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2007 INSC 78
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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
2007 INSC 78
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The respondent, V. Appala Swamy, served as Principal in several Government Junior Colleges in Andhra Pradesh. On 18 July 1990, departmental charges alleging falsification of records, misappropriation of funds, and negligence were framed against him. An inquiry report was submitted on 8 January 1992, but before disciplinary action could be taken, he retired on 30 June 1992.

By an interim order dated 18 March 1993, the Director of Intermediate Education fixed provisional pension. Thereafter, a show-cause notice proposed withholding 50% of that pension. While the departmental proceedings and a connected recovery action remained pending, the respondent filed OA No. 4866 of 2001 before the Andhra Pradesh Administrative Tribunal. On 17 April 2003, the Tribunal ordered the State to conclude the disciplinary enquiry within three months.

Dissatisfied, the respondent approached the High Court in Writ Petition No. 9412 of 1998 and connected matters. On 28 February 2005, the High Court quashed the disciplinary proceedings and directed full release of pension with 12% interest from 1 July 1992. The State appealed to the Supreme Court.

Legal Issues Presented

  1. Whether the High Court was justified in quashing the pending departmental proceedings and directing release of full pension solely on the ground of delay in their conclusion.
  2. Whether, under Rule 9 of the Andhra Pradesh Civil Services (Classification, Control and Appeal) Rules, 1963, the initiation of a second proceeding after retirement was legally sustainable.

Arguments of the Parties

Appellants (State of Andhra Pradesh)

  • Serious charges involving misappropriation exceeding ₹4.47 lakh warranted completion of the enquiry; mere delay could not vitiate the proceedings.
  • Rule 9 of the 1963 Rules permitted continuation/institution of disciplinary proceedings even after retirement.
  • Precedents such as State of U.P. v. Brahm Datt Sharma and State of U.P. v. Harihar Bhole Nath bar courts from quashing enquiries solely on account of delay.

Respondent (V. Appala Swamy)

  • Relied heavily on M.V. Bijlani v. Union of India to contend that protracted delay (over a decade) prejudiced him and rendered the enquiry unfair.
  • Asserted entitlement to full pension from the date of retirement because the State had failed to act on the inquiry report within a reasonable time.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
State of U.P. v. Brahm Datt Sharma, (1987) 2 SCC 179 Court should not interfere with disciplinary proceedings if they are otherwise maintainable under service rules. Cited to show that continuation of proceedings under Rule 9 is permissible and courts should refrain from quashing them merely because of pendency.
State of U.P. v. Harihar Bhole Nath, (2006) 13 SCC 460 Similar principle reaffirming court’s limited role in halting valid disciplinary enquiries. Relied upon to underscore that tribunal or High Court should not quash proceedings if statutory basis exists.
Secy. to Govt., Prohibition & Excise Deptt. v. L. Srinivasan, (1996) 3 SCC 157 Delay alone is not decisive; employee must show prejudice or that employer condoned misconduct. Formed part of the test applied by Supreme Court: respondent had not demonstrated prejudice before inquiry officer.
P.D. Agrawal v. State Bank of India, (2006) 8 SCC 776 Reiterates need to balance delay with seriousness of charges; delay per se insufficient for quashing. Used to distinguish respondent’s reliance on Bijlani and to reinforce that additional factors must be evaluated.
Registrar, Coop. Societies v. Sachindra Nath Pandey, (1995) 3 SCC 134 Principles governing when disciplinary proceedings may be set aside for delay. Supported the Court’s view that no hard-and-fast rule exists; each case depends on its facts.
M.V. Bijlani v. Union of India, (2006) 5 SCC 88 Illustrates circumstances where extreme delay and lack of material can prejudice employee. Distinguished: Supreme Court held Bijlani turned on peculiar facts and does not create a blanket rule to quash enquiries solely for delay.

Court's Reasoning and Analysis

The Supreme Court noted that although departmental proceedings had been delayed, the High Court failed to examine critical factors:

  • Seriousness and specificity of the charges, including large-scale misappropriation across multiple colleges.
  • Whether Rule 9 of the 1963 Rules authorized continuation of disciplinary action post-retirement. Precedents confirmed such authority.
  • Whether the respondent demonstrated actual prejudice caused by delay, a burden placed on the employee by earlier judgments.

The Court emphasised two governing principles: (i) delay may justify quashing proceedings only if the employer’s conduct implies condonation of misconduct, or (ii) if demonstrable prejudice to the employee exists. The respondent had shown neither. Consequently, the High Court’s decision—anchored solely on delay and pension deprivation—was legally unsustainable.

Holding and Implications

APPEAL ALLOWED; HIGH COURT JUDGMENT SET ASIDE.

The Supreme Court ordered the State to conclude the departmental enquiry within six months of receiving the judgment. Recovery proceedings against the respondent remain stayed until final decision, and he may file additional representations within four weeks. No order as to costs.

Implications: The ruling reaffirms that courts should not quash valid disciplinary proceedings merely due to delay unless prejudice or implied condonation is proven. It underscores the need for fact-specific analysis and preserves the State’s authority to pursue post-retirement misconduct under applicable service rules.

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    Government Of Andhra Pradesh And Others v. V. Appala Swamy .

    S.B Sinha, J.— Leave granted.

    2. This appeal is directed against a judgment and order dated 28-2-2005 passed by a Division Bench of the High Court of Andhra Pradesh at Hyderabad, in Writ Petition No. 9412 of 1998 questioning the correctness of the judgment and order dated 17-4-2003 passed by the Andhra Pradesh Administrative Tribunal in OA No. 4866 of 2001 and CA No. 758 of 2001.

    3. The basic fact of the matter is not in dispute.

    4. The respondent herein was working as a Principal in various colleges, situated in the State of Andhra Pradesh. On or about 18-7-1990, several charges of misconduct were framed against him. A departmental proceedings was initiated. In the said departmental proceeding, the inquiry officer submitted his report on 8-1-1992. However, before any action could be taken pursuant to and in furtherance of the said report, the respondent retired on 30-6-1992.

    5. A proceeding was initiated against the respondent upon service of a notice to show cause as to why 50% of the provisional pension fixed in his favour in terms of an interim order dated 18-3-1993 in OA No. 992 of 1993 passed by the Director of Intermediate Education, Hyderabad, or part thereof should not be withheld. The respondent filed his reply to the said show-cause notice on 20-11-1997. During the pendency of the said departmental proceeding, an original application was filed by him before the Andhra Pradesh Administrative Tribunal which was marked as OA No. 4866 of 2001.

    6. By reason of its order dated 17-4-2003, the Andhra Pradesh Administrative Tribunal directed the State to conclude the departmental proceeding within a period of three months. The said order came to be questioned by the respondent herein before the High Court. In the meantime, a recovery proceeding was also initiated against him. The correctness or validity of the said recovery proceeding was also questioned by the respondent before the High Court. The High Court by its order dated 16-2-2005 passed in Writ Petition No. 110 of 2005, directed the third appellant herein to be personally present in court and explain the reasons as to why the amount of pension payable to the respondent herein had not been paid despite the earlier directions of the High Court. The original Respondent 3 (Appellant 3 herein) submitted his explanation. However, by reason of the impugned judgment, the High Court, on the premise that the pension payable to the respondent has illegally been withheld for a long time, directed:

    “Accordingly, the writ petition is disposed of directing the Government to release full pension to the petitioner from 1-7-1992 duly giving credit to the pension already paid to him. The pension, as directed above, shall be released to the petitioner within a period of two (2) months from the date of receipt of a copy of this order. The arrears of pension shall carry interest at the rate of 12% per annum from 1-7-1992 till date of payment.”

    7. The writ petition filed by the respondent herein questioning a part of the order of the Tribunal was also dismissed.

    8. The principal issue which falls for our determination, in view of the rival contentions advanced by the learned counsel appearing on behalf of the parties, is: Whether the High Court was justified in passing the impugned judgment quashing the disciplinary proceedings and issue a direction to the appellant to pay all pensionary benefits to the respondent herein, only on the ground of delay in concluding the departmental proceedings.

    9. The charges made against the respondent are as under:

    “Charge 1.—That Shri V. Appala Swamy, while working as Principal, Govt. Junior College, Kurupam had falsified and tampered with certain records of the college and irregularly drawn the salaries for certain period without being regulated.
    Charge 2.—That Shri V. Appala Swamy, while working as Principal, Govt. Junior College, Kurupam had misappropriated the funds and committed serious financial irregularities in flagrant violation of rules and regulations thereby, causing pecuniary loss to the Government.
    Charge 3.—That Shri V. Appala Swamy, while working as Principal, Govt. Junior College, Kurupam was found to be very negligent and highly irresponsible in discharging of his duties.”

    10. It was found that the respondent while working in different institutions had committed acts of misappropriation, the details whereof are as under:

    (1) Govt. Junior College, Chodavaram Rs 1,92,754.45 (2) Govt. Junior College, Chinthapalli Rs 15,121.50 (3) Govt. Junior College, Pendurthi Rs 36,879.60 (4) Govt. Junior College, Kurupam (Disciplinary case) Rs 40,801.70 (5) Incremental arrears irregularly sanctioned by himself from 1 of 1987 to 4 of 1992 Rs 7572.00 (6) Excess HRA drawn at GJC, Chodavaram from 5 of 1987 to 10 of 1989 Rs 9240.00 (7) Surrender leave salary due to irregular credit of earned leave for Panchayat Raj Election in 1980-1981 Rs 1386.40 (8) Govt. Junior College, Parvathipuram Rs 1,43,538.00 Total Rs 4,50,293.00 (sic 4,47,293.65)

    11. It may be true that there was some delay on the part of the appellants to conclude the departmental proceedings. The Tribunal did not accept the contention raised on behalf of the respondent that only by reason thereof the entire departmental proceedings became vitiated. The High Court thus, in our opinion, was required to consider the question as to whether, in the facts and circumstances of this case, particularly in view of the nature of the charges levelled against the respondent as also the explanation offered by the appellants in this behalf, it was a case where the entire proceedings should have been quashed. The High Court in its impugned judgment did not address itself the said question. It, as noticed hereinbefore, from the very beginning proceeded on the premise that the pension was payable to the respondent on his retirement. The High Court furthermore did not determine the question as to whether a proceeding could have been initiated against the respondent in terms of Rule 9 of the Andhra Pradesh Civil Services (Classification, Control and Appeal) Rules, 1963. If it is held that the second proceeding was maintainable in terms of the extant rules, ordinarily, the Tribunal or the High Court should not have interfered therewith. This aspect of the matter is concluded by the decisions of this Court in State of U.P v. Brahm Datt Sharma (1987) 2 SCC 179, (1987) 3 ATC 319 and State of U.P v. Harihar Bhole Nath (2006) 13 SCC 460, (2006) 11 Scale 322.

    12. So far as the question of delay in concluding the departmental proceedings as against a delinquent officer is concerned, in our opinion, no hard-and-fast rule can be laid down therefor. Each case must be determined on its own facts. The principles upon which a proceeding can be directed to be quashed on the ground of delay are:

    (1) where by reason of the delay, the employer condoned the lapses on the part of the employee;
    (2) where the delay caused prejudice to the employee.

    Such a case of prejudice, however, is to be made out by the employee before the inquiry officer.

    13. This aspect of the matter is now squarely covered by the decisions of this Court in Secy. to Govt., Prohibition & Excise Deptt. v. L. Srinivasan (1996) 3 SCC 157, (1996) 33 ATC 745; P.D Agrawal v. State Bank of India (2006) 8 SCC 776, (2006) 5 Scale 54; Registrar, Coop. Societies v. Sachindra Nath Pandey (1995) 3 SCC 134, (1995) 29 ATC 538.

    14. Learned counsel appearing on behalf of the respondent, however, placed strong reliance on a decision of this Court in M.V Bijlani v. Union of India (2006) 5 SCC 88. That case was decided on its peculiar facts. In that case, even the basic material on which departmental proceedings could be initiated was absent. The departmental proceedings were initiated after 6 years and continued for a period of 7 years. In that fact situation, it was held that the appellant therein was prejudiced.

    15. Bijlani (2006) 5 SCC 88, therefore, is not an authority and, in fact, as would appear from the decision in P.D Agrawal (2006) 8 SCC 776, (2006) 5 Scale 54 for the proposition that only on the ground of delay the entire proceedings can be quashed without considering the other relevant factors therefor.

    16. The High Court did not consider any of the aforementioned aspects.

    17. For the reasons aforementioned, the impugned judgment of the High Court cannot be sustained and it is set aside accordingly. We, however, direct the appellants to conclude the departmental proceeding at an early date but not later than six months from the date of communication of this order. It is open to the respondent herein to file additional representation before the appropriate authority within a period of four weeks from date.

    18. However, till a final decision is taken in the matter by the State, the recovery proceedings shall remain stayed.

    19. This appeal is allowed with the aforementioned observations and directions. In the facts and circumstances of the case, there shall be no order as to costs.

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    Comments

    Government Of Andhra Pradesh And Others v. V. Appala Swamy .
    (Jan 25, 2007)