Holding

The High Court exceeded its jurisdiction by re‑appreciating evidence and interfering with the departmental enquiry; its orders were set aside and the dismissal upheld.

Summary

The respondent, a senior stenographer in Indian Oil Corporation Ltd., was identified by a vigilance enquiry as the organiser of a scheme in which employees submitted forged medical certificates and bills to obtain reimbursements, causing monetary loss to the corporation. He was charge‑sheeted, suspended and, after a departmental enquiry, the enquiry officer found him guilty of gross misconduct; the disciplinary authority dismissed him, an order affirmed by the appellate authority. The respondent filed writ petitions in the Punjab & Haryana High Court challenging the dismissal, arguing that he had been acquitted of the criminal charges and that the punishment was discriminatory and violative of Article 14. The High Court set aside the dismissal, holding it arbitrary and reinstating the respondent with back wages. On appeal, this Court held that the High Court had exceeded its limited jurisdiction in departmental matters and could not re‑appreciate the evidence or interfere with the findings of the enquiry officer; consequently the High Court’s orders were quashed and the dismissal upheld.

Issues considered

Whether the High Court has jurisdiction to interfere with the findings and punishment in a departmental enquiry
Whether the principles of natural justice were violated in the departmental enquiry
Whether the punishment of dismissal was disproportionate or discriminatory violating Article 14
Whether the acquittal in criminal proceedings affects the validity of the disciplinary dismissal
Scope of judicial review of disciplinary actions under the Conduct, Discipline and Appeal Rules, 1980 and the Industrial Disputes Act, 1947

Legislation cited

Indian Penal Code, 1860s. 420, s. 468, s. 471
Industrial Disputes Act, 1947

Subjects

departmental enquirymisconductjudicial reviewhigh court jurisdictionnatural justicearticle 14discriminationdismissalcorporate governancefalse medical billsindustrial disputes act

Judgment

A INDIAN OIL CORPORATION LTD. AND ANR.
v.
ASHOK KUMAR ARORA

FEBRUARY 5, 1997

B [J.S. VERMA, S.C. SEN AND S.P. KURDUKAR, JJ.]

Service Law-Departmental Enquiries-Jurisdiction of High Court to
inteifer~Scope of

C Misconduct-Act of procuring false medical certificates and medical
bills and making reimbursement claims--Moneta1y loss to Indian Oil Cor-
poration-Responden4 Senior Stenographer in the Corporation was held
inst1Umental in cheating or committing forgery of medical bills for himself
and also for other employees-Dismissal from service-Held, justified.

D The respondent, a Senior Stenographer in the appellant company,
was identified in a vigilance enquiry as the organiser and the principal
man behind a racket of employees of the Corporation presenting false •
medical bills and getting them reimbursed from the Corporation. He was
charge sheeted for gross acts of misconduct. The Inquiry Officer found the
E respondent guilty and the Corporation on perusal of the report of the
Enquiry Officer passed an order dismissing the respondent from service
of the Corporation. The Writ Petitions filed by the respondent were allowed
by the High Court, holding the order imposing the punishment of dismiss-
al of the respondent as w;trnlly arbitrary. Hence these appeals.
-l .,.-
F The appellant urged that the High Court committed a serious juris-
dictional error as it could not have reappreciated the evidence adduced
by the parties during domestic enquiry and interferred with the findings
recorded by the Enquiry Officer and affirmed by the Disciplinary Authority
as the High Court cannot sit over the findings of the Enquiry Oflicer as
G an Appellate Court/Authority.

The respondent submitted that the Enquiry Officer had totally mis-
construed the record and erroneously found him guilty of the charges
levelled against him as there was no sufficient material before the Enquiry
Officer to hold him guilty of misconduct, and that the High Court had
H rightly interferred with the findings of the Enquiry Officer, there being
980
INDIAN OILCORPN. LTD. v. ASHOKKR.ARORA 981

patent discrimination while awarding the extreme penalty of dismissal A
) against him whereas other employees were let off"ith minor punishments.

Allowing the appeal, this Court,

HELD : The High Court in cases of departmental enquiries and the B
findings recorded therein does not exercise the powers of appellate
Court/Authority. The jurisdiction of the High Court in such cases is very
limited for instance where it is found that the domestic enquiry is vitiated
because of non-observance of principles of natural justice, denial of
reasonable opportunity; findings are based on no evidence, and or the
punishment is totally disproportionate to the proved misconduct of an c
employee. The Enquiry Officer on appraisal of the materials before him
held that the respondent was actively involved and a brain behind procur-
ing false medical certificates and medical bills not only for himself but also
for other employees and on the basis of which the reimbursement claims
were made by the respondent and other employees. The Corporation D
1 ,;, sanctioned these reimbursement claims of the various employees which
had resulted into monetary loss to the Corporation. Before the Enquiry
Officer except the respondent other employees of the Corporation ad-
mitted the charges and consequently a minor penalty was awarded to them.
The respondent contested the charges levelled against him and denied that
he was instrumental in cheating or committing forgery of the medical bills. E
On consideration of report and findings of the Enquiry Officer, the Dis-
ciplinary Authority took a lenient view in respect of other employees.
Having regard to the involvement of the respondent in the entire episode,
the Disciplinary Authority awarded him the penalty of dismissal from
~ J. · service. The order of dismissal passed by the Disciplinary Authority F
against the respondent was also affirmed by the Appellate Authority.
Curiously enough, the High Court in its impugned judgment compared the
case of the respondent with the other employees who had been awarded a
lesser penalty and opined that there was discrimination resorted to by the
Disciplinary Authority in the matter of awarding the punishment. It was
this action of the Disciplinary Authority in awarding the penalty being G
discriminatory and violative of Article 14 of the Constitution. The High
Court has totally overlooked the finding of the Enquiry Officer and af-
firmed by the Disciplinary Authority that the respondent was instrumental
in obtaining forged medical bills not only for himself but also for other
employees and he was the main actor behind the cheating. It was because H
982 SUPREME COURT REPORTS [1997] 1 S.C.R.

A of this finding, the Disciplinary Authority, rightly considered the award of
penalty/punishment to the respondent differently then the other employees
who although got the benefit of reimbursement on the forged bills but they
-( -
accepted their guilt before the Enquiry Officer. Having regard to the facts
and circumstances of this case, the High Court had committed serious
B jurisdictional error while interfering with the quantum of punishment.
There was neither any discrimination resorted to by the Disciplinary
Authority nor the punishment awarded to the respondent was disproJJOr-
tionate to his misconduct. [988-D, G-H, 984-A-G]
.-
State of Andhra Pradesh v. S. Sree Rama Rao, [1963] 3 SCR 25; State
C of Andhra Pradesh v. Chitra Venkata Rao, [1976] 1 SCR 521; Corporation
of City of Nagpur andAnr. v. Ramachandra, [1981]3 SCR 22; Nelson Motis
v. Union of India and Anr. • AIR (1992) SC 1981 and Sengara Singh and
Others v. State of Punjab and Others, (1983) 3 S.L.R. 685, relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6035-36
D of1994.
-"'. '
From the Judgment and Order dated 25.11.93 of the Punjab and
Haryana High Court in R.A. No. 429-30 of 1993.

N.B. Shetye, A. Mariarputham, Ms. Aruna Mathur for Arputham,
E
Aruna & Co. for the Appellants.

In-person for the Respondent.

The Judgment of the Court was delivered by
F l -
S.P. KURDUKAR, J. : The first appellant is a company incorporated
under Companies Act, 1956 and carries on business at various
places/centres in India having its registered office at Bombay. The first
appellant (for short 'the Corporation') carries on its business of selling
petrol and petroleum products al various places in India. The second
G appellant is the Director, Research and Development Centre. Faridabad
in Haryana State.

2. The respondent-Ashok Kumar Arora joined the service of the'
Corporation as a Junior Stenographer on August, 6, 1974 and thereafter
H came to be promoted as Senior Stenographer on December 26, 1977.
INDIAN OIL CORPN. LTD. v. ASHOKKR ARORA [S.P. KURDUKAR, J.] 983
3. In the year 1964, it had come to the notice of the corporation that A
... ) some of its employees were presenting false medical bills and getting them
reimbursed from the Corporation. In order to verify the truth or otherwise
of such claims, a vigilance enquiry was held by the office of Chairman of
the Corporation (Indian Oil Corporation Ltd.) which unearthed a racket
of its employees claiming reimbursements on presenting false medical bills. B
The report was accordingly submitted by the vigilance department to the
Corporation identifying the respondent as the organiser and the principal
man behind the said racket amongst other employees of the Corporation.
The Corporation after obtaining the approval of its Chairman on April 10,
1984 lodged the FIR of forgery and .cheating by preferring claims on the
basis of false medical prescriptions from Dr. Mrs. Puja Kundra and false C
medical bills showing the purchase of various medicines. The vigilance
department also suggested to initiate proceedings against the employees
who obtained the benefits by cheating the Corporation. This action was
suggested under the Conduct, Discipline and Appeal Rules, 1980 of the
India Oil Corporation Ltd. (for short 'CDA Rules'). D

4. Pursuant to the FIR lodged on April 10, 1984, the investigating
agency on completing the investigation filed a charge sheet in the court of
Metropolitan Magistrate, Faridabad on May 1, 1985 against the respondent
for the offences punishable under Sections 420, 468 and 471 of the Indian
Penal Code. In the meantime, on July 7, 1984, the respondent came to be E
arrested by the local police and was detained in the police custody for over
48 hours. The Corporation taking recourse to CDA Rules suspended the
respondent on July 11, 1984 with effect from the date of his arrest and
detention in the police custody for over 48 hours. The Addl. Chief Judicial
Magistrate, Faridabad, on conclusion of the trial convicted the respondent p
on two counts i.e. under Section 420 and 471 of the Indian Penal Code and
sentenced him to undergo RI for two years and to pay a fine of Rs. 500;
in default of payment of fine to undergo further imprisonment for a period
of three months and RI for one year and to pay a fine of Rs. 500; in default
of payment of fine to undergo further RI for three months respectively.
Substantive sentences were directed to run concurrently. On such convic- G
tions being recorded by the criminal court, the Corporation by an order
dated February 21, 1989 dismissed the respondent from service of the
Corporation.

5. The respondent being aggrieved by the order of conviction and H
984 SUPREME COURT REPORTS [1997) 1 S.C.R.
A sentence passed by the Addl. Chief Judicial Magistrate, Faridabad,
preferred an appeal to the Session Court, Faridabad and the Addi. Ses-
sions Judge vide his order dated July 13, 1989, allowed the appeal and set
aside the convictions and sentences of the respondent and acquitted him
of all the charges. The revision against the order of acquittal filed before
B the Punjab & Haryana High Court by the Corporation came to be dis-
missed. The . S.L.P. to this Court was also dismissed. The net result,
therefore, was that the respondent stood acquitted of the criminal charges.

6. The respondent who was dismissed from the service of the Cor-
poration pursuant to the order dated February 21, 1989 filed a writ petition
C before the Punjab & Haryana High Court Chandigarh challenging the said
order on the ground that since he had been acquitted by the criminal
courts, his order of dismissal was illegal and not sustainable. The respon-
dent, therefore, sought the reliefs of reinstatement including the back
wages etc. In the meantime, the respondent had also preferred an appeal
D under CDA Rules to the Appellate Authority challenging his order of
dismissal from service of the Corporation passed on February 21r' 1989.
Since the departmental representation of the respondent was pending
-
when the writ petition was filed, the High Court vide its order dated August
28, 1989 directed the Corporation to dispose of the respondent's repre-
E sentation expeditiously. In pursuance of the directions issued by the High
Court, the Corporation considered the representation filed by the respon-
dent and opined the having regard to the facts and circumstances of the
case, it was necessary to hold a departmental enquiry against the resp<;m-
dent. The Corporation, therefore, in exercise of its power under Rule 26(4)
CDA Rules directed that the departmental enquiry be held against the
F respondent and he be deemed to be under suspension from the date of his
dismissal order dated February 21, 1989.

7. The Corporation on February 22, 1990charge sheeted the respon-
dent for gross acts of misconduct which in the opinion of the Corporation
G constituted acts of dishonesty in connection with the business or the
property of the corporation and acts subversive of discipline and good
behaviour. On service of the charge sheet, the respondent submitted his
reply on March 5, 1990 which was considered being not satisfactory by the
Corporation. The Corporation, therefore, on May 25, 1990 directed that a
H domestic enquiry be held against the respondent.
INDIAN OIL CORPN. LTD. v. ASHOKKR. ARORA [S.P. KURDUKAR, J.] 985

8. On November 10, 1991, the respondent filed another writ petition A
before the High Court of Punjab & Haryana being writ petition No. 3170
of 1992 praying therein, inter alia, for the grant of certain reliefs including
a direction to reinstate him in service with effect from July 7, 1984 and re
lease the salary and other consequential benefits with effect from the said
date i.e. July 7, 1984.
B
9. During the pendency of this writ petition, the Enquiry Officer
appointed by the Corporation held the enquiry and submitted his report
dated June 26, 1992. The Inquiry Officer found the respondent guilty of
acts of misconduct. He held as under :
c
"The nexus of the delinquent in collusion with Dr. J.K. Kundra
in fabricating and furnishing prescriptions and bills and providing
the same to other employees ;is well as presenting them himself
with the purpose of cheating the Corporation and to make wrong-
ful gain to him and wrongful loss to the Corporation is established.
The Bills on the letter head of Dr. S.C. Saxena and Dr. Ms. Puja n/
Kundra are in the same handwriting. Dr. J.K. Kundra made avail-
able false and forged bills to Shri Arora, who in turn, to Shri Kirat
Singh, Shri Ram Ashray and Shri Amar Singh. The aforesaid
employees in tum paid the premium of peerless Policy and for this
purpose Shri Arora was personally interested to earn commission on E
Peerless premium as the Agency of Peerless was in the name of his
wife.

It stands proved that ShriArora was guilty ofprocuring and getting
false medical bills reimbursed from the office of the I. 0. C. for himself
and other employees and it is further proved that had submitted false F
and fabricated medical bills and got reimbursed on the strength of
the same having full knowledge that they were false and bogus
documents. He has thus been dis-honest in connection with the
business and property of 1.0.C. I further hold that the above acts
are subversive of discipline or of good behaviour."
G
The Corporation (Disciplinary Authority) on perusal of the report of
the Enquiry Officer vide its Order dated July 21, 1992 passed an order
dismissing the respondent from service of the Corporation with immediate
effect. It further directed that no recovery of payment already made to the
respondent during the period of suspension will be effected. The respon- H
986 SUPREME COURT REPORTS [1997] 1 S.C.R.
A dent was directed to contact the finance department for collecting his dues,
if any, on any working day within a period of one month from the date of -( -
issuing the order.

10. The respondent on July 23, 1992 filed an appeal against his order
of dismissal from service to the Appellate Authority who after considering .
B the grounds taken up in the appeal memo and other materials on record, '1 1

vide its order dated September 28, 1992, dismissed the said appeal.

11. The respondent being aggrieved by the order passed by the
Appellate Authority on September 28, 1992 filed yet another Writ petition •
C being CWP No. 13934 of 1992 before the Punjab & Haryana High Court '
challenging the legality and correctness of the order of dismissal dated
September 28, 1992 passed by the Appellate Authority.

The first appellant-Corporation filed the detailed writ~en statement
pleading, inter alia, that the writ petition was not maintainable since the
D respondent had already filed the writ petition No. 3170 of 1992 and this
court cannot_ sit over the order of the Disciplinary Authority as an Appel-
late Court/Authority. The respondent had not exhausted the alternative
remedy available under the Industrial Disputes Act, 1947 and, therefore,
the writ petition be dismissed as pre-mature. The writ petition raised
E several disputed questions of facts which cannot be decided in a writ
jurisdiction. The impugned order of dismissal does .not suffer from any
illegality and this court in exercise of its extra jurisdiction should not
interfere with the order passed by the Disciplinary Authority after holding
the enquiry. The Corporation, therefore, prayed that the writ petition be
dismissed.
F
12. Both the writ petitions bearing C.W.P. Nos. 3170 of 1992 and
.
••
13934 of 1992 were heard together by the Division Bench of the High Court
and the learned court vide its impugned judgment dated May 27, 1993
allowed both the writ petitions filed by. the respondent and passed the
G following order :

"In view of the aforesaid position, we are satisfied that the
impugned order imposing the punishment of dismissal of the
petitioner is wholly arbitrary. Accordingly we allow both these writ
petitions and quash the impugned orders dated 21.7.1992 (an-
H nexure P-12) and 9.10.1989 ( annexure P-3) eg. deeming the
=t

INDIAN OIL CORPN. LTD. v. ASHOKKR ARORA [S.P. KURDUKAR, J.] 987

petitioner under suspension from the date of his original dismissal, A
i.e. 21.2.1989. Resultantly, the petitioner stands reinstated to his
service and he shall be entitled to the back wages by way of arrear ·
of salary and allowances etc. to which he would have been entered
(entitled), had he not been placed under suspension and dismissed
from service."
B
13. The appellants thereafter filed review application No. 429/93 in
CWP No. 13934 of 1992 and review application No. 430/93 in CWP No.
3170 of 1992 praying therein that the judgment dated May 27, 1993 be
reviewed and re-called on the grounds set out in the review applications;
The High Court however did not agree with the contentions raised in the C
review applications and consequently vide its impugned order dated
November 25, 1993 dismissed both the review applications.

14. Feeling aggrieved by the orders dated May 27, 1993. as well as
November 25, 1993 passed by the High Court in writ petitions as well ~
in review applications, the appellants on obtaining leave, have filed these D
appeals challenging the legality and correctness of the orders passed by the
High Court. Since these appeals arise out of a common judgment, they are
being disposed of by this judgment.

15. Mr. N.B. Shetye, Learned Senior Counsel appearing in support. E
of these appeals urged that the High Court had committed a serious
jurisdictional error while interferring with the order of dismissal dated July
21, 1992 and order dated February 21, 1989 removing respondent's name
from the rolls of R & D Centre. He urged that the High Court could not
have re-appreciated the evidence adduced by the parties during domestic
enquiry and interferred with the findings recorded by the Enquiry Officer F
and affirmed by the Disciplinary Authority. The High Court cannot sit over
the findings of the Enquiry Officer as an Appellate Court/Authority and,
therefore, the impugned judgments of the High Court are unsustainable.
He, therefore, prayed that the appeals be allowed and the impugned orders
passed by the High Court be quashed and set aside.
G
16. The respondent Mr. Ashok Kumar Arora appeared in person and
tried to justify the orders passed by the High Court. He submitted that the
Enquiry Officer had totally misconstrued the materials on record and
erroneously found him guilty of the charges levelled against him. There was
no sufficient material before the EnquiIJ: Officer to hold him guilty of H
988 SUPREME COURT REPORTS [1997] 1 S.C.R.

A misconduct and, therefore, the High Court has rightly interferred with the -<,
findings of the Enquiry Officer. He also submitted that there is patent
discrimination while awarding the extreme penalty of dismissal against him
l
whereas other employees were let off on minor punishments. The order
passed by the Disciplinary Authority was thus discriminatory and the High
Court had committed no error while ordering his reinstatement. There is
B no substance in the appeals and the same be dismissed.

17. We have given our anxious .thought to the various contentions
raised us and have gone through the materials on record sine the respon-
'
dent was appearing in person. On careful scrutiny of the materials on
c record, we are of the considered ~iew that the impugned orders passed by
the High Court are unsustainable for the following reasons.

18. At the outset, it needs to be mentioned that the High Court in
such cases of departmental enquiries and the findings recorded therein
D does not exercise the powers of appellate court/Authority. The jurisdiction _..
of the High Court in such cases is very limited for instance where it is found
that the domestic enquiry is vitiated because of non-observance of prin- """
ciples of natural justice, denial of reasonable opportunity; findings are
based on no evidence and or the punishment is totally disproportionate to
the proved misconduct of an employee. There is catena of judgments of
E this Court which had settled the law on this topics and it is not necessary
to refer to all these decisions. Suffice it to refer to few decisions of this
Court on this topic viz., State of Andhra Pradesh v. S. Sree Rama Rao,
[1963] 3 SCR 25; State of Andhra Pradesh v. Chitra Venkata Rao, [1976] 1
SCR 521; Corporation of City of Nagpur and Anr. v. Ramachandra, [1981]
3 SCR 22 and Nelson Matis v. Union of India and Anr., AIR [1992] SC
.
F
1981.

19. The Enquiry Officer on appraisal of the materials before him held
that the respondent was actively involved and a brain behind procuring
false medical certificates and medical bills not only for himself but for other
G employees and on the basis of which the reimbursement claims were made
by the respondent and other employees. The corporation sanctioned these
'·
reimbursement claims of the various employees which had resulted into ,._, ~

monetary loss to the corporation. Before the Enquiry Officer except the
respondent other employees of the Corporation admitted the charges and
H consequently a minor penalty was awarded to them. The respondent con-
990 SUPREME COURT REPORTS [1997] 1 S.C.R.
A same is devoid of any merits. The respondent was unable to illustrate in
what manner' he was denied a reasonable opportunity.

21. The impugned orders made in the review application filed by the
appellants are also unsustainable. In the review applications, all these
contentions were specifically taken up, yet the High Court without advert-
-
B ing to any of these contentions has dismissed these applications without
a,ssigning sustainable reasons.

22. In the result, the appeals filed by the appellants are allowed. The
impugned judgments and orders of High Court dated May 27, 1993 and
C November 25, 1993,are quashed and set aside. In' the circumstances, there
will be not order as to costs.

RA. ·'Appeals allowed.

' ~