Citation Codes

Neutral Citations

2009 INSC 413

Equivalent Citations

citation codes

Case Number

Civil Appeal No. 1921 of 2009, decided on March 26, 2009

Disposition

remanded

Advocates

Dhruv Mehta and T.S Sabasish (for M/s K.L Mehta), Advocates, for the Appellant;
Ajay Veer Singh [for Dr. (Ms) Vipin Gupta], Advocate, for the Respondents.

Judges

Justice Markandey Katju
Justice B. Sudershan Reddy

Acts

Section 5, Subsection 2 of the 1983 Income Tax Act

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Smart Summary

Supreme Court Case Summary

Factual and Procedural Background

Respondent 1, an employee of Rani Laxmi Bai Kshetriya Gramin Bank, was charge-sheeted, found guilty in a departmental enquiry and, by order dated 23-4-2003, penalised with fixation of his pay at Rs 7,780 after a reduction of fifteen increments under Regulation 38(1)(Kha-II) of the 2000 Service Rules.

He preferred a statutory appeal before the Bank’s Board of Directors on 13-6-2003. The Board dismissed the appeal on 4-9-2003 without assigning any reasons, communicating the result through its letter of 3-10-2003.

Aggrieved, the respondent filed a writ petition before the High Court of Judicature at Allahabad. On 13-3-2007 the High Court allowed the writ, quashing both the appellate order and the disciplinary authority’s order.

The present appeal was filed by the Bank against the High Court’s judgment.

Legal Issues Presented

Whether an appellate authority’s order that merely affirms a disciplinary finding must contain reasons.
Whether the High Court erred in also setting aside the disciplinary authority’s order when the defect identified lay only in the appellate order.

Arguments of the Parties

Appellant’s Arguments

Invoking State Bank of Bikaner & Jaipur v. Prabhu Dayal Grover (1995) 6 SCC 279, the appellant contended that an order of affirmation need not record reasons.

Respondent’s Arguments

This information was not available in the provided opinion.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
State Bank of Bikaner & Jaipur v. Prabhu Dayal Grover, (1995) 6 SCC 279	Whether an affirming appellate order must give reasons.	Court clarified the case still requires disclosure of application of mind; hence at least brief reasons are necessary.
Divisional Forest Officer v. Madhusudhan Rao, (2008) 3 SCC 469	Need for speaking orders in quasi-judicial decisions.	Relied on to reinforce the duty to give reasons.
M.P. Industries Ltd. v. Union of India, AIR 1966 SC 671	Importance of reasoned administrative orders.	Cited in support of requirement for disclosure of reasons.
Siemens Engg. & Mfg. Co. of India Ltd. v. Union of India, (1976) 2 SCC 981	Rule that speaking orders promote fairness and transparency.	Used to bolster the principle that reasons must be given.
S.N. Mukherjee v. Union of India, (1990) 4 SCC 594	Constitution Bench recognising duty to state reasons; limited exception for affirming authorities.	Court explained that even affirming orders need succinct reasons to show application of mind.
State of Madras v. A.R. Srinivasan, AIR 1966 SC 1827	Adequacy of reasons in appellate orders.	Interpreted consistently with current holding that brief reasons are mandatory.

Court’s Reasoning and Analysis

The Court held that the rule of law mandates transparency; hence judicial or quasi-judicial authorities must provide reasons to demonstrate application of mind and permit effective review. An order of affirmation may be concise, but cannot be devoid of reasons entirely.

Applying that standard, the appellate authority’s one-line dismissal of the respondent’s appeal was unsustainable. The Court concurred with the High Court on this point.

However, the Court found the High Court over-stepped by quashing the disciplinary authority’s order, as the denial of reasons related only to the appellate stage. The proper remedy was to remit the matter to the appellate authority to reconsider the appeal and issue a speaking order after hearing the respondent.

Holding and Implications

PARTLY ALLOWED. The Supreme Court set aside the High Court’s judgment insofar as it annulled the disciplinary authority’s order, but affirmed that the appellate order was invalid for want of reasons. The matter is remitted to the Board of Directors to hear the appeal afresh, grant an opportunity of hearing to Respondent 1 and pass a speaking order expeditiously. No costs were awarded.

Implications: The decision reinforces that even an affirming appellate order must contain at least brief reasons, fortifying procedural fairness in disciplinary proceedings while limiting judicial interference to the defective stage of the process.

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Chairman, Disciplinary Authority, Rani Lakshmi Bai Kshetriya Gramin Bank v. Jagdish Sharan Varshney And Others

Order

1. Heard learned counsel for the parties. This appeal has been filed against the judgment and order dated 13-3-2007 Writ Appeal No. 2868 of 2004 passed by the High Court of Judicature at Allahabad, whereby and whereunder the High Court has allowed the writ petition and quashed the order dated 23-4-2003 passed by the disciplinary authority and the resolution of the Board of Directors dated 4-9-2003 as communicated by the Board's letter dated 3-10-2003.

2. It appears that there was some allegation against Respondent 1 on the basis of which he was charge-sheeted; an enquiry was held and he was found guilty and he was given the punishment of fixing his pay scale at Rs 7780 by reducing the increment of timescale by 15 under Regulation 38(1) (Kha-II) of Chapter IV of the Rani Laxmi Bai Kshetriya Gramin Bank Officers and Employees Service Rules, 2000 (for short “the Rules”). Aggrieved and dissatisfied by the order of the disciplinary authority dated 23-4-2003, Respondent 1 filed an appeal before the appellate authority (Board of Directors) on 13-6-2003 which was dismissed by the appellate authority on 4-9-2003 without giving any reasons whatsoever.

3. Aggrieved against the order of the appellate authority dated 4-9-2003, Respondent 1 filed a writ petition in the High Court of Judicature at Allahabad. The High Court by the impugned order has allowed the writ petition filed by Respondent 1 and set aside the orders of the appellate authority and disciplinary authority on the ground that the order of the appellate authority dated 4-9-2003 did not contain any reasons.

4. Shri Dhruv Mehta, learned counsel appearing for the appellant relied on a decision of this Court in State Bank of Bikaner & Jaipur v. Prabhu Dayal Grover (1995) 6 SCC 279, (1995) 31 ATC 492 and contended that an order of affirmation does not require any reasons.

5. In our opinion, an order of affirmation need not contain as elaborate reasons as an order of reversal, but that does not mean that the order of affirmation need not contain any reasons whatsoever. In fact, the said decision in Prabhu Dayal Grover case (1995) 6 SCC 279, (1995) 31 ATC 492 has itself stated that the appellate order should disclose application of mind. Whether there was an application of mind or not can only be disclosed by some reasons, at least in brief, mentioned in the order of the appellate authority. Hence, we cannot accept the proposition that an order of affirmation need not contain any reasons at all. That order must contain some reasons, at least in brief, so that one can know whether the appellate authority has applied its mind while affirming the order of the disciplinary authority.

6. The view we are taking was also taken by this Court in Divl. Forest Officer v. Madhusudhan Rao (2008) 3 SCC 469, JT (2008) 2 SC 253 (vide SCC para 20 : JT para 19), and in M.P Industries Ltd. v. Union of India AIR 1966 SC 671, Siemens Engg. & Mfg. Co. of India Ltd. v. Union of India (1976) 2 SCC 981, AIR 1976 SC 1785 (vide SCC para 6 : AIR para 6), etc.

7. In the present case, since the appellate authority's order does not contain any reasons, it does not show any application of mind.

8. The purpose of disclosure of reasons, as held by a Constitution Bench of this Court in S.N Mukherjee v. Union of India (1990) 4 SCC 594, is that people must have confidence in the judicial or quasi-judicial authorities. Unless reasons are disclosed, how can a person know whether the authority has applied its mind or not? Also, giving of reasons minimises the chances of arbitrariness. Hence, it is an essential requirement of the rule of law that some reasons, at least in brief, must be disclosed in a judicial or quasi-judicial order, even if it is an order of affirmation.

9. No doubt, in S.N Mukherjee case (1990) 4 SCC 594 it has been observed that:

“36. … The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge.”

The above observation, in our opinion, really means that the order of affirmance need not contain an elaborate reasoning as contained in the order of the original authority, but it cannot be understood to mean that even brief reasons need not be given in an order of affirmance. To take a contrary view would mean that appellate authorities can simply dismiss appeals by one-line orders stating that they agree with the view of the lower authority.

10. For the same reason, the decision of this Court in State of Madras v. A.R Srinivasan AIR 1966 SC 1827 (vide AIR para 15) has also to be understood as explained by us above.

11. Hence, we agree with the High Court that reasons should have been contained in the appellate authority's order, but we cannot understand why the High Court has set aside the order of the disciplinary authority, in addition to setting aside the appellate order.

12. Hence, this appeal is partly allowed and the impugned judgment of the High Court to the extent that it has set aside the order of the disciplinary authority is set aside, and the matter is remanded to the appellate authority to decide the appeal filed by Respondent 1 afresh in accordance with law after affording an opportunity of being heard to Respondent 1 and also by passing a speaking order. The said appeal shall be decided very expeditiously. No order as to costs.

Chairman, Disciplina... v. Jagdish Sharan Varsh...