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  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Citation Codes
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Disposition
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  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The first respondent, appointed as a Cooperative Supervisor in 1961, was serving as Seed Store In-charge-cum-Secretary of Sahkari Sangh, Raniwan, in August 1976. After his transfer to Gonda on 19-8-1976, he failed to hand over charge, allegedly removed the society’s records, and absconded. An October 1976 inspection uncovered irregularities and alleged misappropriation, leading to an FIR for criminal breach of trust in November 1976. He was suspended on 13-12-1976 and served with a charge-sheet that, according to the appellant, could not be delivered because he avoided service and refused to cooperate with the inquiry. On 20-4-1978 the Deputy Registrar dismissed him from service.

The respondent’s departmental appeal was dismissed on merits, but while it was pending he instituted Writ Petition No. 2990 of 1979 in the Allahabad High Court (Lucknow Bench). On 15-1-1992 the writ petition was allowed solely because the Inquiry Officer’s report had not been furnished to him, relying on Union of India v. Mohd. Ramzan Khan. The Supreme Court set aside that order and remitted the matter for fresh consideration. On 7-12-1993 the High Court again allowed the writ petition, this time holding that the Inquiry Officer ought to have conducted a full oral inquiry with witness testimony even in the respondent’s absence. The present appeal challenges that second High Court judgment.

Legal Issues Presented

  1. Whether, in the face of the respondent’s alleged non-cooperation, Regulation 68 of the Cooperative Federal Authority (Business) Regulations, 1976 required the Inquiry Officer to record witness statements and conduct a full oral inquiry before recommending dismissal.
  2. Whether the High Court erred in setting aside the dismissal without first determining the factual dispute over the respondent’s alleged refusal to participate in the disciplinary proceedings.

Arguments of the Parties

Appellant's Arguments

  • The respondent adopted “total non-cooperation,” ignored repeated opportunities to participate, and never filed a reply to the charge-sheet.
  • Under Regulation 68, when a delinquent employee neither replies to the charge-sheet nor appears, an oral inquiry with recorded evidence is not obligatory.
  • The High Court overlooked the detailed chronology of opportunities granted, set out in the appellant’s counter-affidavit, and allowed the writ petition on an untenable ground.

First Respondent's Arguments

  • The respondent did not refuse to reply; he was prevented from doing so because the authorities denied him inspection of relevant documents.
  • The allegation of non-cooperation is unfounded given the denial of access to records.
  • More than sixteen years have elapsed since the initiation of proceedings, and the prolonged pendency should weigh against further continuation.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Union of India v. Mohd. Ramzan Khan (1991) 1 SCC 588; 1991 16 ATC 505 The delinquent must be supplied a copy of the Inquiry Officer’s report before an order of punishment is passed. Formed the sole basis of the High Court’s first judgment (15-1-1992) that was later set aside; mentioned only as background in the present decision.

Court's Reasoning and Analysis

The Supreme Court noted that the charges against the respondent were “very serious” and was unwilling to terminate proceedings merely because sixteen years had elapsed, especially when the appellant alone could not be blamed for delay. The Court found that:

  • The High Court had not examined, let alone decided, the appellant’s factual assertion that the respondent repeatedly failed to cooperate despite multiple opportunities.
  • An oral inquiry may not be obligatory if Regulation 68 dispenses with that requirement when the delinquent remains silent or absent; the High Court assumed otherwise without analysing the regulation.
  • Resolving the dispute required factual determination—specifically, whether the respondent’s non-participation was wilful or the result of denial of documents—and interpretative analysis of Regulation 68. The High Court had undertaken neither.

Consequently, the Court concluded that the High Court’s judgment could not stand because it rested on an assumption about the necessity of an oral inquiry without addressing the contested facts or the regulatory framework.

Holding and Implications

Appeal Allowed; High Court judgment dated 7-12-1993 set aside; matter remitted to the High Court for fresh disposal.

The writ petition must now be reconsidered after examining the disciplinary records, resolving the factual dispute over the respondent’s cooperation, and interpreting Regulation 68. The Court directed an expedited hearing because of the proceeding’s age. No costs were awarded. The decision sets no new precedent but clarifies that appellate courts should not invalidate disciplinary orders without first resolving contested factual and regulatory questions.

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    Deputy Registrar, Cooperative Societies, Faizabad v. Sachindra Nath Pandey And Others

    B.P Jeevan Reddy, J.— Leave granted. Heard counsel for the parties.

    2. This appeal is preferred against the judgment of a learned Single Judge of the Allahabad High Court (Lucknow Bench) allowing the writ petition filed by the first respondent herein.

    3. The first respondent was appointed as a Cooperative Supervisor in 1961. In August 1976, he was working as Seed Store Incharge-cum-Secretary, Sahkari Sangh, Raniwan. On 19-8-1976 he was transferred to Gonda, but he did not hand over the charge. It is alleged that he took the records of the society with him and absconded. On inspection of the Raniwan Seed Store in October 1976, the irregularities and misappropriation allegedly committed by the respondent came to light. An FIR was lodged against the first respondent for criminal breach of trust in November 1976 and on 13-12-1976, the first respondent was placed under suspension pending inquiry into charges against him, and an Inquiry Officer appointed. Memo of charges was issued to the first respondent but the case of the appellant is that it could not be served upon the first respondent because he was avoiding service and did not also cooperate in the conduct of the inquiry. Ultimately the first respondent was dismissed by an order dated 20-4-1978 made by the Deputy Registrar. The respondent filed an appeal but while the appeal was pending he filed a writ petition in the High Court and requested for dismissal of his appeal as withdrawn. The Appellate Authority, however, dismissed the appeal on merits.

    4. On 15-1-1992 the High Court allowed the writ petition (WP No. 2990 of 1979) on the only ground that a copy of the Inquiry Officer's Report was not furnished to the first respondent before dismissing him and that it is a violation of the principle of natural justice. Reliance was placed upon the decision of this Court in Union of India v. Mohd. Ramzan Khan (1991) 1 SCC 588, (1991) 16 ATC 505. On an appeal being preferred by the appellant against that order, this Court set aside the judgment of the High Court and remitted the matter for disposing of the writ petition afresh after considering the other grounds raised by the first respondent. It is then that the impugned order was made on 7-12-1993 allowing the writ petition again. The only ground on which the High Court has allowed the writ petition on this occasion is that the Inquiry Officer ought to have held an inquiry “by recording the statements of witnesses and send his report to the Disciplinary Authority” even if the first respondent failed to cooperate with the Inquiry Officer. Since it was not done, the order of dismissal has been held to be bad.

    5. The learned counsel for the appellant submits that in this case the first respondent adopted a course of total non-cooperation and procrastination and that in spite of repeated opportunities being given he did not respond or participate in the inquiry. The first respondent did not even care to file an explanation or reply to the memo of charges. In the circumstances, the authorities had no option but to hold that the charges are proved. Even after the report of the Inquiry Officer was submitted, a number of opportunities were given which he again failed to avail of. It is submitted that though the whole history of the case has been set out in the counter-affidavit filed in the High Court, the learned Judge did not notice any of those facts and yet allowed the writ petition on an untenable ground. It is further contended that according to Regulation 68 of the Cooperative Federal Authority (Business) Regulations, 1976, it was not obligatory upon the Inquiry Officer to record the evidence of the witnesses where the first respondent did neither submit a reply nor an explanation to the memo of charges. Though he was apprised of the inquiry, he did not care to attend in spite of repeated opportunities. In such a situation, he cannot complain of not recording the evidence of witnesses and other evidence, it is submitted.

    6. On the other hand, Shri Raju Ramachandran, learned counsel for the first respondent submitted that it is not a case where the first respondent refused or failed to submit his reply/explanation to the memo of charges but that he could not do so in view of the refusal of the authorities to grant him inspection of the relevant documents. Learned counsel submitted that the charge of non-cooperation is unsustainable in the facts and circumstances of the case. He also impressed upon us that though the proceedings against the first respondent were initiated as far back as 1978, proceeding in that behalf are still continuing even after the expiry of about 16 years.

    7. On a perusal of charges, we find that the charges are very serious. We are, therefore, not inclined to close the matter only on the ground that about 16 years have elapsed since the date of commencement of disciplinary proceedings, more particularly when the appellant alone cannot be held responsible for this delay. So far as the merits are concerned, we regret to say that the High Court has not dealt with the submissions — and facts in support of the submission of the appellant — that in spite of being given a number of opportunities the first respondent has failed to avail of them. If the appellant's allegations are true then the appellant cannot be faulted for not holding a regular inquiry (recording the evidence of witnesses and so on). The High Court has assumed, even without referring to Regulation 68 aforesaid that holding of an oral inquiry was obligatory. Indeed, one of the questions in the writ petition may be the interpretation of Regulation 68. On facts, the first respondent has his own version. In the circumstances, the writ petition could not have been allowed unless it was held that the appellant's version of events is not true and that the first respondent's version is true. In the circumstances, we have no alternative but to set aside the order under appeal and remit the matter to the High Court once again for disposal of the writ petition afresh in the light of the observations made herein. Since the matter is a very old one it is but appropriate that the matter is dealt with expeditiously. Perhaps, it would be appropriate if the Court looks into the records relating to the disciplinary proceedings also.

    8. The appeal is accordingly allowed with the above directions. No costs.

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    Deputy Registrar, Cooperative Societies, Faizabad v. Sachindra Nath Pandey And Others
    (Feb 21, 1995)