Holding

Non‑supply of the Inquiry Officer’s report does not per se invalidate a disciplinary order; the employee must show prejudice, and the High Court’s order was set aside for failing to do so.

Summary

Kailash Chandra Ahuja, a technical officer of Haryana Financial Corporation, was dismissed after a disciplinary inquiry in which the Inquiry Officer’s report was not furnished to him before the disciplinary authority imposed the penalty. The High Court set aside the dismissal on the ground that non‑supply of the report violated natural justice. The Supreme Court held that while furnishing the report is a component of natural justice, its absence does not automatically invalidate the punishment; the employee must demonstrate that the omission caused prejudice. Since the High Court had not found any such prejudice, its order was set aside. The appeal was allowed and the matter remitted to the High Court to determine whether prejudice was caused by the non‑supply of the report.

Issues considered

Whether the failure to furnish the Inquiry Officer’s report to the delinquent employee automatically vitiates the disciplinary order of dismissal.
Whether the High Court erred in setting aside the dismissal without a finding of prejudice to the employee.

Legislation cited

Constitution (42nd Amendment) Act, 1976
Constitution of Indias. Article 311(2)

Subjects

Service lawDisciplinary proceedingsNatural justiceAudi alteram partemInquiry Officer reportPrejudiceDismissalAdministrative law

Judgment

[2008] 10 S.C.R. 222

,..
A HARYANA FINANCIAL CORPORATION & ANR.
v.
KAILASH CHANDRA AHUJA
(Civil Appeal No. 4222 of 2008)
JULY 8, 2008
B ....... ~.
[C.K. THAKKER AND D.K. JAIN, JJ:]

Service Law - Disciplinary proceedings - Non-supply of
Inquiry Officer's report to the delinquent by Disciplinary Au-
c thority - Effect of - Held: Inquiry Officer's report must be fur-
nished to the delinquent employee - However, failure to do
so would not vitiate the order of punishment unless it resulted
in prejudice to the employee - Whether prejudice had been
caused to employee depends on facts and circumstances of
each case - On facts, High Court did not record any finding
D ~-
that prejudice caused to delinquent employee - Thus, order
of High Court setting aside the dismissal order cannot be up-
held - Matter remitted back to decide whether prejudice
caused to employee - Punjab Financial Corporation (Staff)
Regulations, 1961- Regulation 41 (1)(eJ.-Administrative law
E - Natural justice.

The respondent was appointed as a Technical Of-
ficer with the appellant-Corporation. He was reprimanded
on two occasions. Thereafter, on basi~ of certain allega-
F tions against the respondent, the Corporation initiated ~ ~I

proceedings against him. The Inquiry Officer was ap-
pointed and he exonerated the respondent of all the
charges. However, on account of certain deficiencies in
the report, the matter was remanded to the Inquiry Officer.
The respondent appeared and participated in the proceed-
G
ings. The Inquiry Officer submitted the report and held
the respondent guilty. Thereafter, the respondent was is- j \. . .

sued notice to show cause as to why he should not be
dismissed from service under Regulation 41 (1) (e) of the

H 222
HARYANA FINANCIAL CORPORATION & ANR. v. 223
I
KAILASH CHANDRAAHUJA
""" .J Punjab Financial Corporation (Staff) Regulations, 1961 . A
The deHnquent filed a reply and was given a hearing.
Thereafter, he was dismissed from service. The respon-
dent filed appeal before the Corporation but the same was
dismissed. The respondent then filed a writ petition. High
Court set aside the order of dismissal on the ground of B
/. ..... non-supply of the report of the Inquiry Officer to the re-
... spondent. Hence the present appeal.

-.. ':
~.

....
Allowing the appeal and remitting the matter to High
Court, the Court
HELD: 1.1 It is clear that though supply of report of
c
Inquiry Officer is part and parcel of natural justice and
must be furnished to the delinquent- employee, failure to
,I
do so would not automatically result in quashing or set-
ting aside of the order or the order being declared null
D
~
and void. For that, the delinquent employee has to show
'prejudice'. Unless he is able to show that non-supply of
report of the Inquiry Officer has resulted in prejudice or
miscarriage of justice, an order of punishment cannot be
held to be vitiated. And whether prejudice had been
caused to the delinquent-employee depends upon the E
facts and circumstances of each case and no rule of uni-
versa! application can be laid down. [Para 47] [241-E-G]
1.2 In the instant case, it is not in dispute by and be- !.
I

}
tween the parties either before the High Court or before F
....
this Court, that a copy of the report of Inquiry Officer was
not supplied to the delinquent-writ-petitioner. The High
Court failed to appreciate and apply in its proper perspec-
tive the ratio laid down in B. Karunakar's case, though the
High Court was conscious of the controversy before it.
G
The Court also noted the submission of the Corporation
that there was 'no whisper' in the writ petition showing
~) ! any prejudice to the delinquent as required by B.
Karunakar's case, but allowed the writ petition and set
aside the order of punishment observing that in such
H
224 SUPREME COURT REPORTS [2008] 10 S.C.R.

A cases, prejudice is 'writ large'. It did.·not record any find-
ing that prejudice had been caused to the delinquent-
employee. The above said observation and conclusion
is not in consonance with the decisions referred includ-
ing a decision of the Constitution Bench in B. Karunakar's
B case. Hence, the view of the High Court cannot be up-
held and is set aside. [Paras 22, 23, 24 and 48] ·[233-E,
23.3-G,H, 234 A, 241 H and 242 A-B]
1.3 Since the High Court did not consider whether ('
·-
1

failure to supply the report of the Inquiry Officer had or had
C not resulted in prejudice to the delinquent employee, ends
of justice wo.uld be met with if matter is remitted to the High
Court to decide the said question. [Para 49] (242-C]
-
"\

,,_

Managing Director, ECIL, Hyderbad and Ors. v. B.
D Karunakar and Ors. 1993 (4) SCC 727 - followed.
Union oflndia and Ors. v. Mohd. Ramian Khan 1991. (1)
SCC 588; Kai/ash Chander Asthana v. State of UP. 1988 (3)
sec 600 - referred to.
2.1 The principles of natural justice have to be com-
E plied with. One of the principles of natural justice is audi
alteram partem ("Hear the other side"). But the concept
'nah1ral justice' is not a fixed one. It has meant many
things to many writers, lawyers, jurists and systems of
law. It has many colours, shades, shapes and forms. Rules
F of natural justice are not embodied rules and they cannot
be imprisoned within the strait-jacket of a rigid formula.
[Para 25] [234-C,D & E]
Union of India v. P.K. Roy (1968) 2 SCR 196; AK
G Kraipak v. Union of India 1969 (2) SCC 262; R. S. Dass v.
Union of India 1986 Supp SCC 617 - relied on.
Russel v. Duke of Norfolk 1949 (1) All ER 109; Byrne v Ki-
nematograph Renters Society, 1958 (2) All ER 579 - referred to.
2.2 At the same time the effect of violation of rule of
H
HARYANA FINANCIAL CORPORATION & ANR. v. 225
KAILASH CHANDRAAHUJA
. ..it audi alteram partem has to be considered. Even if hearing A
is not afforded to the person who is sought to be affected
or penalized, before few years it could not be argued that.
notice would have served no purpose" or "hearing could
not have made difference" or "the person could not have
f ~ offered any defence whatsoever". [Para 31] [236-A & B] B
Board of High School v. Kumari Chitra 1970 (1) SCC 121;
S.L. Kapoor v. Jagmohan 1980 (4) SCC 379 - referred to.
Ridge v. Baldwin 1964 AC 40 - referred to.
Administrative Law by Wade and Forsyth 9th Edn. pp. c
506-509 - referred to.
2.3 The recent trend however, is of 'prejudice'. Even
in those cases where procedural requirements have not
been complied with, the action has not been held ipso facto
~
D
illegal, unlawful or void unless it is shown that non-ob-
servance had prejudicially affected the applicant. [Para
37] [237-E]
Jankinath v. State of Orissa 1969 (3) SCC 392; State
Bank of Patiala v. S. K. Sharma 1996 (3) SCC 363; M. C. Mehta E
v. Union of India 1999 (6) SCC 237; Aligarh Muslim Univer-
sity v. Mansoor Ali Khan, 2000 .(7) SCC 529; Ajit Kumar Nag
v. General Manager (PJ}, Indian Oil Corporation Ltd, Haldia
and Ors. 2005 (7) SCC 764; PD. Agrawal v. State Bank of
> _..( India and Ors. 2006 (8) SCC 776; Ranjit Singh v. Union of F
India, 2006 (4) SCC 153 - referred to.
Malloch v. Aberdeen Corporation, 1971 (2) All ER 1278
- referred to.
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4222
G
of 2008
. " ~
From the final Judgment and Order dated 6/11 /2006 of
the High Court of Punjab and Haryana at Chandigarh in C.W.P.
No. 8299/2005
H
226 SUPREME COURT REPORTS [2ooa110.s.c.R. ~

)..
A Amit Dayal for the Appellants. """""
J

R.P. Bhatt, S.C .. Patel, Tejas Patel and Subhashish
Bhowmic for th~ Respondent.
The Judgment of the Court was delivered by
B C.K. THAKKER, J. 1. Leave granted.
jr ~

2. The Haryana Financial Corporation (hereinafter referred
to as 'the Corporation'), being aggrieved by the decision of the
High Court ·of Punjab'& Haryana dated November 6, 2006 in
c Civil Writ Petition No. 8299 of 2005 has approached this Court.
According to the appellant, the order passed by the High Court
is not in consonance with law laid down by this Court in several
cases, particularly, a decision of the Constitution Bench of this
Court in Managing Director, ECIL, Hyderabad & Ors. V B.
Karunakar & Ors., (1993) 4 SCC 727. ,.
D 'r- ' I

3. To appreciate the grievance voiced by the Corporation,
few relevant facts may be stated;
<·
.
4. The respondent herein (writ petitioner before ·the High
. Court) Kailash Chandra Ahuja was appointed as Technical Of-
E
ficer in the Corporation in June, 1979. According to the appel-
!ant-Corporation, he was given 'warning' in 1984. In 1993, he
was working as Deputy General Manager. In 1997, he was.rep-
rimanded. On August 17, 1999, he was working as Branch
Manager at Branch Office, Rewari. The Corporation initiated \)
F proceedings against the writ-petitioner in accordance with Regu- >--
lation 41 ( 1) and (2) of Punjab Financial Corporation (Staff)
Regulations, 1961 (hereinafter referred to as 'the Regulations')
on the allegations enumerated in the Statement of Charges.
The statement related to commission and omission on the part
G of the writ-petitioner. The writ-petitioner submitted a reply on.
December 14, 1999. An Inquiry Officer was appointed who sub-
\. ·"-
mitted his report on December 15, 2000 and exonerated the
writ-petitioner of all.the charges. According to the Corporation,
however, the report of the Inquiry Officer suffered from certain
H deficiencies. Hence, the Managing Director of the Corporation
HARYANA F.INANCIAL CORPORATION & ANR. v. 227
KAILASH CHANDRAAHUJA [C.K. THAKKER, J]
:- ~
asked the Inquiry Officer vide a communication dated June 19, A
2001 and.sought clarification. The matter was remanded to the
Inquiry Officer with the advice to clarify the points within 15 days:
The Inquiry Officer called the delinquent to appear before him
on August 7, 2001. The delinquent appeared and participated
; ..... in the proceedings without any protest. The Inquiry Officer then B·
submitted his findings vide his report dated September 5, 2001
holding the delinquent guilty. A notice was thereafter issued by
the Managing Director of the Corporation to the delinquent on
December 18/20, 2001 to show cause why he should not be
dismissed from service under Regulation 41 (1) (e) of the Regu- c
lations. The delinquent filed his reply on February 8, 2002. He
was granted personal hearing and was dismissed from ser-
vice by a speaking order dated April 4, 2002. The delinquent
preferred an appeal before the Board of Directors of the Cor-
poration under the Regulations but the said appeal was also
~ D
dismissed by the Board by an order dated January 27, 2005.
The delinquent, therefore, filed a writ petition in the High Co_urt
. of Punjab & Haryana which, as stated above, was allowed by
the High Court setting aside the order dated April 4, 2002 passed
by the Corporation. It is this order which is challenged by the
Corporation in the present appeal. E
5. Notice was issued by this Court on April 9, 2007. The
respondent-writ petitioner appeared through an advocate and
waived service of notice upon him. Time was granted to file
> -I. aff'.idavit-in-reply as well as rejoinder. Meanwhile, the order F
passed by the High Court impugned in the present appeal was
also stayed. On January 10, 2008, the Registry was directed to
place the matter for final hearing on a non-miscellaneous day.
The matter thus has been placed for final disposal before us.
6. We have heard learned counsel for the parties. G

J j 7. The learned counsel for the Corporation submitted that
as is clear from the order passed by the High Court, the re-
spondent-writ petitioner had raised a "short issue" before the
Court. It was contended that the Disciplinary Authority i.e. Man-
H.
228 SUPREME COURT REPORTS · [2008] 10 S.C.R.

...__
~
A aging Director did not furnish a copy of the inquiry report before
recording a finding that he had accepted the finding of guilt re-
corded by the Inquiry Officer in his inquiry report dated Sep-
tember 5, 2001. According to the learned counsel, supply of
inquiry report after the respondent had been found guilty by the
B Inquiry Officer was mandatory, in view of the fact that the writ- ,... ~

petitioner had been exonerated by the Inquiry Officer earlier vide
his report dated December 15, 2000. Reliance in this connec-
tion was placed by the learned counsel for the writ- petitioner
on B. Karunakar, as on also two decisions of the High Court of
c Punjab & Haryana in M. S. Sandhu v. Haryana Vidyut Parsaran
Nigam Ltd., (2005) 4 SCT 628 and Ramesh Kumar v. State of
Haryana & Ors., (2006) ·3 SCT 799.
8. On behalf of the Corporation, the learned counsel con-
tended that there was no whisper in the writ petition that any.
D prejudice had been caused to the case of the writ petitioner .,.._
which was required to be shown as per the ratio laid down in B.
Karunakar cited by the counsel for the writ-petitioner. It was
urged that ·it is only in those cases where a Court or Tribunal
comes to the conclusion that non-supply of the report of the In-
E quiry Officer had caused prejudice to th~ delinquent that it would
vitiate the action. If, on the other hand, non-supply of report would
have made 'no difference' to the ultimate finding and punish-
ment imposed, the order of punishment could not be interfered
with.
F 9. The High Court held that supply of report of the Inquiry > ..
Officer was an 'essential requirement' and non-supply thereof
resulted in violation of principles of natural justice. It, therefore,
set aside the order of dismissal. According to the counsel for
the Corporation, the High Court was wholly wrong in tal<ing the
G -above view which is contrary to the decision of the Constitution
Bench of this Court in B. Karunakar and the appeal deserves
to be allowed. );· l'

10. The learned counsel for the writ- petitioner, on the other
hand, supported the order passed by the High Court. He con-
H
HARYANA FINANCIAL CORPORATION & ANR. v. 229
> KAILASH CHANDRAAHUJA [C.K. THAKKER, J]

tended that the High Court was right in relying upon various A
decisions referred to therein and in setting aside the order of
punishment by granting liberty to the Corporation to take ap-

.""""
propriate proceedings in accordance with law. No interference,
therefore, is called for against the said order in exercise of dis-
cretionary jurisdiction under Article 136 of the Constitution. B
11. Having heard learned counsel for the parties and hav- .
ing considered the rival contentions, in our opinion, the appeal
deserves to be allowed.

12. Since only one question had been raised before the c
High Court as well as before us, we may clarify at the outset
that we are not entering into merits of the matter and allega-
tions and counter allegations by the parties. A limited contro-
versy before us is whether the High Court was right in setting
aside the order of punishment merely on the ground of non-
D
supply of report of the Inquiry Officer to the delinquent.
13. As held by this Court in Union of India & Ors. V Mohd.
Ramzan Khan, (1991) 1 SCC 588, when Inquiring Authority
and Disciplinary Authority is not one and the same and the Dis-
ciplinary Authority appoints an Inquiring Authority to inquire into E
charges levelled against a delinquent-officer who holds inquiry,
finds him guilty and submits a report to that effect to the Disci-
plinary Authority, a copy of such report is required to be sup-
..... plied by the Disciplinary Authority to the delinquent-employee
before an order of punishment is imposed on him. It was also F
held that non~supply of report of the Inquiry Officer to a delin-
quent employee would be violative of principles of natural jus-
tice. The Court observed that after the Constitution (42"d Amend-
ment) Act, 1976, second opportunity contemplated by Article
311(2) of the Constitution had been abolished, but principles of
G
} j natural justice and fair play required supply of adverse material
to the delinquent who was likely to be affected by such material.
Non-supply of report of Inquiry Officer to the delinquent would
constitute infringement of doctrine of natural justice. In B.
Karunakar, a three Judge Bench of this Court was called upon
H
230 SUPREME COURT- REPORTS [2008] ·10 S. C.R.

A to consider the effect of non-supply of Inquiry Officer's report to ·
. the delinquent. The attention of the Court was invited to certain
decisions wherein a different note had been struck by this Court.
Reference was made in this regard to a three· Judge Bench
dedsion of this Court .in Kai/ash Chander Asthana v. State.of
B UP, (1988) 3 sec 600, wherein it was held th~t non:-supply of
the report would not 'ipso facto' vitiate the order of punishment
in absence of prejudice to the delinquent. Though Mdhd . .
Ramzan Khan was. decided. s.Libsequently, Kai/ash Chander··.
Asthan~ w.as not brought to the notice of the Court: The Bench,
c a
therefore, .felt that the matter should be placed before la~ger
Bench and accordingly the Registr)' .was directed to place the
papers before Hon'ble Chief Justice of India so that an appro- ·
.Priate action can be taken [vide Managing Director, ECIL v. B.
Katunakar, (1992) 1SCC 709]. Accordingly, the mater was
placed before the Constitutio.n Bench.. "
0
14. The Constitution Bench observed that the bas1c q~es.:
tion of law which arose in the matters was whether the report.of
the Inquiry Officer appointed by the Disciplinary Authority to hold ..
an inquiry into the charges againstthe delinqu~nt-employee was ..
E required to be furnished to the employee to en.able him to make
representation to the. Disciplinary Authority before such author-
ity arrives at its own finding with regard 'to the guilt or otherwise.
of the employee arid the punishment, if any, to be awarded to
him. On the basis of the above fundamental issue, certain other
F incidental questions were also raised by the Constitution Bench
which included the effect of non-supply of Inquiry Officer's re~
port. · · ·

. 15. So far as the .s~pply of report of the Inquiry Officer is
.concerned, it was held by the Constitution Benchthcit the delin-
. G quent employee·had·a right to receive t!'le Inquiry Officer's re-
port and a oenial thereof would constitute breach of ·natural jus-
. tice. · · · · ·

16~ Speaking for the major.ity, Sawarit J:.stated: . ·. ·
. - ' ..
.H "Hence it has to be held that when the e·nquiry officer.is· not
HARYANA FINANCIAL CORPORATION & ANR. v. 231
.> KAILASH CHANDRA AHUJA [C.K. THAKKER, J]

the disciplinary authority, the delinquent employee has a 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 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 8
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
principles of natural justice". c
(emphasis supplied)
17. The Court then considered the effect of non-supply
of Inquiry Officer's report on the delinquent.
18. The majority stated; D

"The next question to be answered is what is the effect on
the order of punishment when the report of the enquiry
officer is not furnished to the employee and what relief
should be granted to him in such cases. The answer to
E
this question has to be relative to the punishment awarded.
When the employee is dismissed or removed from ser\lice
and the inquiry is set aside because the report is not
furnished to him, in some cases the non-furnishing of the
> ,..._
report may have prejudiced him gravely while in other cases
it may have made no difference to the ultimate punishment F
awarded to him. Hence to direct reinstatement of the
employee with back-wages in all cases is to reduce the
rules of justice to a mechanical ritual. The theory of
reasonable opportunity and the principles of natural justice
have been evolved to uphold the rule of law and to assist c5
} ! the individual to vindicate his just rights. They are not
incantations to be invoked nor rites to be performed on all
and sundry occasions. Whether in fact, prejudice has been
caused to the employee or not on account of the denial to
him of the report, has to be considered on the facts and H
232 SUPREME COURT REPORTS [2008] 10 S.C.R.

A circumstances of each case. Where, therefore, even after
the furnishing of the report, no different consequence
would have followed, it would be a perversion of justice
to permit the empioyee to resume duty and to get all the
consequential benefits. It amounts to rewarding the
B dishonest and the guilty and thus to stretching the concept
of justice to illogical and exasperating limits. ·it amounts
to an 'unnatural expansion of natural justice' which in
itself is antithetical to justice". I
(emph~sis supplied)
c ,i

19. Holding that it was incumbent on the delinquent em-
ployee to show prejudice, the majority held that non-supply of
report of the lnquir; Officer to the delinquent employee would
not by itself make the order of punishment null and void ornon
est.
0
20. The majority concluded;
"Hence, in all cases where the enquiry officer's report is
not furnished to the delinquent employee in the disciplinary
proceedings, the Courts and Tribunals should cause the
E copy of the report to be furnished to the aggrieved
employee if he has not already secured it before coming
to the Court/Tribunal and give the employee an opportunity
to show how his or her case was prejudiced because of
the non-supply of the report. If after hearing the parties, the
F Court/Tribunal comes to the conclusion that the non-supply
of the report would have made no difference to the ultimate
findings and the punishment given, the Court/Tribunal
should not interfere with the order of punishment. The CourU
Tribunal should not mechanically set aside the order of
G punishment on the ground that the report was not furnished
as is regrettably being done at present. The courts should
· avoid resorting to short cuts. Since it is the Courts/Tribunals
which will apply their judicial mind to the question and give
their reasons for setting aside or not setting aside the
H order of punishment, (and not any internal appellate or

,,
I
HARYANA FINANCIAL CORPORATION & ANR. v. 233
~ KAILASH CHANDRA AHUJA [C.K. THAKKER, J]

revisional authority), there would be neither a breach of A
the principles of natural justice nor a denial of the
reasonable opportunity. 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 punishmenf'. B
(emphasis supplied)

21. From the ratio laid down in B. Karunakar, it is explic-
itly clear that the doctrine of natural justice requires supply of a
copy of the Inquiry Officer's report to the delinquent if such In- c
quiry Officer is other than the Disciplinary Authority. It is also
clear that non-supply of report of Inquiry Officer is in the brepch
of natural justice. But it is equally clear that failure to supply a
report of Inquiry Officer to the delinquent employee would not
ipso facto result in proceedings being declar~d null and yoid
D
and order of punishment non est and ineffective. It is for the
delinquent-employee to plead and prove that non-supply of such
report had caused prejudice and resulted in miscarriage of,jus-
tice. If he is unable to satisfy the Court on that point, the order of
punishment cannot automatically be set aside.
E
. 22. In the instant case, it is not in dispute by and between
the parties either before the High Court or before us that a copy
of the report of Inquiry Officer was not supplied to the delin-
quent-writ-petitioner. While the contention of the writ petitioner
is that since failure to supply l,nquiry Officer's report had resulted F
in violation of natural justice and the order was, therefore, liable
to.be quashed, the submission on behalf of the Corporati6n is
that no material whatsoever has been placed nor a finding is
recorded by the High Court that failure to supply Inquiry Officer's
report had resulted in prejudice to the delinquent and the order
G
; 'I of punishment was, therefore, liable to be quashed.
23. The High Court, unfortunately, failed to appreciate and
apply in its proper perspective the ratio laid down in B.
Karunakar, though the High Court was conscious of the contra-
versy before it. The Court also not~d the submission of. the H
234 · · . SUPREME COURT REPORTS [2008J 10 S.C.R.

A Corporation that there was 'no whisper' in the writ petition show-
ing any prejudice to the delinquent as required by B. Karunakar,
but allowed. the writ petition and set aside the order of punish- ·
ment observing that in such cases, prejudice is 'writ large'.
24. In our considered view, the High Court was wrong in
B making the above observation and virtually in ignoring the ratio
of B .. Karunakar that prejudice should be shown by the delin-
quent. To repeat, in B. Karunakar, this Court stated;

"Whether in fact, prejudice has been caused ·to the
c employee or not on account of the denial to him of the
report, has to be considered on the facts and
circumstances of each case".

· 25. It is settled law that principles of natural justice have to
·be complied with. One of the principles of natural justice· is audi
D alteram partem ("Hear the other side"). But it is equally well
settled thafthe concept 'natural justice' is not a fixed one. It has
meant many things to many writers, lawyers, jurists and sys-
tems of law. It has many colours, shades, shapes and forms.
Rules of natural justice are not embodied rules and they cannot
E be imprisqned within the strait-jacket of a rigid formula.
26. Before about six decades, in Russel v. Duke of Nor-
folk, (1949) ·1 AllER 109: 65 TLR 225, Tucker, L.J. stated:
"There are, in my view, no words which are of universal >
F applfcation to every kind of. inquiry and every kind of
domestic tribunal. The requirements of natural justice must
depend on the circumstances of the case, the nature of
the inquiry, the rules under which the tribunal is acting, the
subject-matter that is being dealt with, and so forth".
G 27. In the oft~quoted passage from Byrne v. Kinemato-
graph Renters Society, (1958) 2 AllER 579, Lord Harman enun-
ciated;
· "What, then, are the requirements of natural justice in a .
case of this. kind? First, I think that the person accused
H
HARYANA.FINANCIALCORPORATION.&ANR.. .v. 235
KAILASH CHAND.RA AHUJA [C.K .. THAKKER, J]

.. should know the nature of the accusation .made; secondly, A
that he should be given an opportunity to. state his case; ·
and thirdly, of course,.th~t the tribunal should actiri good
·faith: I do not think that there realty is anything more".
.. ~ (emphasis supplied)
B
28. This Court has also taken sim.ilar view. lri Union of
India v. PK. Roy, AIR.1968 SC 850: (1968) 2 SCR 1.96, speak-
ing for the Court, Ramaswami, J. ob~erved:
"(T)he extent ·and application ·of the doctrine of natural·
ju~tice cannot be imptisoned within the strait jacket of a c
rigid formula ..The.application of the doctnn·e depends· upon
. the nature of the jurisdiction conferred on tlie administrative
authority, upon the character of the rights of.the persons
! ~
affected, the sc~eme and policy of the statute. and other
I relevant circumstances disclosed iri the particular case". D
.. 29. In the leading case of A.K. Kraipak v. Union of India,
(1969) 2 SCC 262, Hegde, J. stated; .
"What particular rule of natur?I justice should apply to a.
· given: case must depend to a great extent on the facts and E
circumstances ·of that case, the framework of the law under
wh_i~h th~ enquiry is held and the constitution of the Tribunal
· , or body of persons appointed for that purpose. Whenever
,. ""\ a complaiht is made· before a court that some principle of
n.~tural justice had been contravened the court has to F
deCide whether the observance of that rule was necessary
for a just deci~ion on the facts of that case".
30. Again, iri R. S. Dass v.. Union of India, 1986 Supp
SCC 617, this Court said;
G
.· "It is well established that r.ules of natural Justice are not
!' '(
rigid rules; they are flexible and their application d.epends
upon the setting and the ba~kground of statutory provision,
nature of the right which may be affe·cted and the
consequences
. . which
. may. entail,. its application depends
H
236 SUPREME COURT REPORTS [2008] 10 S.C.R.
.....

A upon the facts and circumstances of each case".
31. At the same time, however, effect of violation of ru·le of
audi alteram partem has to be considered. Even if hearing is
not afforded to the person who is sought to be affected or pe-
nalized, can it not be argued that notice would have served no
)' .
B purpose" or "hearing could not have made difference" or "the
person could not have offered any defence whatsoever''.

32. In this connection, it is interesting to note that under
the English Law, it was held before few years that non-compli-
c ance with principles of natural justice would make the order null
and void and no further inquiry was necessary.

33. ·In the celebrated decision of Ridge v. Baldwin, 1964
AC 40 : (1963) 2 AllER 66, it was contended that an opportunity
of hearing to the delinquent would have served no purpose. )..
'
D Negativing the contention, however, Lord Reid stated;
"It may be convenient at this point to deal with an argument
that, even if as a general rule a watch committee must
hear a constable in his own defence before dismissing
him, this case was so clear that nothing that the appellant
E
could have said could have made any difference. It is at
least very doubtful whether thatcould be accepted as an
excuse".
(emphasis supplied) ;. ...

F 34. Wade and Forsyth in their classic work, Administra-
tive Law, (9 1h Edn.) pp. 506-509 also stated that if such argu-
ment is upheld, the Judges may be tempted to refuse relief on·
the ground that a fair hearing could have made no difference to
the result "But in principle it is vital that the procedure and the
G merits should be kept strictly apc;irt, since otherwise the merits
may be prejudiced unfairly". 'I .
(emphasis supplied)

35. This Court expressed the same opinion. In Board of
H High School v. Kumari Chitra, (1970) 1 SCC 121, the Board
HARYANA FINANCIAL CORPORATION & ANR. v. 237
KAI LASH CHANDRA AHUJA [C. K .. THAKKER, J]
)..,
cancelled the examination of the petitioner who had actually ap- A
peared at the examination on the ground that there was short-
age in attendance at lectures. Admittedly, no notice was given
to her before taking the action. On behalf of the Board it was
contended that the facts were not in dispute and therefore, 'no
~ ~ useful purpose would have been served' by giving a show cause B
notice to the petitioner. This Court, however, set aside the deci-
sion of the Board, holding that the Board was acting in a quasi-
judicial capacity and, therefore, it ought to have observed the
principles of natural justice.

36. In S.L Kapoor v. Jagmohan, (1980) 4 SCC 379, re- C
jecting the argument that observance of natural justice would
have made no difference, this Court said; ·

"The non-observance of natural justice is itself prejudice
to any man and proof of prejudice independently of proof
0
of denial of natural justice is unnecessary. It 'II comes from
a person who has denied justice that the person who has
been denied justice is not prejudiced".
(emphasis supplied)
37. The recent trend, however, is of 'prejudice'. Even in E
those cases where procedural I
requirements have not been
complied with, the action ha:s not been held ipso facto illegal,
unlawful or void unless it is shown that non-observance had preju-
dicially affected the applicant.
F
38. In Malloch v Aberdeen Corporation, (1971) 2 AllER
1278, Lord Reid said;

"(l)t was argued that to have afforded a hearing to the
appellant before dismissing him would have been a
useless formality because whatever he might have said G
could have made no difference. If that could be clearly
demonstrated it might be a good answer''.
(emphasis supplied)

H
238 SUPREME· COURT REPORTS [2008] 1O.S. C.R.

A..
A 39: Lord Guest agreed with the. above statement, :went
further and stated;
"A great many arguments might ha'.(e been put forward.
· but if none of them had any chance. of sucqess then I can
see no good reason why the respondents should .have
.8 given. the appellant a hearing, nor can I see that he was ,;: ...
·prejudiced in any way".
40. In
.
Jankinath v: State of Orissa,
. (1969) 3 SCC 392,. it
was contended that natural justice was vi.olated inasr')'luch as . · ·
c the petitioner was .not allowed to lead evidence and the mate-:-
rial gathered behind his back was used in .determining his guilt.
Dealing with the co~tention, the Court stated;

"We have to look to what actual prejudice has been cau_s_ed ·
to a person by the supposed denial to him of a particular
o· right". (emphasis supplied) ).._
41. In B. Karunakar, this Court considered several cc:ises .
and held that it was only if the Court/Tribunal finds that the fur-
nishjng of the report "would have made a .difference" to the re- t
suit in the case that it should set aside the order of punishment.
E The law laid down in B. Karunakarwas reiterated and followed
in subsequent cases also [vide State Bank ol Patiala I(. S.K. ·
Sharma, (1996) 3 SCC 363; M. C. Mehta v. nion of India, (1999)
6 sec 237].

F 42. In Aligarh Muslim University v. Mansoor Ali Khan,
(2000) 7 sec 529, the relevant rule provided automatic termi-
,. " I

nation of service of an employee on unauthorized absence for
certain period. M remained absent for more than five years and,
hence, the post was deemed to have been vacated by hfrn. M
G challenged the order being vi.olative of natural justice as no op-
portunity of hearing was afforded before taking the action ..
43. Though the Court held that the rules of natural justice 'i "·
were violated, it refused to set aside the order on the ground
that no prejudice was caused to M. Referring to several cases,
H considering theory of 'Us.eless' or 'empty' formality and noting
HARYANA FINANCIAL CORPORATION & ANR. v. 239
KAI LASH CHANDRA AHUJA [C. K. THAKKER, J] .
,)., :
"admitted or undisputed" facts, the Court held that the only con- A
clusion which could be drawn was that had M .been given a
notice, It "would not have made any difference" and, hence, no
prejudice had been caused to M.
44. In Ajit Kumar Nag v. General Manager (PJ}, Indian
.>
"" Oil Corporation Ltd, Haldia & Ors., (2:005) 7 SCC 764, speak- . B
. ing for a three Judge Bench, one of.us (C.K. Thakker, J.) stated:·
"We are aware of the normal rule that a person must have
a fair trial and a fafr appeal and he cannot be asked to be
satisfied with an unfair trial and a fair appeal. We are also c
conscious of the general principle that pre-decisional
hearing is better and should always be preferred to post-
decisional hearing. We are further aware ~hat It has_ been
stated that apart from Laws of Men, Laws of God also
observe the rule of audi alteram partem. It has been stated
~ D
that the first hearing in human history was given in the
Garqen of Eden. God did not pass sentence upon Adam
and Eve before giving an opportunity to show cause as to
why they had eaten the forbidden fruit. [See R. v. University
of Cambridge, (1723) 1 Str 557] But we are also aware
that the principles of natural justice are not rigid or immutable E
and hence they cannot be imprisoned in a straitjacket. They
must yield to and change with exigencies of situations. They
must be confined within their limits and cannot be allowed
#
... to run wild. It has been stated: "'To do a great right' after all,
it is permissible sometimes 'to do a little wrong'." [Per F
Mukharji, C.J. in Charan Lal Sahu v. Union of India, (1990)
1 SCC 613 (Bhopal Gas Disaster), SCC p.
705,para 124.] While interpreting legal provisions, a court
of law cannot be unmindful of the hard realities of life. In
our opinion, the approach of the Court in dealing with G
such cases should be pragmatic rather than pedantic,
"r realistic rather than doctrinaire, functional rather than
formal and practical rather than precedentiaf'.

(emphasis supplied)
H
240 SUPREME COURT REPORTS [2008] 10 S.C.R.

A 45. Recently, in PD. Agrawal v. State Bank of India & Ors.,
(2006) 8 SCC 776, this Court restated the principles of natu.ral
justice and indicated that they are flexible and in the recent times,.
they had undergone a 'sea change'. If there is no prejudice to
the employee, an action cannot be set aside merely on the
B ground that no hearing was afforded before taking a decision
by the authority.
.46. In Ranjit Singh v. Union of India, (2006) 4 SCC 153,
referring to the relevant case-law, this Court said;

c "In view of the aforementioned decisions of this Court, it
is now well settled that the principles of natural justice
were required to be complied with by the disciplinary
authority. He was also required to apply his mind to the
materials on record. The enquiry officer arrived at findings
which were in favour of the appellant. Such findings were
D
required (sic sought) to be overturned by the disciplinary
authority. It is in that view of the matter, the power sought
to be exercised by the disciplinary authority, although not
as that of an Appellate Authority, but is akin thereto. The
inquiry report was in favour of the appellant but the
E discipl-inary authority proposed to differ with such
conclusions and, thus, apart from complying with the
principles of natural justice it was obligatory on his part, in
the absence of any show-cause filed by the appellant, to I
)-
analyse the materials on record afresh. It was all the more
F necessary because even CBI, after a thorough
investigation in the matter, d.id not find any case against
the appellant and thus, filed a closure report. It is, therefore,
not a case where the appellant was exonerated by a
. criminal court after a full-fledged trial by giving benefit of
G doubt. It was also not a case where the appellant could be
held guilty in the disciplinary proceedings applying the
standard of proof as preponderance of the probability as
contrasted with the standard of proof in a criminal trial i.e.
proof beyond all reasonable doubt. When a final form was
H filed in favour of the appellant, CBI even did not find a
HARYANA FINANCIAL CORPORATION & ANR. v. 241
KAILASH CHANDRA AHUJA [C.K. THAKKER, J]

prima facie case against him. The disciplinary authority in A
the aforementioned peculiar situation was obligated to
apply its mind on the materials brought on record by the
parties in the light of the findings arrived at by the inquiry
officer. It should not have relied only on the reasons
> ~ disclosed by him in his show-cause notice which, it will B
bear repetition to state, was only tentative in nature. As
the Appellate Authority in arriving at its finding, laid
emphasis on the fact that the appellant has not filed any
objection to the show-cause notice; ordinarily, this Court
would not have exercised its power of judicial review in
such a matter, but the case in hand appears to be an
c
exceptional one as the appellant was exonerated by the
inquiry officer. He filed a show-cause but, albeit after some
time the said cause was available with the disciplinary
authority before he issued the order of dismissal. Even if
4- D
he had prepared the order of dismissal, he could have
considered the show-cause as he did not leave his office '

by then. The expression "communicatLon" in respect of an
order of dismissal or removal from service would mean
that the same is served upon the delinquent officer". (See
State of Punjab v. Amar Singh Harika, AIR 1966 SC 1313) Ei

47. From the aforesaid decisions, it is clear that though
supply of report of Inquiry Officer is part and parcel of natural
justice and must be furnished to the delinquent- employee, fail-
~

~ ure to do so would not automatically result in quashing or set- F
ting aside of the order or the order being declared null and void.
For that, the delinquent employee has to show 'prejudice'. Un-
less he is able to show that non-supply of report of the Inquiry
Officer has resulted in prejudice or miscarriage of justice, an
order of punishment cannot be held to be vitiated. And whether G,
prejudice had been caused to the delinquent-employee depends
).. 1 upon the facts and circumstances of each case and no rule of
universal application can be laid down.

48. In the instant case, no finding has been recorded by
the High Court that prejudice had been caused to the delin- H
242 SUPREME COURT REPORTS [2008] 10 S.C.R.

A quent-employee-writ-petitioner. According to the High Court,
such prejudice is 'writ large'. In our view, the above observation
and conclusion is not in consonance with the decisions referred
to above, including a decision of the Constitution Bench in B.
Karunakar. The view of the High Court, hence, cannot be up-
B held. The impugned order, therefore, deserves to be set aside
and is accordingly set aside. ~

~
I
49. Since the High Court has not considered the second ,_
question, namely, whether failure to supply the report of the In- '
quiry Officer had or had not resulted in prejudice to the delin-
C quent employee, ends of justice would be met with if we remit
the matter to the High Court to decide the said question.
50. For the foregoing reasons, the appeal deserves to be
allowed and is accordingly allowed with the above observations.
Jn the facts and in the circumstances of the case, however,
there shall be no order as to costs.
N.J. Appeal allowed.