Holding

When departmental and criminal proceedings arise from identical facts and the employee is acquitted, the ex parte departmental findings are vitiated and the employee must be reinstated with arrears, and no fresh inquiry on the same facts may be ordered.

Summary

Capt. M. Paul Anthony, a security officer of Bharat Gold Mines Ltd., was arrested after a police raid at his residence recovered gold items. He was suspended and a departmental inquiry was initiated, but his request to stay the inquiry pending the criminal trial was denied. The inquiry proceeded ex parte, he was found guilty and dismissed. The criminal trial later acquitted him, holding that no raid or recovery occurred. The Supreme Court held that when departmental and criminal proceedings are based on identical facts and the employee is acquitted, the ex parte departmental findings are vitiated; the appellant was entitled to reinstatement with full back‑wages and no fresh inquiry on the same facts. The appeal was allowed, setting aside the High Court’s decision.

Issues considered

The propriety of conducting a departmental inquiry simultaneously with a criminal trial on the same set of facts.
Whether an ex parte departmental inquiry and dismissal can stand after the employee’s acquittal in the criminal case.
Whether denial of adjournment and non‑payment of subsistence allowance violated principles of natural justice.
Whether a fresh departmental inquiry may be instituted after acquittal on the same facts.

Legislation cited

Constitution of Indias. Article 136, s. Article 14, s. Article 16, s. Article 21
General Clauses Acts. Section 16

Subjects

departmental inquirycriminal trialsimultaneous proceedingsnatural justiceex partesuspensionsubsistence allowancereinstatementacquittalservice law

Judgment

CAPT. M. PAUL ANTHONY A
v.
BHARAT GOLD MINES LTD. AND ANR.

MARCH 30, 1999

[S. SAGHIR AHMAD AND V.N. KHARE, JJ.] B

Service Law-Departmental and criminal proceedings on same set of
facts continuing simultaneously-Effect of-Raid being conducted and
incriminating articles recovered from Appellant's residence-Appellant's
request for deferring departmental inquiry to await outcome of criminal C
trial rejected-Appellant not attending inquiry on account of ill health
and financial difficulties-Inquiry held ex parte and appellant dismissed from
service-Thereafter appellant acquitted in criminal case on same facts and
examining same witnesses-Finding given that no search was conducted nor
any recovery made-Held, it would be unjust and unfair to allow findings D
recorded at ex parte departmental enquiry to stand; appellant reinstated
with entire arrears of salary-Constitution on India, Articles 14 and 16

Natural Justice-Non-payment of subsistence allowance during
pendency of departmental inquiry-Appellant employee unable to attend
on account of penury-Request for adjourning inquiry to await decision E
in criminal case refused-Proceedings held ex parte and appellant
dismissed from service-Held dismissal in violation of natural justice;
findings recorded at inquiry stood vitiated-Constitution of India, Articles
14 and 21-Fundamental Rule 53

Constitution of India, Article 136-Appe/lant employee dismissed F
consequent upon ex parte departmental proceedings commenced in 1985-
Appellant acquitted in 1987 in criminal proceedings on same set of facts-
Supreme Court setting aside dismissal in 1999-Held, on facts, no fresh
inquiry on same set of facts to be instituted.

Appellant was employed with respondent No. 1 as Security Officer. On G
June 2, 1985 police conducted a raid at the appellant's ho-use and a mining
sponge gold ball and gold bearing sand were recovered by the police. An FIR
was lodged on the same day. The next day the appellant was placed under
suspension and thereafter served with a charge sheet proposing a regular
departmental enquiry. H
257
258 SUPREME COURT REPORTS [1999] 2 S.C.R.

A Allowing the appeal, this Court

HELD : 1.1. The appellant having been acquitted by a judicial
pronouncement with the finding that the "raid and recovery" at his residence
were not proved, it would be unjust, unfair and rather oppressive to allow the
findings recorded at the ex parte departmental proceedings, to stand.
B (273-E)

1.2. Since the facts and the evidence in both the proceedings, namely,
the departmental proceedings and the criminal case were the same without
there being any iota of difference, the distinction, which is usually drawn as
C between the departmental proceedings and the criminal case on the basis of
approach and burden of proof, would not be applicable to the instant case.
(273-F)

Delhi Cloth & General Mills Ltd v. Kushal Bhan, (1960) 3 SCR 227;
Tata Oil Mills Company Ltd. v. Workmen, (1964) 7 SCR 555; Jang Bahadur
D Singh v. Baij Nath Tiwari, (1969] 1 SCR 134; Kusheshwar Dubey v. Mis
Bharat Coking Coal Ltd., (1988) 4 SCC 319; Nelson Matis Vo Union of India,
(1992] Supp. 1 SCR 325; State of Rajasthan v. B.K. Meena, [1996] 6 SCC
417 and Depot Manager, Andhra Pradesh State Road Transport Corporation
v. Mohd. Yousuf Miyan, (1997] 2 SCC 699, referred to.

E 2. The appellant had been punished in total violation of the principles
of natural justice and he had literally not been afforded any opportunity of
hearing. The appellant had not been provided any subsistence allowance
during the period of suspension and the adjournment prayed for by him on
account of his illness, duly supported by medical certificates was refused
resulting in exparte proceedings against him. The appellant was not paid
F subsistence allowance during the pendency of the departmental proceedings.
-
-
He informed the respondents that he was unable to attend the enquiry on
account of financial difficulties and illness and made several requests for
staying the proceedings to await the outcome of the criminal trial. The
request was rejected. The proceedings were held ex parte. The appellant was
G held guilty dismissed from service in June, 1986. (272-G]
. \

The same police officers and panch witnesses who were examined by
the Inquiry Officer were examined in the criminal case. On February 3 ,
1987, the appellant was acquitted in the criminal case with the finding that
no search was conducted nor any recovery made at the appellants' houseo
H The appellant's request to the respondents that he be reinstated in view of
CAPT. M. PAULANTHONYv. B.G.M. LTD. [S. SAGHIRAHMAD,J.] 259
the acquittal was rejected on the ground that he had already been dismissed A
from service on the completion of the departmental inquiry which was conducted
independently of the criminal case. (273-C-D)

The departmental appeal by the appellant against the order of dismissal
was rejected by the appellate authority. Thereafter, Single Judge of the High
Court allowed the appellant's writ petition challenging the order of dismissal. B
While ordering reinstatement, the Single Judge gave liberty to the
respondents to initiate fresh proceedings. The Division Bench of the High
Court allowed the Respondents, appeal and set aside the order of the Single
Judge been refused resulting in ex-parte proceedings against him. Moreover,
on account of his penury occasioned by non-payment of subsistence allowance, C
he could not undertake a journey to attend the disciplinary proceedings. The
findings recorded by the Inquiry Officer at such proceedings, which were
held ex-parte, stood vitiated. (272-H; 273-A)

State of MP. v. State of Maharashtra, [1977) 2 SCR 555; O.P. Gupta
v. Union of India, [1987) 4 SCC 328; State of Maharashtra v. Chanderbhan, D
[1983) 3 SCR 337; Fakirbhal Fulabhai Solanki v. Presiding Officer, [1986)
2 SCR 1059; and Ghanshyam Dass Shrivastva v. State of Madhya Pradesh,
[1973) I SCC 656 1183, referred to.

3. In the peculiar circumstances of the case, specially having regard
to the fact that the appellant had been undergoing this agony since 1985 E
despite having been acquitted by the criminal court in 1987, no fresh
departmental inquiry would be instituted against the appellant on the same
set of facts. The appellant would be reinstated forthwith on the post of
Security Officer and would also be paid entire arrears of salary, together
with all allowances from the date of suspension till his reinstatement, within
three months. [273-H; 274-AJ F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1906 of
1999.

From the Judgment and Order dated 17.9.97 of the Karnataka High Court
in W.A. No. 4419 of 1995. G
P.R. Ramasesh for the Appellant Tripurari Ray and Vineet Kumar for the
Respondents.

The Judgment of the Court was delivered by

S. SAGHIR AHMAD, J. Leave granted. H
260 SUPREME COURT REPORTS (1999] 2 S.C.R.

A Whether departmental proceedings and proceedings in a criminal case
launched on the basis of the same set of facts can be continued simultaneously
is a question which crops up perennially in service matters and has once
again arisen in this case in the following circumstances.

. Bharat Gold Mines Ltd. (Respondent No. l) is a Govt. undertaking at
B Kolar Golct Fields in Kamataka, where the appellant was appointed as a
Security Officer on 31.10.1983. On 2nd of June, 1985, a raid was conducted
by the Superintendent of Police at the house of the appellant from where a
mining sponge gold ball weighing 4.5 grams and 1276 grams of 'gold bearing
sand' were recovered. Thereafter, on the same day, a First Information Report
C was lodged at the Police Station and a criminal case was registered against
the appellant, who was placed under suspension on 3.6.1985. The next day,
namely, on 4th of June, 1985, a charge-sheet was issued proposing a regular
departmental inquiry with regard to the recovery of the above articles from
his house. On 11th of June, 1985, the appellant made a representation to the
Disciplinary Authority denying the allegations made against him in the charge
D sheet and pleaded that the entire episode was a concoction. He prayed that
the departmental proceedings initiated against him may be dropped or may,
in the alternative, be postponed till the conclusion of the criminal proceedings
against him on the basis of the First Information Report lodged against him
at the Police Station on 2.6.1985. The representation was rejected on 19.6.1985
E and the appellant was informed that the disciplinary proceedings would be
held against him on 1.7.1985.

In the meantime, the appellant filed Writ Petition No. l 0842 of 1985 in
the Karnataka High Court for a direction to restrain the respondents from
proceeding with the disciplinary inquiry till the conclusion of the criminal case
F as the appellant's defence was likely to be prejudiced. This Writ Petition was
disposed of by the High Court on 19.8.1985 and a direction was issued to the
respondents to consider and dispose of the appellant's appeal filed against
the order of suspension but liberty was given to the respondents to defer the
disciplinary proceedings if it was found expedient so to do. The respondents
G did not defer the departmental proceedings and continued the proceedings
which the appellant could not attend on account of his ill-health and financial
difficulties which compelled him to shift to his home-town in Kerala. The
respondents were infonned by a number of letters supported by medical
certificates about his illness with a_ request for staying the departmental
proceedings and await the re5ult of the criminal case. But the Inquiry Officer
H rejected the request and recorded his findings on 10.5.1986 holding the appellant
CAPT.M. PAULANTHONYv. B.G.M.LTD. [S.SAGHIRAHMAD,J.] 261

• guilty. These findings were accepted by the Disciplinary Authority and by A
order dated 7th June 1986, the appellant was dismissed from service.

On 3rd of February, 1987, judgment in the criminal case was pronounced
and the appellant was acquitted with the categorical findings that the
prosecution had failed to establish its case. This judgment was communicated
by the appellant to the respondents on 12.2.1987 with a request that he may B
be reinstated, but respondents, by their letter dated 3 .3 .1987, rejected the
request on the ground that the appellant had already been dismissed from
service on the completion of the departmental inquiry which was conducted
independently of the criminal case and, therefore, the judgment passed by the
Magistrate was of no conseguence. C
The order of dismissal passed by the respondents was challenged in a
departmental appeal which was rejected by the Appellate Authority on
22.7.1987.

It was, at this stage, that the appellant approached the High Court D
throush a Writ Petition under Article 226 of the Constitution challenging
the va~ity of the order of dismissal on various grounds, including that the
departm~ntal proceedings based on the same set of facts on which the criminal
case was 'launched against him, ought to have been stayed awaiting the result
of the criminal case. It was also pointed out that since the appellant had
already been acquitted and the prosecution case against the appellant based E
on the "raid and recovery" which also constituted the basis of the departmental
proceedings, had not be~n found to be true, he was entitled to be reinstated
in service.

The Writ Petition was allowed by a Single Judge of the High Court on
26.9.1995 with the finding that the departmental proceedings and the criminal F
case being based on the same set of facts, departmental proceedings should
have been stayed till the result of the criminal case and since in the criminal
case the appellant had already been acquitted and the prosecution case was
not found established, the respondents could not legally refuse reinstatement
or the consequent back-wages to the appellant. While directing reinstatement G
of the appellant, the High Court gave liberty to respondents to initiate fresh
proceedings against the appellant after perusing the judgment passed in the
criminal case.

This judgment was, however, set aside by the Division Bench on 17th
September, 1997 in a letters patent appeal filed by the respondents. It is this H
262 SUPREME COURT REPORTS [1999] 2 S.C.R.

A judgment which is under appeal before us.

Learned counsel for the appellant has contended that the respondents
having themselves launched the crimi~I case were not justified in proceeding
with the departmental inquiry which was based on the same set of facts and
ought to have stayed those proceedings till the conclusion of the criminal
B case. Since the basis of action in both the cases, namely, the departmental
proceedings and the criminal case, was the raid conducted by the
Superintendent of Police at the residence of the appellant from where a
recovery was also allegedly made, the departmental proceedings were liable
to be stayed as the facts and the evidence in both the proceedings were
C common. In these circumstances, the appellant, it is contended, was justified
in requesting the respondents to stay the departmental proceedings and on
the refusal of the respondents to stay the proceedings, the appellant was
justified in not participating in those proceedings as his defence was likely
to be prejudiced. It is also contended that the appellant was ill and for that
reason also the departmental proceedings ought to have been stayed till he '
D had completely recovered. It is also submitted that the appellant who had
been placed under suspension was not being paid the Subsistence Allowance
with the result that he :f~ll into serious financial difficulties and could not
undertake any journey '~q:>m his home-town in Kerala to Kolar Gold Fields
in Karnataka for participating in the departmental proceedings. The Division
E Bench, it is contended, was not justified in interfering with the judgment
passed by the Single Judge who had found it as a positive fact that the
departmental proceedings and the criminal case were based on the same set
of facts and the evidence in both the cases was common.

Learned counsel for the respondents has, however, contended thal(_the
F respondents were under no obligation to stay the departmental proceedings
and await the result of the criminal case as there was no legal bar in hoiding
-
the departmental proceedings simultaneously with the proceedings in the
criminal case, particularly as the level of proof in both the proceedings is
different and the purpose with which the departmental proceedings are
G conducted is also not identical with the purpose with which the criminal case
is prosecuted for an offence committed by the employee.

This question, as observed earlier, is of a perennial nature and has
arisen more often than not in spite of the judicial pronouncements, specially
by this Court, having settled the question and provided the answer. Still, the
H problem is raised either by the employer or by the employee in one or the
CAPT.M.PAULANTHONYv. B.G.M.LTD. [S. SAGHIRAHMAD,J.] 263

qther form. In the instant case, the order of dismissal had already been passed A·
before the decision of the criminal case which ultimately resulted in the
acquittal of the appellant. Whether the acquittal coupled with other
circumstances, specially ex-parte proceedings, of the case, will have the effect
of vitiating the departmental proceedings or the order of dismissal passed
against the appellant, is the question which is to be considered in this appeal.
B
As we shall presently see, there is a consensus of judicial opinion
amongst the High Courts whose decisions we do not intend to refer in this
case, and the various pronouncements of this Court, which shall be copiously
referred to, on the basic principle that proceedings in a criminal case and the
departmental proceedings can proceed simultaneously with a little exception. C
As we understand, the basis for this proposition is that proceedings in a
criminal case and the departmental proceedings operate in distinct and different
jurisdictional areas. Whereas in the departmental proceedings, where a charge
relating to misconduct is being investigated, the factors operating in the mind
of the Disciplinary Authority may be many such as enforcemer.t of discipline
or to investigate the level of integrity of the delinquent or the other staff, the D
standard of proof required in the those proceedings is also different than that
required in a criminal case. While in the departmental proceedings the standard
of proof is one of preponderance of the probabilities, in a criminal case, the
charge has to be proved by the prosecution beyond reasonable doubts. The
little exception may be where the departmental proceedings and the criminal
case are based on the same set of facts and the evidence in both the E
proceedings is common without there being a variance.

The first decision of this Court on the question was rendered in Delhi
Cloth & General Mills Ltd. v. Kushal Bhan, [l 960] 3 SCR 227 =AIR (l 960)

--
SC 806 = (1960) LLJ 520 SC, in which it was observed as under:
F
"It is true that very often employers stay enquiries pending the
decision of the criminal trial courts and that is fair; but we cannot
say that principles of natural justice require that an employer must
wait for the decision at least of the criminal trial court before taking
action against an employee. In Bimal Kanta Mukherjee v. Mis G
Newsman's Printing Works, (1956) LAC 188, this was the view
taken by the Labour Appellate Tribunal. We may, however, add that
if the case is of a grave nature or involves questions of fact or law,
which are not simple, it would be advisable for the employer to await
the decision of the trial court, so that the defence of the employee in
the criminal case may not be prejudiced." H
264 · SUPREME COURT REPORTS (1999] 2 S.C.R.

A This was followed by Tata Oil Mills Company Ltd. v. Workmen. [1964] ·
7 SCR ?55 =AIR (1965) SC 155, in which it was, inter alia, laid down as under:

"There is yet another point which remains to be considered. The
Industrial Tribunal appears to have taken the view that since criminal
proceedings had been started against Raghavan, the domestic enquiry
B should have been stayed pending the final disposal of the said criminal
proceedings. As this Court has held in the Delhi Cloth and General
Mills Ltd. vs. Kushal Bhan, it is desirable that if the incident giving
rise to a charge framed against a workman in a domestic enquiry is
being tried in a criminal court, the employer should stay the domestic
C enquiry pending the final disposal of the criininal case."

The question cropped up again with· a new angle in Jang Bahadur .
Singh v. Baij Nath Tiwari, [1969] l SCR 134 =AIR (1969) SC 30, as it was
contended that initiation of disciplinary proceedings during the pendency of
a criminal case on ihe same 'factS amounted to contempt of court. This plea
D was rejected and the Court observed as under :

. "The issue in the disciplinary proceedings is whether the employee
is guilty of the charges on which it is proposed to take action against
him. The. same issue may arise for decision in a civil or criminal
proceeding pending in a court. But the pendency of the court
E proceeding does not bar the taking of disciplinary action. The power
of taking such action is vested in the disciplinary authority. The civil
or criminal court has no such power. The initiation and continuation
· of disciplinary proceedings in good faith is not calculated to obstruct
or interfere with the cour$e ofjustice in the pending court proceeding.
F - The employee is free to move the court for an order restraining the
continuance of the disciplinary proceedings. If he obtains a stay
order, a wilful violation of the order would of course amount to
contempt of court. In the absence of a stay order the disciplinary
authority is free to exercise its lawful powers." _ ~ - - ·
G These decisions indicate that though it would not be wrong in
conducting two parallel proceedings, one by way of disciplinary action and
the other in the criminal court, still.it would be desirable to stay the domestic
·inquiry ifthe incident giving rise to a charge framed against the employee in
a domestic inquiry is being tried in a criminal court. The case law was
H reviewed by this Court in Kusheshwar Dubey v. Mis Bharat Coking Coal
CAPT. M.PAULANTHONYv. B.G.M. LTD. [S. SAGHIRAHMAD,J.] 265

Ltd. & Ors., [1988] 4 SCC 319 = 1988 Supp. (2) SCR 821=AIR1988 SC 2118 A
and it was laid down as under :

"The view expressed in the three cases of this Court seem to support
the position that while there could be no legal bar for simultaneous
proceedings being taken, yet, there may be cases where it would be
appropriate to defer disciplinary proceedings awaiting disposal of the B
criminal case. In the latter class of cases, it would be open to the
delinquent employee to seek such an order of stay or injunction from
the court. Whether in the facts and circumstances of particular case
there should or should not be such simultaneity of the proceedings
would then receive judicial consideration and the court will decide in C
the given circ___umstances of particular case as to whether the
disciplinary proceedings should be interdicted, pending criminal trial.
As we have already stated that it is neither pos"ible nor advisable to
evolve a hard and fast, strait-jacket formula valid for all cases and of
general application without regard to the particularitie~ of the individual D
situation. For the disposal of the present case, we do 'not think it
necessary to say anything m9re, particularly when we do not intend
to lay down any general guideline."

The Court further observed as under :
E
"In the instant case, the criminal action and the disciplinary
proceedings are grounded upon the same set of facts. We are of the
view that the disciplinary proceedings should have been stayed and
the High Court was not right in interfering with the trial court's order
of injunction which had been affirmed in appeal."
F
Then came the decision in Nelson Motis v. Union of India & Ors.,
[1992] 4 SCC 711 = 11992] Supp.I SCR 325 =AIR (1992) SC 1981, which
laid down that the disciplinary proceedings can be legally continued
even where the employee is acquitted in a criminal case as the nature
and proof required in a criminal case are different from those in the G
departmental proceedings. Besides, the Court found tha,t the acts
which led to the initiation of departmental proceedings were not
exactly the same which were the subject matter of the criminal case.
The question was not considered in detail. The Court observed:

"So far the first point is concerned, namely whether the disciplinary H
266 SUPREME COURT REPORTS [1999] 2 S.C.R.

A proceedings could have been continued in the face of the acquittal
of the appellant in the criminal case, the plea has no substance
whatsoever and does not merit a detailed consideration. The naturn
and scope of a criminal case are very different from those of a
departmental disciplinary proceeding and an order of acquittal,
therefore, cannot conclude the departmental proceedings. Besides,
B the Tribunal has pointed out that the acts. which led to the initiation
of the departmenal disciplinary proceeding were not exactly the
same which were the subject matter of the criminal case.
(Emphasis supplied)

C The entire case law was reviewed once again by this Court in State of
Rajasthan v. B.K. Meena & Ors., [1996] 6 SCC 417 =AIR 1997 SC 13 = 1997
(1) LLJ 746 (SC), wherein it was laid down as under:
"It would be evident from the above decisions that each of them
starts with the indisputable proposition that there is no legal bar for
both proceedings to go on simultaneously and then say that in certain
situation, it may not be 'desirable', 'advisable' or 'appropriate' to
proceed with the disciplinary enquiry when a criminal case is pending
on identical charge. The staying of disciplinary proceedings, it is
emphasised, is a matter to be determined having regard to the facts
and circumstances of a given case and that no hard and fast rules can
E be enunciated in that behalf. The only ground suggested in the above

-
!
decisions as constituting a valid ground for staying the disciplinary i
P,_roceedings is that 'the defence of the employee in the criminal case
may not be prejudiced.' This ground has, however, been hedged in
by providing further that this may be done in cases of grave nature
involving questions of fact and law. In our respectful opinion, it
F means that not only the charges must be grave but that the case must
involve complicated questions oflaw and fact. Moreover, 'advisability',
'desirability' or 'propriety', as the case may be, has to be "determined
in each case taking into consideration all the facts and circumstances
of the case. The ground indicated in D.C.M. (AIR 1960 SC 806) and
G Tata Oil Mills (AIR 1965 SC 155) is also not an invariable rule. It is
only a factor which will go into the scales while judging the advisability
or desirability of staying the disciplinary proceedings. One of the
contending considerations is that the disciplinary enquiry cannot be
- and should not be.- delayed unduly. So far as criminal cases are
concerned, it is well known that they drag on endlessly where high
H officials or persons are involved. They get bogged down on one or
CAPT. M. PAULANTHONYv. B.G.M. LTD. [S. SAGHIRAHMAD,J.] 267

the other ground. They hardly ever reach a prompt conclusion. That A
is the reality in spite of repeated advice and admonitions from this
Court and the High Courts. If a criminal case is unduly delayed that
may itself be a good ground for going ahead with the disciplinary
enquiry even where .the disciplinary proceedings are held over at an
earlier stage. The interests of administration and good government B
demand that these proceedings are concluded expeditiously. It must
be remembered that interests of administration demand that undesirable
elements are thrown out and any charge of misdemeanour is inquired
into promptly. The disciplinary proceedings are meant not really to

-- punish the guilty but to keep the administrative machinery unsullied
by getting rid of bad elements. The interest of the delinquent officer C
also lies in a prompt conclusion of the disciplinary proceedings. If he
is not guilty of the charges, his honour should be vindicated at the
earliest possible moment and if he is guilty, he should be dealt with
promptly according to law. It is not also in the interest of administration
that persons accused of serious misdemeanour should be continued
in office indefinitely, i.e., for long periods awaiting the resuit of criminal D
proceedings. It is not in the interest of administration. It only serves
the interest of the guilty and dishonest. While it is not possible to
enumerate the various factors, for and against the stay of disciplinary
proceedings, we found it necessary to emphasise some of the important
considerations in view of the fact that very often the disciplinary E
proceedings are being stayed for long periods pending criminal
proceedings. Stay of disciplinary proceedings cannot be, and should
not be, a matter of course. All the relevant factors, for and against,
should be weighed and a decision taken keeping in view of the

- various principles laid down in the decisions referred to above."

This decision has gone two steps further to the earlier decisions by
F

· providing : ·

(1) The 'advisability', 'desirability' or 'propriety' of staying the
departmental proceedings "go into the scales while judging the G
advisability or desirability of staying the disciplinary
proceedings" merely as one of the factors which cannot be
considered in isolation of other circumstances of the case. But
the chai:ges in the criminal case must, in any case, be of a grave
and serious nature involving complicated questions of fact and
m~ H
268 . SUPREME COURT REPORTS [1999) 2 S.C.R.

A (2) One of the contending considerations would be that the
disciplinary enquiry cannot - and should not be - delayed
unduly. If the criminal case is unduly delayed, that may itself be
a good ground for going ahead with the disciplinary enquiry·
even though the disciplinary proceedings were held 'over at an
B earlier stage. It would not be in the interests of administration
that persons accused of serious misdemeanour should be
continued in office indefinitely awaiting the result of criminal
proceedings.

In another case, namely, Depot Manager, Andhra Pradesh State Road
C Transport Corporation v. Mohd Yousuf Miyan, [1997] 2 SCC 699 =AIR 1997 )
SC 2232~ again it was held that there is no bar to proceed simultaneously with
the departmental inquiry and trial of'"a criminal case unless the charge in the
criminal case is of a grave nature involving complicated questions of fact and
law.
D
The conclusions which are deducible from various decisions of this
Court referred to above are :

(i) Departmental proceedings ~d proceedings In a criminal case
E can proceed simultaneously as there is no bar in their_ being
conducted simultaneously, though separately.

(ii) If the departmental proceedings and the criminal case are based
on identical and similar set offacts and the charge in the _criminal

F
case against the delinquent employee is of a grave nature which
involves complicated questions of law and fact, it would be
desirable to stay the departmental proceedings till the conclusion
of the criminal case.
'
--
,,
(iii) Whether the nature of a charge in a criminal case is grave and
whether complicated questions of fact and law are involved in
G
that case, will depend upon the nature of offence, the nature of
the case launched against the employee on the basis of evidence
and material collected against him during investigation or as
reflected in the charge sheet.

H (iv) The factors mentioned at (ii) and (iii) above cannot be considered
CAPT. M. PAUL ANTHONY v. B.G.M. LTD. [S. SAGHIRAHMAD, J.] 269
in isolation to stay the Departmental proceedings but due regard A
has to be given to the fact that the departmental proceedings
cannot be unduly delayed.
(v) If the criminal case does not proceed or its disposal is being
unduly delayed, the departmental proceedings, even if they were
stayed on account of the pendency of the criminal case, can be B
resumed and proceeded with so as to conclude them at an early
date, so that if the employee is found not guilty his honour may
be vin9icated and in case he is found guilty, administration may
get rid of him at the earliest.
In the instant case, the ~uperintendent of Police had raided the residential C
premises of the appellant and had recovered a mining sponge gold ball
weighing 4.5 gfams and 1276 grams of 'gold bearing sand'. It. was on this
basis that criminal case was launched against him. On the same set of facts,
constituting the raid and recovery, departmental proceedings were initiated
against the appellant as the "recovery" was treated to be a 'misconduct.' On D
the service of the charge sheet, the appellant raised an objection that the ·
departmental proceedings may be stayed as the basis of these proceedings
was the raid conducted at his residence on which basis a criminal case had
already been launched against him. He requested that the decision of the
criminal case may be awaited, b~t his request was turned down. The request E
made a second time for· that purpose also met the same fate. When the

r appellant approached the High Court, liberty was given to the respondents
to stay the departmental proceedings if they considered it appropriate but
they were directed to dispose of the appellant's appeal against the order by
which he was placed under suspension. The order of the High Court }J.ad no
effect on the respondents and they decided to continue with the departmental F
proceedings which could not be attended by the appellant as he informed the
Inquiry Officer that he WaS ni. His request for adjournment of (he departmental
proceedings on that ground ~as not acceded to and the proceedings continued
ex-parte against him. He was ultimately found guilty of the charges and was
dismissed from service. G
Learned counsel for the appellant also contended that during the period
of suspension the respondents had not paid him the Supsistence Allowance
with the result that he could not undertake a journey from his home-town in
Kerala to Kolar Gold Fields in Kamataka where the departmental proceedings
were being held. lnis plea has not been accepted by the High Court on the H
270 SUPREME COURT REPQRTS [1999] 2 S.C.R.

A ground that it was not raised before the Inquiry Officer and it was not pleaded
before him that it was on account of non- payment of Subsistence Allowance ,.
that the appellant could not go to Kolar Gold Fields for participating in the
disciplinary proceedings.

Before us, it is not disputed on behalf of the respondents nor was it
B disputed by them before the High Court, that Subsistence Allowance was not
paid to the appellant while the proceedings ~gainst him were being conducted
at the departmental level.

To place an employee under suspension is an unqualified right of the
C employer. This right is conceded to the employer in service jurisprudence
everywhere. It has even received statutory recognition under service rules
framed by various authorities, including Govt. of India and the State
Governments. (See : for example, Rule 10 of Central Civil Services (Classification,
Control & Appeal) Rules, Even under the General Clauses Act, this right is
cqnceded to the employer by Section 16 which, inter alia, provides that power
D to appoint includes power to suspend or dismiss.

The order of suspension does not put an end to an employee's service
and he continue~ to be a member of the service though he is not permitted
to work and is paid only Subsistence Allowance which is less than his salary.
(See:. State ofMP. v. State ofMaharashtra, [1977]2 SCR 555_= (1977) 2 SCC
E 288 =AIR (1977) SC (1466).

Service Rules also usually provide for payment of salary at a reduced
rate during the period of suspension. (See: Fundamental Rule 53). This
. constitutes the "Subsistence Aliowance". If there is no provision in the Rules
applicable to a particular class of service for payment of salary at a reduced
F rate, the employer would be liable to pay full salary even during the period
of suspension.
' .
Exerciseof ri£ht to suspend an employee may be justified on facts of
a particular case. Ib.~tances, however, are not rare where officers have been
G found to be afflicted by "suspension syndrome" and the employees have
been found to be. placed under suspension just for nothing. It is their irritability
rather than the employee's trivial lapse which has often resulted in suspension.
Suspension notwithstanding, non-payment of Subsistence Allowance is an
inhuman act which has an unpropitious effect on the life of an employee.
When the employee is placed under suspension, he is demobilised and the
H salary is also paid to him at a reduced rate under the nick name of' Subsistence
CAPT. M. PAULANTHONYv. B.G.M. LTD. [S. SAGHIRAHMAD,J.] 271
Allowance', so that the employee may sustain himself. This Court, in O.P. A
Gupta v. Union of India & Ors., [1987] 4 SCC 328 made the following
observations with regard to Subsistence Allowance :

"An order of suspension of a government servant does not put an
end to his service under the government. He continues to be a B
member of the service in spite of the order of suspension. The real
effect of suspension as explained by this Court in· Khem Chand v.
Union of India is that he contin~es to be a member of the government
service but is not permitted to work and further during the period of
suspension he is paid only some allowance - generally called
subsistence allowance - which is normally less than the salary instead c
of the pay and allowances he would have been entitled to if he had
not been suspended. There is no doubt that an order of suspension,
unless the departmental inquiry is concluded within a reasonabl~ time,
affects a government servant injuriously. The. very expression ,
'subsistence allowance' has an undeniable penal significance. The D
dictionary meaning of the word 'Subsist' as given in Shorter Oxford
English Dictionary, Vol.II at p. 2171 is "to remain alive as on food;
to continue to exist''. "Subsistence" means - means of supporting
life, especially a minimum livelihood. "
(Emphasis supplied) E

If, therefore, even that amount is not paid, then the very object of
paying the reduced salary to· the employee during the period of suspension
would be frustrated. The act of non-pa~ent of Subsistence Allowance can
be likened to slow-poisoning as the employee, if not permitted to sustain F
himself on account of non-payment of Subsistence Allowance, would gradually
starve himself to death.

On joining Govt. service, a person does not mortgage or barter away
his basic rights as a human being, including his 'fundamental rights, iji favour
of the Govt. The Govt., only because it has the power to appoint does not G
become the master of the body and soul of the employee. The Govt. by
providing job opportunities to its citizens only fulfils its obligations under the
Constitution, including the Directive Principles of the State Policy. The
employee, on taking up an employment only agrees to....subject himself to the
regulatory measures concerning his service. His association with the H
272 SUPREME COURT REPORTS [1998] 2 S.C.R.

A Government or any other employer, like Instrumentalities of the Govt. or
Statutory or Autonomous Corporations etc., is regulated by the terms of
contract of service or Service Rules made by the Central or the State Govt.
under the Proviso to Article 309 of the Constitution or other Statutory Rules
including Certified Standing Orders. The fundamental rights, including the
B Right to Life under Article 21 of the Constitution or the basic human rights
are not surrendered by the employee. The provision for payment of Subsistence
Allowance made in the Service Rules only ensures non-violation of the right
to life of the employee. That was the reason why this Court in State of
Maharashtra v. Chanderbhan, [1983] 3 SCR 337 = [1983] 3 SCC 387 =AIR
C 1983 SC 803 struck down a Service Rule which provided for payment of a
nominal amount of Rupee one as Subsistence Allowance to an employee
placed under suspension. This decision was followed· in Fakirbhai Fulabhai
Solanki v. Presiding Officer & Anr., [1986] 3 SCC 131 = [1986] 2 SCR [1059]=
AIR (l 986) SC ll 68 and it was held in that case that if an employee could
not attend the departmental proceedings on account of financial stringencies
.ncaused by non-payment of Subsistence Allowance, and thereby could not
undertake a journey away from his home to attend the departmental
proceedings, the order of punishment, including the whole proceedings would
stand vitiated. For this purpose, reliance was also placed on an.earlier decision
in Ghanshyam Dass Shrivastva v. State ofMadhya Pradesh, [1973) I SCC 656
E =AIR 1973 SC 1183,

The question iwhether the appellant was unable to go to Kolar Gold
Fields to participate in the inquiry proceedings on account of non-payment
of Subsistenc~ Allowance may not have been raised before the Inquiry
F Officer, but it was positively raised before the High Court and has also been
raised before us. Since it is not disputed that the Subsistence Allowance was
not paid to the appellant during the pendency of the departmental proceedings,
we have to take strong notice of it, particularly as it is not suggested by the
respondents that the appellant had any other source of income.

G Since in the instant case the appellant was not provided any Subsistence
Allowance during the period of suspension and the adjournment prayed for
by him on account of his illness, duly supported by medical certificates, was
-
refused resulting in ex-parte proceedings against him, we are of the opinion
that the appellant has been punished in total violation of the principles of
H natural justice and he was literally not afforded any opportunity of hearing.
CAPT. M.PAULANTHONYv. B.G.M.LTD. [S. SAGHIRAHMAD,J.] 273
Moreover, as pleaded by the appellant before the High Court as also before A.
us that on account of his penury occasioned by non-payment of Subsistence
Allowance, he could not undertake a journey to attend the disciplinary
proceedings, the findings recorded by the Inquiry Officer at such proceedings,
which were held ex-parte, stand vitiated.

There is yet another reason for discarding the whole of the case of the
B
respondents. As pointed out earlier, the criminal case as also the departmental
proceedings were based on identical set of facts, namely, 'the raid conducted
at the appellant's residence and recovery of incriminating articles there from.'
The findings recorded by the Inquiry Officer, a copy of which has been placed
before us, indicate that the charges framed against the appellant were sought c
to .be proved by Police Officers and Panch witnesses, who had raided the
house of the appellant and had effected recovery. They were the only witnesses
examined by the Inquiry Officer and the Inquiry Officer, relying upon their
statements, ·came to the conclusion that the charges were established against
the appellant. The same witnesses were examined in the critliinal case but the D .
court, on a consideration of the entire evidence, came to the conclusion that
no search was conducted nor was any recovery made from the residence of
the appellant. The whole case of the prosecution was thrown out and the
appellant was acquitted. In this situation, therefore, where the appellant is
acquitted by a judicial pronouncement with the finding that the "raid and E

- recovery" at the residence of the appellant were not proved, it would be
unjust, unfair and rather oppressive to allow the findings recorded at the ex-
parte departmental proceedings, to stand.

Since the facts and the evidence in both the proceedings, namely, the F
departmental proceedings and the criminal case were the same without there
being any iota of difference, the distinction, which is usually drawn as
between the departmental proceedings and the criminal case on the basis of
approach and burden of proof, would not be applicable to the instant case.

For the reasons stated above, the appeal is allowed, the impugned G
judgment passed by the Division Bench of the High Court is set aside and
that of the learned Single Judge, in so far as it purports to allow the Writ
Petition, is upheld. The learned Single Judge has also given liberty to the
respondents to initiate fresh disciplinary proceedings. In the peculiar
circumstances of the case, specially having regard to the fact that the appellant H .
274 SUPREME COURT REPORTS [1998] 2 S.C.R.

A is undergoing this agony since 1985 despite having been acquitted by the
criminal court in 1987, we would not direct any fresh departmental inquiry to
be instituted against him on the same set of facts. The appellant shall be
reinstated forthwith on the post of Security Officer and shall also be paid
entire arrears of salary, together with all allowances from the date of
B suspension till his reinstatement, within three months. The appellant would
also be entitled to his cost which is quantified as Rs.15,000.

S.M. Appeal alloWed.

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