G H STATE BANK OF INDIA & ORS.versusMOHAMMAD BADRUDDIN

1016                     [2019] 9REPORTS
                SUPREME COURT     S.C.R. 1016              [2019] 9 S.C.R.


 A                       STATE BANK OF INDIA & ORS.
                                        v.
                         MOHAMMAD BADRUDDIN
                         (Civil Appeal No.5604 of 2019).
 B                                JULY 16, 2019
            [L. NAGESWARA RAO AND HEMANT GUPTA, JJ.]
             Service Law:
              Punishment of reversion – Propriety of – Disciplinary
 C     proceedings – Departmental enquiry – Punishment of compulsory
       retirement – Appellate Authority altered the punishment to one of
       reversion – Reviewing Authority sustained the punishment of
       reversion – Writ petition by the delinquent dismissed by Single Judge
       of High Court – Division Bench of High Court in writ appeal
       relying on Ramzan Khan case set aside the order of punishment
 D
       holding that copy of Inquiry Report was not supplied to the
       delinquent before passing order of punishment and hence violative
       of principles of natural justice – Appeal to Supreme Court – Held:
       The judgment relied on by the Division Bench, whereby
       non-furnishing of inquiry report was held to be violative of rules of
 E     natural justice, since was given prospective effect, the inquiries
       conducted prior to date of that judgment (i.e. 20.11.1990) would
       not be affected by the law laid down in that judgment – The order
       of punishment in the present case was passed prior to 20.11.1990,
       it could not have been set aside on the ground of non-furnishing of
       copy of inquiry report – Punishment of reversion is restored.
 F
             Removal from service – Propriety of – Disciplinary inquiry –
       5 charges levelled against the delinquent – Inquiry Officer found
       only charge No. 4 as proved while other charges (charge Nos. 1, 2,
       3 & 5) were not found proved – Disciplinary Authority disagreed
       with the findings in respect of charge Nos. 1 and 5 – Thus on the
 G     basis of charge Nos. 1,4 and 5 and also on the basis of punishment
       of reversion in earlier departmental proceedings, inflicted penalty/
       punishment of removal from service – Order was confirmed in
       departmental appeal – Single Judge of High Court dismissed the
       writ petition – Division Bench of High Court, in writ appeal, held
 H
                                      1016
    STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                          1017


that punishment of removal stands vitiated because the reasons for      A
disagreement with the Inquiry Report in respect of charge Nos. 1
and 5 was not supplied to the delinquent and because the previous
punishment of reversion was taken into consideration without
bringing it to the notice of the delinquent – Appeal to Supreme Court
– Held: There is no mandatory requirement of communicating the
                                                                        B
proposed punishment after 42nd Constitutional amendment –
Therefore, there cannot be any bar in the constitutional scheme to
take into consideration previous punishments – Thus,
non-communication of previous punishments in the show
cause notice will not vitiate the punishment imposed –
Non-communication of reasons for disagreement recorded in               C
respect of charge Nos. 1 and 5 also cannot be faulted with –
However, in exercise of power of judicial review, Supreme Court
cannot maintain the punishment of removal from service in view of
findings recorded on charge No. 4 – It is for the Disciplinary
Authority to consider whether punishment of removal on the basis
                                                                        D
of charge No. 4 alone was sustainable or not – Matter is remitted
back to Disciplinary Authority.
      Disposing of the appeals, the Court
      HELD:
      Civil Appeal No. 5605/2019                                        E

       1. The Division Bench by impugned order set aside the
order of punishment on the ground that copy of the Inquiry Report
was not supplied to the delinquent, before the Disciplinary
Authority passed an order of punishment, but was supplied along
with the order of punishment, therefore, there is complete              F
violation of cardinal principle of natural justice. In *Mohd. Ramzan
Khan case (case relied on by Division Bench) laid down that
wherever Inquiry Officer has furnished a report to the Disciplinary
Authority at the conclusion of the inquiry holding the delinquent
guilty of all or any of the charges with proposal for any particular    G
punishment or not, the delinquent is entitled to a copy of such
report and will also be entitled to make a representation against
it. A non-furnishing of the report would amount to violation of
rules of natural justice and make the final order liable to challenge
hereafter. However, the said judgment itself has been given
                                                                        H
1018           SUPREME COURT REPORTS                    [2019] 9 S.C.R.


 A     prospective effect i.e. the inquiries concluded prior to the
       judgment dated November 20, 1990 will not be affected by the
       law laid down in the said judgment. Since the order of punishment
       was passed by the Disciplinary Authority prior to November 20,
       1990, therefore, the same could not be set aside only for the
       reason that the copy of the Inquiry Report was not supplied to
 B
       the delinquent. Consequently, the order of the High Court in
       LPA No. 261 of 2007 is set aside and the order of punishment of
       reversion to the post of Junior Management Grade at the lowest
       stage, as modified by the Appellate Authority, is ordered to be
       restored. [Paras 4, 5 and 7] [1021-E-H; 1022-F]
 C          Managing Director, ECIL, Hyderabad & Ors. v. B.
            Karunakar & Ors. (1993) 4 SCC 727 : [1993] 2 Suppl.
            SCR 576; Union of India & Ors. v. Mohd. Ramzan Khan
            (1991) 1 SCC 588 : [1990] 3 Suppl. SCR 248 – held
            inapplicable.
 D          Civil Appeal No. 5604/2019
              2.1 The previous punishments could not be subject matter
       of the charge-sheet as it is beyond the scope of inquiry to be
       conducted by the Inquiry Officer as such punishments have
       attained finality in the proceedings. The requirement of second
 E     show cause notice stands specifically omitted by 42nd Amendment
       of the Constitution of India. Therefore, the only requirement now
       is to send a copy of Inquiry Report to the delinquent to meet the
       principle of natural justice being the adverse material against
       the delinquent. There is no mandatory requirement of
 F     communicating the proposed punishment which was specifically
       contemplated by clause (2) of Art. 311 of the Constitution prior
       to 42nd Constitutional amendment. Therefore, there cannot be
       any bar to take into consideration previous punishments in the
       constitutional scheme as interpreted by this Court. Thus, the
       non-communication of the previous punishments in the show
 G     cause notice will not vitiate the punishment imposed.
       [Paras 23 and 24] [1031-E-H; 1032-A]
            2.2 The findings recorded by the Division Bench that the
       order of punishment passed on the basis of uncommunicated
       reasons of disagreement recorded in respect of charge Nos. 1
 H
   STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                         1019


and 5 cannot be faulted with. The High Court has set aside the        A
order of punishment on the ground that it violates the principle
of natural justice. Though, charge No. 4 may be sufficient to
inflict punishment but it is not necessary that charge No. 4 alone
will entail punishment of removal from service. While exercising
the power of judicial review, it will not be within jurisdiction of
                                                                      B
this Court to maintain the order of punishment of removal from
service in view of findings recorded on charge No. 4 itself. It is
for the Disciplinary Authority to inflict punishment as it may
consider appropriate after finding the charge No. 4 proved against
the delinquent. [Paras 28 and 29] [1033-F-H; 1034-A-C]
       2.3 Since the delinquent has attained the age of               C
superannuation, there cannot be any order of reinstatement or of
suspension. In view thereof, the order of punishment dated
November 4, 1993 as also the order of the Appellate Authority
are set aside and the matter is remanded back to the Disciplinary
Authority to consider as to whether it would like to record reasons   D
of disagreement on charge Nos. 1 and 5 and/or impose punishment
on the basis of charge No. 4 with which there is no disagreement,
as it may consider appropriate. [Para 32] [1035-D-E]
      P.D. Agrawal v. State Bank of India & Ors. (2006) 8
      SCC 776 : [2006] 1 Suppl. SCR 454; Managing                     E
      Director, ECIL, Hyderabad & Ors. v. B. Karunakar &
      Ors. (1993) 4 SCC 727 : [1993] 2 Suppl. SCR 576
      – followed.
      Punjab National Bank and Others v. K. K. Verma (2010)
      13 SCC494 : [2010] 11 SCR 311;Union of India &                  F
      Ors. v. Mohd. Ramzan Khan (1991) 1 SCC 588 :
      [1990] 3 Suppl. SCR 248; Punjab National Bank &
      Ors. v. Kunj Behari Misra (1998) 7 SCC 84 :
      [1998] 1 Suppl. SCR 22 – relied on.
      State of Orissa & Ors. v. Bidyabhushan Mohapatra                G
      AIR 1963 SC 779 : [1963] Suppl. SCR 648; Nicholas
      Piramal India Limited v. Harisingh (2015) 8 SCC 272
      – distinguished
      State of Mysore v. K. Manche Gowda AIR 1964 SC
      506 : [1964] SCR 540 – held inapplicable.
                                                                      H
1020            SUPREME COURT REPORTS                      [2019] 9 S.C.R.


 A           Govt. of A.P. & Ors. v. Mohd. Taher Ali (2007) 8 SCC
             656 : [2007] 10 SCR 929 ; Union of India & Ors. v.
             Bishamber Das Dogra (2009) 13 SCC 102
             – referred to.
                              Case Law Reference
 B     [1993] 2 Suppl. SCR 576        held inapplicable      Para 5
                                      followed               Para 16
       [1990] 3 Suppl. SCR 248        held inapplicable      Para 5
                                      relied on              Para 16
 C
       [1998] 1 Suppl. SCR 22         relied on              Para 12
       [1963] Suppl. SCR 648          distinguished          Para 13
       [2006] 1 Suppl. SCR 454        followed               Para 13
       [2007] 10 SCR 929              referred to            Para 13
 D
       (2009) 13 SCC 102              referred to            Para 13
       [1964] SCR 540                 held inapplicable      Para 14
       (2015) 8 SCC 272               distinguished          Para 15
       [2010] 11 SCR 311              relied on              Para 22
 E


             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5604
       of 2019

 F           From the Judgment and Order dated 18.04.2017 of the High Court
       of Jharkhand at Ranchi in L.P.A. No. 258 of 2007
                                        With
             Civil Appeal No. 5605 of 2019.
              K.V. Vishwanathan, Sr. Adv., Sanjay Kapur, AOR Ms. Megha
 G     Karnwal, Harshal Narayan, Ms. Shubhra Kapur, Kauser Husain, Advs.
       for the Appellants.
            Sanjeev Kumar Choudhary, Ms. Shradha Choudhary, Aniruddha
       P. Mayee, Advs. for the Respondent.

 H
       STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                                  1021


          The Judgment of the Court was delivered by                               A
          HEMANT GUPTA, J. 1. Leave granted.
      2. The present civil appeals arise out of an order passed by the
High Court of Jharkhand at Ranchi on April 18, 2017, whereby the intra
court appeals filed by the respondent Mohammad Badruddin were
allowed and the orders of punishment were set aside. The respondent                B
was granted all consequential benefits including back wages.
      3. The High Court has dealt with two appeals arising out of two
separate writ petitions imposing separate punishments.
       4. Firstly, we take up Civil Appeal arising out of Special Leave            C
Petition (Civil) No. 20770 of 2017. The said appeal is directed against
an order passed by the High Court in Letters Patent Appeal No. 261 of
2007 wherein the Appellate Authority altered the punishment of
compulsory retirement in terms of Rule 49(1) of the State Bank of India
(Supervising Staff) Service Rules1 to one of reversion to the post of
Junior Management Grade at the lowest stage vide order dated October               D
12, 1988. Such order became the subject matter of challenge in C.W.J.C.
No. 444 of 1989. The writ petition was dismissed but the letters patent
appeal was allowed. The Division Bench set aside the order of punishment
on the ground that copy of the Inquiry Report was not supplied to the
delinquent before the Disciplinary Authority passed an order of                    E
punishment, but was supplied along with the order of punishment,
therefore, there is complete violation of cardinal principle of natural justice.
       5. We find that the Constitution Bench judgment reported in
Managing Director, ECIL, Hyderabad & Ors. v. B. Karunakar &
Ors.2 though quoted by the High Court, had been applied wrongly. The               F
Disciplinary Authority has passed an order of punishment on August 12,
1988 i.e. before this Court in Union of India & Ors. v. Mohd. Ramzan
Khan3 laid down that wherever Inquiry Officer has furnished a report
to the Disciplinary Authority at the conclusion of the inquiry holding the
delinquent guilty of all or any of the charges with proposal for any
particular punishment or not, the delinquent is entitled to a copy of such         G
report and will also be entitled to make a representation against it. A
non-furnishing of the report would amount to violation of rules of natural
1
    ‘Rules’.
2
    (1993) 4 SCC 7273
3
    (1991) 1 SCC 588                                                               H
1022             SUPREME COURT REPORTS                            [2019] 9 S.C.R.


 A     justice and make the final order liable to challenge hereafter. However,
       the said judgment itself has given prospective effect i.e. that the inquiries
       concluded prior to the judgment dated November 20, 1990 will not be
       affected by the law laid down in the said judgment.
             6. The judgment in Mohd. Ramzan case was approved by the
 B     Constitution Bench in B. Karunakar, wherein it was held as under:
             “34. However, it cannot be gainsaid that while Mohd. Ramzan
             Khan case [(1991) 1 SCC 588 : 1991 SCC (L&S) 612 : (1991) 16
             ATC 505] made the law laid down there prospective in operation,
             while disposing of the cases which were before the Court, the
 C           Court through inadvertence gave relief to the employees concerned
             in those cases by allowing their appeals and setting aside the
             disciplinary proceedings. The relief granted was obviously per
             incuriam. The said relief has, therefore, to be confined only to the
             employees concerned in those appeals. The law which is expressly
             made prospective in operation there, cannot be applied
 D           retrospectively on account of the said error. It is now well settled
             that the courts can make the law laid down by them prospective
             in operation to prevent unsettlement of the settled positions, to
             prevent administrative chaos and to meet the ends of justice. In
             this connection, we may refer to some well-known decisions on
 E           the point.”
              7. Since the order of punishment was passed by the Disciplinary
       Authority prior to November 20, 1990, therefore, the same could not be
       set aside only for the reason that the copy of the Inquiry Report was not
       supplied to the delinquent. Consequently, the order of the High Court in
 F     LPA No. 261 of 2007 is set aside and the order of punishment of reversion
       to the post of Junior Management Grade at the lowest stage, as modified
       by the Appellate Authority, is ordered to be restored.
             8. In view of the aforesaid, Civil Appeal arising out of Special
       Leave Petition (Civil) No. 20770 of 2017 is allowed.
 G           9. The Civil Appeal arising out of Special Leave Petition (Civil)
       No. 20488 of 2017, is directed against an order passed by the High
       Court in Letters Patent Appeal No. 258 of 2007 arising out of C.W.J.C.
       No. 2310 of 1995 filed by the respondent Mohammad Badruddin. The
       challenge in the writ petition is to an order dated November 4, 1993 by
 H
    STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                                1023
                 [HEMANT GUPTA, J.]

which the respondent was inflicted penalty of removal from service.           A
The Division Bench set aside the order of removal on the ground of
violation of principle of natural justice as the reasons of disagreement in
respect of charge Nos. 1 and 5 were not communicated to the delinquent.
      10. The memo of charge was served upon the respondent
(delinquent) on June 13, 1989 in respect of the following five charges:       B
      “CHARGE-1.
      On 15.12.1983, he opened a Savings Bank Account No. 11945 in
      a fake name viz. Shri Ajit Kumar Agrawal and also verified the
      forged signature appearing on the relative account opening form.
      He thus showed gross negligence in opening the said account             C
      through which a series of frauds involving Rs.2,52,000/- were
      perpetrated, causing the Bank a pecuniary loss of the same amount.
      The list of fraudulent payment manipulated through the said
      account is given in Annexure ‘A’.
      CHARGE-2.                                                               D
      He passed the following payments (a to k) from different Savings
      Bank Accounts although the relative instruments had not been
      posted in the concerned accounts:-
      Moreover, the balance of account no. 10586 at the time of making
                                                                              E
      payments mentioned against b, c, d, e and f was Rs.875.44 only.
      All the aforementioned payments turned out to be fraudulent once.
      Had he cared to refer to the concerned ledgers before passing
      the instruments, frauds amounting to Rs.1,12,000/- could have been
      averted.
                                                                              F
      CHARGE-3
      He passed the aforementioned payment without satisfying himself
      that the relative instruments were in order in every particular and
      thereby violated the instructions contained in para 3(c), Chapter2
      of the Bank’s Book of Instructions, Volume-II.
                                                                              G
      CHARGE-4
      On the following dates (a to g of the charge sheet) while checking
      the Clean Cash Book, he failed to notice that the figures of Savings
      Bank Account appearing therein did not tally with those of Savings
                                                                              H
1024            SUPREME COURT REPORTS                          [2019] 9 S.C.R.


 A           Bank Summary Day Book. His perfunctory checking of the Clean
             Cash Book resulted in suppression of frauds amounting to
             Rs.70,000/-.
             CHARGE-5
             He has thus not only failed to discharge his duties with devotion
 B           and diligence, much against Rule 32(4) of State Bank of India
             (Supervising Staff) Service Rules but also caused a heavy
             pecuniary loss to the Bank.”
              11. The Inquiry Officer in his Report dated February 5, 1992 held
       that charge Nos. 1, 2, 3 and 5 were not proved against the delinquent
 C     though charge No. 4 stands proved. The Disciplinary Authority disagreed
       with the findings in respect of charge Nos. 1 and 5 and held as under:
             “(i) The appellant failed to discharge his duties with devotion and
             diligence;

 D           (ii) The appellant failed to interview the depositor before opening
             Savings Bank Account No. 11945 and he also did not ensure
             completion of particulars by the depositors on the reverse side of
             the Account Opening – cum – Specimen signature form, as a
             result a fake Savings Bank Account in the name of Shri Ajit Kumar
             Agrawal was opened through which a series of frauds involving
 E           Rs.2,52,000/- were perpetrated. The said action indicated gross
             negligence which caused substantial financial loss to the Bank.
             (iii)The appellant was found guilty of perfunctory checking of Clean
             Cash Book which resulted in suppression of frauds amounting to
             Rs.70,000/-. As a Branch Manager, he also failed to notice all the
 F           figures of Savings Bank Account appearing in the Clean Cash
             Book did not tally with the figures shown in the summary of Savings
             Bank day books on several dates. Had he carefully checked the
             Clean Cash Book, the difference would have come to light on the
             same day.”
 G            12. On the basis of the findings recorded and keeping in view
       punishment of reversion to Junior Manager Grade at the lowest stage
       earlier, the delinquent was inflicted penalty of removal from service in
       terms of Rule 67(g) of the Rules. The appeal against such order of
       punishment was dismissed on March 8, 1995. The writ petition was
       dismissed by the learned Single Bench on June 15, 2007. But in an intra
 H
    STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                                 1025
                 [HEMANT GUPTA, J.]

court appeal, the Division Bench set aside the order passed by the learned     A
Single Bench as also the order of punishment imposed by the Disciplinary
Authority. The Division Bench relied upon Punjab National Bank &
Ors. v. Kunj Behari Misra4 to hold that the order of punishment stands
vitiated as the reasons for disagreement with the Inquiry Report have
not been supplied to the delinquent. The Bank is in appeal before this
                                                                               B
Court against such order passed by the Division Bench.
        13. Learned counsel for the appellants submitted that the delinquent
faced Departmental Inquiry on five charges. There is no disagreement
in respect of the findings recorded on charge No. 4. The charge No. 4
is a grave and independent charge and, therefore, the order of punishment
will not warrant interference as the order of removal from service on          C
such charge alone cannot be said to be disproportionate to the misconduct.
The reliance is placed upon Constitution Bench judgment in the case of
State of Orissa & Ors. v. Bidyabhushan Mohapatra 5 and P.D.
Agrawal v. State Bank of India & Ors.6 to contend that in view of
principle of severability of charges, the order of punishment will not         D
warrant interference in exercise of the power of judicial review vested
with the High Court under Article 226 of the Constitution of India. Another
reason which weighed with the High Court was that previous punishment
of reversion to the Junior Manager in the lowest grade was taken into
consideration though the delinquent was not made aware of such fact in
the proceedings. It is contended that such reasoning is not tenable in         E
view of judgment of this Court in Govt. of A.P. & Ors. v. Mohd. Taher
Ali7 as also in Union of India & Ors. v. Bishamber Das Dogra8. It is
also argued that since the allegation against the delinquent relates to
gross negligence of fraud and fraudulent conduct while dealing with the
affairs of the Bank, therefore, such delinquent who was entrusted not          F
only with public money but also with the money of customers, does not
warrant any indulgence.
      14. On the other hand, learned counsel for the delinquent relies
upon the Constitution Bench judgment of this Court in State of Mysore
v. K. Manche Gowda9 to contend that before the past punishment is              G
4
  (1998) 7 SCC 84
5
  AIR 1963 SC 779
6
  (2006) 8 SCC 776
7
  (2007) 8 SCC 656
8
  (2009) 13 SCC 102
9
  AIR 1964 SC 506                                                              H
1026                SUPREME COURT REPORTS                            [2019] 9 S.C.R.


 A     taken into consideration, the delinquent has to be made aware of such
       fact. The reliance is on the following:
                 “8. BeforeTop of Form we close, it would be necessary to make
                 one point clear. It is suggested that the past record of a government
                 servant, if it is intended to be relied upon for imposing a punishment,
 B               should be made specific charge in the first stage of the enquiry
                 itself and, if it is not so done, it cannot be relied upon after the
                 enquiry is closed and the report is submitted to the authority entitled
                 to impose the punishment. An enquiry against a government servant
                 is one continuous process, though for convenience it is done in
                 two stages. The report submitted by the Enquiry Officer is only
 C               recommendatory in nature and the final authority which scrutinizes
                 it and imposes punishment is the authority empowered to impose
                 the same. Whether a particular person has a reasonable opportunity
                 or not depends, to some extent, upon the nature of the subject-
                 matter of the enquiry. But it is not necessary in this case to decide
 D               whether such previous record can be made the subject matter of
                 charge at the first stage of the enquiry. But, nothing in law prevents
                 the punishing authority from taking that fact into consideration
                 during the second stage of the enquiry, for essentially it relates
                 more to the domain of punishment rather than to that of guilt. But
                 what is essential is that the government servant shall be given a
 E               reasonable opportunity to know that fact and meet the same.”
               15.Learned counsel also relied upon the judgment in Nicholas
       Piramal India Limited v. Harisingh10 to support the said argument
       that the past record could not be taken into consideration without notice
       to the delinquent, therefore, the punishment of removal by taking into
 F     consideration previous punishments, is not tenable.
              16. The argument of Mr. Vishwanathan, learned senior counsel
       for the appellants is that the Constitution Bench judgment in K. Manche
       Gowda is in respect of provisions of Article 311 as they existed prior to
       amendment of the said provision by the 42nd Constitutional Amendment.
 G     The reliance is placed upon Mohd. Ramzan Khan’s caseas affirmed
       by the Constitution Bench in B. Karunakar’s case to contend that after
       the constitutional amendment, no notice of the proposed punishment is
       required to be served. Therefore, the ratio of the judgment relating to
       10
            (2015) 8 SCC 272
 H
    STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                               1027
                 [HEMANT GUPTA, J.]

pre 42nd constitutional amendment will not be applicable to the post         A
amendment proceedings.
       17. We have heard the learned counsel for the parties and find
merit in the arguments raised by Mr. Vishwanathan, learned senior
counsel for the appellants, to some extent. The 42nd Constitutional
Amendment deleted the following words appearing in clause (2) of             B
Article 311 of the Constitution of India, which reads as under:
      “and where it is proposed, after such inquiry to impose on him any
      such penalty, until he has been given a reasonable opportunity of
      making representation on the penalty proposed, but only on the
      basis of the evidence adduced during such inquiry.”                    C
      18. A perusal of such omitted provisions would show that an
opportunity was required to be given to submit a representation on penalty
proposed but such requirement had been omitted by 42nd Constitutional
Amendment. This Court in Mohd. Ramzan case considered the effect
of amendment and held as under:                                              D
      “9. Where, however, the Inquiry Officer furnishes a report with
      or without proposal of punishment the report of the Inquiry Officer
      does constitute an additional material which would be taken into
      account by the disciplinary authority in dealing with the matter. In
      cases where punishment is proposed there is an assessment of           E
      the material and a tentative conclusion is reached for consideration
      of the disciplinary authority and that action is one where the
      prejudicial material against the delinquent is all the more
      pronounced.
                                  xx      xx       xx                        F
      12. We have already noticed the position that the Forty-second
      Amendment has deleted the second stage of the inquiry which
      would commence with the service of a notice proposing one of
      the three punishments mentioned in Article 311(1) and the
      delinquent officer would represent against the same and on the
                                                                             G
      basis of such representation and/or oral hearing granted the
      disciplinary authority decides about the punishment. Deletion of
      this part from the concept of reasonable opportunity in Article
      311(2), in our opinion, does not bring about any material change in

                                                                             H
1028            SUPREME COURT REPORTS                          [2019] 9 S.C.R.


 A           regard to requiring the copy of the report to be provided to the
             delinquent.
                                         xx      xx       xx
             15. Deletion of the second opportunity from the scheme of Article
             311(2) of the Constitution has nothing to do with providing of a
 B           copy of the report to the delinquent in the matter of making his
             representation. Even though the second stage of the inquiry in
             Article 311(2) has been abolished by amendment, the delinquent
             is still entitled to represent against the conclusion of the Inquiry
             Officer holding that the charges or some of the charges are
 C           established and holding the delinquent guilty of such charges. For
             doing away with the effect of the enquiry report or to meet the
             recommendations of the Inquiry Officer in the matter of imposition
             of punishment, furnishing a copy of the report becomes necessary
             and to have the proceeding completed by using some material
             behind the back of the delinquent is a position not countenanced
 D           by fair procedure. While by law application of natural justice could
             be totally ruled out or truncated, nothing has been done here which
             could be taken as keeping natural justice out of the proceedings
             and the series of pronouncements of this Court making rules of
             natural justice applicable to such an inquiry are not affected by
 E           the Forty-second Amendment. We, therefore, come to the
             conclusion that supply of a copy of the inquiry report along with
             recommendation, if any, in the matter of proposed punishment to
             be inflicted would be within the rules of natural justice and the
             delinquent would, therefore, be entitled to the supply of a copy
             thereof. The Forty-second Amendment has not brought about any
 F           change in this position.”
              19. Later, the Constitution Bench in B. Karunakar affirmed the
       said judgment to hold that it was no longer necessary to issue a notice to
       the delinquent employee to show cause against the punishment proposed.
       The Court held as under:
 G
             “19. In Mohd. Ramzan Khan case [(1991) 1 SCC 588 : 1991
             SCC (L&S) 612 : (1991) 16 ATC 505] the question squarely
             fell for consideration before a Bench of three learned Judges
             of this Court, viz., that although on account of the Forty-
             second Amendment of the Constitution, it was no longer
 H
STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                                1029
             [HEMANT GUPTA, J.]

 necessary to issue a notice to the delinquent employee to show           A
 cause against the punishment proposed and, therefore, to
 furnish a copy of the enquiry officer’s report along with the
 notice to make representation against the penalty, whether it
 was still necessary to furnish a copy of the report to him to
 enable him to make representation against the findings
                                                                          B
 recorded against him in the report before the disciplinary
 authority took its own decision with regard to the guilt or
 otherwise of the employee by taking into consideration the
 said report. The Court held that whenever the enquiry officer
 is other than the disciplinary authority and the report of the
 enquiry officer holds the employee guilty of all or any of the           C
 charges with proposal for any punishment or not, the
 delinquent employee is entitled to a copy of the report to enable
 him to make a representation to the disciplinary authority
 against it and the non-furnishing of the report amounts to a
 violation of the rules of natural justice.
                                                                          D
                             xx       xx       xx
 25. While the right to represent against the findings in the report is
 part of the reasonable opportunity available during the first stage
 of the inquiry viz., before the disciplinary authority takes into
 consideration the findings in the report, the right to show cause        E
 against the penalty proposed belongs to the second stage when
 the disciplinary authority has considered the findings in the report
 and has come to the conclusion with regard to the guilt of the
 employee and proposes to award penalty on the basis of its
 conclusions. The first right is the right to prove innocence.
 The second right is to plead for either no penalty or a lesser           F
 penalty although the conclusion regarding the guilt is
 accepted. It is the second right exercisable at the second stage
 which was taken away by the Forty-second Amendment.
                             xx       xx       xx
                                                                          G
 29.
  Hence it has to be held that when the enquiry officer is not the
 disciplinary authority, the delinquent employee has a right to receive
 a copy of the enquiry officer’s report before the disciplinary
 authority arrives at its conclusions with regard to the guilt or
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1030            SUPREME COURT REPORTS                            [2019] 9 S.C.R.


 A           innocence of the employee with regard to the charges levelled
             against him. That right is a part of the employee’s right to defend
             himself against the charges levelled against him. A denial of the
             enquiry officer’s report before the disciplinary authority takes its
             decision on the charges, is a denial of reasonable opportunity to
             the employee to prove his innocence and is a breach of the
 B
             principles of natural justice.
             30. (iv) In the view that we have taken, viz., that the right to make
             representation to the disciplinary authority against the findings
             recorded in the enquiry report is an integral part of the opportunity
             of defence against the charges and is a breach of principles of
 C           natural justice to deny the said right, it is only appropriate that the
             law laid down in Mohd. Ramzan case should apply to employees
             in all establishments whether Government or non-Government,
             public or private. This will be the case whether there are rules
             governing the disciplinary proceeding or not and whether they
 D           expressly prohibit the furnishing of the copy of the report or are
             silent on the subject. Whatever the nature of punishment, further,
             whenever the rules require an inquiry to be held, for inflicting
             the punishment in question, the delinquent employee should
             have the benefit of the report of the enquiry officer before
             the disciplinary authority records its findings on the charges
 E           levelled against him. Hence question (iv) is answered
             accordingly.”
                                                             (Emphasis supplied)
              20. In K. Manche Gowda’s case, the Inquiry Officer
 F     recommended that the delinquent may be reduced in rank. But while
       serving show cause notice after the report of the Inquiry Officer, the
       Disciplinary Authority proposed punishment of dismissal from service.
       The order of punishment considered the previous punishments imposed
       upon the delinquent to come to the conclusion that the delinquent is unfit
       to continue in Government service and, therefore, he was ordered to be
 G     dismissed from service. It was, in these circumstances, the Court ordered
       that the past conduct can be taken into consideration during the second
       stage of inquiry, which essentially relates more to the domain of
       punishment rather than to that of guilt. An opportunity should be given
       to the delinquent to know that fact and meet the same.
 H
        STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                                  1031
                     [HEMANT GUPTA, J.]

       21. The omission of the words from clause (2) of Article 311 of              A
the Constitution reproduced above completely changes the requirement
of serving notice in respect of the proposed punishment. The amended
provisions of Article 311 of the Constitution of India have been considered
in Mohd. Ramzan’s case and later in B. Karunakar’s case. The
judgment of this Court in Nicholas Piramal India Limited arises out
                                                                                    B
of an Award passed by the Labour Court under the Industrial Disputes
Act, 1947. The jurisdiction of the Labour Court is much wider where
the punishment can be reviewed by the Labour Court in terms of
Section 11-A of the said Act.
       22. This Court in Punjab National Bank and Others v. K. K.
Verma11 has taken the same view that right to represent against the                 C
proposed penalty has been taken away by the 42nd Amendment. It was
so held:
          “32. Thus, the right to represent against the findings in the inquiry
          report to prove one’s innocence is distinct from the right to represent
          against the proposed penalty. It is only the second right to represent    D
          against the proposed penalty which is taken away by the 42nd
          Amendment. The right to represent against the findings in the
          report is not disturbed in any way. In fact, any denial thereof will
          make the final order vulnerable.”
       23.Thus, the requirement of second show cause notice of proposed             E
punishment has been dispensed with. The mandate now is only to apprise
the delinquent of the Inquiry Officer’s report. There is no necessity of
communicating proposed punishment which was specifically contemplated
by clause (2) of Article 311 prior to 42nd Amendment.
       24. The previous punishments could not be subject matter of the              F
charge sheet as it is beyond the scope of inquiry to be conducted by the
Inquiry Officer as such punishments have attained finality in the
proceedings. The requirement of second show cause notice stands
specifically omitted by 42nd Amendment. Therefore, the only requirement
now is to send a copy of Inquiry Report to the delinquent to meet the               G
principle of natural justice being the adverse material against the
delinquent. There is no mandatory requirement of communicating the
proposed punishment. Therefore, there cannot be any bar to take into
consideration previous punishments in the constitutional scheme as
11
     (2010) 13 SCC 494
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1032            SUPREME COURT REPORTS                             [2019] 9 S.C.R.


 A     interpreted by this Court. Thus, the non-communication of the previous
       punishments in the show cause notice will not vitiate the punishment
       imposed.
             25. In Kunj Behari Misra, it is categorically held that when the
       Inquiry Report is in favour of the delinquent officer but the Disciplinary
 B     Authority proposes to differ with such conclusions then that Authority
       must give the delinquent an opportunity of being heard, for otherwise he
       would be condemned unheard. The Court held as under:
             “17. These observations are clearly in tune with the observations
             in Bimal Kumar Pandit case [AIR 1963 SC 1612 : (1964) 2 SCR
 C           1 : (1963) 1 LLJ 295] quoted earlier and would be applicable at
             the first stage itself. The aforesaid passages clearly bring out the
             necessity of the authority which is to finally record an adverse
             finding to give a hearing to the delinquent officer. If the enquiry
             officer had given an adverse finding, as per Karunakar case
             [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704]
 D           the first stage required an opportunity to be given to the employee
             to represent to the disciplinary authority, even when an earlier
             opportunity had been granted to them by the enquiry officer. It
             will not stand to reason that when the finding in favour of the
             delinquent officers is proposed to be overturned by the disciplinary
 E           authority then no opportunity should be granted. The first stage of
             the enquiry is not completed till the disciplinary authority has
             recorded its findings. The principles of natural justice would
             demand that the authority which proposes to decide against the
             delinquent officer must give him a hearing. When the enquiring
             officer holds the charges to be proved, then that report has to be
 F           given to the delinquent officer who can make a representation
             before the disciplinary authority takes further action which may
             be prejudicial to the delinquent officer. When, like in the present
             case, the enquiry report is in favour of the delinquent officer but
             the disciplinary authority proposes to differ with such conclusions,
 G           then that authority which is deciding against the delinquent officer
             must give him an opportunity of being heard for otherwise he
             would be condemned unheard. In departmental proceedings, what
             is of ultimate importance is the finding of the disciplinary authority.”
               26. The judgment of this Court in Bidyabhushan Mohapatra’s
 H     case is not applicable to the facts of the present case as in the aforesaid
    STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                                1033
                 [HEMANT GUPTA, J.]

case, the High Court has held that the findings of the Tribunal on charges    A
1(a) and 1(e) were vitiated because it had failed to observe the rules of
natural justice. In the present case, the delinquent has not been apprised
of reasons of disagreement which were required to be communicated to
the delinquent in view of the judgment of this Court in Kunj Behari
Misra’s case prior to the stage of imposing punishment. Since the reasons     B
of disagreement were not communicated, the order of removal from
service would be in realm of conjectures as to whether punishment of
removal would be sustainable on charge No. 4 alone. The judgment
referred to is only in respect of punishment which is the second stage
after recording of finding of the guilt. In the present case, the pre-
requisite condition of communicating reasons of disagreement has not          C
been complied with, which is leading to finding of guilt. Therefore, the
judgment is not applicable to the facts of the present case.
      27. In P.D. Agrawal’s case, the delinquent was in appeal against
an order whereby the action against the delinquent was maintained. This
Court in P.D. Agrawal’s case held as under:                                   D
      “50. We are, therefore, of the opinion that charge 2 being severable,
      this Court can proceed on the basis that the charges against the
      appellant in respect of charge 2 were not proved.
                 xx               xx               xx
                                                                              E
      54. For the reasons aforementioned, we are of the opinion that it
      is not a fit case where this Court should exercise its discretionary
      jurisdiction under Article 136 of the Constitution. This appeal is,
      therefore, dismissed. However, in the facts and circumstances of
      this case, there shall be no order as to costs.”
                                                                              F
      28. In the present case, the High Court has set aside the order of
punishment on the ground that it violates the principle of natural justice.
This Court has not found reasons to set aside the order of punishment
whereas in a case where order of punishment has been set aside, the
principles of natural justice would warrant that the matter is remitted
back to the Disciplinary Authority to consider whether the removal of         G
the delinquent on the basis of charge No. 4 alone can be sustained or
not.
      29. In view of the said judgment, the findings recorded by the
Division Bench that the order of punishment passed on the basis of
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1034             SUPREME COURT REPORTS                             [2019] 9 S.C.R.


 A     uncommunicated reasons of disagreement recorded in respect of charge
       Nos. 1 and 5 cannot be faulted with. In fact, the argument of Mr.
       Vishwanathan is that charge No. 4 alone is sufficient to maintain the
       order of punishment of removal from service. Though, charge No. 4
       may be sufficient to inflict punishment but it is not necessary that the
       charge No. 4 alone will entail punishment of removal from service. While
 B
       exercising the power of judicial review, it will not be within our jurisdiction
       to maintain the order of punishment of removal from service in view of
       findings recorded on charge No. 4 itself. It is for the Disciplinary
       Authority to inflict punishment as it may consider appropriate after finding
       the charge No. 4 proved against the delinquent.
 C            30. It is admitted that the delinquent has attained the age of
       superannuation. Though, the parties are at variance on the date of
       superannuation but the fact remains that in view of the finding on charge
       No. 4 proved against the delinquent to which there was no disagreement,
       we find that the order of the High Court granting consequential benefits
 D     to the delinquent is not justified. However, the question required to be
       examined is what are the options available at this stage.
              31. In B. Karunakar case, the Constitution Bench examined the
       question as to what should be the order if the principle of natural justice
       has not been applied with and the order of punishment stands vitiated on
 E     that account. The Court held that if the order of punishment stands
       vitiated, the proper relief is to direct reinstatement with liberty to the
       management to proceed with the inquiry, by placing the employee under
       suspension and continuing the inquiry from the stage of furnishing him
       with the report. The question of back wages and other benefits should
       invariably be left to be decided by the authority concerned according to
 F     law, after the culmination of the proceedings and depending upon the
       final outcome. The Court held as under:
              “31. …….It is only if the Court/Tribunal finds that the furnishing
              of the report would have made a difference to the result in the
              case that it should set aside the order of punishment. Where after
 G            following the above procedure, the Court/Tribunal sets aside the
              order of punishment, the proper relief that should be granted is to
              direct reinstatement of the employee with liberty to the authority/
              management to proceed with the inquiry, by placing the employee

 H
      STATE BANK OF INDIA. v. MOHAMMAD BADRUDDIN                                   1035
                   [HEMANT GUPTA, J.]

       under suspension and continuing the inquiry from the stage of               A
       furnishing him with the report. The question whether the employee
       would be entitled to the back-wages and other benefits from the
       date of his dismissal to the date of his reinstatement if ultimately
       ordered, should invariably be left to be decided by the authority
       concerned according to law, after the culmination of the
                                                                                   B
       proceedings and depending on the final outcome. If the employee
       succeeds in the fresh inquiry and is directed to be reinstated, the
       authority should be at liberty to decide according to law how it
       will treat the period from the date of dismissal till the reinstatement
       and to what benefits, if any and the extent of the benefits, he will
       be entitled. The reinstatement made as a result of the setting aside        C
       of the inquiry for failure to furnish the report, should be treated as
       a reinstatement for the purpose of holding the fresh inquiry from
       the stage of furnishing the report and no more, where such fresh
       inquiry is held. That will also be the correct position in law.”
       32. Since the delinquent has attained the age of superannuation,            D
there cannot be any order of reinstatement or of suspension. In view
thereof, the order of punishment dated November 4, 1993 as also the
order of the Appellate Authority are set aside and the matter is remanded
back to the Disciplinary Authority to consider as to whether it would like
to record reasons of disagreement on charge Nos. 1 and 5 and/or impose
punishment on the basis of charge No. 4 with which there is no                     E
disagreement, as it may consider appropriate.
       33. In view of the aforesaid, Civil Appeal arising out of Special
Leave Petition (Civil) No. 20488 of 2017 is allowed. Since, admittedly
the delinquent has attained the age of superannuation, we direct the
Disciplinary Authority to pass an appropriate order within three months            F
of the receipt of copy of this judgment in respect of payment of back
wages as well as terminal benefits, if any, payable to the delinquent.
       34. With the said directions and liberty, the appeals stand disposed
of.
                                                                                   G

Kalpana K. Tripathy                                         Appeals disposed of.




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