# STATE BANK OF PATIALA AND ORS v. S.K. SHARMA

- **Citation:** [1996] 3 S.C.R. 972
- **Court:** Supreme Court of India
- **Decided:** 1996-03-27
- **Case number:** Civil Appeal No. 5129 of 1996
- **Bench:** B.P. Jeevan Reddy, Ks. Paripoornan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-bank-of-patiala-and-ors-v-s-k-sharma-14169
- **Pages:** 36

## Headnote

c
Se1vice Law :
State Bank of Patiala (Officers') Service Regulations, 1979: Regulation
68(ii}(x}(b )(iii).
Departmental enquby-Natural justice-Statements of two witnesses-Copies of-Not supplied to delinquenHiowever, he was pem1itted
to pemse them and take notes therefrom more than three days p1ior to their
exami11ati01r-No objection raised by delinquent during enqui1y-Held :
D Regulation substantially complied with-No prejudice caused to delinquent-No inte1ference with enquby and order of removal called for.
'
Depwtmental enquby-Temporary misappropriation-By bank office1-Statements of witnesses and complainant-Recorded at preliminary
enqui1y-Charges established by enquiry officer inspite of non-examination of
E complainant-Held: Finding by High Cowt that it was a case of 'no evidence
as coniplainant. was not exa!nined, unsustainable in law.
Adniinistfative law :
Natural Justice--Action in violation of rules/regulations/statutory
F JJrovisions-b1cu1porati11.g pri11ci11les of natural justice (audi alteranz JJartemf-Va/idity of-Principles laid dow1r-Substantive provisions-Nomially
to be co1nplied wit/1-Procedural provision-Neither substantial nor 111andat01y-lf no prejudice caused no inte1ference of cowt called fo,-Substantial
contpliance with such provision enough.
G
Natural justice-Rules I Regulatio11s/Stattlf 01)1 provisions-Nol incorporating p1inciples of-But such p!inciples implied by nan;re of order/action-Held : "no O]Jpo1ttu1ity
11
/
11no hcaring'i_An1ou11ted to tota_/ violation of
such princijJ/es--"No adequate opportunity
11/'no fair hea1ing"-A1nounted to
violation of only a facet of such principle.1-0rder/action-Fo1111er case would
H be invalid-Latter cas~Test of prejudice to be applied-If 110 prejudice
972
~
I
STATEBANKOFPATIALAv. S.K.SHARMA
973
caused, order actio11 wollld be valid.
Natul·al fllstic~Principles of-Mere technical violation of-Held: setting aside punishnzent and entire enquily would be negation of justice and
not jllstified.
A
Natural jllstic~Audi a/teram paitem-Object of-To enmre fair hearB
ing and no failure of justic~Where State or pllblic interest called for curtail-·
ing of 111/e, court nzust balance such interest -tt·itlz requiren1e11t of natural
jllstice before arriving at a11 appropriate decisio11.
Judicial review-Scope of-Natural J11stice-Pri11ciples of-Question of
compliance with-Held : scope was the same whether it was writ petition C
under Article 226 or civil suit.
Mandatory provision-Waiver of-Could be waived by person concerned if,ft was in public interest.
Words and Phrases : "Waiver''--1\feaning of
D
The respondent was working as Manager of a branch of the appellant-Bank- Father of one B had taken loan from handed the appellantBank and after his death B came and handed over the amount to the
respondent in discharge of the loan. The respondent was subsequently E
transferred to another branch. B discovered that the amount paid by him
to the respondent was not credited to his/his father's account. Soon
thereafter the amount was deposited in the Bank in the name of B. The
Appellant-Bank's case was that having received the amount from B, the
respondent did n~t credit the said amount into Bank account immediately, F
though he issued a letter to the effect that since the crop lo<ln amount bad
been adjusted, the entry regarding mortgage ofland of the loanee in favour·
-----
'
of the Bank be revoked.
'
Before ordering a regular oral enquiry, the Bank had directed two
of its officers to conduct a preliminary enquiry 3.gainst the respondent. The G
said officers examined "itnesses including B and the Patwari of the village
arid also gathered necessary documentary evidence. On the basis of the
preliminary report, a regular enquiry was ordered. The Bank and the
,,
Rspondeitt examined their respecthre ·witnesses. B, who was ihe com·
plainant, did not appear as a witness at the regular enquiry. However, the H
974
SUPREME COURT REPORTS
[1996] 3 S.C.R.
A Patwari was examined as a witness at the regular

## Text

_Characters 0–39,975 of 90,184. This is a partial read: ask again with offset=39975 for what follows._

A
STATE BANK OF PATIALA AND ORS.
v.
S.K. SHARMA
MARCH 27, 1996
B
[B.P. JEEVAN REDDY AND KS. PARIPOORNAN, JJ.]
c
Se1vice Law :
State Bank of Patiala (Officers') Service Regulations, 1979: Regulation
68(ii}(x}(b )(iii).
Departmental enquby-Natural justice-Statements of two witnesses-Copies of-Not supplied to delinquenHiowever, he was pem1itted
to pemse them and take notes therefrom more than three days p1ior to their
exami11ati01r-No objection raised by delinquent during enqui1y-Held :
D Regulation substantially complied with-No prejudice caused to delinquent-No inte1ference with enquby and order of removal called for.
'
Depwtmental enquby-Temporary misappropriation-By bank office1-Statements of witnesses and complainant-Recorded at preliminary
enqui1y-Charges established by enquiry officer inspite of non-examination of
E complainant-Held: Finding by High Cowt that it was a case of 'no evidence
as coniplainant. was not exa!nined, unsustainable in law.
Adniinistfative law :
Natural Justice--Action in violation of rules/regulations/statutory
F JJrovisions-b1cu1porati11.g pri11ci11les of natural justice (audi alteranz JJartemf-Va/idity of-Principles laid dow1r-Substantive provisions-Nomially
to be co1nplied wit/1-Procedural provision-Neither substantial nor 111andat01y-lf no prejudice caused no inte1ference of cowt called fo,-Substantial
contpliance with such provision enough.
G
Natural justice-Rules I Regulatio11s/Stattlf 01)1 provisions-Nol incorporating p1inciples of-But such p!inciples implied by nan;re of order/action-Held : "no O]Jpo1ttu1ity
11
/
11no hcaring'i_An1ou11ted to tota_/ violation of
such princijJ/es--"No adequate opportunity
11/'no fair hea1ing"-A1nounted to
violation of only a facet of such principle.1-0rder/action-Fo1111er case would
H be invalid-Latter cas~Test of prejudice to be applied-If 110 prejudice
972
~
I
STATEBANKOFPATIALAv. S.K.SHARMA
973
caused, order actio11 wollld be valid.
Natul·al fllstic~Principles of-Mere technical violation of-Held: setting aside punishnzent and entire enquily would be negation of justice and
not jllstified.
A
Natural jllstic~Audi a/teram paitem-Object of-To enmre fair hearB
ing and no failure of justic~Where State or pllblic interest called for curtail-·
ing of 111/e, court nzust balance such interest -tt·itlz requiren1e11t of natural
jllstice before arriving at a11 appropriate decisio11.
Judicial review-Scope of-Natural J11stice-Pri11ciples of-Question of
compliance with-Held : scope was the same whether it was writ petition C
under Article 226 or civil suit.
Mandatory provision-Waiver of-Could be waived by person concerned if,ft was in public interest.
Words and Phrases : "Waiver''--1\feaning of
D
The respondent was working as Manager of a branch of the appellant-Bank- Father of one B had taken loan from handed the appellantBank and after his death B came and handed over the amount to the
respondent in discharge of the loan. The respondent was subsequently E
transferred to another branch. B discovered that the amount paid by him
to the respondent was not credited to his/his father's account. Soon
thereafter the amount was deposited in the Bank in the name of B. The
Appellant-Bank's case was that having received the amount from B, the
respondent did n~t credit the said amount into Bank account immediately, F
though he issued a letter to the effect that since the crop lo<ln amount bad
been adjusted, the entry regarding mortgage ofland of the loanee in favour·
-----
'
of the Bank be revoked.
'
Before ordering a regular oral enquiry, the Bank had directed two
of its officers to conduct a preliminary enquiry 3.gainst the respondent. The G
said officers examined "itnesses including B and the Patwari of the village
arid also gathered necessary documentary evidence. On the basis of the
preliminary report, a regular enquiry was ordered. The Bank and the
,,
Rspondeitt examined their respecthre ·witnesses. B, who was ihe com·
plainant, did not appear as a witness at the regular enquiry. However, the H
974
SUPREME COURT REPORTS
[1996] 3 S.C.R.
A Patwari was examined as a witness at the regular enquiry. Though the
copies of the statements of B and the Patwari were not supplied to the
respondent, he was permitted to peruse the same more than three days
prior to the commencement of the examination of witnesses.
B
At the conclusion of the enc1uiry, a report was submitted by the
enquiry officer holding the charges of temporary misappropriation established. The competent authority accepted the report and ordered the
removal of the respondent from service. An appeal and a review submitted
by the respondent were dismissed. The respondent thereupon instituted a
suit challenging the order of removal. The Trial Court decreed the suit on
C ground of violation of Rule 68(ii)(x)(b)(iii) of the State Bank of Patiala
(Officers') Service Regulations, 1979 because of non-supply of the statements of witnesses and documents to the delinquent. The appellate Court
confirmed the decree. The second appeal filed by the appellant-Bank was
dismissed by the High Court which, while affirming the findings of the
courts below, assigned one more ground that inasmuch as B was not
D examined, it was a case of 'no evidence'. Aggrieved by the High Court's
judgment the appellant-Bank preferred the present appeal.
E
Allowing the appeal, this Court
HELD : 1.1. The scope of judicial review regarding compliance with
principles of natural justice is the same whether it was a writ petition filed
under Article. 226 of the Constitution of India or a suit filed in the civil
court. (982.-Gl
~.2. Sin.ce B, 'the colnplainant, was·· not examined, it cannot be said
F
to be a Case of no evidence. Witnesses were examiried including tWo officers
of the Bank who conducted the preliminary enquiry and had recorded the
statements of witnesses including B. They spoke to the preliminary enquiry
conducted by them and the statement of B recorded by them. Other Bank
officials were examined to establish that the letter addressed to the Tehsildar In fact 'written· bf and bears signature of the· respondent. The
G Patwari was· also examined. It is on the basis of this evidence that the
enquiry officer had come 'to the condusion that both charges were established inspite of non-exa'mination of B. Neither the Trial Court nor the
first Appellate Court ha~e found that it is a case of no evidence. The
additional ground assigned by the High Court is, therefore, unsustainable
H in law. (983-A-C]
·
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STATE BANK OF PATIALAv. S.K. SHARMA
975
2.1. TI1e several procedural provisions governing: the disciplinary · A
enquiries (llhether provided by rules made under the proviso to Article 309
J....
of the Constitution, under regulations 1nade by ~tatutory bodies in exercise
of the power conferred by a statute or for that matter, by way of a statute)
are nothing but tlaborJtion of the principles of natural justice and their
se\·eral facets. It is a case of coditication of the several facets of rule of audi B
I. I(
alteram pwtem or the rule against bias. Regulation 68(ii)(x)(b)(iii) of the
State Bank of Patiala (Olficers') Service Regulations, 1979 is part of a
regulation made in exercise of statutory authority. The sub-clause incorporates a facet oftbe principles of natural justice. It is designed to provide
an adequate opportunity to the ·delinquent officer to cross-~xamine the
witnesses effectively and the~eby defend hims~lf properly. It is a procedurdl C
provision. l\lerely because, word "_shall" is used therein it cannot be held to
be mandatory. l\loreover, even a mandatOry requirement can be waived by
the person coricerned if such mandatory Provision is conceh:cd in his
interest and not in publiC interest. From his conduct, the respohdent must
be deen1ed t~, have waived it. Tiiis is an rispect \\'hich n1ust be borne in ~ind D
\\'bile examining a complaint of non-observance of procedural rules g1n·erning such enquiries. As a rule, all such procedural rules are designed to
afford a full and proper opportunity to the delinquent oflicer/employee to
defend himself and are, therefore, . conceived in his interest. Hence,
whether. mandatory or directory, they would normally be conctiwd in
his interest only. Tims sub-clause (iii) is conceived in the interest of E .
the delinquent oflicer, and hence, he 'could wain it .. [987-D·E; 985'.C-D;
1001-E-F;.1003-E-G]
.
Dhire11dra Nath Goraiv.Sudhir Cha11dra Ghosh & Ors., [1964] 4 S.C.R. .
1001 and Krisha11 Lal v. State of Jammu & Kashmir, [199~] 4 S.C.C. 422, F
relied on.
· 2.2. In the instant case. though the copies of the statements of two .
witnesses (Patwari and B) were not furnished, the respondent _was per_-: _
milted to peruse them and take note~ therefrom more than three days prior·
to their examination. Of the rn'o \\itnesses, B was not examined and only
Patwari was examined. The respondent did not raise _any objection during
G
the enquiry that the non-furnishing of the copies of the statements is
disabling him or has disabled him, as the case may be, from effectively
cross-examining the witnesses or to defend himself. No prejudice has
resulted to the respondent on account _of not furnishing him the copies of H
•
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l
1f r
i
.
i
976
SUPREME COURT REPORTS
[1996] 3 S.C.R.
A the statements of witnesses. In the circumstances there has been a substantial compliance of. Regulation 68(ii)(x)(b)(iii) of the Regulations, though
not a full compliance. Therefore, failure to literally comply with Regulation
68(ii)(x)(b)(iii) would not vitiate the enquiry altogether. Setting aside the
llllnishment and the entire enquiry on the ground of violation of sub-clause
"
(iii) would not be in the interest of justice, but would be its negation.
(1006-F-H; 1007-B]
B
3.1. Justice means justice between both the parties. The interests of
justice equally demand that the guilty should be punished and that technicalities and irregularities which do not occasion failure of justice are not
C allowed to defeat ends of justice. Principles of natural justice are but the
means to achieve the ends of justice. They cannot be perverted to achieve the
D
opposite end. That would be a counter-productive exercise. Principles of
natural justice cannot be reduced to any hard and fast formulae and cannot
be put in a straight-jacket. Their applicability depends upon the context and
the facts and circumstances of each case. [1003-H; 1004-A; 999-E]
Mahendra Singh Gill v. Chief Election Commissioner, (1978] 2 S.C.R.
272 and Russel v. Duke of Noifolk, (1949) 1 All. E.R. 109, referred to.
3.2. It would not be correct to say that for any and every violation of a
<
facet of natural justice or of a rule incorporating such facet, the order_
E passed is altogether void and ought to be set aside without further enquiry.
The approach and test adopted in B. Karunakar should govern all cases
where the complaint is not that there was no hearing (no notice, no opportunity and no hearing) but one of not affording a proper hearing (i.e.,
adequate or a full hearing) or of violation of a procedural rule or requireF
ment governing the .enquiry; the complaint should be examined on the
touch-stone of prejudice. It is from the stand point of fair hearing· applying
~:
the test of prejudice, as it may be called • that any and every complaint of
violation of the rule of audi alteram partem should be examined. The test is
: all things taken tog~ther whether the delinquent officer/employee. had or
G did not have a fair he~ring. (1000-F-G; 999-H; 1000-F]
.
• I
Managing Director E.C.I.L. v. B. Kanmakai; (1993] 4 S.C.C. 727, _f?llowed.
H
4.1. An order pJ~sed imposing a punishment on an. employe1(upon a
'
•
.
! .. ,;·.
'
. .'
..
', '·f'
disciplinary/departmental enquiry in violation. of the rules/regula-
~
.
' .
' - ,.
.,
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'
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STATE BANKOFPATIALAv. S.K.SIIARMA
977
tions/statutory pro\"isions governing: such ~nquiries should not be set aside A
automatically. The Court or Tribu.nal should enquire \\'hether (a) the
provision violated is of a substantive natu~e or (b) \\'h.ether it is pri>cedural
in charncter. [100.t-C-D)
4.2. A substanthre provision has normally to be con1plied u·itli ~nd the
theory of ~ubst~ntial compliance or the test of prejudice would not be
applicable in such a case. (100.t-D-E)
B
4.3. In the case of ,·iolation of a procedurJl provision, the position is
this: prncedurJI provisions are generally meant for alTording a reasonable
and adequate opportunity to . the delinquent officer/employee. They are, C
generally speaking:, conceived in his interest. Violation of any and every
procedural provision cannot be said to automatically vitiate the enquiry ·
held or order passed. Except cases falling under 'no notice', 'no opportunity
and 'no hearing' categories, the complaint of violation of procedural_
provision should be examined from the stand point of view of prejudice, viz., D
"·hether such violation has prejudiced the delinquent officer/employee in
defending himself properly and elTectively. If it is found that he has been so
prejudiced, appropriate orders have to be made to repair and remedy the
prejudice including the setting aside the em1uiryand/or the order of punishment. If no prejudice is established to have resulted therefroin, it is obvious,
no interference is called for. There may be certain procedural provisions E
which are Or a fundamental character, whose violation is by itself proof of
prejudice. The Court may not insist on proof of prejudice in such cases.
Whether there is a provision expressely providing that arter the evidence of
the employer/government is over, the employee shall be given an oppor·
tunity to lead, defence in his evidence and in a gil'en case, the ent1uiry ollicer F
does not give that opportunity inspite of the delin<Juent officer/employee·
asking for it. The prejudice is self-evident. No proof of prejudice as such
need be called for in such a case. Thus, the test is one of prejudice, i.e.,
whether the person has received a fair hearing considering all things. The
very aspect can also be looked at from the point of view of directory and
mandatory provisions, if one is so inclined.' 111e principle stated herein.. G
below is only another way of looking at the same aspect as :is dealt with
herein and not a dilTerent or distinct principle. [1004-E-11; 1005-A-C]
4.4. In the case of a procedural provision which is not of a mandatory
character, the complaint of violation has to be examined from the H •
978
SUPREME COURT REPORTS
(1996] 3 S.C.R.
A
standpoint of Substantial compliance. Be that as it n1ay, the order passed in
violation of such a provision ran he set aside only where such violation has
occasioned pr~judice to the delim1uent employee. [HIOS-C-D]
B
4.5. In the case of violation of a procedural provision, which is of a
nulndator}' rharacter, it has to be ascertained n·hether the provision is
conceived in the interest of the person proceeded against or in puhli_c
interest. If it in found to be the forn1er, then it rnuSt be seen \\'bet.her the
delinquent otlicer has waived the said requiren1ent, either explicitly or by
his conduct. If he is found to have waived it, then the order of punishment
cannot be set aside on the ground of said violation. If, on tl~e other hand, it
C is found that the delin.<1uent ollicer/employee has not or that the provision
could not be waived by him, then the Court or Tribunal should. make
appropriate directions (including the setting aside of the order of punishment). The ultin1ate test is al\\-ays the same, viz., test of prejudice. or the test
of fair hearing, as the case may he. [1005-D-F]
D
Managing Direct01; E.C.J.L. v. B. Kmunakm; [1993] 4 S.C.C. 727,
E
followed.
4.6. Where the en.11uiry is nut governed by any rules/regulations/statutory Jlrovisions and the only obligation is to observe the principles of natural justice - or, for that 1natter, \Vherever such principles are
held to be implied by the very nature and impact of the order/action- the
Court or the Tribunal should 1nake a distinction between a 'total.violation of
natural justice (rule of Audi alteran1 pa1ten1) and violation of a facet of the
said rule. A distinction must he made between "no opportunity" and "no
ade<1uate opportunity", i.t'., between -"no notice"/"no hearing
11 and "no f3ir
F. hearing:". (a) In the case of for1nt'r, the order passed \\'ould undoubtt>dly be
invalid (one n1ay call it '\oid" or a nullity if one chooses to.) In such cases,
11orn1ally, liberty \\'ill' be reserved for the authority to take proceedings,
afresh according to law, i.e., in acc,~rdance with the said rule (audi altera111
pt11ten1). (h) But in the_ latter case, the efl'ect of violation (of a facet of the rule
G of audi altercnn pa1te111) has to be exa1nined front the standpoint of
prejudice; it is to he seen hy the Court or Tribunal whether in the totality of
the circu1nstanccs. the delinquent oflicer/entployee did or did not have a fair
hearing and the order to be made shall depend upon tl1e answer to the said
query. [1005-G-H; 11106'.A-B]
H
4.7. While applying the rule of audi a/ceram pwtem (the primary
}
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.'.>,·
.STATE BANK OF PATIAI::Av. S.K.'SHARMA
919
pti1idple of natllral justice) 'ther1iurt/Tribunal/Aiithority must al,_;ays A
bear··in n1ind the· ultiniitte- and uver-riding·Ohjective·undei-Iying tlie~said
rule, viz., to ensure a fair he·aring aild to.ensure· ihat'thefe is r'lfJ failure of
justice. It is this objeciive·which sh1iuld ·guide ihein ili applying the rule to
varying situations that arise before them. [1006-D-E]
. "
.
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4.8. There may be situations where the interests of State or public' B'
interest may call for curtailing of the rule of audi alteram pmtem. In such
situations, the Court may have to balance pubik!Si~tt inierest »vith the
. requirement ·of natura_I justice. an'd ~i'r~ivC ~at an ·ap'propi-iat: de~isiono
• -
, · [1006-E-F]
4.9. The principles stated above are .by no means intended to be C
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~xhaustive and are ··evolved keeping in view· the Context Of diSciplinary
enquiries and orders of punishm~nt .imposed by an employer upon the
employee, (1004-B]
~I
• > .
• .
State of Uttar Pradesh.v. Mohd. Noah, [1958] S.C.R. 595; G.B. Gautam
v. Union of India & Ors., [1993] 1 S.C.C. 78; Sunil Kumar Bane1jee v. State D
of West Bengal & Ors., '[1980] 3 S.C.R; 179, Chintapalli Agency TA.S.CS.
Limited v. Secretary (F&A) Govemm?nt .of Andhra Pradesh, ·AIR (1977) SC'
2313 and S.L. Kapoor, v. Jagmohai1, •[1981] l S.C.R. 746, followed.
A.K. Roy v. Union of India, [1982] 1 S.C.C. 271; Swadeshi Cotton Mills E
v .. Unioi1 of India, [1981l 1S.C.C.664;A.K. Kraipak & Ors. v. Union oj India
& Ors., [1969] 2 S.C.C. 262; Liberty Oil Mills v. Union of India,_ [1984] 3
S.C.C. 465; KL T1ipathi v. State Bank of India & Ors., [1984] 1 S.C.C. 43;
Hiranath Misra v. Rajendra Medical College, [1973] 1 S.C.C.'805; Janakinath
S.arangi v. State o[Olissa, [1969] 3. S.C.C. 392; Ridge,v, Baldi<'in, (1964) A.C.
40; M. Vasudevan Pitiai v: City Co;mcii of Singapore, [1968]1 W.L.R. 1278; F'
.
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• J
Calvin v. Can;, (1980) A.C. 574;AI Mehdawi v. Secretmy of State for the Home
Department, (1990) 1 A.C. 876; Malloch v. Aberdeen Coporation,, (1971) 2
All. E.'R-.1278; R.. v: Secreiary of State for Transp01t ex pa1te Gwent County
Council, .(1987) 1 All KR. 161; Bush~//. v. Seoetmy of Statefor Environmen~
(1981) A.C. 75 and CCS.U. y. Ministcrforthe Civil Se1vice, (1985) A.C. 374, G
referred to/Wade on Administrative Law (Seventh Edition) P. S15, referred
fo.
Unim,.iJf India v. Mohd. Ramzan Khan, [1991]1S.C.C.588;'State of
Bo'!ibay v: Nam/ Latif Khan, [1965] 3 S.C.R. 135; State of Utta~· Pradesh &
, Anr. _v .. S1i GS. Slup111a, (1967) J S.C.R. 848;-.Unioii of India .v. T.R:· Vm1na, H
980
SUPREME COURT REPORTS
[1996] 3 S.C.R.
A
(1958] S.C.R. 499; State of 01issa v. Dr. Binapani Devi, [1967) 2 S.C.R. 625;
R. v.Beare, [1988] 2 S.C.R. 387, Grewal v. Canada, (1992] 1 Canada Federal
Court Reports 581 and Maradana Mosq11e Tntstees v. Mahm11d, (1967) 1
A.C.13 and Wooq v. Woad, (1874) LR 9 Ex. 190, cited.
B
c
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5129 of
1996 ..
From the Judgment and Order dated 23.5.95 of the Punjab &
Haryana High Court in R.S.A. No. 2529 of 1994.
S.P. Goyal and.Ms. Arnita Gupta for the Appellants.,
O.P. Rana and R.C. Gubrele for the Respondents.
The Judgment of the Court was delivered by
B.P. JEEVAN REDDY, J. Leave granted. Heard counsel for the
D parties.
E
F
G
H
(
This appeal preferred against the judgment and decree of the Punjab
and Haryana High Court dismissing the second appeal filed by the appellant raises certain basic question concerning natural justice in the context
of disciplinary proceedings.
A disciplinary enquiry was held against the respondent in respect of
two charges. They are :
"Charge No. 1
'That he did not deposit the sum of Rs. 10,000 handed over to him
by Sh. Balwant Singh in December 1985, in the crop loan account
of Sh. Jarnail Singh S/o. Sh. Lahra Singh. Later on the entire
amount of R. 11,517-50 outstanding in the account was deposited
by someone on the 22nd March 1986 under the signature of Sh.
Balwant Singh. He thus utilised the amount of Rs. 10,000 for
approximately 3 months for his own advantage.'
Charge No. II
'That he, in contravention of Regulation 50( 4) of the State Bank
of Patiala (Officers') Service Regulations 1979, issued an undated
letter in his own handwriting addressed to the Tehsildar, Bhatinda
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... STATE BANKOFPATIALAv. S.K. SHARMA [JEEVAN REDDY,J.] 981
for revocation ofMutatiof}-(lnthc Jand'inortgaged to the Bank even A
when the crop Joan account of Shri Jarnail Singh was not adjusted.
He thus jeopardised the interests of the Bank'."
Al the relevant time, the respondent was working as the Manager of
Kot Falla branch of the appellant-Bank. The charge against the respon-
.dent, in short, is one of temporary misappropriation. One Jarnail Singh had
taken a loan of Rupees ten thousand from the Bank. After .Tamai! ·Singh's
death, his son, Balwant Singh' came and handed over a. sum of Rupees ten
thousand to the respondent in December, 1985 ;in disc.harge of the said
loan. In February, 1986, the respondent was transferre.d to another liran'ch.
In Mar~h, Balwant Singh went to the Bank. and discover6d that· the amount
paid by him to the respondent was not credited t~ his/his fpther's account.
Soon thereafter, a sum of Rs. ll,517.50p was deposited in the Bank in the
name of Balwant Singh. The appellant-Bank's case .is that having received
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the amount from Balwant Singh in December, 1985, the respondent did not
credit the said amount into the Bank account until March, 1986, though tie
issued a, Jetter addressed to TehsiJdar; Bhatinda in December, 1985 itself. D
to the effect that since the crop Joan amount has been adjusted; the entry
tegar,ding mortgage of land of J atnail Singh in favour of tlie 'Bank be
revoked.
'"
·Before ordering a regular oral enquiry, the Bank had directed Sri
K.J Wadhan and Sri P.N. Garg to conduct a preliminary enquiry:'The said E
officers examined witnesses including Balwant Singh and the Patwari of the
village, Sri Kaur Singh, and also gathered necessary documentary evidence ..
• It is on. the basis of the material so_ gathered and the preliminary report
they submitted that the regular oral enquiry was ordered. In the enquiry,
',\
six \vitnesscs'(PWs. l to 6) were examined on behalf of the Bank and three F
,.
witnesses (DWs. 1 to 3) on behalf of the respondent. The Bank examined
Sri K.J. Wadhan and Sri P.N. Garg who had conducted the preliminary
enquiry .and recorded the statements of Balwant Singh among others. The
Patwari, Kaur Singh, was examined as PW-5. The other t'1.ree witnesses,
PWs.3, 4 and 6 are the employees of the Bank who spoke to ihe various
. aspects of the Bank's case, BaJwant Singh who ·was the complainant did G
not appear as a witness at the regular enquiry·inspite of severai 'attempis
made to procure his presence, though his statement had been recorded
~uriiig the preliminary enquiry.
.
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'
At the conclusion of the enquiry , a report was submitted by the H
982
SUPREME COURT REPORTS
[1996] 3 S.C.R.
A enquiry officer holding both the charges established. The competent
authority accepted the report and ordered. the removal of the respondent
from the service. Ari appeal and a review submitted by the respondent were
dismissed. The respondent thereupon instituted a suit in the court of
learned Sub-Judge, Jlnd Class, Bhatinda for a declaration that the order
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of removal is void and illegal and for a declaration that he continues to be
in service with all consequential benefits. The Trial Court rejected all the
grounds urged by the respondent in support of his case except one, viz.,
that "the list of witnesses and list of documents were not supplied along
with charge-sheet and then the same were not supplied by the presenting
officer during the course of enquiry". On the only ground that "this argument of the learned counsel for the plaintiff was not meted out by the
learned counsel for the· defendants in his written arguments", the Trial
Court held the allegation established. It found that the said failure to
supply is violative· of Regulation 68(x)(b)(iii) of the State Bank of Patiala
(Officers') Service Regulations, 1979 and on that basis, decreed the suit.
D On appeal, the judgment and the decree of the Trial Court was affirmed.
The Appellate Court found the following facts: during the ·course of
enquiry, the presenting officer filed a provisional list of documents/witnesses (P-2) on June 2, 1987. The list contained nine documents including
the statements of Kaur Singh, Patwari, and Balwant Singh, complainant.
E
The said documents were marked as P-3 to P-11. Though a copy of the list
of documents/statements was supplied to the respondent-plaintiff, copies
of the documents P-3 to P-11 were not supplied to him. He was, however,
advised to peruse, examine and take notes of the said documents/statements. This opportunity was given only half an hour before the commencement of the enquiry proceedings. The Appellate Court found that in the
F
above circu1nstancc\ there was a clear violation of Rcgulcttion 68 \vhich
has prejudicially affected the respondent'• defence. The second appeal
filed by the Bank was dismissed by a learned single Judge of the High
Court affirming the said finding. The learned .Judge in fact assigned one
more ground in support of the respondent's case, viz., that inasmuch as
Bahvant Singh was not examined, it is a case of 'no evidence'. Before
G entering upon the discussion of issues arising herein, it is well to reiterate
the well-accepted proposition that the scope of judicial review in these
matters is the same whether it is a writ petition filed under Article 226 of
the Constitution of India or a suit filed in the civil court.
H
To clear the ground for considering the main question arising herein,
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STATE BANKOFPATIALAr. S.K. SHARMA [JEEVAN REDDY,J.] 983
\•<
we may first dispose of the additional :ground assigned by the High Court. A
Because Balwant ·Singh, the <;omplairlcint., \Vas not exaniine<l, it cannot be
said to be a case of n6 evidence. As stated above, as many as six witnesses
were examined including two officers of the Bank who conducted the
preliminary enquiry and had recorded the statements of witnesses including Balwanl Singh. They spoke lo the preliminary enquiry conducted by B
them and the statement of Balwanl Singh recorded by them. Other Bank
officials were examined to cstabli.sh th.at the letter Exh. P-6 addressed to.
the Tehsildar, Bhatindawas in fact written by and bears the signature of
the respondent. Kaur Singh, Pat{vari, was a]so exam:incd. It 'is on the basis
of this evidence ihat the enquiry officer ·had come lo the conclusion that
both the charges were established inspile of non-examination of Balwant C
Singh. Neither the Trial Court nor the first Appellate Court .have found
that it i_s a ca~e of no evidence . The additional. ground assigned by the
High C<;>urt is, therefore, unsustainable in law.
Now, coming to the m'ain ground ~pon which. the plaintiffs case has D
been decreed, viz., the non-furnishing of the copies of the_ statements of
witnesses and documents, the factual position as found by the Appellate
Court is- to the follo~ing effect: though a list of documents/witnesses was
furnished to the ·respon.dent before. the .commencement of the enquiry, the
copies of the documents and statementi;;, recorded during the preliminary
enquiry were not supplied to the respondent. Half an. hour before the E
com_mencement of the enquiry proceedings, the respondent \Va~.advised to
-peruse the said.documents and the· statements of witnesses which he <lid.
Balwanl-Singh was not examined at the regular enquiry. The other witness
v.,rho was examined d4ring. the prelimin~ry enquiry, Kaur Singh,_ Patwari 1
was examined at the reguJ;.jr enqt.Jiry. The question is wh('.ther_ on-:thc above . F
facts, it can be held. that. there is a violation of Regulation 68 and whether
the violation, if any, vitiates the en'quiry. Regulation 68, insofar as 1s
relevant .reads thus ::
"(a) The inquiring authority shall where the officer docs not admit
all or any of the articles of charge furnish to such officer a list of G
• documents by which and a. list of witnesses by whom, the articles
of charge are· proposed to be proved ..
(b) The inquiring authority· shall also record an order. that the
officer may for the purpose of preparing his defence :
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SUPREME C"URT REPORTS
[1996] 3 S.C.R .
•
(i)
Inspect and take note> of the documents listed within five days
of the order or within such further time not exceeding five
days as the inquiring authority may allow:
(ii) submit a list of documents and witnesses that he wants for
enqrnry.
(iii) be supplied with copies of statements of wit11esses, if any,
recorded earlier and the Inquiring Authority shall furnish
such. copies not later than three days before the commenceme11t
of the examination of the wit11esses by the !11qui1i11g Auth01ity.
(Emphasis added)
(iv) gave a notice within ten days of the order or within such
further time not exceeding ten days as the inquiring authority
may allow for the discovery of production of the documents
referred to at (ii) above."
(Taken from the Judgment of the Appellate Court)
It is sub-clause (iii) which is said to have been violated in this case,
The sub-clause provides that copies of the statements of witnesses, if any,
recorded earlier shall be furnished to the delinquent officer "not later three
days before the commencement of the examination of witnesses by the
Inquiring Authmity." From the appellate Court judgment, it appears that
on June 2, 1987, the respondent was given an opportunity of perusing and
taking notes from the said documents and statements of witnesses and that
the enquiry also commenced on that day. It, however, appears from a copy
of the enquiry report that the six witnesses for the Bank were examined on
the following dates: $/Sri K. S. Wadhan and P.N. Garg (PWs.1 and 2) on
July 6, 1987, S/Sri Mangat Rai Verma, Prakash Singh and Kaur Singh
(PWs. 3, 4 and 5) on July 7, 1987 and Sri Ashwini Kumar (PW-6) on July
27, 1987. The three defence witnesses were also examined on July 27, 1987.
G It is thus evident that though copies of the statements of Kaur Singh and
Balwant Singh were not supplied to the respondent, he was permitted to
peruse the same more than three days prior to the examination of witnesses. It is necessary to emphasise that sub-clause (iii) aforesaid only
speaks of copies of statements of witnesses recorded earlier and does not
H refer to documents. So far as the documents are concerned, the only right
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''' STATE BANK OF PATIALAv. Sf. SHARMA[JEEVAN REDDY, J.] 985
/
•
given to the delinquent officer by Rtgulation 68 is to inspect and take notes A
and, that has been_ done: Coming back to the statements of witnesses,
· Balwant Singh was not examined at the oral enquiry at all as stated above.
·Only Kaur.Singh,,,Patwari, was examined. The issue boils down to this:
whether the failure.to literally comply with s_ub-clause (iii) of clause (b) of
regulation 68(ii) (x) vitiates the enquiry altogether or whether it can be held B
in the circumstances that there has been a substantial compliance with the
said sub- clause and that.on-that account, the enquiry and the punishment
awarded cannot be said to have been vitiated.
!'I
Su_b-clause (iii) aforesaid is indisputably part of a regulation made in .
exercise of statutory authority. The sub-clause 'incorporates a facet of the C
principle ofnatural justice. It is designed to· provide an adequate opportunity to the delinquenf officeno cross-examine the witnesses effectively
and theteby'defend himself properly: It is.relevant to note in this behalf
that neither the enquiry officer's report nor the judgment of the Trial
Court, Appellate Court or High Court say that the respondent had D
_protested at the relevant. time that he was denied of an adequate opportunity· to cross-examine the witnesses effectively or to defend himself
·properly on account of non,supply of the statements of witnesses. The
Appellate Court, on the contrary, has recorded that when. he was advised
to ·peruse, examine and take ·notes from the, documents including the
statements of witnesses (Kaur Singh and Balwant Singh), the only objection E
raised by the respondent. was that "the documents marked Exh. P-6, P-10
and P-11 were only photostat copies and not originals and should not be
considered or marked exhibits". (Exhs. P-6, P-10 and P-11 are documents
other than the statements- of witnesses, i.e., of Kaur Singh and Balwant
Singh) Moreover, as pointed.out above, the exa1nination of witnesses began F
long after- the expiry of three days from the day on which .the respondent
was advised to and he did peruse the documents and statements of witnesses. In the ·circumstances, it is possible to say that.there has been a
substantial c(;ifipji;;Ilce' with the aforesaid sub-clause (iii) in the facts and
t;:ircumstances ·of this case, though not a. full compliance. This, in tuin,
raises the questio~ whether.each _and every violation of rules or regulations G
governing the enquiry automatically vitiates the. enquiry and the punishment awarded or whether the test of substantial compliance can be invoked
i.n case$ Qf such violation and whether- the issue has to be,examined frOm
the point of view of prejudice. So far as t_he position obtaini~g ·under the
!:ode .of Civil Procedure and· code of Criminal Procedure is· concerned, H
986
SUPREME COURT REPORTS
IJ996]3 S.C.R.
A
there arc specific provisions thereunder providing for such situation. There
is Section 99 Df the Code of Civil Procedure an<l Chapter 35 of the Code
of Criminal Procedure. Section 99 C.P.C. says, "no decree shall he reversed
or substantially varied nor shall any
case be remanded in appeal on
account of any misjoinder or non·joinder of parties or causes of action or
B any e11"01; deject oi· iJTegulmity in any proceedings in the suit, not affecting the
meiits of the case or the jwisdiction of Cowt." Section 465(1) of the Criminal
Procedure Code, which occurs in Chapter 35 similarly provides that "subject to the provisions hereinbeforc contained, no finding, sentence or order
passed by a court of competent jurisdiction shall be reversed or altered by
a court of appcat confirmation or revision on account of any
error,
C omission or irregularity in the con1plaint, summons, warrant, proclamation,
order, judgment or other proceedings before or during t1ial or in any enquily
or other proceeding under this Code or any error or irregularity in any
sanction for the prosecution unless in the opinion of that court a failure of
justice has in fact been occasioned thereby.
11
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It is not brought to our notice that the State Bank of Patiala
(Officers') Service Regulation contains provision corresponding to Section
99 C.P.C. or Section 465 Cr. P.C. Does it mean that any and every violation
of the regulations renders the enquiry and the punishment void or whether
the principle underlying Section 99 C.P.C. and Section 465 Cr. P.C. is
applicable in the case of disciplinary proceedings as well. In our opinion,
the test in such cases should be one of prejudice, as would be later
explained in this judgment. But this statement is subject to a rider. The
regulations may contain certain substantive provisions, e.g., \Vho is the
authority con1petent to impose a particular punishment on a particular
cmploycc/officcr. Such provisions must he strictly complied with. But there
may be any number of procedural provisions which stand on a different
footing. We must hasten to add that even among procedural provisions,
there may be some provisions which are of a fundamental nature in the
case of which the theory of substantial compliance may not be applicable.
For example, take a case where a rule expressly provides that the delinquent officer/employee shall be given an opportunity to produce
evidence/material in support of his case after. the close of evidence of the
other side. If no such opportunity is given al all inspite of a request
therefor, it will be difficult lo say that the enquiry is not vitiated. But in
respect of many procedural provisions, it would be possible to apply the
theory of substantial compliance or the test of prejudice, as the case may
"'
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I STATE BANK OF PATIALAv. S.K. SHARMA [JEEVAN REDDY,J.] 987
be. The position tan be stated in the following words: (1) Regulations ·A
which are of a.substantive natuic have to be complied with and in case of
such provisions, .the theory of substantial compliance would not be available: (2) Even among .procedural provisions, there may.be some provisions
of a fundamental nature which have to be complied with and in whose case,
the theory of substantial compliance may not be available. (3) In respect B
of procedural.provisions other than of a .fun·damcntal nature, the theory
of substantial compliance would be available:· In such cases, complaint/objection on this scope have to be judged on the touch-stone of prejudice, as
explained later in this judgment. In otherwords; the test is: all things taken
together whether the delinquent officer/employee had or did not have a fair
.hearing. We may clarify that which provision falls in which of the aforesaid C
categories is a. matter to be derided ·in each. case having· regard to the
nature and ·character of the relevant provision::
. It would be appropriate to pause h,ere and clarify a douqt which one
may.entertain with respect to the principles aforestated. The several procedural provisions governing the disciplinary enquiries (whether provided D
by rules made under the proviso to Article 309 of the Constitution, under
~
· regulations made by statutory bodies in exercise of the power conferred by
•-i
a statute or for that matter, by way of a.statute) are nothing but elaboration
. of the.principles of natural justic<;: and their.severnl facets. It is a case "o.f,
codifition;of ihe several facets of -rul<; •of ·Olldi .alteram palte'!' ·Or the xule .E
agairist bias .. On~ may ·ask, i~ ,a -decision arrived, at in ".iolatign of principles
:~X t;t'!l.t1;1.ral. justic~ "is voiq,. how come a decision arrived at in violation .. of
rules/regulations/statutory provisions incorporating the said rules can :be
said .to be not void in certain situat~ons. ·It is.this, do~bt .which· .needs a
_.. >!
clarification·- which.in turn calls)'.or a disc~s?ion of the question Whether
.p
~ de,cision arr~vcd at in v~olation of a~y and. cVe:ry facet of principles of
natural justice is void ..
The first decision on -·this aspect is that of the House of Lords in
Ridg~ ~.:Baldw(i1, (1964j P.:c. 40 and tl]e.oft-'quoted words are that of Lord
Reid,.to wit: . : ·
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