Service Jurisprudence
for
HR Professionals
Dr. J. K. Verma
M.Sc., Ph.D., M.B.M., B.L.
Advocate, Patna High Court
Service Jurisprudence
Introduction
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Jurisprudence : Service jurisprudence; corporate jurisprudence;
industrial jurisprudence
 Service (employment) – Elements – Kinds
 Recruitment – rules and requirements in
different services
 Leave, Lien
 Determination of employment
 Discipline – need and ways and means to
infuse, maintain and enforce.
 Disciplinary or departmental proceeding –
Departmental or domestic enquiry – in different
employments like Government, PSU, and industrial
 Punishment
 Natural justice
 Judicial Review
 Labour laws – courts’ interpretations
Service or Employment
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Employer-employee relationship or master-servant relationship :
started as personal service. (Roman Law – the servant had no
right).
An employer is a person or body who:
a) Owns or manages an establishment and in case of manager is
responsible to the owner for the supervision and control of the
industrial establishment;
b) Employs persons (pays wages);
c) Exercises Supervision and control of employees.
An employee is:
A person who is employed to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward.
The essential requirement is ‘to work for wages at monthly rate’.
A servant acts under the direct control and supervision of his master,
and is bound to conform to all reasonable orders given to him in the
course of his work.
Government servant/ workman: retirement age [FR 56(a)/(b)]
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Contract for service or contract of service.
In ‘contract for service’, the master dictates what is to be done and
not the mode or manner of doing it. Such contract does not result in
master-servant relationship.
In ‘contract of service’ the master not only requires what is to be
done but also how it is to be done. This cannot be done unless the
service is closely watched and constant guidance and control is
exercised. Such contracts generally result in employer-employee
relationship. Cassidy v. Ministry of Health, (1951) 1 All ER 574 There
must be an offer and an acceptance. Sultan Sadik v. Sanjay Raj
Subba, (2004) 2 SCC 377. Statutory provisions/ Contract Act.
In the peculiar case of Gottumukkala Appala Narasimha Raju v.
National Insurance Co. Ltd. (2007) 13 SCC 446 in the matter of
compensation under Workmen’s Compensation Act, 1923, a person
died in an accident while driving tractor belonging to his wife.
Compensation was claimed from the insurer company on the ground
that the deceased driver was an employee of the owner, his wife.
Although the Commissioner under the Act awarded compensation
from the insurer, the High Court set it aside. The Supreme Court, in
absence of any documentary evidence to establish master-servant
relationship, rejected the appeal.
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Ingredients of employer-employee relationship were laid down by
the House of Lords 6 decades before in Short v. J.W. Henderson
Ltd. (1946) 174 Law Times 417 (see Union Public Service
Commission v. Girish Jayanti Lal Vaghela. (2006) 2 SCC 482: AIR
2006 SC 1165).
These are:
(a) the master’s power of selection of his servant;
(b) the master’s responsibility of payment of wages or other
remuneration;
(c) the master’s right of suspension or dismissal; and
(d) the master’s right to control the method of doing the work.
There is no dispute regarding the first three ingredients. Questions
have arisen however with respect to scope and ambit of the power
of control and supervision. In determining the relationship of
employer and employee, no doubt, “control” is one of the important
tests but is not to be taken as the sole test. The real test should be
whether the person was fully integrated into the employer’s concern
or remained apart from and independent of it. The other factors
which may be relevant are — who has the power to select and
dismiss, to pay remuneration, deduct insurance contributions,
organise the work, supply tools and materials and what are the
“mutual obligations” between them. Ram Singh v. Union Territory,
Chandigarh. (2004) 1 SCC 126
If the provisions of the contract as a whole are inconsistent
with its being a contract of service, it will be some other kind
of contract and the person doing the work will not be a
servant. Three ingredients, therefore are: (i) employer — one
who employs i.e. engages the services of other persons; (ii)
employee — one who works for another for hire; and (iii)
contract of employment — control and supervision of the
employer. Workmen of Nilgiri Coop. Mkt. Society Ltd. v. State
of T.N. (2004) 3 SCC 514
S. 2(9)(ii), Employees’ State Insurance Act, 1948 – When the
employee is put to work under the eye and gaze of the
principal employer, or his agent, where he can be watched
secretly, accidentally, or occasionally, while the work is in
progress, so as to scrutinize the quality thereof and to detect
faults therein, as also put to timely remedial measures by
directions given, finally leading to the satisfactory completion
and acceptance of the work, that would be supervision. It is
the consistency of vigil. C.E.S.C. Ltd. v. Subhash Chandra
Bose, (1992) 1 SCC 441
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Kinds of employment –
Government or public governed by statutory rules;
Industrial governed by Labour Laws; and
Private governed purely by contract.
A government servant is a person who holds a civil post under the
Union or State Government. It may be noted however that under
sub-rule (iii) a person in the service of a local or other authority
whose services are temporarily placed at the disposal of the Central
Government also gets the status of a government servant. UPSC v.
Girija Jayantilal Vaghela, (2006) 2 SCC 482
In public employment, master-servant relationship is severed by
removal, termination or dismissal. In industrial employment on the
pother hand, the order (of dismissal or discharge) remains in an
inchoate state till the employer obtains order of approval from the
Tribunal u/s 33(2)(b) of the I.D. Act, 1947. T.N. State Transport
Corpn. v. Neethivilangan, Kumbakonam (2001) 9 SCC 99
Rule governing service conditions in different employments –
Articles 309 and 310 of the Constitution of India; Service Rules
made under Proviso to Article 309, Standing Orders certified under
Industrial Employment (Standing Orders) Act, 1946
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309. Subject to the provisions of this Constitution, Acts of the
appropriate Legislature may regulate the recruitment, and conditions
of service of persons appointed, to public services and posts in
connection with the affairs of the Union or of any State:
Provided that it shall be competent for the President or such person
as he may direct in the case of services and posts in connection with
the affairs of the Union, and for the Governor of a State or such
person as he may direct in the case of services and posts in
connection with the affairs of the State, to make rules regulating the
recruitment, and the conditions of service of persons appointed, to
such services and posts until provision in that behalf is made by or
under an Act of the appropriate Legislature under this article, and
any rules so made shall have effect subject to the provisions of any
such Act.
In the English system the pleasure doctrine was prevalent in regard
to government service. The legacy continues. Article 310 of the
Constitution of India provides that person shall continue in
government service till the pleasure of the President or the
Governor, as the case may be. Article 310 reads:
310. (1) Except as expressly provided by this Constitution, every person
who is a member of a defence service or of a civil service of the Union or of
an all-India service or holds any post connected with defence or any civil
post under the Union holds office during the pleasure of the President, and
every person who is a member of a civil service of a State or holds any civil
post under a State holds office during the pleasure of the Governor of the
State.*
The appointment letters or the offers of appointment normally begin with
“President / Governor (as the case may be) is pleased to appoint….” The
Supreme Court held in State of Bihar v. Abdul Majid. AIR 1954 SC 245 that
this pleasure was subject to restrictions imposed by the statutes (Rules
framed u/Art. 309 and provisions of Article 311).
Relevance of Article 310.
Pleasure of the President or the Governor is not his personal one, it is that
of the Council of Ministers.
Status and rights of employees under service rules:
The employee has a right to serve till the age of retirement unless
terminated/removed or dismissed in accordance with the rules and
procedures.
The employee has the protection of Article 311 of the Constitution of India
against arbitrary/ biased/ mala fide/ prejudiced
removal/termination/dismissal or reduction in rank.
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The employee can directly approach a High Court under its writ
jurisdiction (under Article 226 of the Constitution) against arbitrary/
illegal/ unjustified dismissal/removal/termination or reduction in rank.
Under Labour Laws:
Protection of Standing Orders/ I.D. Act, 1947 against arbitrary
termination/discharge/retrenchment/unfair labour practice.
Workman : Whether an employee is a workman or not is to be decided
not on the basis of the grades in which they are placed but on the basis
of their duties, responsibilities and powers (Mukand Ltd. v. Mukand Staff
& Officers' Assn., (2004) 10 SCC 460)
Principal Employer; immediate employer.
An independent contractor is entirely independent of any control or
interference and merely undertakes to produce a specified result,
employing his own means to produce that result. An agent is not subject
to the direct control and supervision of the principal. (see
Superintendent of Post Offices v. P.K. Rajamma, (1977) 3 SCC 94 :
1977 SCC (L&S) 374) The employees of the intermediate employer are
not employees of the principal employer.
The employer governed by labour laws is obliged to follow the labour
welfare obligations caste on him by labour legislations based on Articles
38, 39, 42, 43 and 43-A of the Constitution. These provisions are:
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38. (1) The State shall strive to promote the welfare of the people by
securing and protecting as effectively as it may a social order in
which justice, social, economic and political, shall inform all the
institutions of the national life.
(2) The State shall, in particular, strive to minimize the inequalities in
income, and endeavour to eliminate inequalities in status, facilities
and opportunities, not only amongst individuals but also amongst
groups of people residing in different areas or engaged in different
vocations.
39. The State shall, in particular, direct its policy towards securing—
(a) that the citizens, men and women equally, have the right to an
adequate means of livelihood;
(b) that the ownership and control of the material resources of the
community are so distributed as best to subserve the common good;
(c) that the operation of the economic system does not result in the
concentration of wealth and means of production to the common
detriment;
(d) that there is equal pay for equal work for both men and women;
42. The State shall make provision for securing just and humane
conditions of work and for maternity relief.
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43. The State shall endeavour to secure, by suitable legislation or
economic organisation or in any other way, to all workers,
agricultural, industrial or otherwise, work, a living wage, conditions
of work ensuring a decent standard of life and full enjoyment of
leisure and social and cultural opportunities and, in particular, the
State shall endeavour to promote cottage industries on an individual
or co-operative basis in rural areas.
43A. The State shall take steps, by suitable legislation or in any
other way, to secure the participation of workers in the management
of undertakings, establishments or other organisations engaged in
any industry.
In order to avoid complying with these obligations many employers
in public as well as private sector apply myriad devices. One such
device is ostensibly outsourcing the labour force through an
intermediate contractor. It was held that ‘the presence of
intermediate contractors with whom alone the workers have
immediate or direct relationship ex contractu is of no consequence
and the Management is the real employer and not the immediate
contractor. Hussainbhai, Calicut v. Alath Factory Thezhilali Union,
Kozhikode, (1978) 4 SCC 257
Where the Bank had constituted a committee of the staff to run the
canteen which was responsible only for day-to-day running thereof,
it was held that the Bank could not be absolved of its responsibility
as the employer of the canteen employees. Indian Overseas Bank v.
I.O.B. Staff Canteen Workers' Union, (2000) 4 SCC 245; Steel
Authority of India Ltd. v. National Union Waterfront Workers.: (2001)
7 SCC 1 : 2001 SCC (L&S) 1121
The contract labour are indeed the employees of the principal
employer where :
(i) contract labour is engaged in or in connection with the work of
an establishment and employment of contract labour is
prohibited;
(ii) the contract was found to be a sham and nominal, rather a
camouflage, in which case the contract labour working in the
establishment of the principal employer were held, in fact and in
reality, the employees of the principal employer himself; and
(iii) in discharge of a statutory obligation of maintaining a canteen
in an establishment the principal employer availed the services of
a contractor – the contract labour would indeed be the
employees of the principal employer.
Recruitment
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Constitutional guarantee of equality before law – Articles 14 and 16 of the
Constitution in Government employment – Requirement of acting fairly and
impartially
Constitution of India
Article 14. The State shall not deny to any person equality before the law or
the equal protection of the laws within the territory of India.
Article 16. (1) There shall be equality of opportunity for all citizens in
matters relating to employment or appointment to any office under the
State.
(2) No citizen shall, on grounds only of religion, race, caste, sex, descent,
place of birth, residence or any of them, be ineligible for, or discriminated
against in respect of, any employment or office under the State.
(3) Nothing in this article shall prevent Parliament from making any law
prescribing, in regard to a class or classes of employment or appointment to
an office under the Government of, or any local or other authority within, a
State or Union territory, any requirement as to residence within that State or
Union territory prior to such employment or appointment.
(4) Nothing in this article shall prevent the State from making any
provision for the reservation of appointments or posts in favour of any
backward class of citizens which, in the opinion of the State, is not
adequately represented in the services under the State.
(4A) Nothing in this article shall prevent the State from making any provision
for reservation in matters of promotion, with consequential seniority, to any
class or classes of posts in the services under the State in favour of the
Scheduled Castes and the Scheduled Tribes which, in the opinion of the
State, are not adequately represented in the services under the State.
(4B) Nothing in this article shall prevent the State from considering any
unfilled vacancies of a year which are reserved for being filled up in that
year in accordance with any provision for reservation made under clause (4)
or clause (4A) as a separate class of vacancies to be filled up in any
succeeding year or years and such class of vacancies shall not be
considered together with the vacancies of the year in which they are being
filled up for determining the ceiling of fifty per cent. reservation on total
number of vacancies of that year.
(5) Nothing in this article shall affect the operation of any law which provides
that the incumbent of an office in connection with the affairs of any religious
or denominational institution or any member of the governing body thereof
shall be a person professing a particular religion or belonging to a particular
denomination.
Articles 14 and 16 are also known as equality provisions. Equality is one
aspect of Natural justice, the other being Equity. It is often said that where
there is no legal provision, equity prevails. Compliance with principles of
Natural Justice is hallmark of government service, particularly departmental
enquiry.
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Employment Exchanges (Compulsory Notification of Vacancies) Act,
1959
Not to apply to
Agricultural labour, domestic labour, les than 3 months tenure,
unskilled work, promotional posts, surplus staff, vacancies to be
filled through competitive exams., or on recommendations by UPSC
or PSC, and vacancy with wages less than `60.
Returns
Recruitment rules – different cadres/levels; skilled/unskilled;
professional/general – promotions and
Recruitment to a career and fixed tenure recruitments
Illegal appointment and irregular appointment
Regularisation
Compassionate appointment
Ad hoc appointment
Daily wagers – Organized and unorganized sector
Determination of employment
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Retirement or superannuation
Pre-mature retirement –
at the instance of employee : Voluntary retirement,
resignation
at the instance of the employer : termination, compulsory
retirement,
Voluntary retirement schemes
By way of punishment :
Termination, removal, dismissal, compulsory retirement
Dismissal, removal, termination and compulsory retirement puts an
end to the relationship of employer and employee; but in case of
suspension, reduction in rank or reversion, the relationship of
employer and employee continues. Public Services Tribunal Bar
Assn. v. State of U.P., (2003) 4 SCC 104 Similarly, the master and
servant relationship is not severed on retirement. It continues even
thereafter for grant of retiral benefits. U.P. State Sugar Corpn. Ltd. v.
Kamal Swaroop Tondon, (2008) 2 SCC 41
Discipline
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Definition and need
Efficiency of the administration of the Industrial undertakings is very
vital and relevant consideration. Production must continue, services
must be maintained and run. Efficacy of the services can be ensured
only if manned by disciplined employees or workers. Discipline,
decency and order will have to be maintained. Employees should
have sense of participation and involvement and necessarily sense
of securit. Delhi Transport Corpn. v. D.T.C. Mazdoor Congress, 1991
Supp (1) SCC 600 For smooth functioning, every employer depends
upon a disciplined employees’ force. Indian Rly. Construction Co.
Ltd. v. Ajay Kumar, (2003) 4 SCC 579
Earlier only the interest of the workmen was sought to be protected
with the avowed object of fast industrial growth of the country.
Because of this discipline at the workplace/industrial undertakings
received a setback. The current trend of the Supreme Court is that
in view of the change in economic policy of the country, it may not
now be proper to allow the employees to break the discipline with
impunity. Hombe Gowda Edn. Trust v. State of Karnataka (2006) 1
SCC 430
Departmental Proceeding
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Article 21 of the Constitution reads as under:
21. No person shall be deprived of his life or personal liberty
except according to procedure established by law.
It was held that right to life does not only mean animal
existence, it includes means of livelihood. It implies that
dismissing and employee arbitrarily or without following the
rules and procedures amounts to depriving him of his
livelihood in violation of the procedure established by law.
Such actions would be unconstitutional and cannot be
sustained. Such procedure must be fair, just and reasonable.
Olga Tellis v. Bombay Municipal Corpn. (1985) 3 SCC 545
Articles 309 and 311 provide the framework for and require
framing of rules defining conduct and misconduct; and for
procedure to be followed in departmental enquiries in case of
misconduct; and imposing punishments proportionate to the
misconduct.
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Scope : State – Article 12 Constitution of India
12. In this Part, unless the context otherwise requires, “the State’’
includes the Government and Parliament of India and the
Government and the Legislature of each of the States and all local
or other authorities within the territory of India or under the control of
the Government of India. The State is required to act fairly and
reasonably.
The employees of the State are Government or civil servants.
Therefore all service rules and government actions must conform to
Articles 14, 16, 309 and 311 and the relevant procedures must
conform to principles of natural justice.
The State, as defined in Article 12, is thus comprehended to include
bodies created for the purpose of promoting the educational and
economic interests of the people.
The Courts have expanded the scope of the expression ‘State’
within the meaning of Article 12 to include Public Sector
undertakings/ Enterprises and other organisations. The criteria for
an organisation to be deemed to State are (Pradeep Kumar Biswas v.
Indian Institute of Chemical Biology, (2002) 5 SCC 111) :
(1) Where the entire share capital of the corporation is held by
Government.
 (2) Where the financial assistance of the State is so much as to meet
almost entire expenditure of the corporation.
 (3) Whether the corporation enjoys monopoly status which is Stateconferred or State-protected.
 (4) Existence of deep and pervasive State control.
 (5) Whether the functions of the corporation are of public importance
and closely related to governmental functions.
 (6) If a department of Government is transferred to a corporation.
Departmental Proceeding – why?
Departmental proceeding is needed to maintain discipline in the service
and efficiency of public service. Hindustan Petroleum Corpn. Ltd. v.
Sarvesh Berry, (2005) 10 SCC 471
If an act or omission of an employee reflects upon his character,
reputation, integrity or devotion to duty or is an unbecoming act,
certainly the employer can take action against him. Indian Rly.
Construction Co. Ltd. v. Ajay Kumar, (2003) 4 SCC 79.
 There is no distinction between ‘departmental proceeding’ and
‘disciplinary proceeding’. Punjab National Bank v. M.L. Kalra, (2008) 3
SCC 494
 Departmental Proceeding starts with a departmental enquiry and
culminates with punishment or exoneration of the employee charged.
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EXTRACTS FROM CCS (CONDUCT) RULES, 1964
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3. General
(1) Every Government servant shall at all times-(i) maintain absolute integrity;
(ii) maintain devotion to duty; and
(iii) do nothing which is unbecoming of a Government servant.
3A. Promptness and Courtesy
No Government servant shall
(a) in the performance of his official duties, act in a discourteous manner;
(b) in his official dealings with the public or otherwise adopt dilatory
tactics or willfully cause delays in disposal of the work assigned to him.
3B. Observance of Government's policies
Every Government servant shall, at all times(i) act in accordance with the Government's policies regarding age of
marriage, preservation of environment, protection of wildlife and cultural
heritage;
(ii) observe the Government's policies regarding prevention of crime
against women.
3C. Prohibition of sexual harassment of working women
(1) No Government servant shall indulge in any act of sexual harassment
of any women at her work place.
(2) Every Government servant who is incharge of a work place shall take
appropriate steps to prevent sexual harassment to any woman at such work
place.
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4. Employment of near relatives of Govt. servants in companies or
firms
5. Taking part in politics and elections
6. Joining of associations by Government servants
No Government servant shall join or continue to be a member
of, an association the objects or activities of which are prejudicial to
the interests of the sovereignty and integrity of India, or public order
or morality.
7. Demonstration and strikes
8. Connection with press or other media
9. Criticism of Government
10. Evidence before Committee or any other authority
11. Communication of Official Information
12. Subscriptions
No Government servant shall, except with the previous
sanction of the Government or of the prescribed authority, ask for or
accept contributions to, or otherwise associate himself with the
raising of, any funds or other collections in cash or in kind in
pursuance of any object whatsoever.
13. Gifts
(1) Save as provided in these rules, no Government servant shall
accept, or permit any member of his family or any other person
acting on his behalf to accept, any gift.
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EXPLANATION :- The expression "gift" shall include free
transport, boarding, lodging or other service or any other pecuniary
advantage when provided by any person other than a near relative
or personal friend having no official dealings with the Government
servant.
NOTE (1) - A casual meal, lift or other social hospitality shall
not be deemed to be a gift NOTE (2) - A Government servant shall avoid accepting lavish
hospitality or frequent hospitality from any individual, industrial or
commercial firms, organisations, etc., having official dealings with
him.
13-A. Dowry
14. Public demonstrations in honour of Government servants
15. Private trade or employment
16. Investment, lending and borrowing
17. Insolvency and habitual indebtedness
18. Movable, immovable and valuable property
18-A. Restrictions in relation to acquisition and disposal of
immovable property outside India and transactions with foreigners,
etc.
19. Vindication of acts and character of Government servant
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20. Canvassing of non-official or other outside influence
No Government servant shall bring or attempt to bring any political
or other outside influence to bear upon any superior authority to further
his interests in respect of matters pertaining to his service under
Government.
21. Restriction regarding marriage
(1) No Government servant shall enter into, or contract, a marriage
with a person having a spouse living; and
(2) No Government servant having a spouse living, shall enter into, or
contract, a marriage with any person:
Provided that the Central Government may permit a Government
servant to enter into, or contract, any such marriage as is referred to in
clause (1) or clause (2), if it is satisfied that (a) such marriage is permissible under the personal law applicable
to such Government servant and the other party to the marriage; and
(b) there are other grounds for so doing.
(3) A Government servant who has married or marries a person other
than of Indian nationality shall forthwith intimate the fact to the
Government.
22. Consumption of intoxicating drinks and drugs
22-A. Prohibition regarding employment of children below 14 years
of age.
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311. (1) No person who is a member of a civil service of the Union or
an all-India service or a civil service of a State or holds a civil post
under the Union or a State shall be dismissed or removed by an
authority subordinate to that by which he was appointed.
(2) No such person as aforesaid shall be dismissed or removed or
reduced in rank except after an inquiry in which he has been
informed of the charges against him and given a reasonable
opportunity of being heard in respect of those charges.
Provided that where it is proposed after such inquiry, to impose
upon him any such penalty, such penalty may be imposed on the
basis of the evidence adduced during such inquiry and it shall not be
necessary to give such person any opportunity of making
representation on the penalty proposed:
Provided further that this clause shall not apply—
(a) where a person is dismissed or removed or reduced in rank
on the ground of conduct which has led to his conviction on a
criminal charge; or
(b) where the authority empowered to dismiss or remove a
person or to reduce him in rank is satisfied that for some reason, to
be recorded by that authority in writing, it is not reasonably
practicable to hold such inquiry; or
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(c) where the President or the Governor, as the case may be, is
satisfied that in the interest of the security of the State it is not
expedient to hold such inquiry.
(3) If, in respect of any such person as aforesaid, a question arises
whether it is reasonably practicable to hold such inquiry as is
referred to in clause (2), the decision thereon of the authority
empowered to dismiss or remove such person or to reduce him in
rank shall be final.
Simply put, the proceeding is initiated by appointment of Inquiry
officer and the presenting officer (the disciplinary, appellate,
reviewing and accepting authorities are normally prescribed in
service rules); issue of charge sheet, followed by depositions and
evidences of the prosecution and the defence, submission of
enquiry report, consideration thereof and imposition of punishment
by the disciplinary authority. The employee has a right to appeal and
review and on being unsuccessful, to approach the Administrative
Tribunal and the Court of law.
Departmental proceedings are initiated if information about an
employee’s corruption, malpractice or misconduct comes to the
notice of the disciplinary authority. The Vigilance Manual
enumerates 11 sources :
(a) Complaints received from employees of the organisation or
from the public;
(b) Departmental inspection reports and stock verification surveys;
(c) Scrutiny of annual property statements;
(d) Scrutiny of transactions reported under the Conduct Rules;
(e) Reports of irregularities in accounts detected in the routine
audit of accounts; e.g. tampering with records, over-payments,
misappropriation of money or materials etc.;
(f) Audit reports on Government accounts and on the accounts of
public undertakings and other corporate bodies etc.;
(g) Reports of Parliamentary Committees like the Estimates
Committee, Public Accounts Committee and the Committee on
Public Undertakings;
(h) Proceedings of two Houses of Parliament;
(i) Complaints and allegations appearing in the press etc.;
(j) Source information, if received verbally from an identifiable
source, to be reduced in writing; and
(k) Intelligence gathered by agencies like CBI, local bodies etc.
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Preliminary enquiry
When an allegation of misconduct or corrupt practices is brought to
notice or becomes known during course of routine working, a
preliminary enquiry is held to decide whether the fact(s) prima facie
constitute misdemeanour for which major punishment can be
imposed. If it is so, departmental enquiry is ordered. If the facts
warrant only minor punishment, a show cause or explanation is
asked for and departmental enquiry is dispensed with, being not
necessary.
Suo motu : (b) to (f) : internal sources.
Anonymous complaint not cognizable.
Pseudonymous complaint : before taking cognizance of such
complaints the Chief Vigilance Officer of the department or
organisation concerned should obtain specific orders from the Head
of the Department. A copy of all such complaints shall first be made
available to the officer concerned for his comments, and only
thereafter further action should be taken. Precaution should be
taken to take into custody all relevant documents. ITAT v. V.K.
Agarwal, (1999) 1 SCC 16
By far the most common source is a complaint by an employee or
anybody as mentioned in (a) above.
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In case of a signed complaint the disciplinary authority may straightway
proceed to initiate preliminary enquiry to ascertain whether a prima facie
case is made out against the official or not.
Minor penalties
(i) Censure;
(ii) Withholding of promotion;
(iii) Recovery of pay – pecuniary loss to the Govt.;
(iii)(a) Reduction to a lower stage in the time scale of pay by one stage for
period not exceeding three years without cumulative effect, not affecting
pension;
(iv) Withholding of increment – without cumulative effect.
Major penalties
(v) Reduction in time scale of pay with ….. Increment;
(vi) Reduction in time scale of pay … promotion, seniority;
(vii) Compulsory retirement;
(viii) Removal from service;
(ix) Dismissal;
In minor penalty it is not necessary to follow detailed and lengthy procedure
laid down for imposition of major penalties. There is charge and its denial.
The proceedings can be instituted by issuing notice. U.P. State Sugar
Corpn. Ltd. v. Kamal Swaroop Tondon, (2008) 2 SCC 41 Even in a case
where the procedure for imposition of a major penalty is followed, having
regard to the facts and circumstances of a case, minor penalty can be
imposed.
An amalgam of minor and major penalties in the same order is not
permissible. Union of India v. S.C. Parashar, (2006) 3 SCC 167
The procedural requirements of a departmental enquiry (A. Sudhakar v.
Postmaster General, (2006) 4 SCC 348):
(i) opportunity to the officer concerned to deny his guilt and establish his
innocence which means he must be told that what the charges against him
are and the allegations on which such charges are based;
(ii) he must be given a reasonable opportunity to cross-examine the
witnesses produced against him and examine himself or other witnesses on
his behalf; and
(iii) he must be given opportunity to show cause that the proposed
punishment would not be proper punishment to inflict which means that the
tentative determination of the competent authority to inflict one of the three
punishments must be communicated to him.
Strict rules of evidence do not apply to departmental enquiry. Naresh
Govind Vaze v. Govt. of Maharashtra, (2008) 1 SCC 514 penalty can be
imposed on the delinquent officer on a finding recorded on the basis of
“preponderance of probability”. Mazdoor Sangh v. Usha Breco Ltd., (2008) 5
SCC 554
Section 58 of the Evidence Act, 1872 (charges having been admitted are
not required to be proved) is applicable to departmental enquiries. V.S.P. v.
Goparaju Sri Prabhakara Hari Babu, (2008) 5 SCC 569
Before initiating the proceeding, the delinquent may be suspended with or
without transfer. He shall be entitled to subsistence allowance – Non-coopn.
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Procedures for conducting departmental enquiries (Rule-14, CCS
(CCA) Rules, 1965)
i) Issue of charge-sheet by the Disciplinary Authority to the
delinquent comprising the following and asking him to file his written
statement and if he wishes to be heard in person –
a) imputation of misconduct giving all relevant facts
b) Articles of charges
c) list of documents, witnesses by which charges are proposed
to be sustained.
ii) If the written statement is not acceptable, D.A. to record reasons
for his opinion and order enquiry by appointing Inquiry Officer and
Presenting Officer.
As far as possible the D.A. should make the enquiry himself.
Immediate superior of the delinquent should not be made I.O.
I.O. should be senior in rank than the delinquent.
Delinquent may challenge appointment of a particular I.O. on
ground of bias – stay of the proceedings.
iii) I.O. to intimate the delinquent of the time, date and place of
enquiry as also whether he wants to inspect or have copy of any
document and to give list of documents and witnesses in his
defence. Continued non-appearance of delinquent will result in ex
parte enquiry.
iv) The enquiry being domestic, the delinquent is supposed to plead his
case himself. However he may take assistance of any other
employee or even a retired govt. servant (limitation of 7 cases) or an
employee under suspension’ but not by Union representative or a
legal practitioner. Kalindi v. Tata Locomotive & Engg. Co. Ltd.,
(1960) 3 SCR 407 : AIR 1960 SC 914
v) At the outset the I.O. shall ask the delinquent if he pleads guilty or
wants the enquiry. In case of pleading guilty, it shall be recorded and
authenticated by the delinquent, P.O. and the I.O.
vi) If the delinquent demands certain documents the I.O. shall cause
them to be supplied. Documents, if irrelevant, may be denied after
recording reasons. Prejudice.
vii) First the P.O. shall present the department's case supported by
documents, statements and wiriness.
viii) After the department’s case if closed the delinquent shall present
his case in similar manner.
ix) The P.O. and the delinquent may cross-examine each other’s
witnesses.
x) The deliberations shall be recorded daily and signed by the I.O., P.O.
and the delinquent.
xi) Inquiry report to be drawn on conclusion of the enquiry and to
contain :
a) Case of the department,
b) Case of the delinquent,
c) Assessment of evidence in respect of each article of charge.
d) Finding on each Article of charge.
xii) The report along with the written statement of the delinquent,
oral and/or documentary evidence to be forwarded to the D.A.
Action on Enquiry report
xiii) D.A., if not satisfied (reasons to be recorded) may remit the
matter to I.O. for further enquiry.
xiv) D.A. shall send the Enquiry report to the delinquent for his
submission. (Done generally if not agreeing with the findings of
exoneration – reasons to be recorded. Not required if no prejudice to
the delinquent.)
xv) Imposition of penalty after considering the delinquent’s
submissions.
The order should be speaking one – well reasoned.
The enquiry and the punishment cannot travel beyond the
charges.
Even if all charges are not proved, punishment can be imposed
on the basis of even one charge proved – but proportionate to the
gravity of the charge proved.
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Past bad record, if not part of the charges, cannot be considered
for imposing penalty.
Disciplinary proceedings, if not concluded, should be closed on
death of the delinquent.
Dismissal cannot be ordered with retrospective effect.
Common proceeding – in case of more than one charged
persons.
Even if a criminal case is instituted, departmental proceedings
can also be initiated independently on the same grounds.
Inordinate delay in issuing the charge memo, or initiating the
departmental enquiry, vitiates the entire proceeding. U.P. SRTC
v. Mitthu Singh, (2006) 7 SCC 180
The principles of natural justice demand that an application for
summoning a witness by the delinquent officer should be
considered by the enquiry officer. It was obligatory on the part of
the enquiry officer to pass an order in the said application. He
could not refuse to consider the same. Union of India v. Prakash
Kumar Tandon, (2009) 2 SCC 541; M.V. Bijlani v. Union of India
(2006) 5 SCC 88. Where material prosecution witnesses were
not examined in a departmental enquiry, it was held that this
amounted to violation of the principles of natural justice and the
whole proceeding was held to be vitiated. Hardwari Lal v. State of
U.P., (1999) 8 SCC 582
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In the landmark judgment in Union of India v. Mohd. Ramzan Khan,
(1991) 1 SCC 588 the Supreme Court observed that non-supply of
the report of the inquiry officer to the delinquent, particularly when it
finds him guilty, affects rules of natural justice and vitiates the
proceeding. Not allowing inspection of documents which were not
relevant to defence of the delinquent does not prejudice him and the
enquiry cannot be held vitiated on this account. State of Rajasthan v.
S.K. Dutt Sharma, 1993 Supp (4) SCC 61
Supply of the enquiry report is part and parcel of natural justice.
However unless the delinquent is able to show that non-supply of
report has resulted in prejudice or miscarriage of justice, an order of
punishment cannot be held to be vitiated. Managing Director, ECIL,
Hyderabad v. B. Karunakar, (1993) 4 SCC 727; Haryana Financial
Corpn. v. Kailash Chandra Ahuja, (2008) 9 SCC 31
Appeal :
Order against which no appeal lies –
i) Made by the President
ii) Order of interlocutory nature
iii) Order of I.O. made during the course of enquiry
Orders against which appeal lies –
i) Suspension
ii) Penalty
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iii) Enhancement of penalty
iv) Order imposing financial loss
v) Order affecting career of the delinquent
vi) Reversion
vii) Reducing/withholding pension
viii) Determination of subsistence allowance/ pay etc.
during suspension
Appeal to be filed within 45 days of the order.
Appeal to be individual.
Natural justice – meaning, historical development, scope
and applicability – speaking order
The classic exposition of Sir Edward Coke of natural
justice requires to “vocate, interrogate and adjudicate”.
Canara Bank v. V.K. Awasthy, (2005) 6 SCC 321

In the initial stages it was thought that it had only two elements,
namely, (i) no one shall be a judge in his own cause (nemo judex in
causa sua or nemo debet esse judex propria causa) and (ii) no one
shall be condemned unheard (audi alteram partem or hear the other
side). With the passage of time a third element was introduced,
namely, of procedural reasonableness because the main objective
of the requirement of rule of natural justice is to promote justice and
prevent its miscarriage. Rash Lal Yadav (Dr) v. State of Bihar, (1994)
5 SCC 267; Biecco Lawrie Limited v. State of West Bengal, (2009) 2
SCC (L&S) 729; Ganesh Gogoi v. State of Assam, (2009) 7 SCC 40;
Asit Kumar Kar v. State of W.B., (2009) 2 SCC 703
Thus principles of natural justice are not required to be complied
with when it will lead to an empty formality. Karnataka SRTC v. S.G.
Kotturappa, (2005) 3 SCC 409
In certain cases requirement of compliance with principles of natural
justice may be excluded statutorily as in Article 311(2) Proviso.
Similarly Sections 25-F, 2-FF, 25-FFF of the ID Act by necessary
implication exclude the application of principles of natural justice.
If only one conclusion is possible in the facts of the case and the
administrative authority has arrived at that conclusion, it does not
matter if there has been violation of the principles of natural justice.
M.C. Mehta v. Union of India, (1999) 6 SCC 237
Indicative principles of departmental proceedings vis-à-vis principles of
natural justice are:
 (1) An order passed imposing a punishment on an employee
consequent upon a disciplinary/departmental enquiry in violation of
the rules/regulations/statutory provisions governing such enquiries
should not be set aside automatically.
 (2) A substantive provision has normally to be complied with …
 (3) The complaint of violation of procedural provision should be
examined from the point of view of prejudice, viz., whether such
violation has prejudiced the delinquent officer/employee in
defending himself properly and effectively. … If no prejudice is
established to have resulted there from, no interference is called for.
 (4)(a) In the case of a procedural provision which is not of a
mandatory character, … the order passed in violation of such a
provision can be set aside only where such violation has occasioned
prejudice to the delinquent employee.
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(b) In the case of violation of a procedural provision, which is of a
mandatory character, If the employee has waived his right, then the
order of punishment cannot be set aside on the ground of its
violation. The ultimate test is always the same, viz., test of prejudice
or the test of fair hearing, as it may be called.
(5) A distinction must be made between “no opportunity” and no
adequate opportunity, i.e., between “no notice”/“no hearing” and “no
fair hearing”. (a) In the case of former, the order passed would
undoubtedly be invalid ... In such cases, normally, liberty will be
reserved for the Authority to take proceedings afresh ... (b) But in the
latter case, the effect of violation (of a facet of the rule of audi
alteram partem) has to be examined from the standpoint of
prejudice; …
(6) Fair hearing and justice is to be insured.
(7) Court may have to balance public/State interest with the
requirement of natural justice.
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Judicial Review – grounds
Procedural defects and infirmities
Violation of principles of natural justice –
prejudice – Bias, mala fides, discrimination
Proportionality of misconduct and penalty
Unfair labour practice
Where a company termed its employees as
trainees and denied employer-employee
relationship to avoid rigours of labour laws, it
was held that it would be impossible to believe
that the entire production activity was being
carried on with none other than the so-called
trainees. Trambak Rubber Industries Ltd. v.
Nashik Workers Union, (2003) 6 SCC 416
Labour laws – Courts’ interpretations
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Industrial Disputes Act, 1947
Sections 2, 10, 11, 17, 18, 24, 25(B, C, E, F, FF,
G, U), and 33
Employment Exchanges (Compulsory
Notification of Vacancies) Act, 1959
Sections 3, 4 and 5
Contract Labour (Regulation and Abolition) Act,
1970
Sections 1, 7, 9 and 10
Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952
Sections 7A and 7C
Labour laws – Courts’ interpretations.
Contd.
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Factories Act, 1948
Section 41B,41C, 41H, 46, 67, 71, 85, 86, 93, 96A, 97
and 101
Minimum Wages Act, 1948
Sections 12 to 17 and 22
Payment of bonus act, 1965
Sections 4 to 9, 15 and 25
Payment of Gratuity Act, 1972
Sections 2, 2A, 4A, 7 and 10
Payment of Wages Act, 1936
Sections 3 to 5 and 7
Workmen’s Compensation Act, 1923
Sections 3, 4A,