Managing Director, ECIL, Hyderabad and Ors. vs. Karunakar and Ors.

Facts

A three-judge Bench of this Court found a conflict in the two decisions of this Court, viz., Kailash Chander Asthana etc. v. State of U.P. and Ors. etc. MANU/SC/0221/1988, and Union of India and Ors. etc. v. Mohd. Ramzan Khan MANU/SC/0124/1991 and thus, referred the matter to the Chief Justice for being placed before a Larger Bench.

Key Takeaways for Students

Legal Issue

1. Whether the inquiry report should be furnished to the employee without the statutory rules?
2. Whether the report is to be furnished to the employee when the punishment imposed is other than the major punishment of dismissal, removal, or reduction in rank?
3. Whether there is an obligation to furnish the report only on demand or otherwise?
4. Whether the law laid down in Mohd. Ramzan Khan's case will apply to all establishments - Government and non-Government, public and private sector undertakings?
5. What is the effect of the non-furnishing of the report on the order of punishment and what relief does an employee have?
6. When does the law for furnishing of the report should come into operation?
7. What was the law before the date of the decision of Mohd. Ramzan Khan's case?

Holding

Denial of inquiry report: The employee has a right to receive a copy of the Inquiry report about the charges leveled against him, before the disciplinary authority arrives at its conclusions about the guilt or innocence of the employee, even if the statutory rules do not permit the furnishing of the report or are silent on the subject. A denial is a denial of a reasonable opportunity to the employee to prove his innocence, is a breach of the principles of natural justice, and is a violation of Article 311(2), Articles 14 and 21 of the Constitution.

Furnishing inquiry report: It is mandatory under Article 311(2) of the Constitution to hold an inquiry before the employee is dismissed, removed or reduced in rank and Service rules will apply while imposing punishment. Whenever the service rules contemplate an inquiry before a punishment is awarded, the employee will have the right to receive the Inquiry Officer's report, notwithstanding the nature of the punishment.

Obligation to furnish the report: it is the right of the employee to have the report to defend himself effectively and whether the employee asks for the report or not, the report has to be furnished to him.

Application of Mohd. Ramzan Khan's case: The law laid down in Mohd. Ramzan Khan's case should apply to employees in all establishments, Government or non-government, public or private, irrespective of rules governing the disciplinary proceeding, the furnishing of the report copy, or the nature of punishment.

Effect on the order of punishment and relief: The effect of the denial to an employee of the report, has to be considered on the facts and circumstances of each case. The Courts and Tribunals should cause a copy of the report to be furnished to the aggrieved employee if it was not served to him before coming to the Court/Tribunal, and give the employee a reasonable opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the Court/Tribunal concludes that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, it should not interfere with the order of punishment.

Operation of law on furnishing reports and Law prevailed before the decision of Mohd. Ramzan Khan's case: Questions (vi) and (vii) may be considered together. The decision in Mohd. Ramzan Khan’s case had a prospective effect i.e., applicable to the orders of punishment passed after 20th November 1990, to prevent unsettlement of the settled positions, and administrative chaos and to meet the ends of justice. Before the 42nd Amendment of the Constitution, the stage at which the opportunity to defend became available to the employee had stood deferred till the second notice requiring him to show cause against the penalty, was issued to him. The right to prove his innocence to the disciplinary authority was to be exercised by the employee along with his right to show cause as to penalty. After the 42nd Amendment of the Constitution the second stage of the inquiry, viz., the inquiry into the nature of punishment, was abolished.

Final Decision Appeal Allowed

Ratio

The Principles of natural justice must be followed in service related matters.