Holding

Reliance on a precedent without examining the factual background is impermissible, and an acquittal does not automatically entitle reinstatement; the matter must be reconsidered on its own facts.

Summary

Mansaram Nainwal, a bus driver of Uttaranchal Road Transport Corporation, was dismissed after a departmental inquiry found him guilty of rash driving that caused a fatal accident. The Labour Court upheld the dismissal, but he was acquitted in the parallel criminal trial. The High Court, relying on Capt. M. Paul Anthony v. Bharat Gold Mines Ltd., reinstated him, holding that acquittal automatically warranted reinstatement. The Supreme Court held that a court cannot rely on a precedent without analysing the factual matrix of the case before it and that an acquittal does not per se compel reinstatement. It observed that the correct approach is to consider the principles laid down in Union of India v. Bihari Lal Sidhana and remitted the matter to the High Court for fresh consideration of the facts.

Issues considered

Whether an acquittal in a criminal case automatically mandates reinstatement of a government servant dismissed in departmental proceedings.
Whether the High Court erred in applying the ratio of Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. without examining the factual background of the present case.
What is the correct legal position on the interplay between criminal acquittal and departmental disciplinary action.

Legislation cited

Subjects

service lawdisciplinary inquirydismissalacquittalreinstatementprecedentdepartmental proceedingscriminal caseindustrial disputeUttaranchal Road Transport Corporation

Judgment

A UTTARANCHAL ROAD TRANSPORT CORPN. AND ORS.
v.
MANSARAM NAINWAL

JULY 28, 2006

B [ARIJIT PASAYAT AND LOKESHWAR SINGH PANTA, JJ.]

Precedenls:

Departmental praceedings as also prosecution in criminal court of a
C bus driver involved in a bus accident-Found guilty in disciplinary inquiry
and dismissed from service-Labour Court upheld dismissal-High Court
placing reliance on a decision of Supreme Court, set aside dismissal order
and directed reinstatement holding that delinquent was acquiued in criminal
case-Held, reliance on a decision without looking into factual background of
D the case is clearly impermissible-Postulates of precedent--Explained---As
the High Court did not indicate as to how the case relied on hy it applied to
the facts of the case, mailer remitted to it for consideration afresh.

Service law~Disciplinary inquiry-Dismissal from service-Acquittal
in criminal case-Effect of
E
Respondent. was a bus driver in the service of the appellant-
Corporation. His bus met with an accident. A disciplinary inquiry was
initiated against him. The charges leveled against him were found to have
been proved and he was dismissed from service. His departmental appeal
was rejected. The Labour Court also found him guilty and held the
F termination ordel" not unjustified. He challenged the award before High
Court. A criminal case was also filed against the respondent wherein he
was acquitted. The High Court, relying on the judgment of the Supreme
Court in Anthony's case*, allowed the writ petition, set aside the
termination order and directed reinstatement of the respondent holding
G that he had been acquitted in the criminal case.

In the present appeal it was contended for the appellant-Corporation
that the ratio in Anthony's case* was not applicable to the facts of the
-
H
instant case; and that, even otherwise, acquittal in a criminal case would
not lead to an automatic reinstatement nor would it render the
168 -
UlTARANCHAL ROAD TRANSPORT CORPN. ''·MAN SA RAM NAINWAL 169

departmental proceedings invalid. A
Allowing the appeal and remitting the matter to the High Court, the
Court

HELD: I. I. Reliance by a court on a decision without looking into
the factual background of the case before it is clearly impermissible. B
According to the well-settled theory of precedents, every decision contains
three basic postulates - (i) findings of material facts, direct and inferential;
an inferential finding of fact is the inference which the Judge draws from
the direct or perceptible facts; (ii) statements of the principles of law
applicable to the legal problems disclosed by the facts; and (iii) judgment C
based on the combined effect of the above. Enunciation of the reason or
principle on which a question before a Court has been decided is alone
binding as a precedent. (173-G; 174-A-CI

State of Orissa v. Sudhansu Sekhar Misra and Ors., AIR (1968) SC 647
and Union of India.and Ors. v. Dhanwanti Devi and Ors., (1996) 6 SCC 44, D
relied on.

1.2. The position in law relating to acquittal in a criminal case and
question of re-instatement has been dealt with in Sidhana's case**. As the
High Court did not deal with the factual scenario and as to how the
Anthony's case* helped the respondent, it would consider the matter afresh. E
(171-F; 174-E-FJ

*Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. and Anr., [1999] 3
SCC 679 and ** Union of India and Anr. v. Bihar Lal Sidhana, [1997) 4
sec 385, referred to.
F
Quinn v. Leathem, (1901) AC 495 (H.L.), referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3179 of2006.

From the Judgment and Order and dated 9.8.2005 of the High Court of
Uttaranchal at Nainital in Writ Petition No. 673 (M/S) of 2003 (Old No. G
13150 of 1996.

Pradeep Misra for the Appellants.

A.S. Rawat and K.S. Rana for the Respondent.

The Judgment of the Court was delivered by H
170 SUPREME COURT REPORTS (20061 SUPP. 4 S.C.R.

A ARIJIT PASAYAT, J. Leave granted.

Appellants call in question legality of the judgment rendered by a learned
Single Judge of the Uttaranchal High Court. By the impugned judgment, the
learned Single Judge set aside the order of termination passed by 2ppellant
No.2 and directed re-instatement of the respondent in service with continuity
B of service, but without back wages.

Factual background needs to be noted in brief.

The respondent was appointed as Driver in appellant No.1-U.P. State
Road Transport Corporation (hereinafter referred to as the 'Corporation'). On
...
c 10.10.1990 while the respondent was plying the bus No.VGA 938 on
Mussoorie road, all of a sudden the vehicle met with an accident and fell into
a ditch. Thereafter, a disciplinary enquiry was initiated against the respondent
in which the charges against the respondent were found proved and the
appellant vide its order dated 31.3.1993 dismissed the respondent from service.
Thereafter, the respondent filed an appeal before appellant No.2, which was
D
rejected on 30.6.1993. Thereafter, the respondent raised an industrial dispute
under Section 4-K of the U.P. Industrial Disputes Act, 1947 (in short the
'Act'). The industrial dispute decided by the award was rtferred in the
following terms:-

E "Whether the termination of the services of applicant/workman Sri
Mansaram Nainwal s/o Visheshware Dutt Nainwal, driver by the
employers from 31.3.1993 is unjustified and/or illegal? If so, to which
benefit/compensation the applicant/workman is entitled and to what
extent?"

F The Labour Court issued notice to the parties. The appellants and the
respondent filed their written statement/objection. The stand of appellants
before the Labour Court was that the respondent was appointed as a Driver.
On 10.10.1990 when he was plying the bus No. UGA 938 on Dehradun-
Mussoorie Road, due to his rash and negligent driving, the bus fell into the
ditch in which 12 persons died and some other persons got seriously injured
G and the bus was also got damaged as a result of which the Corporation
suffered a huge loss of Rs.2,50,000/-. It was also pleaded that the respondent ......
was charge sheeted and a departmental enquiry was held against him in
which full opportunity of hearing was provided to the respondent. In the
enquiry, the charges against the respondent were found proved and he was
H removed from the service.
UITARANCHALROADTRANSPORTCORPN. 1•. MANSARAMNAINWAL[PASAYAT,J] 171

On the other hand, the respondent in his written statement accepted that A
he was served charge sheet and a departmental enquiry was also held against
him. But he plea4ed that the necessary documents were not being produced
though demand was made several times. The Investigating Officer found him
not guilty in the enquiry, even though he was dismissed from service.

Labour Court found the respondent guilty and held that the termination B
was not unjustified.

Challenging the order of Labour Court, the respondent filed a Writ
Petition which, as noted above, was allowed by the impugned judgment. The
foundation of the High Court's judgment was to the effect that in the criminal C
trial the respondent was acquitted .and placing reliance on a decision of this
Court in Capt. M. Paul Anthony v. Bharat Gold Mines ltd. and Anr., [1999]
3 sec 679 the order of termination was set aside.

In support of the appeal, learned counsel for the appellant submitted
that the ratio in Anthony's case (supra) has no application to the facts of the D
present case. It has not even been indicated as to how the factual position is
similar. In any event, acquittal in a criminal case does not lead to an automatic
re-instatement a~d <tlso does not render the departmental proceedings invalid.
It was, therefore, submitted that the High Court was clearly wrong in its
l
conclusion.
E
On the other hand, learned counsel for the respondent submitted that
the departmental authorities in the enquiry conducted against the respondent
had clearly found that he was not responsible for the accident and there was
no misconduct involved.

The position in law relating to acquittal in a criminal case, its effect on F
departmental proceedings and re-instatement in service has ,been dealt with
by this Court in Union of India and Anr. v. Bihari Lal Sidhana, [1997] 4
sec 385. It was held in paragraph 5 as follows:
"5. It is true that the respondent was acquitted by the criminal court
but acquittal dties not automatically give him the right to be re- G
instated into the service. It would still be open to the competent
authority to take decision whether the delinquent government servant
can be taken into service or disciplinary action should be taken under
the Central Civil Services (Classification, Control and Appeal) Rules
or under the Temporary Service Rules. Admittedly, the respondent H
172 SUPREME COURT REPORTS [20061 SUPP. 4 S.C.R.

A had been working as a temporary government servant before he was
kept under suspension. The termination order indicated the factum
that he, by then, was under suspension. It is only a way of describing
him as being under suspension when the order came to be passed but
that does not constitute any stigma. Mere acquittal of government
employee does not automatically entitle the government servant to
B reinstatement. As stated earlier, it would bt; open to the appropriate
competent authority to take a decision whether the enquiry into the
conduct is required to be done before directing reinstatement or
appropriate action should be taken as per law, if otherwise, available.
Since the respondent 1s only a temporary go\'ernment servant, the
c power being available under Rule S( I) of the Rules, it is always open
to the competent authority to invoke the said power and terminate the
services of the employee instead of conducting the enquiry or to
continue in service a government servant accused of defalcation of
public money. Re-instatement would be a charter for him to indulge
with impunity in misappropriation of public money."
D
The ratio of Anthony's case (supra) can be culled out from paragraph
22 of the judgment which reads as follows:

"The conclusions which are deducible from various decisions of this
Court referred to above are:
E
(i) Departmental proceedings and proceedings in a criminal case
can proceed simultaneously as there is no bar in their being
conducted simultaneously, though separately.
(ii) If the departmental proceedings and the criminal case are based
p on identical and similar set of facts and the charge in the criminal
case against the delinquent employee is of a grave nature which
involves complicated questions of law and fact, it would be
desirable to stay the departmental proceedings till the conclusion
of the criminal case.
(iii) Whether the nature of a charge in a criminal case is grave and
G whether complicated questions of fact and law are involved in
that case, will depend upon the nature of offence, the nature of
the case launched against the employee on the basis of evidence
and material collected against him during investigation or as
reflected in the charge sheet.
H
UTTARANCHAL ROAD TRANSPORT CORPN. v. MANSARAM NAINWAL [PASA YAT,.1.J J 73

(iv) The factors mentioned at {ii) and (iii) above cannot be considered A
in isolation to stay the departmental proceedings but due regard
has to be given to the fact that the departmental proceedings
cannot be unduly delayed.
(v) If the criminal case does not proceed or its disposal is being
unduly delayed, the departmental proceedings, even if they were B
stayed on account of the pendency of the criminal case, can be
resumed and proceeded with so as to conclude them at an early
date, so that if the employee is found not guilty his honour may
be vindicated and in case he is found guilty, the administration
may get rid of him at the earliest."
c
Though the High Court had not indicated as to how the decision of
this Court in Anthony's case (supra) laid down as a matter of law that whenever
there is acquittal in a criminal trial re-instatement is automatic, in all
probabilities basis was para 36 of Anthony's case (supra) which reads as
follows:
D
"36. For the reasons stated above, the appeal is allowed, the impugned
judgment passed by the Division Bench of the High Court is set aside
and that of the learned Single Judge, insofar as it purports to allow
the writ petition, is upheld. The learned Single Judge has also given
liberty to the respondents to initiate fresh disciplinary proceedings. Jn E
the peculiar circumstances of the case, specially having regard to the
fact that the appellant is undergoing this agony since 1985 despite
having been acquitted by the criminal court in 1987, we would not
direct any fresh departmental enquiry to be instituted against him on
the same set of facts. The appellant shall be reinstated forthwith on
the post of Security Officer and shall also be paid the entire arrears F
of salary, together with all allowances from the date of suspension till
his reinstatement, within three months. The appellant would also be
entitled to his cost which is quantified at Rs.15,000/-."

(underlined for emphasis)
G.
The High Court unfortunately did not discuss the factual aspects and by
merely placing reliance on earlier decision of the Court held that reinstatement
was mandated. Reliance on the decision without looking into the factual
background of the case before it is clearly impermissible. A decision is a
precedent on its own facts. Each case presents its own features. It is not H
174 SUPREME COURT REPORTS [2006) SUPP. 4 S.C.R.

A everything said by a Judge while giving judgment that constitutes a precedent.
The only thing in a Judge's decision binding a party is the principle upon
which the case is decided and for this reason it is important to analyse a
decision and isolate from it the ratio decidendi. According to the well-settled
theory of precedents, every decision contains three basic postulates (i) findings
of material facts, direct and inferential. An inferential fiuding of facts is the
B inference which the Judge draws from the direct, or perceptible facts; (ii)
statements of the principles of law applicable to the legal problems disclosed
by the facts; and (iii) judgment based on the combined effect of the above.
A decision is an authority for what it actually decides. What is of the essence
in a decision is its ratio and not every observation found therein nor what
C logically flows from the various observations made in the judgment. The
enunciation of the reason or principle on which a question before a Court has
been decided is alone binding as a precedent. (See: State ofOrissa v. Sudhansu
Sekhar ,Hisra and Ors .. AIR (1968) SC 647 and Union of India and Ors. v.
Dhanwanti Devi and Ors.. [ 1996) 6 SCC 44 ). A case is a precedent and
binding for what it explicitly decides and no more. The words used by Judges
D in their judgments are not to be read as if they are words in an Act of
Parliament. In Quinn v. Leathem, (190 I) AC 495 (H.L.), Earl of Halsbury LC
observed that every judgment must be read as applicable to the particular
facts proved or assumed to be proved, since the generality of the expressions
which are found there are not intended to be exposition of the whole law but
E governed and qualified by the particular facts of the case in which such
expressions are found and a case is only an authority for what it actually
decides.

Unfortunately, the High Court has not discussed the factual scenario as
to how the Anthony's case (supra) had any application. As noted above, the
F position in law relating to acquittal in a criminal case and question of re-
'nstatement has been dealt with in Sidhana's case (supra). As the High Court
had not dealt with the factual scenario and as to how the Anthony's case
(supra) helps the respondent. we think it appropriate to remit the matter back
to the High Court for fresh consideration. Since the matter is pending for
G long, it would be in the interest of the parties if the High Court is requested
to dispose of the writ petition within d period of 4 months from the date of
receipt of this order.

The appeal is allowed to the aforesaid extent with no order as to costs.

H R.P. Appeal allowed.