Holding

The High Court erred in deeming the question of prejudice irrelevant; the High Court must first ascertain whether the delayed subsistence allowance caused prejudice before interfering with the Tribunal’s finding.

Summary

Shankarlal, a clerk in the Madhya Pradesh Public Works Department, was suspended on 4 September 1982 with subsistence allowance payable under Rule 53 of the Madhya Pradesh Fundamental Rules. He failed to attend most of the departmental enquiry dates, leading to an ex‑parte finding of misconduct and termination of service on 28 May 1985. The State Administrative Tribunal held that the delay in payment of the allowance was his own fault, while the High Court set aside the termination, holding that non‑payment violated natural justice. On appeal, the Supreme Court ruled that the High Court erred by treating the question of prejudice as irrelevant and directed that the High Court must first determine whether the delayed allowance caused prejudice before interfering with the Tribunal’s finding. The appeal was partly allowed and the matter remitted to the High Court, with the State ordered to pay Rs.50,000 as litigation costs.

Issues considered

Whether non‑payment of subsistence allowance during suspension violates the principles of natural justice.
Whether the High Court erred in holding that the question of prejudice to the employee is irrelevant.
Whether the Tribunal’s finding that the employee himself was responsible for the delayed allowance is correct.
Whether the matter should be remitted to the High Court to determine prejudice before interfering with the Tribunal’s finding.

Legislation cited

Constitution of Indias. Article 21

Subjects

service lawsubsistence allowancesuspensionnatural justicedepartmental enquiryprejudiceRule 53administrative tribunalex parte proceedings

Judgment

A STATE GOVERNMENT OF M.P. & ORS.
j -
v.
SHANKARLAL

DECEMBER 13, 2007
B
[S.B. SINHA AND HARJIT SINGH BEDI, JJ.]
L
Service Law-Subsistence allowance-Delayedpayment-Effect
of-Suspension-Departmental proceedings-Non-participation of
C employee-In ex parte proceeding, employee found guilty of
misconduct-Termination ofservice-Administrative Tribunal holding
that employee himself was responsible for delayed payment of
subsistence allowance-High Court holding that delayed payment was
violative ofprinciples of natural justice-On appeal, held: It was
D necessary for the High Court to arrive at a decision whether non- .
payment ofsubsistence allowance caused prejudice to the employee-
Hence matter, remitted to High Court-Madhya Pradesh Fundamental
Rules-r. 53-Principles ofNatural Justice.

E Respondent-employee was placed under suspension by order
dated 4.9.1982. In the order it was stipulated that subsistence allowance
would be paid to him in terms of Rule 53 of Madhya Pradesh
Fundamental Rules. During the course of departmental proceedings,
out of eighteen dates, respondent attended the hearing only on five
F dates. Thus in ex parte departmental proceeding, he was found guilty
and consequently his services were terminated. Respondent collected
his subsistence allowance for the period 4.9.1982 to 20.9.1982 in January
1985 and payment till September, 1984 was made in February 1987.
Departmental appeal against the order of termination was dismissed.
G In the original application filed by him, State Administrative Tribunal
held that no case was made out for interference with the order of
disciplinary authority. On the question ofnon-payment of subsistence
allowance, it held that respondent himself was responsible for delayed

H 542
STATE GOVERNMENT OF M.P. v. SHANKARLAL 543

·. r) payment. In writ petition, High Court held that non-payment of A
subsistence allowance amounted to violation of principles of natural
justice.
In appeal to this court, appellant-State contended that order of
High court was wrong as the respondent had not shown any prejudice
with regard to non-payment of subsistence allowance. B

or~ Partly allowing the appeal, the Court
HELD: 1. The High Court, committed a serious error in holding
that the question of prejudice is irrelevant The High Court, was required
to arrive at a correct finding of fact so as to enable it to pose unto itself c
the right question for arriving at a right decision.
[Paras 16and17) [550-B, E]
Indra Bhanu Gaur v. Committee, Management of MM Degree
College and Ors., [2004) 1 SCC 281, relied on.
D
-\ Jagdamba Prasad Shukla v. State of UP. and Ors., [2000) 7 SCC
90, distinguished. ·
UP. State Textile Corpn. Ltd v.P.C. Chaturvedi, [2005] 8 SCC211,
referred to.
E
2. Respondent, indisputably, has been found guilty ofcommission
of misconduct A fmding offact has been arrived at by the Tribunal that
the respondent himself was to thank himself for non-receipt of
.... ~
subsistence allowance. It was held that the appellant had taken all
possible steps for disbursement of subsistence allowance. F
[Para 18) [550-F, G)
3. In the peculiar facts and circumstances of the case, interest of
justice shall be subserved if the matter is remitted to the High Court
for consideration thereof afresh. The High Court may look into the
records of the case so as to enable it to arrive at a decision whether G
_>... non-payment of subsistence allowance caused any prejudice to the
respondent in the event it intends to interfere with the finding of fact
arrived at by the Tribunal that the respondent himself was responsible
therefor. However, in the peculiar facts and circumstances of this case,
the State is directed to pay a sum ofRs.50,000/- to the respondent by H
544 SUPREME COURT REPORTS [2007] 13 (Addi.) S.C.R.

A way oflitigation costs. [Paras 19 and 20) (550-H; 551-A, B, CJ
t' .
O.P. Guptav. Union ofIndia and Ors., AIR (1987) SC 2257, referred
to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 587 of
B 2005.

From the final Judgment and Order dated 15.09.2003 of the High
J. ...
Court of Madhya Pradesh at Jabalpur in Writ Petition No. 1497 of2002.
Vibha Datta Makhija for the Appellant.
c
Shankarlal Respondent-In-Person.
The Judgment of the Court was delivered by
S.B. SINHA, J. l. Respondent was appointed as a Lower Division
D Clerk in the Public Works Department on 25.9.1971. He was promoted
as Upper Division Clerk on l.l.1979.
2. A departmental proceeding was initiated against him. He was
placed under suspension by an order dated 4.9.1982. In the said order
of suspension, it was clearly stipulated that subsistence allowance would
E be paid to him in terms of Rule 53 of the Fundamental Rules. On or about
19 .6.1982, he was transferred from Katni to Barhi. He did not join at
Barhi after the order of suspension was passed. It appears that a
communication was issued to him on 5.10.1983 asking him to collect the
subsistence allowance stating : r ...
F
"You are suspended by the Superintending Engineer PWD (B&R)
Jabalpur Circle, Jabalpurvide orderNo.l 164/E-11-19 of74 dated
4.9.82 and suspension order was sent to you, but you have refused
to take it.
G (2) Charge sheet was issued by SEJC vide No.2067 /E-11-19 of
74 dated 16. l 0.82, and sent through peon and 2 sub-Engineer of ~

this Division, but you have refused to take it.
(3) Executive Engineer, PWD (E/M) Dn. Jabalpur Enquiry officer
H of your D.E. case have served the notice for facing the DE and
ST ATE GOVERNMENT OF M.P. v. SHANKARLAL 545
[SINHA, J.]
attending their office, but you have refused to take it. A
r.J
Please arrange to take the above letters from their officer and
produced to the undersigned, so that further action, for sanction
of suspension allowance and other dues, can be taken by this
officer.
B
Please also explain for your not joining in Barhi Sub Division
..,.._~-
with Head Quarters at Barhi after suspension & why your absence
from Barhi should not be considered as willful absence from Head
quarters and action taken accordingly."
c
3. For a few days, namely, on 2.11.1983, 22.11.1983, 9.12.1983
and 20.1.1984, he took part in the departmental proceedings. On those
days, some witnesses on behalf of the department were examined and
cross-examined. But on 24.2.1984, he absented himself A telegram was
sent to him asking him to submit his list of witnesses and defence on D
12.3 .1984. He did not comply therewith. He also did not take part in
the departmental proceedings on 29.3.1984. Another chance was given
to him to appear before the enquiry officer on 19 .4.1984 but even on
the said date he was not present. He although was present on 5.5 .1984,
but did not take part in the hearing in the said proceeding stating that he E
had filed an appeal before this Court.
We may place on record that neither any number has been put in
the said purported S.L.P. nor the same was registered, although according
- '1 to the respondent, who had appeared in person bef9re us, the said SLP
was still pending. F

4. On subsequent dates, he absented himself and, thus, did not take
part in the enquiry proceedings. Out of 18 dates fixed for hearing, the
respondent was present only on five days. In the aforementioned situation,
an ex parte departmental proceeding was held wherein he was found guilty G
of the charges levelled against him. We may also place on record that he
collected his subsistence allowance for the period 4.9 .1982 to 20.9.1982
in January 1985 and thereafter payment till September 1984 was made
in February 1987. His services, however, were terminated by an order
dated 28.5.1985. The amount of subsistence allowance ofthe respondent H
546 SUPREME COURT REPORTS [2007] 13 (Addi.) S.C.R.

A was raised from 50% to 75% on 14.6.1985.
5. He preferred an appeal thereagainst which was dismissed by the
Chief Engineer being the appellate authority on 15 .11.1999.
6. An original application was filed by him before the State
B Administrative Tribunal wherein, inter alia, a question in regard to non-
payment of subsistence allowance was raised. The Tribunal in its order
opined: J."'
"1berefore, the applicant himself is responsible for delayed payment
of the subsistence allowance, not the respondents."
c
7. Other contentions raised by him before the Tribunal were also
not accepted. The Tribunal held that the conclusion of the enquiry officer
being based on evidence produced in the departmental enquiry, no case
has been made out for interference with the order of the Disciplinary
D Authority. The original application was, therefore, dismissed.
8. On a writ petition preferred by the appellant thereagainst before
the High Court ofjudicature at Madhya Pradesh at Jabalpur which was
marked as Writ Petition No.1497 of2002, a Division Bench of the High
E Court, however, held that non-payment of subsistence allowance
amounted to violation of principles of natural justice, stating :
'The Tribunal dismissed the application on the ground that the

F
Tribunal or Court are not the appellate forum to review the
punishment. However, this fact cannot be marginaliz.ed and blinked
away because it goes to the root of the matter and it has nexus
with the principles of natural justice, that unles.s and until subsistence
'( -
allowance is paid to the delinquent employee in proper time, how
he could take proper steps in defending his case in the departmental
enquiry. In the present case, the period during which the subsistence
G allowance was not paid was quite long which is 4.9.1982 to
13.11.1984.
On the basis of the aforesaid premised reasons, we set aside the
order passed by the Tribunal as well as the order terminating the
H services of the petitioner passed by the authority. The petitioner is
STATE GOVERNMENT OF M.P. v. SHANKARLAL 547
[SINHA, J.]

,,-f
hereby directed to be reinstated. However, looking to the entire A
facts and surrounding circumstances, we do not think it proper to
award any back wages."

9. Ms. Vibha Datta Makhija, learned counsel appearing on behalf
of the State, in support of this appeal would submit that the respondent B
having not shown any prejudice in regard to non-payment of the
-) ):-
subsistence allowance, the High Court committed a serious error in
passing the impugned judgment.
10. Respondent who appeared in person, on the other hand,
contended that non-payment of subsistence allowance violates the right c
to life of a person as contained in Article 21 of the Constitution oflndia
and in that view of the matter, it was obligatory on the part of the appellant
herein to pay the said allowance.
11. Rule 53 of the Madhya Pradesh Fundamental Rules provides D
--{ that subsistence allowance should be paid to an employee who has been
placed under suspension. Payment of inadequate quantum of subsistence
allowance has been adversely commented by this Court [See OP. Gupta
v. Union of India & Ors., AIR (1987) SC 2257].
12. It is, thus, not in dispute that all facilities for receipt of payment E
of subsistence allowance must be given to the delinquent officer.
13. An almost identical question in regard to payment of subsistence
allowance albeit in a different fact situation came up before this Court in
Jagdamba Prasad Shukla v. State of UP. & Ors., [2000] 7 SCC 90 F
wherein it was opined :
"6. It is evident from the record that the High Court is not right in
observing that the ground sought to be urged was not taken in the
claim petition or in the writ petition. In fact, the High Court in the
latter part of the judgment observes that : G

~-
"for the first time, the petitioner has taken the ground in this
writ petition that he could not attend the departmental
proceedings due to financial crunch as he was not paid his
subsistence allowance". H
548 SUPREME COURT REPORTS [2007] 13 (Addi.) S.C.R.

A A perusal of the record shows that the contention urged before
the High Court and again before us, was also raised before the
U.P. Public Service Tribunal and even earlier before the authorities.
The U.P. Public Service Tribunal considered it and on the facts of
the case, the Tribunal held that:
B
"Therefore, those rulings where person was unable to attend
the enquiry for non-payment of subsistence allowance, resulting
~- -
in inquiry being vitiated will not be applicable."
Apart from it, in reply dated 22-1-1979 sent to the show-cause
c notice, the appellant specifically stated that he has not been paid
his pay and suspension allowance which cannot be withheld and
as such how could he be expected to reach Gorakhpur or
elsewhere due to shortage of funds. He further stated that :
''the applicant has requested a number of times for drawing
D
his pay and suspension allowance, but the same could not be
drawn and sent to the applicant which was a serious handicap
to appear anywhere even ifhe so preferred during illness and
even against the recommendations of his medical attendant".
E The request of the appellant for payment of subsistence allowance
is also contained in his letter dated 31-3-1978 sent to the
Superintendent of Police, Railways, Gorakhpur Section,
Gorakhpur. The said letter also contains the address of the
appellant. The address of the appellant is in fact contained on
F various communications sent by him to the respondents. It is
curious that the respondents could serve all other communications
including the show-cause notice to the appellant but insofar as the
payment of subsistence allowance is concerned, the plea taken is
that the appellant did not intimate his address and, therefore, the
G amount could not be sent. Thus, it is evident that despite repeated
requests, the subsistence allowance was not paid to the appellant
from the date of suspension till removal. It is also evident that the
appellant had expressed difficulty in reaching the place of inquiry
due to shortage of funds.
H
STATE GOVERNMENT OF M.P. v. SHANKARLAL 549
[SINHA, J.]
8. The payment of subsistence allowance, in accordance with the A
Rules, to an employee under suspension is not a bounty. It is a
right. An employee is entitled to be paid the subsistence allowance.
No justifiable ground has been made out for non-payment of the
subsistence allowance all through the period of suspension i.e. from
suspension till removal. One of the reasons for not appearing in B
inquiry as intimated to the authorities was the financial crunch on
account of non-payment of subsistence allowance and the other
was the illness of the appellant. The appellant in reply to the show-
cause notice stated that even if he was to appear in an inquiry
against medical advice, he was unable to appear for want of funds C
on account of non-payment of subsistence allowance. It is a clear
case of breach of principles of natural justice on account of the .
denial of reasonable opportunity to the appellant to defend himself
in the departmental enquiry. Thus, the departmental enquiry and
the consequent order of removal from service are quashed." D
14. We may, however, notice that in Indra Bhanu Gaur v.
Committee, Management of MM Degree College & Ors., [2004] 1
SCC 281, a Bench of this Court opined that when an opportunity had
been granted to the delinquent officer to take the subsistence allowance, E
it must be shown that because of non-payment thereof, he was not in a
position to participate in the proceedings or that any other prejudice in
effectively defending the proceedings was caused to him.
15. Yet again, in UP. State Textile Corpn. Ltd v. P. C. Chaturvedi,
[2005] 8 sec 211, it was held : F

"Rule 41 provides that the subsistence allowance is payable only
when the employee, if required, presents himself every day at the
place of work. Obviously, for establishing that the employee had
presented himself at the place of work, the authorities had clearly G
stipulated a condition that the attendance register was to be signed.
No explanation was offered by Respondent 1 employee as to why
he did not sign the register. It cannot be lightly brushed aside as
technical and/or inconsequential. As admittedly, Respondent 1
employee had not signed the attendance register even though H
550 SUPREME COURT REPORTS [2007] 13 (Addi.) S.C.R.

H 19. We, therefore, are of the opinion that in the peculiar facts and
STATE GOVERNMENT OF M.P. v. SHANKARLAL 551
[SINHA, J.]
circumstances of the case, interest of justice shall be subserved ifthe A
impugned judgment is set aside and the matter is remitted to the High Court
for consideration thereof afresh. The High Court may look into the records
of the case so as to enable it to arrive at a decision whether non-payment
of subsistence allowance caused any prejudice to the respondent in the
event it intends to interfere with the finding of fact arrived at by the Tribunal B
that the respondent himself was responsible therefor.
.. J
20. However, we direct that in the peculiar facts and circumstances
of this case, the State should pay a sum ofRs.50,000/- (Rupees fifty
thousand only) to the respondent by way oflitigation costs. The State C
shall also place before the High Court all relevant records. We would
request the High Court to consider the desirability of disposing of the
matter expeditiously.
21. The appeal is allowed to the aforesaid extent and with the
aforesaid directions and observations. D
K.K.T. Appeal partly allowed .

... )