NARESH KUMAR SINHAversusSTATE OF BIHAR & ORS.

                 [2025] 4 S.C.R. 2742 : 2025 INSC 814

                           Naresh Kumar Sinha
                                     v.
                           State of Bihar & Ors.
                       (Civil Appeal No. 4661 of 2025)
                                 02 April 2025
            [J.K. Maheshwari* and Aravind Kumar, JJ.]


                           Issue for Consideration
       Whether the High Court erred in declining to interfere in the order
       terminating the service of the appellant.

                                  Headnotes†
       Service Law – Termination from service – When not justified –
       Appellant-Clerk was terminated from service alleging that the
       appointment order was issued by an incompetent authority
       Deputy Director, Human Resources Development Department
       (DDHRD) and was illegal; and that the appellant had forged
       the appointment order – Termination upheld by High Court –
       Interference with:
       Held: Order of termination is untenable on fact and record – The
       reasoning that the appointment order was issued by DDHRD is
       incorrect as the appointment order was issued by Government of
       Bihar, Human Resource Development Department, and signed
       by Additional Director and not by DDHRD – Further, mere bald
       statement that the appointment was based on forged document
       or on fraud is not sufficient – Appellant worked for more than 16
       years regularly, was regularly paid salary by the department, and
       has thus, acquired the status of permanent employee – Mere
       correspondence of an officer alleging non-issuance of appointment
       memo is not enough to prove such fraud, particularly when such
       appointment was made in furtherance to an advertisement, and
       while terminating the services, it is said that order of appointment
       was issued by incompetent authority – Allegation of fraud has
       not been pleaded and substantiated – In case the record was not
       traceable, it would not ipso facto make the appointment forged or
       fabricated – If the department was of the opinion that the order of
       appointment is not available on record, an enquiry should have
       been conducted for looking into the alleged forgery in issuance of
* Author
[2025] 4 S.C.R.                                                               2743

               Naresh Kumar Sinha v. State of Bihar & Ors.


     the appointment order – In absence of any such enquiry, allegations
     of fraud and fabrication leading to termination are unjustified –
     Orders passed by the High Court set aside – Termination order
     quashed – Appellant to be reinstated with 50% back wages and
     all the consequential benefits – Fraud. [Paras 12, 15, 22, 24]

     Service Law – Termination from service, on ground of fraud –
     Non-production of the record by Department – Adverse
     inference to be drawn:
     Held: When the allegation of forgery or fraud has been made by the
     State Government, it must have some foundation – In cases where
     mere allegation of fraud has been made without any foundation
     and then the records have been called by the Court to assess
     such allegations, it is the duty of the Head of the Department to
     produce the same for perusal – In the present case, if the said
     record was not traceable, then it was the duty of the Department
     to identify who was responsible for misplacing such record, and
     an enquiry in this regard ought to have been conducted against
     the defaulting person and report in that regard should have been
     placed – In absence thereof, mere plea of non-traceability of the
     record is insufficient – Thus, despite granting multiple opportunities,
     which resulted in non-production of the record, in the facts, adverse
     inference drawn against the respondents. [Para 22]
     Words and Phrases – Fraud – Meaning and impact – Discussed.
     [Paras 17-20]

                               Case Law Cited
     Ram Chandra Singh v. Savitri Devi and Others [2003] Supp. 4
     SCR 543 : (2003) 8 SCC 319 – referred to.
     Lazarus Estates Ltd. v. Beasley (1956) 1 QB 702; Derry v. Peek
     (1889) 14 AC 337 – referred to.

                       Books and Periodicals Cited
     Advance Law Lexicon, 3rd Edition 2005 by P. Ramanatha Aiyar.

                              List of Keywords
     Termination of service; Order of termination; Forgery; Fraud;
     Services terminated without following the due process of law; Forged
     appointment; Forged document; Genuineness of the appointment
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     order; Appointment order issued by incompetent authority; Non-
     traceability of the record; Allegation of fraud; Allegation of fraud not
     pleaded and substantiated; Absence of enquiry; Issuance of show
     cause notice; Reinstatement; Reinstated in service with back wages;
     Termination order quashed; Clerk; Government of Bihar, Human
     Resource Development Department; Deputy Director, Human
     Resources Development Department (DDHRD); Additional Director.

                             Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4661
     of 2025
     From the Judgment and Order dated 17.05.2019 of the High Court
     of Judicature at Patna in LPA No. 379 of 2018

                          Appearances for Parties
     Advs. for the Appellant:
     Anurag Singh, Anil Kumar Mishra.
     Adv. for the Respondents:
     Manish Kumar.

                 Judgment / Order of the Supreme Court

                                  Judgment

     J.K. Maheshwari, J.

1)   Leave granted.
2)   The appellant assails the order dated 17.05.2019 passed by the
     Division Bench of the High Court of Judicature at Patna dismissing
     the Letters Patent Appeal No.379 of 2018. In the LPA, the order
     passed in C.W.J.C. No. 15852 of 2006 dated 20.02.2018 was
     challenged wherein the order of termination dated 21.11.2005, was
     in question. As such, by the orders impugned, interference in the
     order of termination of service of appellant had been declined.
3)   The facts shorn of details are that in furtherance to an advertisement
     dated 22.06.1981, appellant was appointed as clerk vide order dated
     24.06.1989, and posted at S.M.T. High School, Vaishali, Bihar. He
     submitted his joining on 04.07.1989 which was initially resisted by
[2025] 4 S.C.R.                                                        2745

              Naresh Kumar Sinha v. State of Bihar & Ors.


     headmaster but later he was allowed to join and he performed his
     duty. Thereafter, on transfer to other schools, he worked for more than
     one and a half decade. On 19.09.2005, the District Education Officer,
     Patna issued a show cause notice, alleging that his appointment was
     forged and vide order dated 21.11.2005, his services were terminated
     without following the due process of law. Appeal filed against such
     termination was also rejected vide order dated 13.10.2006.
4)   Being dissatisfied, Writ Petition was filed which was dismissed. During
     pendency of the writ petition, learned Single Judge vide order dated
     27.07.2011 sought report with respect to the genuineness of the
     appointment order. The same was filed along with an affidavit, inter
     alia, stating that the original file of appointment could not be traced,
     but the file relating to transfer of newly appointed clerks in 10+2
     secondary schools has been traced out. It was said that the order of
     appointment was issued in violation of the terms of Circular No.16440
     dated 02.12.1980 of the Personnel and Administrative Reforms
     Department. Learned Single Judge while dismissing the writ petition
     and relying on those averments held that the order of appointment
     could have been issued at the level of the Directorate and not at the
     level of Deputy Director, Human Resources Development Department
     (in short “DDHRD”). As such, appointment of the appellant was issued
     by an incompetent authority and was illegal. Further, with reference
     to dispatch number of the order, it was observed that the register
     was relating to transfer of clerks which also does not tally. Thus, the
     contention of appellant with respect to issuance of appointment by
     the same dispatch was not accepted, because it will not make the
     appointment of the appellant genuine. As such, learned Single Judge
     refused to interfere and dismissed the writ petition.
5)   Aggrieved by such dismissal, the appellant filed the impugned LPA
     before the Division Bench, which was also dismissed relying on the
     same report and affidavit, wherein the Division Bench held that the
     appointment of appellant was not issued at the appropriate level by
     the Department, hence, found to be forged. Accordingly, the Division
     Bench maintained the order of learned Single Judge.
6)   In the counter affidavit filed by the State, it is inter-alia stated that
     the DDHRD was incompetent to appoint Class III employees in the
     schools. Thus, when the order of appointment was not issued by the
     competent authority, appellant had illegally occupied the post and he
     cannot claim equity after committing such fraud. Further, in the case
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     of fraud or forgery, plea of violation of the principle of natural justice
     is not tenable. It is said that the appellant and one Sanjay Kumar
     Sinha were said to be appointed by the then DDHRD issuing different
     orders of appointment dated 24.06.1989; however, while verifying,
     the Section Officer has denied issuance of such orders. On the said
     pretext, while examining the orders of transfers of 36 clerks, it was
     found that 12 were appointed before 02.10.1980, 2 were appointed
     on recommendation of Bihar Public Service Commission and 11
     were appointed on compassionate ground. Remaining 11 including
     appellant and one more were also found to be transferred. In the
     said context, dispatch register was examined, but the same was
     not tallied. As per the directions of the High Court, when enquiry
     was conducted, the original file of the appointment was not made
     available and only a part of file relating to transfer was produced
     before the Principal Secretary. Based on this, it was said that the
     order of appointment, if any, dispatched along with transfer orders,
     cannot be recognized as valid. Hence, any interference in the order
     of termination is not warranted.
7)   In the impugned judgment, the order of learned Single Judge was
     maintained, refusing to interfere with the order of termination of
     appellant, by merely relying upon the report submitted by the Principal
     Secretary, Human Resources Development Department. As per the
     said report, it was specified that the appointment ought to be issued
     at the directorate level and not at the deputy director/DDHRD level.
     It is also said that the dispatch number tallies with the register to
     dispatch the transfer order, and not with the register to dispatch the
     appointment order, therefore, the appointment appears to be forged.
     With these allegations, it is said the appointment of appellant was forged
     and fabricated, therefore, principle of natural justice would not attract.
8)   From the proceedings of this case, it appears that after filing of
     counter affidavit and rejoinder, with an intent to lift the veil on the
     allegations, vide order dated 22.01.2024, a direction to produce the
     original records pertaining to the appointment and working of the
     appellant was issued. Even after granting repeated opportunities,
     respondents have not produced the record. Later, vide order dated
     12.02.2025, while granting further time, this Court observed as under:
          “In the facts of the case, we deem it appropriate that the
          record be traced and produced. In the interest of justice,
          we grant six weeks’ further time to produce the record
[2025] 4 S.C.R.                                                         2747

              Naresh Kumar Sinha v. State of Bihar & Ors.


           failing which drawing adverse inference, appropriate orders
           will be passed.”
     In reference to the above order, during hearing, learned counsel
     of the State submitted that the record is not traceable, as such the
     Court may proceed in the matter.
9)   After having heard learned counsel for the parties and on perusal
     of the counter affidavit, it is luculent that the respondents have not
     disputed the issuance of the advertisement, in furtherance to which
     the appellant was appointed. In absence of any specific denial, it
     may be concluded that appointment of appellant was after following
     the due process of law. On submitting joining, he was allowed to
     perform his duties, later, transferred to Devipad Choudhary Shaheed
     Asmarak (Millar) School and other schools where he served for more
     than a decade. Surprisingly, after serving for more than 16 years,
     a show cause notice dated 19.09.2005 was issued questioning the
     genuineness of his appointment order. On him filing a reply, without
     holding any enquiry into the allegations of fraud and sans the
     procedure as prescribed, the service of the appellant was terminated
     which led to the present litigation.
10) After bestowing our consideration to the facts, it is clear that the
    appointment of appellant was in furtherance to the advertisement
    published in Aryabrata newspaper dated 22.06.1981 and the order
    was issued on 24.06.1989 by the Government of Bihar, Human
    Resource Development Department with signature of Additional
    Director and its communication was made by the DDHRD. The
    appellant was permitted to join, and later he was transferred at
    different places. At the time of issuing show cause notice, he was
    posted as clerk at Parvati Higher Secondary School, Bikram, Patna
    and while passing the order of termination, he was posted as clerk
    at Urehan Girls Higher Secondary School, Bihta, Patna. The show
    cause notice and the order of termination were initiated from the
    office of the District Education Officer, Patna and by that time he
    had served the department for more than 16 years.
11) Further, it is noted that the show cause notice was issued in reference
    to L.P.A. No. 527/05 and letter No. 769 dated 23.07.2005 of Director,
    Secondary Education, Bihar, Patna. The context of the above referred
    LPA and the letter has not been placed for perusal. In this show cause
    notice, an explanation was sought from appellant based on information
    furnished by the DDHRD regarding non-issuance of the appointment
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     from the directorate, that why he should not be terminated from the
     service. On furnishing the explanation on 27.09.2005, the order of
     termination was passed inter-alia stating that the appointment of the
     appellant was issued by the DDHRD and the appointment has not been
     issued from the secretariat. In addition to referring the office letter, it
     was said the directorate has not issued the appointment order, so it
     is forged by the appellant. In the order of termination, the directions
     of the department’s letter No. 17127 dated 12.06.1981 has also been
     referred whereby it is admitted that appointment of Class-III posts
     can be made at the district level following the directions contained
     in letter No. 3/R-1-103/73-7605 and 16440 dated 02.12.1980 of the
     Department of Personnel and Administrative Reforms.
12) On analyzing all those documents, the reasons of termination as
    mentioned in the order, and the averments made in counter affidavit,
    it is clear that appointment order was issued by Government of
    Bihar, Human Resource Development Department, and signed by
    Additional Director and not by DDHRD. Thus, on the face of it, first
    reason assigned in the order of termination that the appointment
    was issued by DDHRD is incorrect. Moreover, in reference to the
    letter No. 994 dated 08.09.2005 of DDHRD, it is said that the
    appointment has not been issued at the secretariat level which is not
    the defence taken in the counter affidavit. Further, references made
    to directions contained in the departmental letters dated 12.06.1981
    and 02.12.1980 are also not germane to the issue, which merely
    prescribe that the appointment of Class-III post can be made at
    district level, following the procedure as specified therein. In the
    counter affidavit filed, it has not been stated that the appointment
    of the appellant was not made after following due process of law.
    From the above discussions, the reasons assigned in the order
    of termination are factually incorrect and based on extraneous
    consideration which cannot be accepted.
13) In this regard, stand taken in the counter affidavit that appointment
    was issued by the DDHRD and not from the directorate is not
    correct. The perusal of appointment letter clearly indicates that it was
    issued by the Government of Bihar, Human Resource Development
    Department and signed by the Additional Director, meaning thereby
    that the appointment has been issued either at directorate level or at
    Government level and not at the level of DDHRD. Therefore, findings
    of the High Court on this issue are contrary to the record per se illegal.
[2025] 4 S.C.R.                                                      2749

              Naresh Kumar Sinha v. State of Bihar & Ors.


14) In addition to the above, it is to observe that order of appointment
    issued from the office of the Government of Bihar/directorate cannot
    be nullified by an order of the District Education Officer, merely by
    issuing a show cause notice and without following any procedure.
15) Since the plea of fraud taken by the respondents has been accepted
    by the High Court in the order impugned, the foundation of the said
    plea requires consideration. The show cause notice memo dated
    19.09.2005 is in reference to L.P.A. No. 527/05 and letter No. 769
    dated 23.07.2005. As per the contents of the said memo, District
    Education Officer vide letter No. 1126 dated 31.08.2005 sought some
    information from the DDHRD which was furnished vide letter no. 994
    dated 08.09.2005 indicating that the appointment memo No. 365 dated
    24.06.1989 (wrongly mentioned as dated 29.06.1989) was not issued
    from the directorate. The stand taken before the High Court and in
    the report sought is that the said record is not traceable. This is not
    the stand of the government that selection and appointment has not
    taken place, further no record of such selection is available. In such
    case where the record is not traceable, it would not ipso facto make
    the appointment forged or fabricated. As discussed in para 13, the
    appointment order dated 24.06.1989 was issued at Government/
    Directorate level, therefore, correspondence of the DDHRD for non-
    issuance of the memo of appointment without denying the process
    of selection and existence of appointment order, is of no help.
16) The termination order was challenged in writ petition before the High
    Court in 2006, which was decided in 2018. During the pendency of
    the writ petition, directions were issued on 27.07.2011 to place the
    record regarding appointment. In furtherance of which, only a report
    was submitted. The said report merely refers to the correspondence
    of the DDHRD as referred in the show cause memo. On filing LPA,
    the report produced pursuant to the order dated 27.07.2011 has
    been referred. It is a matter of prudence that when the allegation of
    forgery or fraud has been made by the State Government, it must
    have some foundation. Mere correspondence of an officer alleging
    non-issuance of appointment memo is not enough to prove such
    fraud, in particular when such appointment was made in furtherance
    to an advertisement, and while terminating the services, it is said
    that order of appointment was issued by incompetent authority, i.e.,
    the DDHRD.
2750                                                         [2025] 4 S.C.R.

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17) Since the termination is based on allegation of fraud which is accepted
    by the High Court, it is necessary to refer when such allegation of
    fraud can be substantiated. In this regard, we have to see what is
    fraud. As per the Advance Law Lexicon, 3rd Edition 2005 by P.
    Ramanatha Aiyar, “fraud” means and includes any of the following
    acts committed by a party to a contract, or with his connivance, or by
    his agent, with intent to deceive another party thereto or his agent,
    or to induce him to enter into the contract:- (1) the suggestion, as a
    fact, of that which is not true, by one who does not believe it to be
    true; (2) the active concealment of a fact by one having knowledge
    or belief of the fact; (3) a promise made without any intention of
    performing it; (4) any other act fitted to deceive; (5) any such act or
    omission as the law specially declares to be fraudulent.
18) In the facts of the present case as discussed above, no pleading or
    foundation which includes any of the ingredients of fraud has been
    put forth or substantiated. In the case of Lazarus Estates Ltd. Vs.
    Beasley: (1956) 1 QB 702, the impact of fraud and its importance
    has been discussed. Denning, L.J. has stated as under:
           “…No court in this land will allow a person to keep an
           advantage which he has obtained by fraud. No judgment
           of a court, no order of a Minister, can be allowed to stand
           if it has been obtained by fraud. Fraud unravels everything.
           The court is careful not to find fraud unless it is distinctly
           pleaded and proved; but once it is proved, it vitiates
           judgments, contracts and all transactions whatsoever…”
19) This Court has considered the said observations in the case of Ram
    Chandra Singh Vs. Savitri Devi and Others: (2003) 8 SCC 319,
    wherein the court discussed what would constitute fraud:
           “…Fraud is a conduct either by letter or words, which
           induces the other person or authority to take a definite
           determinative stand as a response to the conduct of the
           former either by word or letter.”
20) In the case of Derry v Peek: (1889) 14 AC 337, as well, the House
    of Lords observed that in case of fraud, actual fraud on part of person
    must be proved. It will be said to be proved when it is shown that any
    false representation has been made knowingly, or without belief in
    its truth, or recklessly, without caring about its truthfulness or falsity.
    In this regard, any false statement made carelessly and without
[2025] 4 S.C.R.                                                        2751

               Naresh Kumar Sinha v. State of Bihar & Ors.


     reasonable ground for believing it to be true may be evidence of
     fraud. However, it does not mean that it would necessarily amount to
     fraud. Any statement made with honest belief in its truthfulness is not
     fraudulent and would not render the person liable for a fraudulent act.
21) As discussed in paras 11, 12, 13, 14 and 15 above, any pleading
    laying any foundation of alleged fraud specifying any of the ingredients
    of fraud has not been established. It is trite to say that without
    any allegation of fraud, merely using word fraud is not sufficient.
    In addition, this Court has taken care to understand whether the
    allegation of “fraud” is discernible from the record or not. For effective
    adjudication, the original records pertaining to appointment and
    working of appellant were called on 22.01.2024 within a period of
    three weeks. The government sought more time to produce the said
    record on 16.02.2024 but they were not produced. However, on
    12.02.2025 while granting last opportunity to produce the record, it was
    observed that failure to produce the records may result in drawing of
    adverse inference, and appropriate orders will be passed. Even then,
    no records were placed before us for perusal. It is to observe that
    direction in this regard was also issued by the learned Single Judge
    of the High Court on 27.07.2011 but except the report of Principal
    Secretary and affidavit, nothing was produced. In the cases where
    mere allegation of fraud has been made without any foundation,
    and then the records have been called by the Court to assess such
    allegations, it is the earnest duty of the Head of the Department to
    produce the same for perusal. Otherwise in the facts, it was incumbent
    upon him to conduct an internal enquiry and to find out whether the
    process of selection was carried out or not. It was also the duty of the
    Head of the Department to place such record before the court. In the
    present case, if the said record was not traceable, then it is the duty
    of the Department to identify who is responsible for misplacing such
    record, and an enquiry in this regard ought to have been conducted
    against the defaulting person and report in that regard should have
    been placed. In absence thereof, mere plea of non-traceability of the
    record is insufficient. Thus, despite granting multiple opportunities,
    which resulted in non-production of the record, in the above facts, we
    are constrained to draw adverse inference against the respondents.
22) In view of the above, in absence of any foundation of fraud in the
    pleading or in the counter affidavit, we are not inclined to accept such
    plea of fraud. Moreover, the reason of termination as mentioned in the
    order impugned is also contrary to the documents placed on record.
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     This is a case wherein after appointment the appellant has worked
     for more than 16 years regularly and was regularly paid salary by
     the department, which is a fact. As such, he has acquired the status
     of permanent employee. Thereafter, such issuance of show cause
     notice by merely referring to one LPA and the correspondence of the
     department regarding non-issuance of appointment order is improper.
     Because, a mere correspondence stating non-issuance is not sufficient
     to prove an allegation of fraud and warrant termination from service.
     In our view, mere bald statement that the appointment was based on
     forged document or on fraud is not sufficient. In case after such a long
     time of service, if the department was of the opinion that the order
     of appointment is not available on record, an enquiry should have
     been conducted for looking into the alleged forgery in issuance of the
     appointment order. In absence of any such enquiry, such allegations
     of fraud and fabrication leading to termination are unjustified.
23) As per the discussion made hereinabove, in the facts and
    circumstances, an inescapable conclusion is reached that the order
    of termination is based on a reasoning which is per se untenable on
    fact and record. The allegation of fraud has not been pleaded and
    substantiated. In absence of holding any enquiry of such allegation,
    the order of termination is liable to be quashed. The findings recorded
    by the learned Single Judge and the Division Bench are also without
    due consideration of the above facts and are not based on sound
    reasoning, hence, liable to be set aside.
24) Accordingly, we allow this appeal and set aside the orders passed
    by the High Court and quash the order of termination. Appellant is
    directed to be reinstated in service with back wages to the extent of
    50% from the date of termination till his reinstatement. The appellant
    would also be entitled to all the consequential benefits. In light of the
    facts, we leave it open to the respondents to take proper recourse,
    if any, against the appellant following the due process of law.
25) Pending application, if any, shall stand disposed of.

     Result of the case: Appeal allowed.



     †
         Headnotes prepared by: Divya Pandey