sardar Bahadur, was
employed as a Section Officer in the Ministry of Commerce and Industry in the
Steel & Cement Section (B) which along with other sections like Industries
Act and Industrial Policy etc. was under the control of Shri P. S. Sundaram,
Deputy Secretary in that Ministry at that time.
In April, 1956, the Ministry invited
applications for grant of licences to set up steel re-rolling mills.
On June 14 1956, one Shri Nand Kumar
representing Messrs Ram Sarup Mam Chand and Messrs Mam Chand and Company of
Calcutta applied for five licences to set up steel re-rolling mills.
He also handed over on June 125, 1956 to the
respondent a cheque for Rs. 2,500/drawn on the Punjab Co-operative Bank Limited
in favour of Shri P. S. Sundaram. The cheque was certified by the bank as good
for payment upto September 24, 1956. At the back of the cheque, there was a
signature which purported to be that of Shri P. S. Sundaram. It may be noted at
this stage that Shri P. S. Sundaram, the Deputy Secretary had denied the
signature to be his. Above the signature the respondent wrote the words
"Please pay to Shri Sardar Bahadur.' Lower down the respondent wrote the
following words "Please collect and credit the amount into my account.
First payee's endorsement may kindly be guaranteed on my behalf and risk."
This cheque was duly cent to the account of the respondent and the amount of
Rs. 2,500/was credited to his account in the State Bank of India, New Delhi.
The respondent was prosecuted by the Special
Police Establishment on the allegations that the amount covered by the cheque
was taken by him as illegal gratification for using his official position
illegally and in a corrupt manner in order to procure licences for Messrs Ram
Sarup Mam Chand of Calcutta who bad filed applications in that behalf and that
the signature of Shri P. S. Sundaram had been forged by him. The respondent was
charged with offences punishable under Section 5 (2) read with Section 5 (i)
(d) of the Prevention of Corruption Act, 1947 and 221 Section 161, 467 and 471.
of the Indian Penal Code. The respondent was acquitted of all the charges on
june 20, 1960. There after it was proposed to hold an 'inquiry against him
under Rule 15 of the Central Civil Services (Classification, Control and
Appeal) Rules, 1957 on the basis of the following charges :1."That be
failed to inform Shri P. S. Sundaram Deputy Secretary, Ministry of Commerce and
Industry, New Delhi, that a cheque for.Rs. 2,500/in the name of Shri Sundaram
had been issued by Shri Nand Kumar of Messrs Ram Sarup Main Chand and Messrs
Main Chand & Company of Calcutta, 'whose applications for grant of licences
for establishing steel-re-rolling mills were pending in the Ministry of
Commerce and Industry, as security in 'connection with the said applications
when he knew that no such deposit. was to be made;
2. That he failed to inform Shri P. S. Sundaram
that the said Shri Nand Kumar had given him a cheque bearing Shri Sundaram's
signature and bad asked him to deposit it in his account. which he had done
after asking the bank (instead of showing the cheque first to Shri Sundaram
himself) to' guarantee the said signature of Shri Sundaram; and
3. That he borrowed a sum. of: Rs. 2,500/(the
amount covered by the cheque referred,.to above) from the said Shri Nand Kumar,
without obtaining previous sanction of the Government and placed himself under
pecuniary obligations to the extent of Rs. 2,500/and thereby also contravened
rule 13(5) of the Civil Services (Conduct) Rules, 1955." The enquiry was
held and the Inquiry Officer found that the first two charges were not proved
as the identity of P. S.
Sundaram the payee of the cheque, had, not,
been established with Shri 'P. S. Sundaram Deputy Secretary.. But the Inquiring
Officer found that the. third charge has been proved.
The findings of the Inquiring Officer on the
first two charges were not agreed to by the Deputy Secretary, Ministry of
External Affairs, exercising the powers of the President.
He found that all the charges had been
proved. The President after consultation with the Union Public Service
Commission passed an order on April 22, 1968 holding that the charge of gross
misconduct and failure to 'Maintain absolute integrity. and devotion to duty as
a Government ' servant had been substantially proved against the respondent and
imposing the penalty of compulsory ,retirement on him.
The respondent was directed to be retired
from service With immediate effect.
222 it was this order which was quashed by
the Single Judge in the writ petition filed by the respondent. The Letters
Patent Appeal against the-order filed by the Union of India before the Division
Bench was dismissed.
it was contended on behalf of the appellant
that the Inquiry Officer went wrong in finding that charges Nos. 1 & 2 had
not been proved and that the President was right in holding that these charges
had been proved and therefore the High Court should have found that charges
Nos. 1 & 2 were proved, as there was evidence to support the charges. It
was contended that the Inquiring Officer wrongly rejected the copies of ',he
statements of the witnesses examined in the original trial, which statements if
admitted, would have fully established the first two charges against the
respondent. Counsel for the appellant argued that the provisions of the
Evidence Act are not applicable to disciplinary proceedings and therefore the
statements of the witnesses in the criminal trial ought to have been admitted
and relied on for establishing the guilt of the respondent on the first two
charges. Counsel relied on the following observations of Venkatarama lyer,J. in
Union of India v. Varma(1) "Now it is no doubt true that the evidence of
the Respondent and his witnesses was not taken in the mode prescribed in the
but that Act has no application to enquiries
conducted by Tribunal 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 the procedure followed was not in accordance with that
which obtains in a Court of law." In M/s. Bareilly Electricity Supply Co.
Ltd. v. The Workmen and Others.(2) the scope of the above observation was considered
and this is what Jaganmohan Reddy, J. said:"But the application of
principle-,of natural justice does not imply that what is not evidence can be
acted upon. On the other hand what it means is that no materials can be relied
upon to establish a contested fact which are not spoken to by persons who are
competent to speak about them and are subjected to cross-examination by the
party against whom they are sought to be used. When a document is produced in a
Court or a Tribunal the questions that naturally arise is, is it a genuine
document, what are its contents and are the statements contained therein
true." (1)  S.C.R. 499. (2)  (2) S.C.C. 617 at 629 223 We do
not think that the statements should have been received in evidence as the appellant
had taken no step to produce the persons who made the statements for cross examination
of the respondent. It was the duty of the appellant to have produced the
persons whose statements were sought to be proved for the cross-examination of
the respondent. In State of Mysore v. S. S. Makapur(1), this Court said that
the purpose of an examination in the presence of a party against whom an
enquiry is made, is sufficiently achieved, when a witness who has given a prior
statement is recalled, that statement is put to him, and made known to the
opposite party, and the witness is tendered for cross-examination by that
party. As the persons whose statements were sought to be relied on were in
Delhi and as they were not produced and tendered for cross-examination by the
respondent, we think that the Inquiring Officer was right in refusing to act
upon the statements relied on by the appellant. As there was no material before
the Inquiring Officer to. show that P. S. Sundaram mentioned in the cheque is
P. S. Sundaram, the Deputy Secretary, we think the High Court was justified in
holding that these charges had not been proved.
Coming to charge No. 3 the Single Judge as
well as the Division Bench said that although there was great deal of suspicion
on the bona fides of the transaction in the respondent borrowing money from
Nand Kumar, suspicion cannot take the place of proof. They, therefore, held
that the charge has not been proved. The third charge, as already stated, was
that the respondent borrowed Rs. 2,500/from Nand Kumar without obtaining the
previous permission of the Government and placed himself under a pecuniary
obligation to the extent of the amount and thus contravened the provisions of
Rule 13 (5) of the Central Civil Services (Conduct) Rules 1955 which reads
"(5) No Government servant shall, save in the ordinary course of business
with a bank or a firm of standing, borrow money from or otherwise place himself
under pecuniary obligation to any person within the local limits of his
authority or any other person with whom he is likely to have official dealings,
nor shall he permit any member of his family, except with the previous sanction
of the Government, to enter into any such transactions :
Provided that a Government servant may accept
a purely temporary loan of small amount, free of interest, from a personal
friend or a relative or operate a credit account with a bona fide
tradesmen." (3) 1963(2) S.C.R. 943 at 952, 224 The Inquiring, Officer
found that the respondent had borrowed Rs. 2,500/from Nand Kumar without
obtaining the previous permission as required by Rule 13 (5) and thereby
contravened the provisions of the sub-rule. The learned Single Judge held that
although it was proved that the money was borrowed and the respondent placed
himself under pecuniary obligation to Nand Kumar , there' was no evidence nor
had it been found either by the Inquiring Officer or by the President that Nand
Kumar was a person with whom the respondent was likely to have official
dealings. He further said that the evidence of Shri N. S. Satureman was quite
clear that application for licence of M/s Ram Sarup Mam Chand was received in
the Industries, Act Section which was called I.A. (1) Section whereas the
petitioner was working in the Steel & Section where the copies of these
applications started coming only in July 1956 and so in June 1956 when the
cheque wag issued. it was not-.possible to see how in the absence 'of any other
evidence the petitioner could he regarded as 'being in a position where Nand
Kumar waslikely to have any' official, dealings with him in the matter of the
grant of the licences. The Division Bench accepted this finding:
It may be noted that the first part of the
sub-rule 13 (5) of the Central Civil.Service's (Conduct) Rules 1955 says that
no Government servant shall borrow money from. or otherwise place himself under
a pecuniary obligation to any person within the local limits of his authority,
save in the, ordinary. course of business with a bank or a firm of.
standing. The second part of the sub-rule.
forbids him from borrowing money for any other person with whom he. is likely
to have official dealings. The appellant at no time had a case that the
respondent contravened the first part of the sub-rule in borrowing the' amount
from Nand Kumar. So, neither the learned Single Judge nor the Division Bench
had occasion to consider the application of the first part of the sub-rule to
the facts of the case. Even . in the Special Leave Petition the appellant did
not rely on the first part of the subrule. We do not, therefore, think it.
necessary to consider the scope of the first
part of the sub-rule or its. application to the case here.
A finding cannot be characterised as perverse
or unsupported by any relevant materials if it is a reasonable inference from
proved facts. Now what are the proved facts : Nand Kumar as representative of
M/s Ram Sarup Mam Chand and M/s Mam Chand and Company, of Calcutta filed five
applications for licences to set up steel re-rolling mills on 14-6-1956.
On 25-6-56, a cheque drawn in favour of P.'
S. Sundaram was given to the respondent by Nand Kumar for Rs. 2,'500/-; the
cheque was endorsed and the amount credited in the account:
of the respondent. When the respondent
borrowed the amount in question from 225 Nand Kumar, he was not working in the
Industries Act Section Nand Kumar knew that the respondent was working in the
Steel & Cement Section of the Ministry and the applications for.
the grant of licences for setting up the
steel plant rerolling mills would go to that Section. Even if the applications
were to be dealt with at the initial stage by the Industries Act Section the
respondent at least was expected to know that in due course the section in
which he was working had to deal with the same. This is borne out by the fact
that in July 1958 copies of the applications were actually sent to the Steel
& Cement Section where the respondent was working. If he, therefore,
borrowed money from Nand Kumar a few days earlier it seems rather clear that he
placed himself under pecuniary obligation to a person who was likely to have
official dealings with him. The words "likely to have official
dealings" take within their ambit the possibility of future dealings
between the officer concerned and the person from whom he borrowed money. A
disciplinary preceding is not a criminal trial. The standard proof required is
that of preponderance of probability and not proof beyond reasonable doubt. If
the inference that Nand Kumar was a person likely to have official dealings
with the respondent was one which reasonable person would draw from the proved
facts of the case, the High Court cannot sit as a court of appeal over a
decision based on it. Where there are some relevant materials which the
authority has accepted and which materials may reasonably support the
conclusion that the officer is guilty, it is not the function of the High Court
exercising its jurisdiction under Art. 226 to review the materials and to
arrive at an independent finding on the materials. If the enquiry has been properly
held the question of adequecy or reliability of the evidence cannot 'be
convassed before the High Court (See State of Andhra Pradesh v. S. Sreo Rama
Rao(1). No doubt there was no separate finding on the question whether Nand
Kumar was a verson likely to have official dealings with the respondent by the
Inquiring Officer or the President. But we think that such .a finding was
implied when they said that charge No. 3 has been proved. The only question was
whether the proved facts of the case would warrant such an inference.
tested in' the light of the standard of proof
necessary to enter a finding of this nature, we are satisfied that on the
material facts proved the inference and the implied finding that Nand Kumar was
a person likely to .have official dealings with the respondent were reasonable.
The Division Bench said that the conclusion
of the Single Judge that there was no evidence before the Inquiring Officer
that Nand Kumar was likely to have official dealings with the respondent was
not wholly unwarranted, and there are limits, to as (1)  3 S.C.R. 25 at
33, 226 the powers exercised by a Single Judge under Article 226 of the
Constitution, there are limits to the powers of a Division Bench while sitting
in appeal over the judgment of a Single Judge. If the inference that Nand Kumar
was a person likely to have official dealings with the respondent was in the
circumstances of the proved facts in the case a reasonable one, we do not think
there was anything which prevented the Division Bench from interfering with the
order of the Single Judge. In Jugal Kishore Bhadani v. Union of India(1), the
Court observed:"It is well established principle of law that unless the
statute oherwise provides an appellate Court has the same power of dealing with
all questions, either of fact or of law, arising in the appeal before it, as
that of the Court whose judgment is the subject of scrutiny in the
appeal." The respondent contended that he did not borrow Rs. 2,500/from
Nand Kumar. His case was that Nand Kumar owed him Rs. 500/and that when he gave
the cheque to the respondent it was on the understanding that Rs. 2,000/would
be repaid to him and that was done immediately. The respondent produced a
receipt executed by Nand Kumar for having received Rs. 2,000/-, but Nand Kumar
was not examined to prove the genuineness of the receipt. The Inquiring Officer
has considered the question at length in his report and he came to the
conclusion that the case of the respondent that he did not borrow Rs.
2,500/from Nand Kumar cannot be accepted. The learned Single Judge found that
the petitioner had borrowed the amount of Rs. 2,500/from Nand Kumar. That
finding was endorsed by the Division Bench. As it was a reasonable inference
from materials before the Inquiring Officer that Nand Kumar was a person likely
to have official dealings with the respondent and since the respondent borrowed
money from such a person without the permission of Government, the finding of
the Inquiring Officer and the President that the respondent had contravened
Rule 13(5) of the Central Civil Services (Conduct) Rules, 1955 should not have
been interfered with by the High Court.
It may be recalled that the punishment of
compulsorily retirement was imposed upon the respondent on the basis that all
the three charges had been proved against him. Now, it is found that only the
third charge has been proved. The question then is whether the punishment of
compulsorily retirement imposed by the President can be sustained even though
the first two charges have not been proved.
(1) A.I.R. 1965 Patna 196, 227 Now it is
settled by the decision of this Court in State of Orissa v. Bidyabhushan
Mohapatra(1) that if the order of a punishing authority can be supported on any
finding as to substantial misdemeanour for which the punishment can be imposed,
it is not for the Court to consider whether the charge proved alone, would have
weighed with the authority in imposing the punishment. The Court is not
concerned to decide whether the punishment imposed, provided it is justified by
the rules, is appropriate having regard to the misdemtanour established.
We reverse the judgment under appeal and hold
that order of the President imposing the punishment of compulsorily retirement
was not liable to be quashed.
In the result, the appeal is allowed, but in
the circumstances, there will be no order as to costs.
V.P.S. Appeal allowed.
(1)  Supp. 1 S.C.R. 648 a 666.