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AMICUS AI
Citation Codes
Neutral Citations
2017 INSC 632
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section of the State-level Scrutiny Committee's report
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Cites
Cited by
Citation Codes
Neutral Citations
2017 INSC 632
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section of the State-level Scrutiny Committee's report
Smart Summary

Factual and Procedural Background

The Revenue Divisional Commissioner, Central Division, Cuttack, sought candidates for the posts of Farash and Peon by requesting the Employment Exchange, Cuttack, to sponsor five Scheduled Tribe (ST) candidates and five from the unreserved category. Relying on a caste certificate showing him as “Kandha” (an ST), the respondent was sponsored as an ST candidate and appointed Farash in the Commissioner's office.

Subsequent doubt about the respondent’s tribal status led to proceedings before the State-level Scrutiny Committee, which, after inquiry, determined that he actually belonged to the “Pano” community (a Scheduled Caste in Odisha). The Committee cancelled the ST certificate, recommended criminal prosecution, and requested the disciplinary authority to remove him from service. Following a show-cause notice, the respondent was removed.

The respondent initially challenged both the Scrutiny Committee’s order and his removal in the High Court, which directed him to approach the Central Administrative Tribunal (CAT). The CAT set aside the removal, ordered reinstatement, and found no evidence that the certificate was used to secure employment since the post was not reserved for STs. The High Court upheld the CAT’s decision and awarded 50% back wages from 1-9-2014. The State of Orissa appealed to the Supreme Court.

Legal Issues Presented

  1. Whether an employee who obtained sponsorship and employment by presenting a fraudulent Scheduled Tribe certificate is entitled to reinstatement when the post filled was not formally reserved for Scheduled Tribes.
  2. Whether the Tribunal and High Court erred in directing reinstatement and partial back wages after the State-level Scrutiny Committee’s unchallenged finding of fraud.

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
Lazarus Estates Ltd. v. Beasley, (1956) 1 QB 702; (1956) 2 WLR 502; (1956) 1 All ER 341 (CA) “No court will allow a person to keep an advantage obtained by fraud; fraud unravels everything.” The Supreme Court relied on this maxim to hold that the respondent, having procured employment through a fraudulent caste certificate, cannot retain the benefit of that employment.

Court's Reasoning and Analysis

The Supreme Court rejected the CAT and High Court’s conclusions for the following reasons:

  • The respondent’s sponsorship by the Employment Exchange was possible only because he was shown as an ST candidate; without that certificate, his name would not have been forwarded (Reason 5.1 and 5.3).
  • The State-level Scrutiny Committee made a final, unchallenged finding that the respondent fraudulently obtained the ST certificate and recommended action against both him and the issuing officer (Reason 5.2).
  • The CAT erred in concluding there was no evidence that the certificate was used to obtain employment; the very act of sponsorship proved its material influence (Reason 5.4).
  • Because the employment advantage flowed directly from fraud, the principle in Lazarus Estates applies: fraud vitiates all transactions (Reason 5.5).

Holding and Implications

Appeal Allowed — the judgments of the Tribunal and the High Court are set aside; no costs.

Immediate Effect: The respondent’s reinstatement and the award of 50% back wages are nullified; the original removal from service stands.

Broader Implications: The decision reinforces the principle that employment gained through fraudulent caste certificates cannot be sustained, even if the position filled was not formally reserved. No new precedent was set, but the Court reaffirmed the long-standing rule that “fraud unravels everything.”

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    State Of Orissa And Another v. Bibhisan Kanhar .

    L. Nageswara Rao, J.— Leave granted. The order for removal of the respondent who was working as Farash in the Office of the Revenue Divisional Commissioner, Central Division, Cuttack (second respondent) was set aside by the Orissa Administrative Tribunal, Cuttack. The judgment of the Tribunal was confirmed by the Division Bench 2015 SCC OnLine Ori 599 of the High Court of Orissa at Cuttack. Aggrieved, the State of Orissa has filed this appeal.

    2. The Revenue Divisional Commissioner requested the Employment Officer of the Employment Exchange, Cuttack to sponsor five candidates belonging to the Scheduled Tribe community and five from unreserved category for selection and appointment to the posts of Farash and Peon. On the basis of a caste certificate filed by the respondent in the Employment Exchange, he was sponsored as a candidate belonging to a Scheduled Tribe community (Kandha). The respondent was appointed as a Farash in the office of the second respondent. As there was a doubt raised about the respondent belonging to a Scheduled Tribe, proceedings were initiated before the State-level Scrutiny Committee for verification of his caste certificate. He was also placed under suspension.

    3. After a detailed enquiry, the State-level Scrutiny Committee found that the respondent did not belong to the “Kandha” tribe. His caste was “Pano”, which is a Scheduled Caste in the State of Orissa. The State-level Scrutiny Committee directed cancellation of the caste certificate issued in favour of the respondent and also recommended initiation of criminal prosecution against him. The Committee further requested the disciplinary authority to take appropriate action against the respondent for removal from service. After issuance of a show-cause notice, the respondent was removed from service by the second appellant.

    4. Initially, the respondent approached the High Court assailing the legality of the order of the State-level Scrutiny Committee as well as the order of removal. As the respondent was a civil servant, the High Court relegated the respondent to the Central Administrative Tribunal and also gave him liberty to question the order passed by the State-level Scrutiny Committee cancelling his caste certificate. The Central Administrative Tribunal set aside the order of removal and directed reinstatement of the respondent. The reasons given by the Tribunal for allowing the OA filed by the respondent are that the respondent was not appointed in a post reserved for Scheduled Tribes and that there was no material to show that the respondent forged the caste certificate for the purpose of procuring the employment. The writ petition filed by the appellants was disposed of by the High Court confirming the order of the Tribunal. The High Court reiterated the direction issued by the Tribunal to reinstate the respondent. The High Court further directed that the respondent was entitled for back wages at 50 per cent from 1-9-2014 till the date of his reinstatement. The only point that was found in favour of the respondent by the High Court is that he was not appointed in a post reserved for the Scheduled Tribes. The Tribunal and the High Court directed the respondent not to use his Scheduled Tribe certificate in future.

    5. We have examined the material on record and the submissions made by the learned counsel appearing for the parties. We are not in agreement with the judgment of the Tribunal as confirmed by the High Court that the respondent is entitled for reinstatement for the following reasons:

    5.1 It is clear from the record that the respondent was sponsored by the Employment Exchange as a candidate belonging to a Scheduled Tribe community. His name would not have been sponsored but for the certificate which showed that he belongs to the Scheduled Tribe community.

    5.2 The State-level Scrutiny Committee recorded a finding that the respondent indulged in fraud in obtaining a certificate showing that he belongs to a Scheduled Tribe. The Committee recommended action to be taken against the officer who had issued the certificate. The order passed by the State-level Scrutiny Committee has become final as it has not been set aside by any court.

    5.3 Though he was appointed in a post not reserved for the Scheduled Tribes, he would not have been in the zone of consideration if he did not produce the certificate showing that he belongs to a Scheduled Tribe.

    5.4 The Tribunal has committed a serious error in recording a finding that there is no evidence to show that the respondent has obtained the certificate only to procure employment.

    5.5 It is clear from the facts that the respondent fraudulently obtained a certificate showing that he belongs to the Scheduled Tribe community which stands cancelled by the order passed by the State-level Scrutiny Committee.

    6. It was held by Denning, L.J in Lazarus Estates Ltd. v. Beasley (1956) 1 QB 702, (1956) 2 WLR 502, (1956) 1 All ER 341 (CA) that: (QB p. 712 : All ER p. 345)

    “No court … will allow a person to keep an advantage which he has obtained by fraud. […] Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved, it vitiates judgments, contracts and all transactions whatsoever….”

    7. For the foregoing reasons, the appeal is allowed and the judgments of the Tribunal and the High Court are set aside. No costs.

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    Comments

    State Of Orissa And Another v. Bibhisan Kanhar .
    (Jul 17, 2017)