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1995 INSC 38
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  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Neutral Citations
1995 INSC 38
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The opinion concerns multiple civil appeals arising from special leave petitions, with the primary factual discussion focused on Civil Appeal No. 1088 of 1995 (arising out of SLP (C) No. 9649 of 1993). The respondent, Jagdish Chander, was appointed as a constable on 30-10-1985. He was absent from duty from 20-4-1992 to 15-5-1992. By proceedings dated 1-6-1992 (effective 1-6-1992 A.N.), he was discharged from service under Rule 12.21 of the Punjab Police Rules by the Superintendent of Police.

He challenged the discharge in CWP No. 12183 of 1992. The High Court, by order dated 14-1-1993, allowed the writ petition, set aside the discharge, and directed reinstatement with continuity of service and consequential benefits. The State/appellant appealed by special leave to the Supreme Court.

The opinion also briefly addresses Civil Appeal No. 1089 of 1995 (involving respondent Nathu Ram, who had already been taken into service pursuant to Tribunal directions) and Civil Appeal No. 1090 of 1995 (where the discharge was described as innocuous but based on record).

Legal Issues Presented

  1. Whether a discharge order purportedly passed under Rule 12.21 of the Punjab Police Rules is vitiated for non-compliance with principles of natural justice when it contains stigmatic findings (e.g., “habitual absentee”, “negligent”, “undisciplined”).
  2. Whether the High Court was justified in directing reinstatement with continuity of service and consequential benefits after setting aside such a discharge order, or whether the proper course is to allow the employer to hold an enquiry and then mould relief based on the outcome.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Managing Director, ECIL v. B. Karunakar (1993) 4 SCC 727, (1993) 25 ATC 704 When procedural unfairness affects disciplinary/termination action, the appropriate course is to give the employee an opportunity and, if an enquiry is intended, to conduct it; relief should be moulded based on the result. The Court held that even though the discharge order was vitiated for lack of opportunity (given its stigmatic findings), the High Court should not have ordered reinstatement with consequential benefits straightaway; instead, the State should be allowed to proceed by giving opportunity/holding enquiry and then pass appropriate orders, with relief dependent on the outcome.

Court's Reasoning and Analysis

The Court reproduced Rule 12.21 of the Punjab Police Rules, which permits the Superintendent of Police to discharge a constable within three years of enrolment if found unlikely to prove an efficient police officer, and provides that there shall be no appeal against such discharge. The Court explained that the Rule contemplates observation of conduct during this initial period and allows discharge simpliciter if the Superintendent of Police concludes (on an objective consideration of “anterior record”) that the officer is unlikely to prove efficient.

However, the Court distinguished between a discharge simpliciter and a discharge containing adverse findings that stigmatize the officer. It noted that if the Superintendent of Police records findings that would be a “stigma on the career” of the officer and could adversely affect future employment, then “it is settled law” that principles of natural justice require giving the officer an opportunity before such adverse findings are recorded.

Applying that principle, the Court examined the discharge order, which stated that the respondent was being discharged “as he is unlikely to prove an efficient police officer because he is a habitual absentee, negligent to his duty and undisciplined.” The Court held this was not a discharge simpliciter; the characterizations of habitual absence and indiscipline necessarily cast a stigma and could impede future employment. Therefore, the respondent should have been given an opportunity to explain the grounds on which the Superintendent proposed to discharge him, and the Superintendent should have considered the explanation before passing orders. Since this procedure was not followed, the discharge was held vitiated by “manifest error of law.”

Separately, the Court held that the High Court erred in directing reinstatement with consequential benefits as an immediate consequence of setting aside the discharge. Relying on Managing Director, ECIL v. B. Karunakar, the Court stated that the appropriate course is to permit the State to direct an enquiry (if it intends to hold one) and provide the officer an opportunity to defend, and thereafter pass appropriate orders. The Court stated that reliefs should be moulded depending on the enquiry result.

For Civil Appeal No. 1089 of 1995, the Court recorded that respondent Nathu Ram had already been taken into service pursuant to Tribunal directions and was continuing; it directed that he would continue in service until appropriate orders are passed. For Civil Appeal No. 1090 of 1995, the Court dismissed the appeal, stating that the discharge was “innocuous but based on record.”

Holding and Implications

Civil Appeal No. 1088 of 1995: ALLOWED. The High Court’s order directing reinstatement with consequential benefits was set aside. The appellant-State was permitted (if so advised) to issue a show-cause opportunity, consider objections, and pass appropriate orders within two months of receipt of the Supreme Court’s order. No costs were awarded.

Civil Appeal No. 1089 of 1995: ALLOWED. Since respondent Nathu Ram had already been taken into service and was continuing, he was directed to continue in service until appropriate orders are passed. No further implications are stated in the opinion.

Civil Appeal No. 1090 of 1995: DISMISSED. The Court dismissed the appeal because the discharge was “innocuous but based on record.” No costs were awarded.

The direct implication is that a stigmatic discharge under Rule 12.21 requires compliance with natural justice (opportunity to respond), and where such compliance is absent the discharge cannot stand; however, the remedy is not automatic reinstatement with full consequential benefits, and the employer may be allowed to proceed by granting opportunity/holding enquiry and then passing orders, with relief dependent on the outcome. The opinion does not indicate that any new precedent beyond applying existing law was established.

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    State Of Haryana And Another v. Jagdish Chander .

    Order

    1. Leave granted.

    2. For the disposal of the point in controversy the facts in CA No. 1088 of 1995 @ SLP (C) No. 9649 of 1993 lie in a short compass are as under.

    3. The respondent, Jagdish Chander, was appointed as a constable on 30-10-1985. Since he was absent from duty from 20-4-1992 to 15-5-1992, by proceedings dated 1-1-1992, he was discharged from service as a constable, exercising the power under Rule 12.21 of the Punjab Police Rules, (for short “the Rules”). The respondent impugned its validity in CWP No. 12183 of 1992. The High Court by its order dated 14-1-1993 allowed the writ petition, set aside the order and directed the appellant to reinstate the respondent with continuity of the service and consequential benefits. Thus, this appeal by special leave.

    4. Rule 12.21 reads thus:

    “A constable who is found unlikely to prove an efficient police officer may be discharged by the Superintendent of Police at any time within three years of enrolment. There shall be no appeal against an order of discharge under this rule.”

    A reading of this rule would indicate that the Superintendent of Police, before expiry of three years from the date of enrolment of the police officer into the service, has been obviously given power to observe the conduct and discharge the police officer from service, to find whether he was efficient in the discharge of duties and maintains the discipline and conduct expected of him as a disciplined police officer. During that period if the SP finds that he is unlikely to prove an efficient police officer, exercising the power under the rule, he may discharge simpliciter the police officer from service. For recording the finding that the officer is unlikely to prove an efficient police officer, there must be anterior record and the Superintendent of Police must objectively consider that record and record the conclusion in that behalf. But if he records a finding, after considering the record, which would be a stigma on the career of the discharged police officer, it is settled law that the principles of natural justice require that an opportunity be given to him before recording any finding adverse to the officer's conduct which disentitles the officer for any future employment or would be a blot on his career. The order of discharge reads thus:

    “Constable Jagdish Chander No. 3/460 is hereby discharged under PR 12.21 with immediate effect i.e 1-6-1992 A.N as he is unlikely to prove an efficient police officer because he is a habitual absentee, negligent to his duty and undisciplined.”

    5. It would thus be clear from the order of discharge that it is not an order of discharge simpliciter. On the other hand, the SP considered the record and found him to be a habitual absentee, negligent to his duty and undisciplined. The findings of habitual absence and indiscipline necessarily cast a stigma on his career and they would be an impediment for any future employment elsewhere. Under those circumstances, the principles of natural justice do require that he should be given an opportunity to explain the grounds on which the SP proposes to pass an order of discharge and then to consider the explanation submitted by the police officer. Then the SP is competent to pass appropriate orders according to the rules. Since this part of the procedure had not been adopted, the order of discharge is vitiated by manifest error of law.

    6. However, the High Court was not justified in straightaway setting aside the order and directing reinstatement with consequential benefits. In view of the judgment of this Court by a Constitution Bench in Managing Director, ECIL v. B. Karunakar (1993) 4 SCC 727, (1993) 25 ATC 704 the appropriate course for the State would be to direct an enquiry if they intend to hold one and to give an opportunity to the officer concerned to defend himself and then pass appropriate orders. On the basis of the result of the enquiry necessary reliefs need to be moulded.

    7. In this view, the order of the High Court is set aside. It would be open to the appellant, if so advised, to give an opportunity to show cause to the respondents; consider their objections and pass appropriate orders within a period of two months from the date of the receipt of the order.

    8. The Civil Appeal No. 1088 of 1995 (arising out of SLP No. 9649 of 1993) is accordingly allowed but, in the circumstances, without costs.

    9. In Civil Appeal No. 1089 of 1995 [arising out of SLP (C) No. 14881 of 1993] pursuant to the directions issued by the Tribunal since respondent-Nathu Ram has already been taken into service and he is continuing, he would continue in service till appropriate orders are passed. The appeal is allowed.

    CA No. 1090 of 1995 [arising out of SLP (C) No. 17909 of 1993]

    10. Leave granted.

    11. In view of the above law, the appeal is dismissed since the discharge is innocuous but based on record. No costs.

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    Comments

    State Of Haryana And Another v. Jagdish Chander .
    (Jan 13, 1995)