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  • Section 35 of the Standing Orders, Industrial Disputes Act, 1947
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • the Industrial Disputes Act, 1947 (hereinafter referred to as “the 1947 Act”)
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Citation Codes
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citation codes
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Disposition
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  • Section 35 of the Standing Orders, Industrial Disputes Act, 1947
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • the Industrial Disputes Act, 1947 (hereinafter referred to as “the 1947 Act”)
Smart Summary

Factual and Procedural Background

The respondent, a trainee conductor with the Rajasthan State Road Transport Corporation (“the Corporation”), was served with two charge-sheets dated 11-3-1988 alleging that: (i) on 24-2-1988 he allowed ten passengers to travel without tickets after collecting the fare, and (ii) on another occasion he issued tickets for a lesser amount to two passengers while pocketing the difference. A domestic enquiry was held and the Enquiry Officer found both charges proved. On 5-8-1988 the disciplinary authority removed the respondent from service.

The respondent instituted Civil Suit No. 1346 of 1988 challenging the dismissal on grounds of procedural illegality and disproportionality of punishment. The trial court decreed the suit on 30-11-1994, holding the enquiry vitiated and ordering reinstatement. Successive appeals by the Corporation—Civil Regular Appeal No. 119 of 2002 (Additional District Judge) and Civil Second Appeal No. 449 of 2003 (Rajasthan High Court)—were dismissed. The Corporation therefore filed the present civil appeal before the Supreme Court.

Legal Issues Presented

  1. Whether the findings of the subordinate courts that the domestic enquiry was vitiated for violation of natural justice were sustainable in the absence of specific pleadings or evidence.
  2. Whether the High Court, in second appeal, could refuse to interfere with factual findings that were allegedly perverse.
  3. Whether the punishment of removal from service for proven misconduct involving embezzlement of fare was disproportionate.

Arguments of the Parties

Appellant (Rajasthan State Road Transport Corporation)

  • The civil suit was not maintainable; the respondent’s sole remedy lay under the Industrial Disputes Act, 1947.
  • The enquiry complied with Section 35 of the Standing Orders and principles of natural justice; the courts below wrongly shifted the burden of proof.
  • No specific pleadings or proof were produced by the respondent to show procedural violation; consequently the lower-court findings are perverse.
  • Misappropriation of fare constitutes serious misconduct and dismissal cannot be termed disproportionate.

Respondent (Employee)

  • All three subordinate courts recorded concurrent findings that the enquiry was illegal and the punishment excessive; such findings should not be disturbed in second appeal.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke (1976) 1 SCC 496When disputes are covered by the Industrial Disputes Act, jurisdiction of civil courts is limited.Cited by the appellant to contest maintainability of the suit; Supreme Court declined to enter that debate as the plea had not been pressed before the trial court.
Uttam Das v. Shiromani Gurdwara Parbandhak Committee (1996) 5 SCC 71Bar of civil jurisdiction where a special forum exists.Relied on by the appellant for the same proposition; not adjudicated by the Court.
Rajasthan SRTC v. Mohar Singh (2008) 5 SCC 542Exclusive remedy under the Industrial Disputes Act for workmen.Cited but not determinative of the outcome.
Rajasthan SRTC v. Bal Mukund Bairwa (2) (2009) 4 SCC 299Same as above.Cited; issue not decided.
Rajasthan SRTC v. Deen Dayal Sharma (2010) 6 SCC 697Same as above.Cited; issue not decided.
Larsen & Toubro Ltd. v. State of Gujarat (1998) 4 SCC 387Pleadings must set out material facts; relief cannot be granted on incomplete pleadings.Used by the Court to emphasise that the respondent had not pleaded specific violations.
National Buildings Construction Corpn. v. S. Raghunathan (1998) 7 SCC 66Necessity of proper pleadings.Relied on in the same context.
Ram Narain Arora v. Asha Rani (1999) 1 SCC 141Lack of pleadings fatal to a claim.Same application.
Chitra Kumari v. Union of India (2001) 3 SCC 208Pleadings and burden of proof.Cited to support the above proposition.
State of U.P. v. Chandra Prakash Pandey (2001) 4 SCC 78Importance of complete pleadings.Same.
Atul Castings Ltd. v. Bawa Gurvachan Singh (2001) 5 SCC 133Findings without pleadings/evidence are unsustainable.Expressly quoted; central to overturning lower-court findings.
Vithal N. Shetti v. Prakash N. Rudrakar (2003) 1 SCC 18Necessity of pleadings.Reinforced the Court’s view.
Devasahayam v. P. Savithramma (2005) 7 SCC 653Same principle on pleadings.Relied upon.
Sait Nagjee Purushotham & Co. Ltd. v. Vimalabai Prabhulal (2005) 8 SCC 252Pleadings and evidence correlation.Cited.
Rajasthan Pradesh Vaidya Samiti v. Union of India (2010) 12 SCC 609Requirement of specific pleadings.Cited.
Ritesh Tewari v. State of U.P. (2010) 10 SCC 677Same as above.Cited.
Union of India v. Ibrahim Uddin (2012) 8 SCC 148High Court can interfere in second appeal on questions of fact if findings are perverse.Quoted extensively to justify Supreme Court interference despite concurrent findings below.
U.P. SRTC v. Suresh Chand Sharma (2010) 6 SCC 555Proportionality of punishment in misappropriation cases.Basis for holding that dismissal is the only appropriate punishment for corruption.
Municipal Committee, Bahadurgarh v. Krishnan Behari (1996) 2 SCC 714In corruption/embezzlement cases, dismissal is the only proper penalty.Relied on while affirming proportionality of punishment.
Ruston & Hornsby (I) Ltd. v. T.B. Kadam (1976) 3 SCC 71Similar principle on punishment for corruption.Cited in support.
U.P. SRTC v. Basudeo Chaudhary (1997) 11 SCC 370Dismissal justified where funds are misappropriated.Cited.
Janatha Bazar v. Sahakari Noukarara Sangha (2000) 7 SCC 517Same principle on dismissal.Cited.
Karnataka SRTC v. B.S. Hullikatti (2001) 2 SCC 574Dismissal for ticketless travel misconduct.Cited.
Rajasthan SRTC v. Ghanshyam Sharma (2002) 10 SCC 330Dismissal appropriate punishment for conductors misappropriating fare.Cited.
Jagdish Singh v. Natthu Singh (1992) 1 SCC 647High Court’s power in second appeal where findings are perverse.Included in the Ibrahim Uddin discussion.
Prativa Devi v. T.V. Krishnan (1996) 5 SCC 353Same as above.Cited.
Satya Gupta v. Brijesh Kumar (1998) 6 SCC 423Same as above.Cited.
Ragavendra Kumar v. Firm Prem Machinery & Co. (2000) 1 SCC 679Same as above.Cited.
Molar Mal v. Kay Iron Works (P) Ltd. (2000) 4 SCC 285Same as above.Cited.
Bharatha Matha v. R. Vijaya Renganathan (2010) 11 SCC 483Same as above.Cited.
Dinesh Kumar v. Yusuf Ali (2010) 12 SCC 740Same as above.Cited.
Kashmir Singh v. Harnam Singh (2008) 12 SCC 796Same as above.Cited.
Jai Singh v. Shakuntala (2002) 3 SCC 634Interference in second appeal only in exceptional cases of perversity.Cited.
Suwalal Chhogalal v. CIT (1949) 17 ITR 268A question of law arises if the finding is unsupported by material.Referred to in the Ibrahim Uddin quotation.

Court's Reasoning and Analysis

1. Deficiencies in pleadings and proof: The trial court had placed the burden of proving procedural violation on the respondent yet, without any concrete evidence or identification of specific documents or witnesses, held the enquiry contrary to natural justice. The appellate court merely echoed these findings, and the High Court refused to interfere. The Supreme Court held that findings based on ipse dixit and unsupported allegations are perverse and cannot stand.

2. Scope of Second Appeal: Citing Union of India v. Ibrahim Uddin and allied authorities, the Court reaffirmed that second appeals may be entertained on questions of fact where findings are vitiated by non-consideration of evidence or perversity. Hence, the High Court’s refusal to examine the matter was erroneous.

3. Punishment proportionality: Referring to a line of cases beginning with Municipal Committee, Bahadurgarh, the Court reiterated that misappropriation of public funds by conductors constitutes corruption for which dismissal is the only appropriate punishment. Consequently, even if lesser irregularities had occurred in the enquiry, the quantum of punishment would not be open to reduction.

4. Outcome of Enquiry Challenge: Because the respondent failed to plead or prove which documents were withheld, how cross-examination was denied, or what prejudice was caused, the Court concluded that the enquiry was not shown to be illegal. The concurrent findings below were therefore termed perverse.

Holding and Implications

APPEAL ALLOWED – Judgments of the trial court, first appellate court and High Court are set aside; the disciplinary authority’s order of removal dated 5-8-1988 is restored.

Implications: The decision reinforces that (i) courts will not nullify disciplinary proceedings on vague or unsubstantiated allegations of procedural breach, (ii) High Courts may interfere with factual findings in second appeal where such findings are perverse, and (iii) dismissal remains the invariable penalty for conductors who misappropriate fare, thereby upholding a strict anti-corruption stance. No new legal doctrine is created but existing principles on pleadings, appellate review and proportionality are emphatically applied.

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    Rajasthan State Road Transport Corporation And Another v. Bajrang Lal .

    Dr B.S Chauhan, J.— This appeal has been preferred by Rajasthan State Road Transport Corporation (hereinafter referred to as “the Corporation”) against the judgment and order dated 8-11-2005 passed by the High Court of Judicature of Rajasthan (Jaipur Bench) in Rajasthan SRTC v. Bajrang Dal Civil Second Appeal No. 449 of 2003 upholding the judgment and decree dated 28-1-2003 in Civil Regular Appeal No. 119 of 2002 passed by the Additional District Judge, Jaipur, by which and whereunder, it has affirmed the judgment and decree dated 30-11-1994 passed by the Additional Civil Judge (Junior Division) No. 2, Jaipur in Civil Suit No. 1346 of 1988.

    2. The facts and circumstances giving rise to this appeal are that: the respondent while working as a trainee conductor on daily basis was found carrying certain passengers without tickets and, thus, an enquiry was initiated against him. Two charge-sheets dated 11-3-1988 were served upon him. In the first charge-sheet, it was alleged that on 24-2-1988 while he was on duty en route Kota-Rajpura, when his bus was checked, it was found that 10 passengers were travelling without tickets, though he had collected the fare from each of them. In the second charge-sheet, it had been alleged that when he was on duty on route Kota-Neemuch, his bus was checked and he was found carrying two passengers travelling on tickets of lesser amount though he had collected the full fare from them.

    3. The respondent submitted separate replies to the said charge-sheets which were not found satisfactory. Therefore, the enquiry officer was appointed to enquire into the matter and a regular enquiry ensued. The enquiry officer after conclusion of the enquiry submitted the report holding that charges levelled against the respondent in both the charge-sheets stood proved against him.

    4. After considering the report, the disciplinary authority vide order dated 5-8-1988 passed the order of punishment of removal from the service. The respondent filed a civil suit on 2-9-1988 challenging the order of removal alleging that he was not supplied with the documents referred to in the charge-sheets, nor was given the enquiry report nor other documents. More so, the quantum of punishment was disproportionate to the proved delinquency. The suit was contested by the appellants denying all the averments made therein. However, on conclusion of the trial, the suit was decreed vide judgment and decree dated 30-11-1994. Aggrieved, the Corporation filed Civil Regular Appeal No. 119 of 2002 which stood dismissed vide judgment and decree dated 28-1-2003. The Corporation challenged both the aforesaid judgments by filing Regular Second Appeal No. 449 of 2003, which also stood dismissed vide the impugned judgment Civil Second Appeal No. 449 of 2003 and decree. Hence, this appeal.

    5. Shri S.K Bhattacharya, learned counsel appearing on behalf of the appellants, has submitted that none of the courts below have examined the case in correct perspective. The stand taken by the appellants that the suit itself was not maintainable, as the only remedy available to the respondent was to approach the Labour Court under the Industrial Disputes Act, 1947 (hereinafter referred to as “the 1947 Act”) has not been properly examined by the courts below. More so, the pleadings in the plaint were vague. The respondent-plaintiff failed to prove any of the allegations made in the plaint, therefore, the courts below have erred in holding that the enquiry stood vitiated due to violation of statutory provisions and principles of natural justice. The enquiry had been conducted strictly in accordance with law, the provisions of Section 35 of the Standing Orders have been fully complied with and the respondent was given full opportunity to defend himself. Therefore, the findings of fact recorded by the courts below in this respect are perverse. The respondent was found to have embezzled money of the Corporation and the punishment of dismissal cannot be held to be disproportionate to the proved delinquency. Thus, the appeal deserves to be allowed.

    6. On the contrary, Shri Anis Ahmed Khan, learned counsel appearing on behalf of the respondent, has opposed the appeal contending that there are concurrent findings of facts recorded by the three courts. The trial court as well as the first appellate court have recorded the findings of fact that the enquiry had not been conducted in accordance with law and the punishment of dismissal from service was disproportionate to the delinquency proved. Therefore, no interference is called for.

    7. We have heard the learned counsel for the parties and perused the record.

    8. Undoubtedly, the appellant Corporation had taken the plea regarding the maintainability of suit on the ground that the respondent being a workman ought to have approached the forum available under the 1947 Act and the civil suit was not maintainable. In order to fortify this submission Shri Bhattacharya has placed reliance on the judgments of this Court in Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke (1976) 1 SCC 496, AIR 1975 SC 2238; Uttam Das v. Shiromani Gurdwara Parbandhak Committee (1996) 5 SCC 71, AIR 1996 SC 2133; Rajasthan SRTC v. Mohar Singh (2008) 5 SCC 542; Rajasthan SRTC v. Bal Mukund Bairwa (2) (2009) 4 SCC 299 and Rajasthan SRTC v. Deen Dayal Sharma (2010) 6 SCC 697 and asserted that the judgments of the courts below are without jurisdiction.

    9. Be that as it may, before the trial court, the appellants did not press the issue regarding the maintainability of suit even though the issue in this regard had specifically been framed. Thus, we are not inclined in delving into this controversy at all.

    10. The relevant part of the plaint reads:

    “That the plaintiff was imposed with Charge-sheet No. 1158 dated 11-3-1988 that on date 24-2-1988 on the route Kota-Rajpura his vehicle was checked and it was found during the course of the inspection that he was carrying 10 passengers without tickets and another Charge-sheet No. 1159 dated 11-3-1988 was imposed with the statement that on date 27-11-1988 the plaintiff was found carrying 2 passengers without tickets during the course of his giving the duty on the route Kota-Neemuch in the capacity of the conductor and he was also caught in the case of the difference in the ticket amount. That had the bus not been checked in time then the plaintiff would have used the entire sum of money he recovered from the passengers found without tickets for his personal use. Whereas as per the terms and conditions of the Corporation the plaintiff is required to issue the tickets to all the passengers and then to get the same entered in the waybill and that then only the vehicle should have departed. The aforesaid charges were totally wrong and baseless.”

    11. The appellant-defendant in its written statement basically stated:

    “The defendants have mentioned in the reply that the plaintiff had been appointed on the post of the conductor on daily-wage basis. The plaintiff is not entitled to receiving the salary of the regular pay scale from the date 7-12-1985 because the plaintiff was appointed as a daily-wage worker and the salary in accordance with the law was given to the plaintiff.
    During the course of the inquiry the plaintiff was given full opportunity of defence and of being heard. The copy of the enquiry report was supplied to the plaintiff after the completion of the inquiry and he was also intimated the result of the inquiry. In this way no violation of the principle of natural justice was done as against the plaintiff whereas the provisions of Section 35 of the Standing Orders were fully complied with. The disciplinary authority had by fully applying its mind passed the order of termination of the plaintiff. The plaintiff has produced the court fee at his own risk. The defendant Corporation comes within the definition of the “industry” and for which it is only the Hon'ble Industrial Tribunal who has got the jurisdiction to hear and decide the case of such nature. The plaintiff is not entitled to receiving the monetary benefits and other consequential benefits from the defendants. Therefore, the suit of the plaintiff be dismissed with costs.”

    12. After appreciating the material on record, the trial court held:

    “In this way the plaintiff has clearly made the allegation in the plaint that in the inquiry the statements of the witnesses were not recorded in front of the plaintiff. He was not given an opportunity to cross-examine the witnesses produced by the defendant Corporation and nor was he given an opportunity to defend his case and lead the evidence. That he was not supplied with the copies of the documents and was not heard on the quantum of the punishment and he deposed the same by way of the affidavit. That in order to contradict the same the defendants have not produced any evidence by way of deposition and nor any other document in support of the same has been produced. Under these circumstances, there is no reason to disbelieve the evidence of the plaintiff. That since the inquiry which has been initiated against the plaintiff is against the principle of natural justice, under these circumstances, the order of termination which has been passed is also against the law. Therefore, this suit issue is decided in favour of the plaintiff and against the defendants.”
    (emphasis supplied)

    13. The aforesaid findings recorded by the trial court are based only on the allegations made by the respondent in the plaint and on failure of the defendant Corporation to rebut the same, though the trial court had proceeded with the case clearly observing that the burden of proving this issue was on the respondent-plaintiff and not on the defendant Corporation. In such a fact situation, no reasoning whatsoever has been given by the trial court in support of its conclusion. Neither is there any specific pleading as to what document had not been supplied to him which has been relied upon by the enquiry officer or which witness was not permitted to be cross-examined by him. The trial court did not make any reference to the enquiry report or contents thereof. The entire case is based on ipse dixit.

    14. It is a settled proposition of law that a party has to plead the case and produce/adduce sufficient evidence to substantiate his submissions made in the plaint and in case the pleadings are not complete, the court is under no obligation to entertain the pleas. (Vide Larsen & Toubro Ltd. v. State of Gujarat (1998) 4 SCC 387, AIR 1998 SC 1608; National Buildings Construction Corpn. v. S. Raghunathan (1998) 7 SCC 66, AIR 1998 SC 2779; Ram Narain Arora v. Asha Rani (1999) 1 SCC 141; Chitra Kumari v. Union of India (2001) 3 SCC 208, AIR 2001 SC 1237 and State of U.P v. Chandra Prakash Pandey (2001) 4 SCC 78, AIR 2001 SC 1298.)

    15. In Atul Castings Ltd. v. Bawa Gurvachan Singh (2001) 5 SCC 133, AIR 2001 SC 1684 this Court observed as under:

    “12. … The findings in the absence of necessary pleading and supporting evidence cannot be sustained in law.”

    (See also Vithal N. Shetti v. Prakash N. Rudrakar (2003) 1 SCC 18; Devasahayam v. P. Savithramma (2005) 7 SCC 653; Sait Nagjee Purushotham & Co. Ltd. v. Vimalabai Prabhulal (2005) 8 SCC 252; Rajasthan Pradesh Vaidya Samiti v. Union of India (2010) 12 SCC 609, AIR 2010 SC 2221; Ritesh Tewari v. State of U.P (2010) 10 SCC 677, AIR 2010 SC 3823 and Union of India v. Ibrahim Uddin (2012) 8 SCC 148.)

    16. Therefore, once the trial court has held that the burden of proof was on the respondent-plaintiff, it could not have come to the aforesaid findings as there is nothing on record to show how the averments/allegations made by the respondent stood proved.

    17. Even the first appellate court misdirected itself while dealing with the issue as it held:

    “That no evidence was produced by the appellant-defendants. The statement given by the plaintiff is unrebutted. That as per the statement of the plaintiff the statements of the witnesses were not recorded in front of the plaintiff. The plaintiff was not given an opportunity of cross-examining the witnesses produced by the appellant-defendants. The plaintiff was not given an opportunity of leading the evidence and defending his case. The copies of the documents were not supplied to the plaintiff. He was also not heard on the quantum of the punishment. In this way the deposition given by the plaintiff are not rebutted and due to the reason of the same been irrebuttable it can be said that no departmental inquiry was initiated as against the plaintiff. Due to the reason of not holding the departmental inquiry the proceeding initiated against the plaintiff was not in accordance with the principle of natural justice. The order of termination which has been passed without holding the inquiry cannot be said to be passed in accordance with the law. In this way the finding arrived at by the learned subordinate court in respect of Issue 1 is just and proper and there is no need to interfere in the same.”

    18. The appellate court committed a grave error by declaring the enquiry as non est. The termination order as a consequence thereof stood vitiated though there is no reference to any material fact on the basis of which such a conclusion was reached. The finding that copy of the documents was not supplied to the respondent-plaintiff, though there is nothing on record to show that how the documents were relied upon and how they were relevant to the controversy involved, whether those documents had been relied upon by the enquiry officer and how any prejudice had been caused by non-supply of those documents, is therefore without any basis or evidence. When the matter reached the High Court in second appeal, the High Court refused to examine the issue at all by merely observing that no substantial question of law was involved and the findings of fact, however erroneous, cannot be disturbed in second appeal.

    19. With all respect, we do not agree with such a conclusion reached by the High Court, as second appeal, in exceptional circumstances, can be entertained on pure questions of fact. There is no prohibition for the High Court to entertain the second appeal even on question of fact where factual findings are found to be perverse.

    20. In Ibrahim Uddin (2012) 8 SCC 148 this Court held:(-68)

    “65. In Suwalal Chhogalal v. CIT (1949) 17 ITR 268 (Nag) the Court held as under: (ITR p. 277)
    ‘… A fact is a fact irrespective of the evidence by which it is proved. The only time a question of law can arise in such a case is when it is alleged that there is no material on which the conclusion can be based or no sufficient material.’
    ***
    67. There is no prohibition to entertain a second appeal even on question of fact provided the Court is satisfied that the findings of the courts below were vitiated by non-consideration of relevant evidence or by showing erroneous approach to the matter and findings recorded in the court below are perverse. [Vide Jagdish Singh v. Natthu Singh (1992) 1 SCC 647, Prativa Devi v. T.V Krishnan (1996) 5 SCC 353, Satya Gupta v. Brijesh Kumar (1998) 6 SCC 423, Ragavendra Kumar v. Prem Machinery & Co. (2000) 1 SCC 679, Molar Mal v. Kay Iron Works (P) Ltd. (2000) 4 SCC 285, Bharatha Matha v. R. Vijaya Renganathan (2010) 11 SCC 483 and Dinesh Kumar v. Yusuf Ali (2010) 12 SCC 740.]
    68. In Jai Singh v. Shakuntala (2002) 3 SCC 634 this Court held that it is permissible to interfere even on question of fact but it may be only in
    ‘very exceptional cases and on extreme perversity that the authority to examine the same in extenso stands permissible—it is a rarity rather than a regularity and thus in fine it can be safely concluded that while there is no prohibition as such, but the power to scrutiny can only be had in very exceptional circumstances and upon proper circumspection’.
    Similar view has been taken in Kashmir Singh v. Harnam Singh (2008) 12 SCC 796.”
    (emphasis in original)

    21. As regards the question of disproportionate punishment is concerned, the issue is no more res integra. In U.P SRTC v. Suresh Chand Sharma (2010) 6 SCC 555, it was held as under:

    “22. In Municipal Committee, Bahadurgarh v. Krishnan Behari (1996) 2 SCC 714, (1996) 33 ATC 238 this Court held as under:
    ‘4. … In a case of such nature—indeed, in cases involving corruption—there cannot be any other punishment than dismissal. Any sympathy shown in such cases is totally uncalled for and opposed to public interest. The amount misappropriated may be small or large; it is the act of misappropriation that is relevant.’
    Similar view has been reiterated by this Court in Ruston & Hornsby (I) Ltd. v. T.B Kadam (1976) 3 SCC 71, U.P SRTC v. Basudeo Chaudhary (1997) 11 SCC 370, Janatha Bazar (South Kanara Central Coop. Wholesale Stores Ltd.) v. Sahakari Noukarara Sangha (2000) 7 SCC 517, Karnataka SRTC v. B.S Hullikatti (2001) 2 SCC 574 and Rajasthan SRTC v. Ghanshyam Sharma (2002) 10 SCC 330.”

    22. In view of the above, the contention raised on behalf of the respondent employee, that the punishment of removal from service is disproportionate to the delinquency is not worth acceptance. The only punishment in case of the proved case of corruption is dismissal from service.

    23. As a result, the appeal succeeds and is allowed. The judgments of the courts below are set aside and the order of removal from service passed by the disciplinary authority is restored. No order as to costs.

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    Comments

    Rajasthan State Road Transport Corporation And Another v. Bajrang Lal .
    (Mar 14, 2014)