STATE TEXTILE CORPORATION LTD.versusP.C. CHATURVEDI AND ORS.

                U.P. STATE TEXTILE CORPORATION LID.                                 A
                                  v.
                       P.C. CHATURVEDI AND ORS.

                              OCTOBER 3, 2005

                  [ARIJITPASAYAT AND H.K. SEMA, JJ.]                                B


      Service Law:

       Termination-Departmental proceedings, if vitiated for non-supply of
documents and non-payment of subsistence allowance-Held: Employee was C
supplied relevant documents and he did not show and establish that he was
prejudicially affected by non-payment of subsistence allowance-More so
request was made for payment after completion of enquiry-Also the employee
did not sign attendance register as stipulated in the suspension order-
Hence, departmental proceedings not vitiated-Quashing of termination order D
and direction for payment of full back salary and consequential benefits by
High Court set aside-With regard to other reliefs sought by the employee
matter remitted back to High Court for consideration-Uttar Pradesh State
Textile Corporation Conduct, Control and Disciplinary Rules, 1992, Rule 41.

       Disciplinary proceedings were initiated against respondent No. 1-            E
employee on charges of misconduct and suspension order was passed.
Respondent No. 1 challenged the proceedings and also sought other reliefs.
High Court held that the departmental proceedings were non est for non supply
of the documents and non payment of subsistence allowance and set aside the
termination order. It granted payment of full back salary with consequential
benefits, however, it granted liberty to the employee to start proceedings afresh   F
from stage of enquiry. Appellant-Corporation then filed review petition which
was rejected. Hence, the present appeal.

      Disposing of the appeals, the Court

     HELD: 1.1. The judgment of High Court quashing the termination order G
as well as the direction for payment of full back salary and consequential
benefits is unsustainable and therefore, set aside. 1858-D)

      Managing Director, EC/l, Hyderabad and Ors. v. B. Karunakar and
Ors., 11993] 4 SCC 727, relied on.
                                      849                                           H
    850                     SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A        P.G.l. of Medical Education and Research, Chandigarh v. Raj Kumar,
    [2001) 2 SCC 54; Hindustan Motors Ltd v. Tapan Kumar Bhattachdrya,
    (2002) 6 SCC 41; Indian Railway Construction Co. Ltd v. Ajay Kumar, (2003)
    4 SCC 579 and MP. State Electricity Board v. Jarina Bee (Smt.), (2003) 6
    sec 141, referred to.
B          2. Records reveal that copies of large number of documents were
    supplied to respondent No. 1. It is not correct to say that the relevant
    documents were not supplied. High Court had attached great importance to
    the alleged acceptance of certain documents by the Enquiry Officer on              )
    8.10.1992 and the copies thereof were not supplied to respondent No. 1. What
C   was accepted by the Enquiry Officer on 8.10.1992 was not any document but
    list of documents/books of accounts in the possession of respondent No. 1.
    Further, it has not been shown as to how the non-supply of this list caused
    any prejudice. High Court had wrongly accepted that additional documents
    had been entertained and as such the view of High Court is untenable.
                                                                       (854-D-E-F]
D
          3.1. ~espondent No. I-employee did not take any stand before the
    authorities during the pendency of proceedings that because of non-payment
    of subsistence allowance, 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. He did not plead or substantiate that the non-
E   payment was either deliberate or to spite him. In fact, for the first time the
    request was made for payment of subsistence allowance after completion of
    the enquiry. It has to be specifically pleaded and established as to in what way
    the affected employee is handicapped because of non-receipt of subsistence
    allowance. It is ultimately a question of prejudice. Unless prejudice is shown
p   and established, mere non-payment of subsistence allowance cannot be held
    to be denial of opportunity and cannot ipso facto be a ground to vitiate the
    departmental proceedings in every case. [854-G-H)

         Indra Bhanu Gaur v. Committee, Management ofM M Degree College
    and Ors., (2004) 1 SCC 281, relied on.
G
          3.2. Rule 41 of the Uttar Pradesh State Textile Corporation Conduct,
    Control and Disciplinary Rules, I 992 provides that 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 stipulated a condition
H
         U.P. STATETEXT!LECORPORATIONLTD. t'. P.CCHATURVEDI [PASAYAT,J.]     85 [
that the attendance register was to be signed, in the order of suspension. A
Respondent No. I-employee did not sign the attendance register even though
specifically required, nor offered any explanation for the same. The High Court
was not justified in coming to a conclusion that the non-signing was not
consequential or a bona fide lapse. Further, it is also to be noted that at various
point of time the employer informed the respondent No. I-employee about the
consequences of his not signing the attendance register as stipulated in the B
order of suspension. [856-B-C-D)

       1.5. The writ petition filed by respondent No. I-employee before the High
Court was not restricted to the two points on which the High Court granted
relief but there were certain other grounds of challenge. With regard to the C
other grounds of challenge raised in the writ petition, the matter is remitted
to the High Court for consideration. [858-D)

        CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7240-7241 of
2003.

      From the Judgment and Order dated I 0.10.200 I of the Allahabad High
Court in C.M. W.P. No. 7631 of 1994.
                                                                                    D   -
     M.N. Rao, Chandrakant Nayak, Santosh Kumar and Rakesh K. Sharma
for Appfillant.

        Jagat Arora and Rajiv Nanda for the Respondents.
                                                                                    E

        The Judgment of the Court was delivered by

      ARIJIT PASAYA T, J. The appellant (hereinafter referred to as the
'employer') calls in question legality of the judgment rendered by a Division       F   II
Bench of the Allahabad High Court holding that dismissal of respondent No. I
(hereinafter referred to as 'employee') from service pursuant to the disciplinary
proceedings was invalid.

      Respondent No. I-employee filed a writ application questioning legality
of the departmental proceedings initiated against him culminating in the order G
dated 12.7.1993 passed by the Managing Director of the employer-Corporation.
The Managing Director was in agreement with the findings of the Enquiry
Officer holding that very serious charges of misconduct were proved and,
therefore, the respondent No. I-employee was liable for major and deterrent
punishment of dismissal. The appeal filed by respondent No. I-employee was
                                                                                    H
    852                     SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A dismissed by order dated 3 l.12.1993 by the Chairman of the Corporation.
    There were other prayers in the writ petition i.e. (i) to command the respondent
    in the writ petition to continue his functioning and to pay his regular monthly
    salary and allowance including arrears of salary from 1.7.1992; (ii) to direct the
    respondent in the writ petition in the interest of justice to consider the writ
    petitioner's case for voluntary retirement as he had become about 56 years
B   old subject to the decision in the writ petition. The second prayer was made
    as the writ petitioner believed that the Corporation was in the process of
    winding up and had even closed two of its mills at Jhansi and Sandeela and
    all the employees working in its head office had been given option to retire
    under a voluntary retirement scheme. The disciplinary proceedings were
C   initiated on the basis of a complaint made to the Managing Director. On
    receipt of the complaint the respondent No. I-employee was asked to furnish
    his comments about the allegations. Respondent No. I-employee submitted
    his comments on 27.5.1992 on receipt of the confidential letter dated 2.5.1992
    from the Managing Director. Thereafter, on 30.6.1992 an order of suspension
    was passed by the Managing Director. Six charges were framed against the
D   respondent No. I-employee, all of which related to alleged misconduct and
    financial irregularities involving several crores of rupees. The Enquiry Officer
    held that all the six charges except charge No. 5 were proved. The report was
    given to the concerned authorities on 3.2.1993. The enquiry report indicated
    that though the last date of hearing was 8.10.1992, the respondent No. I-
E   employee did not participate after 3.10.1992. It appears that on 5.1.1993 the
    respondent-employee had made a prayer for grant of subsistence allowance
    which was not granted. In between, by making certain allegations against the
    Enquiry Officer the respondent No. I-employee had prayed for change of the
    Enquiry Officer. According to him, relevant documents were not supplied to
    him and Enquiry Officer was exhibiting bias. The prayer in this regard was
F   made on 11.10.1992 which was rejected on 1.12.1992. It is relevant that in the
    order dated 1.12.1992 the Chairman had noted that in spite of adequate
    opportunities the charged officer did not effectively participate and was
    raising various untenable pleas obviously with the object of delaying the
    proceedings. The writ petition was resisted by the present appellant. It was
G   pointed out that all documents had been made available to the respondent
    No. I-employee for the purpose of inspection and relevant copies were supplied.
    Therefore, adequate opportunity was granted to respondent No. I-employee
    to defend himself properly in the departmental proceedings.

          The pica of the respondent-employee was that on 3.10.1992 all of a
H sudden the Enquiry Officer asked him to cross-examine the witnesses. Same
       U.P. STATETEXTILECORPORATION LTD. v. P.C. CHATURVEDI [PASAYAT,J.]   853

was objected to by him as he was taken by surprise. But without properly A
considering the grievance all the four witnesses were examined and the matter
was adjourned for further hearing. The respondent No. I-employee filed his
protest letters on 3.10.1992 and 7.10.1992 and requested the Enquiry Officer
not to proceed in the matter and made a representation on I I.I 0.1992. But on
8.10.1992, four of the remaining witnesses were examined and the enquiry
report was submitted.                                                          B
         The High Court held that departmental proceedings were non-est on
two grounds. Firstly, it was observed that on 8.10.1992 certain documents
were accepted by the Enquiry Officer and copies thereof were not supplied
to the respondent No. I-employee. His request for copies of the documents C
was not heeded to and, therefore, he was highly prejudiced and the proceedings
were in gross violation of the principles ofnatural justice. Additionally, it was
held that non-payment of subsistence allowance also vitiated the departmental
proceedings. Letter of respondent No. I-employee dated 5.1.1993 was taken
note of to observe that he had no other source of livelihood and non-payment
of subsistence allowance was clearly violation of Article 21 of the Constitution D
of India, I 950 (in short 'the Constitution') and, therefore, the proceedings
could not be considered legal and proper. Accordingly, it was held that even
 if it is accepted that there was requirement of signing the attendance register
that was really not of any significance and in any event, was a bona fide
lapse. It was held that claim of respondent No. I-employee that he was E
attending office was otherwise established. The impugned enquiry report as
well as the order of termination of service were quashed. However, the employer
was given liberty to start the proceedings afresh from the stage of the enquiry
as it stood on 3.10.1992. Direction was given for payment of salary and
admissible allowances.
                                                                                 F
      A review petition was filed by the present appellant which was rejected.

      It was pointed out by the appellant that in the order of suspension itself
it was clearly noted that separate register would be maintained to mark his
attendance in office but the respondent No. I-employee did not sign the
attendance register, which, would have otherwise shown whether he was G
attending office pursuant to the order of suspension. Therefore, the non-
paym!!nt of subsistence allowance is of no consequence. Further, no prejudice
has been shown as to how he was prejudicially affected by non-payment of
subsistence allowance, particularly, when he did not comply with the
requirements of the order of suspension about his signing the attendance H
    854                     SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A register after attending office.
          As regards the conclusion that copies of relevant documents were not
    supplied, stand before the High Court was reiterated and it was submitted that
    inspection was allowed and taking copies of relevant documents was permitted.

B         Learned counsel for respondent No. I-employee has submitted that the
    High Court has rightly interfered in the matter because the respondent No.
    I was greatly prejudiced by non-supply of documents, action of the Enquiry
    Officer proceeding ex-parte and last but not the least the non payment of
    subsistence allowance.

C         We shall first deal with the plea regarding alleged non compliance with
    the principles of natural justice.

           Records reveal that copies of large number of documents were supplied
    to the respondent No. I. Whether they were adequate for the purpose of
    taking a view in the disciplinary proceedings is another matter, but to say the
D   relevant documents were not supplied is not correct. The High Court had
    attached great importance to the alleged admission of documents for the
    purpose of adjudication on 8.10.1992. Though this ground was urged with
    great vehemence before the High Court, it is not disputed that what was
    accepted by the Enquiry Officer on 8.10.1992 was not any document but list
E   of documents/books of accounts in the possession of respondent .No. !-
    employee. It has not been shown as to how the non-supply of this !ist caused
    any prejudice. The stand of the respondent was that additional documents
    had been entertained which plea the High Court had wrongly accepted. As
    noted above no additional document was brought on record, and. it was the
    list. On that score, the High Court's view is clearly untenable.
F
          The residual question is non-payment of subsistence allowance.

          So far as the effect of not paying the subsistence allowance is concerned,
    before the authorities no stand was taken by the respondent No. I-employee
    that because of non-payment of subsistence allowance, he was not in a
G   position to participate in the proceedings, or that any other prejudice in
    effectively defending the proceedings was caused to him. He did not plead
    or substantiate also that the non-payment was either deliberate or to spite
    him. It is ultimately a question of prejudice. Unless prejudice is shown and
    established, mere non-payment of subsistence allowance cannot ipso facto be
H   a ground to vitiate the proceedings in every case. It has to be specifically
       U.P. STATE TEXTILE CORPORATION LTD. v. P.C. CHATURVEDI[PASAYAT,J.]   855

pleaded and established as to in what way the affected employee is A
handicapped because of non-receipt of subsistence allowance. Unless that is
done, it cannot be held as an absolute position in law that non-payment of
subsistence allowance amounts to denial of opportunity and vitiates
departmental proceedings.

    The above position was highlighted in Indra Bhanu Gaur v. Committee,           B
Management of MM. Degree College and Ors., [2004] I SCC 281.

       It is to be noted that no grievance was made at any time during the
pendency of the proceedings that the respondent No. I-employee was being
prejudiced on account of non-payment of subsistence allowance. In fact, for        C
the first time the request was made for payment of subsistence allowance on
5.1.1993 i.e. after completion of the enquiry. The ratio in Indrabhanu's case
(supra) is clearly applicable to the facts of the present case.

      As per Uttar Pradesh State Textile Corporation Conduct, Control and
Disciplinary Rules, 1992 (in short the 'Rules') Rule 41 provides as follows: D

           "41- Subsistence allowance during suspension: An employee
       under suspension shall be entitled to draw subsistence allowance
       equivalent to 50% of his basic pay plus 50% dearness allowance
       provided that the employee is not engaged in any other employment
       or business or profession or vocation. The subsistence allowance            E
       would be payable only when the employee, if required, presents
       himself every day at the place of work or such other place as mentioned
       in the relevant order. Further, the employee, under suspension would
       have to furnish a certificate that he is not engaged in other employment,
       business, profession or vocation for entitlement of subsistence
       allowance.                                                                  F
            Variation in amount of subsistence allowance:

           (2) Where the period of suspension exceeds six months, the
       authority which made or is deemed to have made the order of
       suspension, shall competent to vary the amount of subsistence G
       allowance for any period subsequent to the period of the first six
       months as follows:

           (a) The amount of subsistence allowance may be increased upto
       75% of the basic pay and dearness allowance thereon ifthe period of
       suspension has been prolonged for reasons, to be recorded not directly H
    856                    SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A           attributable to the suspended employee;

                 (b) The amount of subsistence allowance may be reduced upto
            25% of the basic pay and dearness allowance thereon if the period of
            suspension has been prolonged due to reasons, to be recorded directly
            attributable to the suspended employee."
B
        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 stipulated a condition that the
  attendance register was to be signed. No explanation was offered by the
C respondent no. I-employee as to why he did not sign the register. It cannot
  be lightly brushed aside as technical and/or inconsequential. As admittedly,
  the respondent No. I-employee had not signed the attendance register even
  though specifically required in the order of suspension the High Court was
  not justified in coming to a conclusion that the non signing was not
D consequential or a bona fide lapse. It is also to be noted that at various point
  of time the employer informed the respondent No. I-employee about the
  consequences of his not signing the attendance register as stipulated in the
  order of suspension.

          We find that while granting opportunity to the employer to proceed
E   further in the matter direction was given for payment of full salary and
    consequential benefits.

          In Managing Director, ECJL, Hyderabad and Ors. v. B. Karunakar and
    Ors., [1993] 4 SCC 727 it was observed as follows:

F           "Hence, in all cases where the enquiry officer's report is not furnished
            to the delinquent employee in the disciplinary proceedings, the Courts
            and Tribunal's should cause the copy ofthe 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-
G           supply of the report. If after hearing the parties, the 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 Court/Tribunal should not mechanically set aside the order of
            punishment Ori the ground that the report was not furnished as is
H
       U.P. STATETEXT!LECORPORATION LTD.'" P.C. CHATURVEDI [PASAYAT,J.]     857

       regrettably being done at present. The courts should avoid resorting A
       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 order of punishment, (and not any internal
       appellate or revisional authority), there would be neither a breach of
       the principles of natural justice nor a denial of the reasonable
       oppurtunity. It is only if the Court/Tribunal finds that the furnishing B
       of the report would have made a difference to the result in the case
       that it should set aside the order of punishment. Where after following
       the above procedure, the Court/Tribunal sets aside the order of
       punishment, the proper relief that should be granted is to direct
       reinstatement of the employee with liberty to the authority/management C
       to proceed with the inquiry, by placing the employee under suspension
       and continuing the inquiry from the stage of furnishing him with the
       report. The question whether the employee would be entitled to the
       back-wages and other benefits from the date of his dismissal to the
       date of his reinstatement if ultimately ordered, should invariably be
        left to be decided by the authority concerned according to law, after D
       the culmination of the proceedings and depending on the final outcome.
       If the employee succeeds in the fresh inquiry and is directed to be
       reinstated, the authority should be at liberty to decide according to
        law how it will treat the period from the date of dismissal till the
       reinstatement and to what benefits, if any and the extent of the E
       benefits, he will be entitled. The reinstatement made as a result of the
       setting aside of the inquiry for failure to furnish the report, should be
       treated as a reinstatement for the purpose of holding the fresh inquiry
       from the stage of furnishing the report and no more, where such fresh
       inquiry is held. That will also be the correct position in law."
                                                                                   F
      That being so, direction for payment of full back salary and consequential
benefits cannot be sustained.

      In P.G./. of Medical Education and Research, Chandigarh v. Raj Kumar,
[2001] 2 SCC 54, this Court found fault with the High Court in setting aside
the award of the Labour Court which restricted the back wages to 60% G
directed payment of full back wages. It was observed thus at p. 57, para 9:

       "9. The Labour Court being the final Court of facts came to a
       conclusion that payment of 60% wages would comply with the
       requirement of law. The finding of perversity or being erroneous or
                                                                                   H
    858                    SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A           not in accordance with law shall have to be recorded with reasons in
            order to assail the finding of the Tribunal or the Labour Court. It is
            not for the High Court to go into the factual aspects of the matter and
            there is an existing limitation on the High Court to that effect."

    This Court observed again at para 12 at p.58 :
B
            "12. Payment of back wages having a discretionary element involved
            in it has to be dealt with, in the facts and circumstances of each case
            and no strait-jacket formula can be evolved, though, however there is
            statutory sanction to direct payment of back wages in its entirety."

C          The position was re-iterated in Hindustan Motors Ltd. v. Tapan Kumar
    Bhattacharya, (2002] 6 SCC 41; Indian Railway Construction Co. Ltd v. Ajay
    Kumar, (2003] 4 SCC 579 and MP. State Electricity Board v. Jarina Bee
    (Smt.), (2003] 6 sec 141.

           The High Court's judgment is, therefore, clearly unsustainable. But we
D find substance in the plea of respondent No. I-employee that his challenge
    before the High Court was not restricted to the two points on which the High
    Court granted relief and there were certain other grounds of challenge. Learned
    counsel for the appellant submitted that there is absolutely no merit in the
    challenges made in the writ petition. We do not think it necessary to go into
E   that aspect as the High Court dealt with only two aspects and not others. We,
    therefore, while setting aside the impugned judgment of the High Court so
    far as the two grounds on which relief was granted to the respondent No. !-
    employee remit the matter to the High Court for consideration of other grounds
    of challenge raised in the writ petition. The High Court shall now consider
    the writ petition on the grounds other than the two with which we have dealt
F   with in these appeals. Writ petition no. CMWP No. 7631/1994 is restored to
    the High Court for dealing with the matter afresh. It is to be noted that
    respondent No. I has already attained the age of superannuation in 2002. We
    make it clear that we have not expressed any opinion about the other grounds
    of challenge as raised in the writ petition.

G          The appeals are disposed of accordingly. No costs.

    N.J.                                                    Appeals disposed of.