PETITIONER: <NAME> Vs. RESPONDENT: <ORG> AND OTHERS DATE OF JUDGMENT04/10/1983 BENCH: <NAME>, <NAME> (J) BENCH: <NAME>, <NAME> (J) CHANDRACHUD, <NAME>, R.S. CITATION: 1984 AIR 273 1984 SCR (1) 184 1984 SCC (1) 43 1983 SCALE (2)587 CITATOR INFO : R 1986 SC 995 (17) D 1987 SC 71 (15) ACT: <ORG>) read with rule 50-Scope of-Whether require due compliance with principles of natural justice-Rule whether statutory-No opinion expressed. Statutory <ORG> employee-Associated with the inquiry- Materials gathered at his back shown-Did not ask for cross- examination-Asked for personal hearing-Personal hearing given-Employee dismissed-Whether rules of natural justice violated. HEADNOTE: On the basis of a complaint made against the appellant, a Branch Manager of the first respondent <ORG>, the Head Office of the <ORG> ordered a preliminary inquiry and after considering the report of the preliminary inquiry directed one of its officers to carry out investigation under the rules governing the service of the officers of the <ORG>. The Investigating officer conducted the investigation and also framed charges against the appellant. The Investigating officer held that the appellant had committed certain irregularities wilfully, violated the established practices and defied the <ORG>'s instructions. On the basis of the report of the Investigating officer the appellant was served with a charge-sheet. The charge against the appellant was that he had acted in violation of procedure of the <ORG>, he had disregarded all safeguards in sanctioning the overdrafts, encashing bills and his conduct had exposed the bank to grave risks and that he had flagrantly violated the bank rules and instructions with a view to cover up attempts to misappropriate bank's money after defrauding the bank. In his reply to the charge-sheet the appellant did not ask for any opportunity to lead evidence in support of his defence and for cross-examination of any of the officers in respect of the matters stated against him. The appellant merely asked for a personal hearing which was granted to him. The Local Board of the <ORG>, after considering all the relevant documents submitted to it, resolved that the appellant be dismissed, Thereafter the appellant was served notice to show cause why he should not be dismissed from service in terms of rule 49(f) of the State <ORG> of India (Officers and Assistants) Service Rules. In his reply the appellant stated inter alia that the inquiry was in violation of the principles of natural justice. <ORG> of the Central Board of the <ORG> after going through all the necessary papers submitted to it, directed that the appellant be dismissed from service. On being dismissed, the appellant challenged his dismissal in <ORG> alleging contravention of the rules. <ORG> dismissed the 185 writ application on the ground that the rules had no statutory effect. Hence this appeal by special leave. The appellant contended that the impugned order should be struck down as having been passed in violation of the principles of natural justice. He submitted that rule 50 of the Rules implied reasonable opportunity which required that materials against a person should not be gathered behind his back and he should be given an opportunity to cross-examine, if necessary, the persons who had supplied the materials or given evidence against him and since in his case the materials against him were gathered in his absence and he was not allowed to cross-examine the witnesses, and that evidence against him was not recorded in his presence, the requirements of rule 50 had not been fulfilled. The appellant also submitted that no loss or damage had been caused to the <ORG> and that the final order did not contain the reasons. Dismissing the appeal, HELD: Referring to rule 49(f) and sub rules (1), (2) and (3) of rule 50 of the State <ORG> of India (officers and Assistants) Service Rules, in the instant case the relevant rules have been complied with. Even if the rules are read as requiring due compliance with the principles of natural justice or even if such basis principles of natural justice were taken as implied in any case there has been no violation of the principles of natural justice in respect of the impugned order. [200 G-H] All actions against a party which involve penal or adverse consequences must be in accordance with the principles of natural justice but whether any particular principles of natural justice would be applicable to a particular situation or the question whether there has been any infraction of the application of that principle, has to be judged, in the light of facts and circumstances of each particular case. The basic requirement is that their must be fair play in action and the decision must be arrived at in a just and objective manner with regard to the relevance of the materials and reasons. The rules of natural justice are flexible and cannot be put on rigid formula. In order to sustain a complaint of violation of principles of natural justice on the ground of absence of opportunity of cross- examination, it has to be established that prejudice has been caused to the appellant by the procedure followed. [206 H; 207 A-C] Neither cross-examination nor the opportunity to lead evidence by the delinquent is an integral part of all quasi judicial adjudications. [207 H] <NAME> Justice" (page 86) and <NAME> 'On Administrative Law' 5th Edition at pages 472-475, referred to. In respect of an order involving adverse or penal consequences against an officer or an employee of statutory corporations, there must be an investigation into the charges consistent with the requirements of the situation in accordance with the principles of natural justice as far as these were applicable to a particular situation. So whether a particular principle of natural justice has been violated or not has to be judged in the background of the nature of 186 the charges, the nature of the investigation conducted in the background of any statutory or relevant rules governing such enquiries. [200 H; 201 A-B] In the instant case the infraction of the natural justice complained of was that the appellant was not given opportunity to rebut the materials gathered in his absence. The appellant was associated with the preliminary investigation that was conducted against him. He does not deny or dispute. that. Information and materials undoubtedly were gathered not in his presence but whatever information was there and gathered namely, the versions of the persons, the particular entries which required examination were shown to him. He was conveyed the information given and his explanation was asked for. He participated in that investigation. He gave his explanation but he did not dispute any of the facts nor did he ask for any opportunity to call any evidence to rebut these facts. He did ask for a personal hearing and he was given such opportunity of personal hearing. His explanations were duly recorded. He does not allege that his version has been improperly recorded nor did he question the veracity of the witnesses or the entries or the letters or documents shown to him upon which the charges were framed and upon which he was found guilty. Indeed he was really consulted at every stage of preliminary investigation upon which the charges were based and upon which the proposed action against him has been taken. In that view of the matter, it cannot be said that in conducting the enquiry or framing of the charges or arriving at the decision, the authorities concerned have acted in violation of the principles of natural justice merely because the evidence was not recorded in his presence or that the materials, the gist of which was communicated to him, were not gathered in his presence. [201 B; 202 H; 203 A-E] In the instant case the charge against the appellant was that he had so conducted himself which exposed the <ORG> to grave risk and for which his explanation was not accepted, after considering his explanation, and after personal hearing reasonably an opinion may be formed that his conduct was such that defrauding of the <ORG> might have been caused. These were the charges against him and these are the charges upon which he was accused. Therefore, whether actual loss or damage had been caused or not, is immaterial. [204 C-D] In the view of the matter being taken, it is not necessary to express any opinion on the question whether these rules under which the enquiry was conducted were statutory rules or not and as such whether the appellant has any statutory remedy against the orders. [204 E] In the instant case though reasons have not been expressly stated, these reasons are implicit namely, the nature of the charges, the explanation offered and the reply of the appellant to the show cause notice. These appear from a fair reading of the order impugned in this case. It, further, appears that there was consideration of those facts and the decision was arrived at after consideration of those reasons. [200 <CITATION> , A.I.R. 1959 S.C. p. 1111; <CITATION> .,  S.C.R. p. 1080; Jankinath Sarangi v. 187 State of Orissa,  3 S.C.R. 392; <CITATION> .,  2 S.C.R. p. 186; <CITATION> ,  2 S.C.R. p. 645; <CITATION> .,  Supp., S.C.R. p. 489; <CITATION> ,  4 S.C.R. p. 718 and <CITATION> .,  Supp. S.C.R. p. 311, referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1135 of 1978.

From the Judgment and Order dated the 2nd February, 1978 of <ORG> in Civil Misc. Writ No. 1724 of 1976.

<NAME> and <NAME> with him for the Appellant.

<NAME>, <NAME>, <NAME>, Miss. <NAME> for M/s. J.B. <ORG> for the Respondents.

<NAME> for <ORG>.

The Judgment of the Court was delivered by <NAME>, <NAME>, the appellant herein joined <ORG> in 1955. At the relevant time, he was working as Branch Manager, <ORG>, Deoria.

Certain complaints were received about his conduct from Gorakhpur Branch Manager, <NAME>, Staff Officer Grade II, who reported to <ORG> on 5th May, 1974 that, from the information given to him by some members of the staff of <ORG>, namely, <NAME>, Head Clerk, <NAME>, Field Officer and from other enquiries made by him he found that the bills negotiated by the Gorakhpur Branch under a Revolving Letter of Credit No. 20/1 dated 21st March, 1974 established by the <ORG> on Gorakhpur Branch for Rs. 2 lakhs at a time subject to maximum of Rs. 17 lakh had remained unpaid to the extent of Rs. 12 lakhs and that the openers of the Letter of Credit, M/s Jamuna Prasad Munni Lal Jaiswal, Deoria were unable to meet their obligations. In the same letter, he also informed that <ORG> had opened another Revolving Letter of Credit No. 20/2 dated 3rd April, 1974 for Rs. 50,000 per day subject to a maximum of Rs. 10 lakhs and that because the clauses of the credit had not been drawn properly, the bills were not negotiated thereunder by his Branch, and were instead, sent on collection basis. Certain other allegations giving the particulars of the bills and records were mentioned. In those circumstances, the head office ordered a preliminary enquiry which was conducted by <NAME>, Staff Officer, Grade II and having considered his report, the head office directed <NAME>, Chief Manager to carry out investigation under the rules governing the services of the officers of <ORG>.

<NAME> conducted the investigation between 9th June to 23rd June, 1974 and in the course of the investigation, he visited Deoria and Gorakhpur. On 9th September, 1974, charges were framed. The information <NAME> could gather was that M/s <NAME>, Station Road, Deoria was a sole proprietorship concern with <NAME> as the sole proprietor. Their business was to deal in scrap iron which they purchased from <ORG> around Deoria and from other sources. The firm maintained a current account only with an average balance of Rs. 10,000. There was no opinion report on record with the Branch. It appeared that the firm had no experience in oil business. <NAME> enquired from Mr. <NAME>. From the report of <NAME>, it appears that in respect of all relevant entries upon which he has based his conclusion, he asked Shri <NAME> after giving him the gist of the relevant materials gathered from other persons in the absence of the appellant and asked his pinion or explanation in respect of those. We have examined the report of <NAME> and find that at all stages in respect of all the matters mentioned in the report the appellant was associated with the preliminary investigation and his versions or explanations were sought for and recorded.

It is significant that in respect of charge (ii)- Letters of Credit No. 20/1 dated 21st March, 1974 and No. 20/2 dated 3rd March, 1974, the petitioner stated as follows:-

"That the Revolving Letter of Credit No. 20/1 dated the 21st March, 1974 for a sum not exceeding Rs. 2 lakhs "at a time" subject to a maximum of Rs. 17 lakhs was established by me after obtaining the permission of the Regional Manager over telephone. The other Letter of Credit No. 20/2 dated the 3rd April, 1974 for a sum not exceeding Rs. 50,000/- "per day" subject to a maximum of Rs. 10 lakhs was established in good faith which was within my power. In so far as compilation of a regular opinion report on the firm is concerned, I may submit that the required particulars had already been collected by the Branch Head Cashier and before issuing the aforesaid Letters of Credit, I had made my own assessment of the firm's credit-worthiness means and their ability to meet their commitments in this regard. In this connection, I remember to have informed <NAME>, the Investigating Officer that the words "per day" instead of "at a time" were substituted at the instance of <NAME>, Manager, <ORG>. Gorakhpur Branch at the material time which I reiterate. It was not my intention to issue clean letter of credit and to this end I used the words "accompanied by once used and unidentified plant lubricating oil in 200 liters each drum". I regret the these words were not properly placed in the Letters of Credit. Both the typists attached to the Branch were on deputation at the material time with the result that formal sanction of the controlling authority was not obtained. On my part I was also awfully busy in inspection of Agricultural loans, other important duties, mobilisation of deposits and I had absolutely little time at my disposal, towards correspondence. In these transactions I had always in mind to promote the <ORG>'s business interest. I had never intended to jeopardise the <ORG>'s interest at any time."

He admitted that amount of Draft No. BS001560 dated 12th January, 1974 for Rs. 75,000 was not credited to "Margin on Documentary Credits Account" before issuing the Letters of Credit. He however stated that margin amount of Rs. 75,000 was lying with the <ORG> as security by means of a draft and the <ORG>'s interests were not jeopardised and were fully protected to that extent. The draft was, however, not duly discharged. He admitted that there was delay in retiring of bills but he gave certain explanation to the show cause notice.

So far as dates of payment of bills No. 30, 35 and 36, he gave his explanation.

So far as another matter-telegrams relating to the advising negotiation of bills under Letter of Credit No. 20/1 dated 21st March, 1974, the appellant stated, inter alia, as follows:-

"A representative of <ORG>, Gorakhpur came to Deoria on the 11th April, 1974 and handed over Gorakhpur Branch S. C. No. 774 to 778 along with a D. O. letter from <NAME>, <ORG>. Finance Manager, <ORG> with a request to arrange for quick payment of the aforesaid bills as they were in urgent need of money. With a view to render helpful service to valued constituent like <ORG> a <ORG> undertaking, the payment advice dated the 11th April, 1974 in respect of S. C. Nos. 774 to 778 was signed by me before the bills were paid as I was to leave my office for inspection. In this connection, I invite your kind attention to the fact that <NAME> was only an Acting Accountant and his name appeared in the Officers Grade I column of the Officers list of the <ORG>. As such I was particular about signing inter office advices of heavy amounts to avoid their being dis-honoured by the branch on which they were drawn. The firm's account showed a credit balance of approximately Rs. 1,02,000 and I had called the proprietor of the firm on that day for depositing sufficient funds in their account so that the bills could be retired by debit to firm's account and it was on his assurance that the payment advice was signed by me in good faith and handed over to Shri <NAME>, Officer Grade II for delivery to the <ORG>'s representative only when the required transactions had been put through in the books of the Branch. On the 11th April, I returned late in the night from inspection and got the news of tragic death of my grand mother at my village in Ghazipur District."

Thereafter he stated that he was mentally disturbed and he left for the village and in conclusion stated as follows in respect of this:-

"However, I am sorry for the fact that the full details of the above transaction were not advised to <ORG> in time. I sincerely regret for this circumstantial omission on my part and assure, Sir, that there was hardly any motive or fraudulent intention behind it."

In the end he did not deny the factual basis stated to him as mentioned in the report of <NAME> or challenge the veracity or the correctness of any of these facts or the materials mentioned in the report of <NAME>. He stated in his reply to the second show cause notice on these points as follows:-

"It would be clear that whatever was done by me in these transactions was done in good faith and to promote the interest of the <ORG>. There was a conspiracy against me that I had indulged in fraudulent transactions and attempted to misappropriate <ORG>'s money are baseless. I never intended to jeopardise the <ORG>'s interest. My integrity and bonafides have always been above board during my service of about 20 years in the <ORG>."

It is material to record the conclusions reached by <NAME> by his investigation upon the basis of which the appellant was charge-sheeted. These were as follows:-

"Considering all circumstances of the case, I am of the view that <NAME> is responsible for the following irregularities:-

(1) The opinion on <ORG> Jamuna Prasad Munnilal Jaiswal a sole proprietorship concern, has been furnished to <ORG> in an out-of the way manner, is not based on any reliable records of the <ORG> and contains commitments far beyond the discretionary powers of the <ORG> Manager.

(2) The two clean letters of credit-one for Rs. 17,00,000 and the other for Rs. 10,00,000 opened on Gorakhpur Branch were for beyond his discretionary powers and no proper approval therefor had been obtained from the appropriate authority.

(3) Although the letters of credit far exceeding his discretionary powers were established-Viz-Nos.

and 20/2 dated the 21st March and 3rd April, 1974 respectively these were reported to the controlling authority in a perfunctory manner on the 6th May and 7th May, i.e., after the position had already come to their knowledge.

(4) DDs. for 6 lacs, negotiated by Gorakhpur Branch and bearing their LBCS Nos. 31, 32 and 33 were removed from the dak and retained by <NAME> in his personal custody without entering them in the <ORG>'s books. These were subsequently found in his safe.

(5) The lists of bills aggregating Rs. 6,01,204.50 relating to Gorakhpur Branch LBCS. No. 31, 32 and 33 (vide item 5 above), after having been entered in the schedule No. 8 Book and after having been referred to jointly.

(6) The terms and conditions of letter of credit No. 20/1 dated 21.3.1974 were changed without complying with the required formalities. (7) The lists of bills aggregating Rs. 6,01,204.50 relating to Gorakhpur Branch LBCs. Nos. 31, 32 and entered in the Schedule 8 Book and after having been referred to jointly by Shri <NAME>, Officer Grade II and Shri <NAME>, Branch Accountant, in the presence of <NAME>, Field Officer disappeared while the books was in <NAME> custody.

(8) The Gorakhpur Branch Manager was advised by him that Gorakhpur Branch LBC No. 30 had been paid on 20.3.1974 whereas it was actually paid on 2.4.1974 and that the Branch's LBCs No. 34, 35 and 36 had been paid on 9.4.1974, whereas these had not been paid at all.

(9) Although a number of bills negotiated by Gorakhpur Branch under the letter of credit had been outstanding no efforts were made by <NAME> for recovering the <ORG>'s dues.

(10) Telegrams from Gorakhpur Branch advising <ORG> of the negotiations done under the letter of credit were received at the Branch but were not attended to although huge sums were involved. (11) The letter of credit No. 20/2 was opened by him on 3.4.1974 irrespective of the fact that a large sum of money was already due from the drawees who were unable to pay promptly.

(12) Five SCS, aggregating Rs. 2.5 lacs received from Gorakhpur Branch bearing their S. No. 774 to 778 for collection were paid on 11.4.1974 by debit to IBI Account instead of the drawyee's account. (13) The plea that since he (<NAME>) was going out for inspection on 11.4.1974 and so was in hurry, he signed the <ORG> payment advice of bills referred to in item No. 12, above in order to avoid inconvenience to <NAME>, <ORG> representative is not supported by circumstantial evidence. I am satisfied from the evidences available that he did not go out on an inspection at 10.15 a.m. that he was in the office till late afternoon and that the inspection plea put up by him is an after thought.

(14) The bills received for collection from Gorakhpur Branch were not entered in Branch Books in the normal manner on receipt but were detained and entered at later dates suiting circumstances. I, therefore hold that <NAME> was committed the above irregularities wilfully, violating the established practices and defying the <ORG>'s instructions and had done so with the motive of helping unauthorisedly M/s <NAME> who were otherwise not in a position to handle from their own resources, transactions involving a turnover of Rs. 27 lacs within the limited period mentioned in the letters of credit."

Thereafter on this basis, on 19th June, 1975, the appellant was issued a show cause notice. In the said show cause notice, the appellant was communicated of three charges. These charges were mainly based on the report of <NAME> as mentioned hereinbefore First charge was furnishing of opinion report to <ORG> in an unauthorised manner. Second charge was about the appellant's conduct in opening two clean revolving Letters of credit Nos. 20/1 dated 21st March, 1974 and the other 20/2 dated 3rd April, 1974. The third charge was about irregularities in respect of the opening of Letters of Credit and payment of bills negotiated thereunder. Sufficient particulars of these charges were mentioned and these appear in the charge-sheet which we need not set out in extenso. The appellant was charged as follows:-

"(a) had acted in a manner highly prejudicial to the Bank's interest;

(b) had exposed the <ORG>'s interest to serious risk;

(c) had attempted to defraud the Bank which act on your part casts serious aspersions on your integrity and bonafides; and

(d) had wilfully and knowingly furnished incorrect particulars, concealed/withheld information/particulars to/from <ORG> (negotiating Branch)/controlling authority and flagrantly violated <ORG>'s rules and instructions with a view to cover up your attempts to misappropriate <ORG>'s money and/or to defraud the <ORG>.

It is thus evident that as the Branch Manager you had failed miserably to safeguard the <ORG>'s interest; on the contrary, you had wilfully/knowingly committed gross irregularities in the opening of the aforesaid Letters of Credit and payment of bills drawn thereunder and attempted to defraud the <ORG>. Your actions, which have seriously jeopardised the <ORG>'s interests and exposed the <ORG> to grave financial risks, cast grave doubts on your integrity and bonafides. It is, therefore, proposed to proceed against you in terms of Rule 49 read with Rule 50 of the State <ORG> of India (Officers & Assistants) Service Rules. You are, therefore, required to submit to us your written statement in defence in terms of Rule 50 (2) ibid in respect of the aforesaid charges within 15 days of the receipt hereof; also, if you so desire, you may apply for a hearing in person with the undersigned. Please note that in the event of your failure to submit the reply within this period, it will be understood that you have no defence to offer."

In his reply dated 5th November, 1975, the appellant had dealt with the different allegations mentioned in the charge-sheet. So far as the first charge was concerned regarding issuance of opinion report fixing estimates arbitrarily and giving over-estimates as mentioned in the charge-sheet, the appellant admitted the facts but stated that it was done out of ignorance and he further stated 'this was, however, done by me out of enthusiasm'.

Regarding Charge (ii), what he had stated has been set out hereinbefore.

It may be mentioned that regarding Charge number (ii), his reply was that the words which ought to have been there 'accompanied by once used and unidentified plant lubricating oil in 200 litres each drum' which were safeguard for encashments pursuant to the letters of credit, were important and significant. He accepted that those words were not properly placed in the letters of credit. As would appear from the report of <NAME> that the appellant had admitted that he had changed the words "at a time" and had used the words 'per day'. The appellant's defence was that he meant the same thing.

In respect of these charges, he admitted the facts and used expressions like these "I regret that due to inadvertence-was not credited".

Another explanation was that he was awfully busy in inspection of agricultural loans. Another charge was that he did not ensure prompt payment of the bill on receipt. He admitted in his reply that this was so but stated that the Gorakhpur branch "created complications and he was put to harassment". He admitted that the furnished in respect of charge (iii) (d) in the show cause notice, incorrect particulars regarding payment of bills negotiated but stated that he was regretting these things.

Another explanation for these matters was that he had to leave office frequently and early during the day for inspection. He admitted in reply to charge (iii) (e) that he used to receive covers and passed these on to Shri <NAME>. In respect of charge

(iii) (f)-Telegraphic advices from Gorakhpur branch for negotiations of bills his reply was that he had not attended to these and amount was not recovered. But his explanation was that it was handled by the branch accountant and it was not possible or necessary for him, because of his pre- occupation to attend to these telegrams personally.

In spite of making allegations against some officers, he did not ask to cross-examine any of these officers in respect of the matters stated against him. He merely asked for personal hearing. He wanted an opportunity to expose the conspiracy. It may be stated, however, that the appellant was given a personal hearing. Even in respect of the matters of conspiracy, he did not ask any opportunity to cross- examine the officials. The appellant did not ask for any opportunity in the reply to lead evidence in support of his defence. He admitted, however, in his reply that the facts he was stating had already been explained to <NAME> during his preliminary investigation.

Thereafter on 1st May, 1976, the appellant received a letter from the Chief General Manager intimating to him that in accordance with the independent investigation conducted under Rule 50(1) of the State <ORG> of India (Officers & Assistants) Service Rules governing the appellant's service in the <ORG>, the statement of charges served dated 19th June, 1975 and the appellant's reply thereto dated 5th November, 1975 were submitted to <ORG> at its meeting held on the 28th April, 1976 and it was resolved that the appellant be dismissed from the service in terms of Rule 49 (f) of the aforesaid service rules. Thereafter the appellant by the said rule was required to submit his written statement showing cause why the penalty proposed should not be imposed upon the appellant. The appellant was further informed that if no reply was received, the State <ORG> of India's authority will presume that the appellant had no submissions to make. Along with the said letter, a copy of the statement of charges and a copy of the report of the Investigating Officer who investigated, consisting of investigation in respect of each of the allegations and the appellant's explanations to the allegations during the time of the preliminary investigation and the facts and materials gathered during the preliminary investigation in which the appellant participated as mentioned thereinbefore was sent.

The appellant on 18th June, 1976 submitted a reply. These have been set out in pages 107 to 129 (of the Paper Book)-Annexure 4 to the affidavit of <NAME> filed in these proceedings. Apart from the detailed reply which had already been submitted by the appellant, a reading of the explanation submitted by the appellant made it clear according to the appellant that none of the charges could be made the basis of any disciplinary action specially action of dismissal. He referred to his excellent record from 1967 to 1973 in which he stated that the entry of appellant's performance was 'excellent' in 1970; that he was an asset to the institution. He further stated that even if there was some technical fault on account of certain interpretation of rules mentioned in the report, the appellant had sought guidance of the Field Officer and further submitted that on account of technical mistake where the <ORG> has not suffered any monetary loss or any other type of loss and in view of his long service for more than 20 years during which the appellant's service as Officer Grade I was excellent, no action could or should be taken against the appellant.

He further stated that the facts and circumstances revealed that the enquiry was in violation of the principles of natural justice and he mentioned the statements against him were alleged to have been recorded during the course of enquiry but while recording those statements the appellant was never informed nor any statement was taken in presence of the appellant. The statements were not signed in his presence. Thereafter he made allegations of bias of certain officers. The appellant further stated that so far as the report of the enquiry officer regarding the opinion report of the firm, M/s <NAME> was concerned, the appellant had not committed any breach of the rules as he had obtained permission on telephone from the competent authority and this fact was brought to the notice of the enquiry officer during the investigation. He also mentioned that the fact that trunk call was booked appears from the register. He stated that he was not guilty of the charges. The main grievance was that the enquiry officer only took the statement of the appellant and none of the statements on which reliance was placed was recorded in the presence of the appellant. The appellant prayed that the penalty proposed may not be imposed. His explanation along with other necessary papers was forwarded to <ORG> of <ORG> and <ORG> in its meeting duly considered the same and directed that the appellant be dismissed from the <ORG>'s service with immediate effect. The appellant was duly communicated to the said effect on 19th October, 1976.

On 4th November, 1976, Writ application under Article 226 was filed by the appellant in <ORG> alleging contravention of <ORG> (Officers and Assistants) Service Rules and on 2nd February, 1978, <ORG> by its judgment held that the rules had no statutory effect and as such, the writ application was dismissed. The appellant, being the petitioner therein, has now come up by special leave to this Court under Article 136 of the Constitution. It appears that the main controversy before <ORG> was whether Rule 50 of the aforesaid rules in force at the relevant time has been complied with or not. On behalf of <ORG>, it was urged that the said rules not having been framed under <ORG> Act , these had no statutory force and as such the appellant could not enforce any statutory right. In that 'light, the application under Article 226 of the Constitution was held not to be maintainable.

The points for consideration urged before us in this appeal were mainly:-

(i) that in conducting the enquiry resulting in the dismissal of the appellant, the principles of natural justice had been violated and the appellant was not given a fair opportunity to defend himself;

(ii) whether Rule 50 of the said rules as prevalent prior to 25.7.1970 had been complied with or not;

(iii)whether the procedure envisaged under Rule 50 contained requirement of due compliance with the principles of natural justice.

In this connection it may be mentioned that if the rules were not statutory but merely contract between the parties, one of the points urged before us was that can a party contract on a basis different from the principles of natural justice ? It may be mentioned further that the said rules came into effect from 1st January, 1958 and the appellant had signed the agreement in accordance with rules on the 9th June, 1974.

In dealing with the points in controversy at this stage it may be relevant to refer to the relevant rules. Rule 49

(f) which dealt with the employee who committed any breach of the rules and regulations of the <ORG>, or displayed negligence, inefficiency or indolence or who knowingly did anything detrimental to the interests of the <ORG> or in conflict with its instructions or committed any breach of discipline or was guilty of any other acts of misconduct would be liable for the penalty of, inter alia, dismissal.

Sub-rule (1) of Rule 50 of the said rules mentioned above postulates that the Managing Director, if he is satisfied that there was a prima facie case for proceeding against an employee, may investigate the case himself or appoint any other investigating officer and submit an independent report in writing. Sub-rule (2) of Rule 50 envisages that brief statement of the charges together with the grounds on which the charges are based should be communicated in writing to the employee. The employee should be required to submit a written statement in defence and given an opportunity to be heard in person if desired by him, and he shall also be given facilities for access to the records of the <ORG> for the purpose of preparing his written statement. The Managing Director for the reasons to be recorded in writing, may refuse such access if in his opinion such records were not strictly relevant or it was not desirable in the interests of the <ORG> to allow such access.

Thereafter sub-rule (3) envisages that the report of the officer who investigated the case together with the employee's statement and a further report in writing by the Managing Director or the Secretary and Treasurer, indicating the charge or charges against the employees shall be laid for consideration, in the case of an employee serving in or under <ORG>, before <ORG> and in the case of an employee serving in a <ORG>, before <ORG>. <ORG> or <ORG> as the case may be shall make such order as they consider in the circumstance fit and proper but if they consider it fit for imposing a penalty mentioned in clause (e) or clause (f) of rule 49, the employee shall be given a further opportunity to state in writing by a specified date why such penalty shall not be imposed. "For this purpose the charge or charges against him together with a copy of the report of the officer who investigated the case and specific penalty proposed to be imposed shall be communicated to him by the Managing Director or the Secretary and Treasurer, as the case may be". If the employee gives a reply, that reply will be taken into consideration and <ORG> will convey its decision in writing to the employee concerned. This rule, it may be mentioned, has been altered with effect from 25th July, 1975. We are, however, not concerned with the said amended rule.

The main argument of Mr. <NAME>, counsel for the appellant, was that the requirements of Rule 50 of the aforesaid rules have not been complied with. He submitted that the materials against the appellant were gathered in his absence and he was not allowed to cross-examine the witnesses, and that evidence against him was not recorded in his presence. He urged that only an opportunity to show cause, after he had replied the charges against him which were based on materials gathered behind him for imposition of penalty, was given. He submitted that reasonable opportunity under the rules required that materials against a person should not be gathered behind his back and he should be given an opportunity to cross-examine, if necessary, the persons who had supplied the materials or given evidence against him. He further submitted that the delinquent officer should also be given an opportunity to rebut such evidence. Mr. <NAME> submitted that infraction of this procedure under the rules will make the investigation bad as basic fundamental requirement of an opportunity was implied in the rule. The impugned order should be struck down as having been passed in violation of the principles of natural justice.

We are of the opinion that Mr. <NAME> is right that the rules of natural justice as we have set out hereinbefore implied an opportunity to the delinquent officer to give evidence in respect of the charges or to deny the charges against him. Secondly, he submitted that even if the rules had no statutory force and even if the party had bound himself by the contract, as he had accepted the Staff Rule, there cannot be any contract with <ORG> which is violative of the principles of natural justice in matters of domestic enquiry involving termination of service of an employee. We are in agreement with the basic submission of Mr. <NAME> in this respect, but we find that the relevant rules which we have set out hereinbefore have been complied with even if the rules are read that requirements of natural justice were implied in the said rules or even if such basic principles of natural justice were implied, there has been no violation of the principles of natural justice in respect of the order passed in this case. In respect of an order involving adverse or penal consequences against an officer or an employee of Statutory Corporations like <ORG>, there must be an investigation into the charges consistent with the requirements of the situation in accordance with the principles of natural justice as far as these were applicable to a particular situation. So whether a particular principle of natural justice has been violated or not has to be judged in the background of the nature of charges, the nature of the investigation conducted in the background of any statutory or relevant rules governing such enquiries. Here the infraction of the natural justice complained of was that he was not given an opportunity to rebut the materials gathered in his absence. As has been observed in "On Justice" by <NAME>, the principles of natural justice basically, if we may say so, emanate from the actual phrase "audi alteram partem" which was first formulated by <NAME> (De Duabus Animabus, XIV, 22, J. P. Migne, PL. 42, 110).

In dealing with particular situation we must formulate the actual principles to be applied in a particular situation. Hence it may be illustrated as <NAME>" (page 86) has done it, thus:-

"Hence when we are judging deeds, and may find that a man did wrong there is a requirement of logic that we should allow the putative agent to correct misinterpretations or disavow the intention imputed to him or otherwise, disown the action. God needed to ask <NAME> 'Hast thou eaten of the tree whereof I commanded thee that thou shouldest not eat ?' because it was essential that <NAME> should not be blamed or punished unless he had done exactly that deed. If the serpent had planted the evidence, or if he had beguiled <NAME> into eating it under the misapprehension that it came from another, non-forbidden tree, then <NAME> had not sinned and should not have been expelled from Eden. Only if the accused admits the charge, or, faced with the accusation, cannot explain his behaviour convincingly in any other way, are we logically entitled to conclude that he did indeed do it." <NAME> 'On Administrative Law', 5th Edition at pages 472-

475 has observed that it is not possible to lay down rigid rules as to when the principles of natural justice are to apply: nor as to their scope and extent. Everything depends on the subject-matter, the application of principles of natural justice, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject- matter of the case. In the application of the concept of fair play there must be real flexibility. There must also have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must depend on the facts and the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter to be dealt with, and so forth.

The basic concept is fair play in action administrative, judicial or quasi-judicial. The concept fair play in action must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified or given some information is in doubt, or if the version or the statement of the person who has testified, is, in dispute, right of cross-examination must inevitably form part of fair play in action but where there is no lis regarding the facts but certain explanation of the circumstances there is no requirement of cross-examination to be fulfilled to justify fair play in action. When on the question of facts there was no dispute, no real prejudice has been caused to a party aggrieved by an order, by absence of any formal opportunity of cross-examination per se does not invalidate or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version or the credibility of the statement.

The party who does not want to controvert the veracity of the evidence from or testimony gathered behind his back cannot expect to succeed in any subsequent demand that there was no opportunity of cross-examination specially when it was not asked for and there was no dispute about the veracity of the statements. Where there is no dispute as to the facts, or the weight to be attached on disputed facts but only an explanation of the acts, absence of opportunity to cross-examination does not create any prejudice in such cases.

The principles of natural justice will, therefore, depend upon the facts and circumstances of each particular case. We have set out hereinbefore the actual facts and circumstances of the case. The appellant was associated with the preliminary investigation that was conducted against him. He does not deny or dispute that. Information and materials undoubtedly were gathered not in his presence but whatever information was there and gathered namely, the versions of the persons, the particular entries which required examination were shown to him. He was conveyed the informations given and his explanation was asked for. He participated in that investigation. He gave his explanation but he did not dispute any of the facts nor did he ask for any opportunity to call any evidence to rebut these facts. He did ask for a personal hearing, as we have mentioned hereinbefore and he was given such opportunity or personal hearing. His explanations were duly recorded. He does not allege that his version has been improperly recorded nor did he question the veracity of the witnesses or the entries or the letters or documents shown to him upon which the charges were framed and upon which he was found guilty. Indeed it may be mentioned that he was really consulted at every stage of preliminary investigation upon which the charges were based and upon which proposed action against him has been taken, In that view of the matter, we are of the opinion, that it cannot be said that in conducting the enquiry or framing of the charges or arriving at the decision, the authorities concerned have acted in violation of the principles of natural justice merely because the evidence was not recorded in his presence or that the materials, the gist of which was communicated to him, were not gathered in his presence. As we have set out hereinbefore, indeed he had accepted the factual basis of the allegations. We have set out hereinbefore in extenso the portions where he had actually admitted the factual basis of these allegations against him, where he has not questioned the veracity of the witness of the facts or credibility of the witnesses or credibility of the entries on records. Indeed he has given explanation namely, he was over-worked, he had consulted his superiors and sought their guidance, his conduct has not actually, according to him caused any financial risk or damage to the <ORG> concerned. Therefore, in our opinion, in the manner in which the investigation was carried out as a result of which action has been taken against him cannot be condemned as bad being in violation of the principles of natural justice. Had he, however, denied any of the facts or had questioned the credibility of the persons who had given information against him, then different considerations would have applied and in those circumstances, refusal to give an opportunity to cross-examine the persons giving information against him or to lead evidence on his own part to rebut the facts would have been necessary and denial of such opportunity would have been fatal. But such is not the case here as we have mentioned hereinbefore.

Our attention was drawn to the new rules called 'State Bank of India (Supervising Staff) Service Rules' which were first introduced on 25th July, 1975 and thereafter from time to time amended which laid down detailed procedure for gathering the information and procedure for recording of the evidence etc. We are, however, not concerned with those rules as at relevant time when the enquiry was conducted, these rules were not in force.

We may also mention that the appellant has contended that there is no evidence that the appellant has actually defrauded the <ORG> or actual loss or damage has been caused to the <ORG> or actual risk has been incurred by the <ORG>. That is true. But the charge against the appellant was that he had so conducted himself which exposed the <ORG> to grave risk and for which his explanation was not accepted, after considering his explanation and after personal hearing reasonably an opinion may be formed that his conduct was such that defrauding of the <ORG> might have been caused. These were the charges against him and these are the charges upon which he was accused. Therefore, whether actual loss or damage had been caused or not, is, in our opinion, immaterial. In that view of the matter, we are of the opinion that the arguments on this aspect of the matter on behalf of the appellant cannot be accepted. In that view of the matter, it is not necessary to express any opinion on the question whether these rules under which the enquiry was conducted were statutory rules or not and as such whether the appellant has any statutory remedy against the orders impugned.

Reliance was placed in support of his argument by Mr. <NAME> on a decision of this Court in the case of <CITATION> , where it would appear from the facts set out at page 1113 of the report that the delinquent had no opportunity of asking questions to the witnesses after knowing what they had said against him. In this case as we have mentioned hereinbefore, the appellant was communicated the gist of what had been gathered in his absence and even then he did not deny these informations nor did he ask any opportunity to cross-examine the witnesses either regarding the veracity of the material that was gathered against him or on the credibility of the persons who had given evidence.

Reliance was also placed on the observations in the decision of this Court in <CITATION> . That however, was a case dealing with the requirements under Article 311(2) of the Constitution.

In that decision, the <ORG> was concerned with the expression 'reasonable opportunity of showing cause under Article 311(2) of the Constitution'. The facts of that case were entirely different from the facts of the instant case. However, <NAME>, dealing with opportunity to show cause explained at pages 1096-97 of the report the position under the said Article as follows:-

"If the opportunity to show cause is to be a reasonable one it is clear that he should be informed about the charge or charges levelled against him and the evidence by which it is sought to be established, for it is only then that he will be able to put forward his defence. If the purpose of this provision is to give the government servant an opportunity to exonerate himself from the charge and if this opportunity is to be a reasonable one he should be allowed to show that the evidence against him is not worthy of credence or consideration and that he can only do if he is given a chance to cross-examine the witnesses called against him and to examine himself or any other witness in support of his defence. All this appears to us to be implicit in the language used in the clause, but this does not exhaust his rights. In addition to showing that he has not been guilty of any misconduct so as to merit any punishment, it is reasonable that he should also have an opportunity to contend that the charges proved against him do not necessary require the particular punishment proposed to be meted out to him. He may say, for instance, that although he has been guilty of some misconduct it is not of such a character as to merit the extreme punishment of dismissal or even of removal or reduction in rank and that any of the lesser punishments ought to be sufficient in his case. To summarise: the reasonable opportunity envisaged by the provision under consideration includes-

(a) An opportunity to deny his guilt and establish his innocence, which he can only do if he is told what the charges levelled against him are and the allegations on which such charges are based;

(b) an opportunity to defend himself by cross- examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence; and finally

(c) an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority, after the enquiry is over and after applying his mind to the gravity or otherwise of the charges proved against the government servant tentatively proposes to inflict one of the three punishments and communicates the same to the government servant."

In substance, in the facts and circumstances of this cases, the provision of the rules under which the enquiry was conducted, the procedure mentioned above has been followed. Here also the appellant was allowed to show that the evidence against him was not worthy of credence or consideration. The evidence was discussed. His explanation was sought for and recorded. The materials and other records were shown to him. He did not ask for any chance to cross- examine the witness or to examine himself or any other witness in support of his defence. Indeed, as we have noted before, he admitted the facts. He was also given in addition an opportunity of showing that he has not been guilty of any such misconduct as to merit the particular punishment proposed to be meted out to him. This opportunity was given. He gave his explanation and that was considered. He asked for a personal hearing which, we have noted in this case, was duly given to him. We are, therefore, of the opinion that the aforesaid passage relied on behalf of the appellant would not be of any assistance to the appellant in this case.

It is true that all actions against a party which involve penal or adverse consequences must be in accordance with the principles of natural justice but whether any particular principle of natural justice would be applicable to a particular situation or the question whether there has been any infraction of the application of that principle, has to be judged, in the light of facts and circumstances of each particular case. The basic requirement is that there must be fair play in action and the decision must be arrived at in a just and objective manner with regard to the relevance of the materials and reasons. We must reiterate again that the rules of natural justice are flexible and cannot be put on any rigid formula. In order to sustain a complaint of violation of principles of natural justice on the ground of absence of opportunity of cross-examination, it has to be established that prejudice has been caused to the appellant by the procedure followed. See in this connection the observations of this <ORG> in the case of <CITATION> . <NAME>, <NAME>, observed there at page 394 of the report "there is no doubt that if the principles of natural justice are violated and there is a gross case this <ORG> would interfere by striking down the order of dismissal; but there are cases and cases. We have to look to what actual prejudice has been caused to a person by the supposed denial to him of a particular right." Judged by this principle, in the background of the facts and circumstances mentioned before, we are of the opinion that there has been no real prejudice caused by infraction of any particular rule of natural justice of which appellant before us complained in this case. See in this connection observations of this <ORG> in the case of <CITATION> . where this <ORG> reiterated that "the doctrine of natural justice cannot be imprisoned within the strait-jacket of a rigid formula and its application depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in a particular case". See also in this connection the observations of <NAME>, <NAME>, in the case of <CITATION> . In our opinion, in the background of facts and circumstances of this case, the nature of investigation conducted in which the appellant was associated, there has been no infraction of that principle. In the premises, for the reasons aforesaid, there has been in the facts and circumstances of the case, no infraction of any principle of natural justice by the absence of a formal opportunity of cross-examination Neither cross-examination nor the opportunity to lead evidence by the delinquent is an integral part of all quasi judicial adjudications.

Another aspect of the violation of the principles of natural justice that was urged before us on behalf of the appellant was that the final order did not contain reasons. In this connection reliance was placed on the observations of this <ORG> in the case of <CITATION> . where this <ORG> observed that if courts of law were to be replaced by administrative authorities and tribunals were essential then administrative authorities and tribunals should afford fair and proper hearing to the persons sought to be affected by the orders and give sufficiently clear and explicit reasons in support of the orders made by them. The <ORG>, further, observed, that the rule requiring reasons to be given in support of an order is like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law.

It may be mentioned that the facts in that case were different. In the instant case though reasons have not been expressly stated, these reasons were implicit namely, the nature of the charges, the explanation offered and the reply of the appellant to the show cause notice. These appear from a fair reading of the order impugned in this case. It, further, appears that there was consideration of those facts and the decision was arrived at after consideration of those reasons. It is manifest, therefore, that absence of any denial by the appellant, indeed admissions of the factual basis and nature of the explanation offered by the appellant were considered by the authority to merit the imposition of the penalty of dismissal. Such a conclusion could not, in the facts and circumstances of the case, be considered to be unreasonable or one which no reasonable man could make.

Counsel relied on the observations of this Court in the case of <CITATION> at pages 723-726 of the report. These observations were made again in the context of jurisdiction of <ORG> to interfere with the orders passed under Article 311 (2) read along with Civil Service (Classification, Control and Appeal) Rules. The Court rejected the plea made in that case that even if the enquiry officer made findings against the public servant, the Government could never re-examine the matter so that even if the Government was satisfied that the findings against the public servant were erroneous, the Government must proceed on the basis that the public servant was guilty and impose some punishment on him. That is not the position here. In this case, there is no evidence that the disciplinary authority was not satisfied with the findings arrived at in the investigation. This case, therefore, is of no assistance in deciding the controversy before us.

Another decision of this Court was relied on by counsel for the appellant, namely, the decision in the case of <CITATION> . That case arose under proceedings in respect of an order passed by <ORG> under Section 237 (b) of the Companies Act appointing four inspectors to investigate the affairs of the appellant company, on the ground that the Board was of the opinion that there were circumstances suggesting that the business of the appellant company was being conducted with intent to defraud its creditors, members or any other persons and that the persons concerned in the management of the affairs of the company having connection therewith were guilty of fraud, misfeasence and other misconduct towards the company and its members. <NAME>, J., at page 342 of the report was of the opinion that in view of the circumstances disclosed therein, without more, could not reasonably suggest that the business of the company was being conducted to defraud the creditors, members and other persons or that the management was guilty of fraud towards the company and its members. From the observations of <NAME> in that decision, it appears that he was also inclined to take the same view. The facts of the instant case are, however, different. It has to be emphasised that the appellant was not charged for defrauding the <ORG>. He was charged mainly for the conduct which suggested that he acted improperly and in violation of the principles on which sound banking business should be conducted. The charge against the appellant was that he had acted in violation of procedure of the <ORG>, he had disregarded all safeguards in sanctioning the overdrafts, encashing bills and his conduct had exposed the bank to grave risks and that he had flagrantly violated the bank rules and instructions with a view to cover up attempts to misappropriate bank's money after defrauding the bank. Whether actual misappropriation had been caused or bank defrauded or not were not relevant in respect of the charges against him.

For the reasons aforesaid, this appeal fails, but for reasons different from those given by <ORG>, and is accordingly dismissed but without any order as to costs.

We must, however, observe in conclusion that having regard to the record of the service of the appellant prior to the conduct revealed in this case and further in view of the fact that actually no loss has been occasioned to the <ORG> by the improper conduct of the appellant, if the <ORG> considers in the interest of justice that the appellant should be given some job or employment in some capacity which might mitigate or compensate in some measure the grave loss suffered by the appellant consequent on the dismissal order, the <ORG> might consider taking such a course of action.

H.S.K. Appeal dismissed.


PETITIONER: RAM SEWAK YADAV Vs. RESPONDENT: <NAME> & ORS. DATE OF JUDGMENT: 17/01/1964 BENCH: <NAME>, J.C. BENCH: <NAME>, J.C. GAJENDRAGADKAR, P.B. WANCHOO, K.N. GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA CITATION: 1964 AIR 1249 1964 SCR (6) 235 CITATOR INFO : RF 1966 SC 773 (33) R 1970 SC 276 (7) E 1972 SC1251 (13) RF 1973 SC 215 (8,11) RF 1973 SC2077 (2) F 1975 SC 283 (45,46) R 1975 SC 693 (14) RF 1975 SC2117 (4,5,7) C 1980 SC 206 (19) F 1984 SC 396 (6) E&R 1989 SC 640 (4) R 1992 SC1163 (9) ACT: Election--challenge on the ground of improper reception, refusal and rejection of votes at the time of counting--<ORG> rejecting claim for inspection of the ballot papers--Validity--Representation of the People Act, 1951 (43 of 1951), ss. 100, 101 and 102 and conduct of Election Rules, 1961. r. 93. HEADNOTE: The respondent challenged the election of the appellant, inter alia, on the ground that there had been improper reception, refusal and rejection of votes at the time of counting and that on a true count he would have received a majority of valid votes and that he was entitled to be declared duly elected. He claimed that by inspection of the ballot papers he would be able to establish his case on the aforesaid allegations and that the <ORG> was bound to grant an order for inspection, because he had tendered the sealed boxes of ballot papers in evidence, and on that account all the ballot papers were part of the record. The <ORG> in its order stated that nothing was brought to its notice which would justify granting an order for inspection. It further observed: "If in future from the facts that may be brought to the notice of the <ORG>, it appears that in the interests of justice inspection should be allowed, necessary orders allowing an inspection could always be passed". Thereupon, another application was submitted by the respondent asking for inspection but no additional materials were placed before the <ORG> and no oral evidence was led at the trial. The <ORG> rejected the application for inspection. On appeal, <ORG> held that ballot papers had actually been called for from the Returning Officer and were before the <ORG>, and there was nothing in the Code of Civil Procedure which prevented the <ORG> from allowing inspection of the ballot papers in the custody of the <ORG>. The <ORG> had therefore rejected the application for inspection without any adequate reasons. The sole question for determination was whether the Election <ORG> erred in declining to grant an order for inspection of the ballot papers which had been, pursuant to an order in that behalf, lodged before the <ORG> in sealed boxes by the Returning Officer. Held: By the mere production of the sealed boxes, the ballot papers did not become part of the record and they were not liable to be inspected unless the <ORG> was satisfied that such inspection was in the circumstances of the case necessary in the interests of justice. 239 The Returning Officer is not a party to an election petition, and an order for production of the ballot papers cannot be made under 0. XI of the Code of Civil Procedure. But the Election <ORG> is not on that account without authority in respect of the ballot papers. Where the interests of justice demand it, the <ORG> may call upon the Returning Officer to produce the ballot papers and may permit inspection by the parties before it of the ballot papers: that power is clearly implicit in ss. 100(1)(d)(iii) , 101 , 102 of the Representation of the People Act, 1951 and rule 93 of the Conduct of Election Rules, 1961. This power to order inspection of the ballot papers which is apart from 0. XI Code of Civil Procedure may be exercised, subject to the statutory restrictions about the secrecy of the ballot papers prescribed by ss. 94 and 128(1) of the Act. <NAME> v. <NAME>, 22 E.L.R. 288, distinguished. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1064 of 1963. Appeal by special leave from the judgment and order dated July 23, 1963, of <ORG> (<ORG>) in First Civil Appeal No. 11 of 1963.

<NAME> and <NAME>, for the appellant. <NAME> and <NAME>, for respondent No. 1. January 17, 1964. The Judgment of the Court was delivered by <NAME> the general elections held in February 1962, five candidates contested the election to <ORG> from the Barabanki single-member constituency. The appellant <NAME>-who will be referred to as <NAME> was at the counting of votes found to have secured the highest number of votes and he was declared elected. <NAME>-hereinafter called <NAME>-who was one of the candidates at the election submitted a petition on April 6, 1962, to <ORG> for an order declaring the election of <NAME> void and for an order that he (<NAME>) be declared duly elected. <ORG>, Lucknow, to which the petition was referred for trial dismissed the petition. In appeal to <ORG> the order passed by <ORG> was reversed and the proceedings were remanded for trial with a direction, among others, that the <ORG> do give reasonable opportunity to both the parties to inspect the ballot papers and other connected papers. With special leave, <NAME> has appealed against the order of <ORG>.

The principal grounds set up by <NAME> in support of his petition were-

(1) that there had been improper reception, refusal and rejection of votes at the time of counting, and in consequence thereof the election was materially affected; (2) that there were discrepancies between the total number of votes mentioned in Form 16 and Form 20;

(3) that the tendered votes were wrongly rejected by the returning officer and on that account the election was materially affected; (4) that at the polling station No. 29, Majgawan in Bhitauli Unit and Kursi polling station in Kursi Assembly Unit, the polling officers did not give ballot papers to the voters;

(5) that the counting of votes of <ORG> continued till 8-30 p.m. in insufficient light notwithstanding the protest lodged by the petitioner; and (6) that on a true count he (<NAME>) would have received a majority of valid votes and that he was entitled to be declared duly elected.

These allegations were denied by <NAME>.

At the trial before the <ORG> the parties led no oral evidence. In respect of the pleas (3), (4) and (5) the burden of proof lay upon <NAME> and as no evidence was led to .-substantiate the same, those pleas failed. Again in the view of the <ORG>, <NAME> could discharge the burden of proof which lay upon him to establish that there were discrepancies ,between the original and the certified copies of Forms Nos 16 & 20, and as the original forms were not called for by <NAME>, his second ground must also fail. <NAME> claimed that he would be able to establish his case on pleas (1) & (6) from the ballot papers, and submitted that an order for inspection of the ballot papers be made and that he be per- mitted to show from the ballot papers that the Returning Officer had improperly received, refused or rejected the votes, and that on a true count he would get the largest number of valid votes. The <ORG> rejected the applica- tion for inspection holding that ballot papers may be allowed to be inspected only if it is necessary in the interest of justice and to support an order for inspection facts must be brought to its notice making out a prima facie case disclosing that errors were committed in the reception, refusal or rejection of votes at the time of counting, and unless a prima facie case was made out the <ORG> would be justified in declining to make an order for inspection. <ORG> however held that ballot papers had actually been called for from the Returning Officer and were before the <ORG>, that there was nothing in the Code of Civil Procedure which prevented the <ORG> from allowing inspection of the ballot papers in the custody of the <ORG>, and that the <ORG> had rejected the application for inspection without any adequate reasons for so doing. The only question which falls to be determined in this appeal is whether the Election <ORG> erred in declining to grant an order for inspection of the ballot papers which had been, pursuant to its order in that behalf, lodged before it in sealed boxes by the Returning Officer. In considering this question the material provisions of the Representation of the People Act , 1951, and the rules framed thereunder may first be noticed. Section 80 of the Act provides that no election shall be called in question except by an election petition presented in accordance with the provisions of Part VI. Section 83(1) states what the election petition shall contain. It states:

"Art election petition-

(a) shall contain a concise statement of the material facts on which the petitioner relies; 159 S.C-16

(b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as posssible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and

(c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908, for the verification of pleadings:

The rest of the section is not material.

Section 90(1) prescribes the procedure to be followed by the <ORG>. It states:

"Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the <ORG>, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908, to the trial of suits: "

Section 92 enumerates the powers which a <ORG> trying an election petition may exercise and the powers so enumerated are the powers which a <ORG> under the Code of Civil Procedure, when trying a suit, may exercise in respect of discovery and inspection, enforcing attendance of witnesses, compelling production of documents, receiving evidence taken on affidavits and issuing commissions for the examination of witnesses. Rules have been framed under the Act relating to production and inspection of election papers. By rule 93 of the Conduct of Election Rules, 1961, it is provided that:

"(1) While in the custody of the returning officer-

(a) the packets of unused ballot papers;

(b) the packets of used ballot papers whether valid, tendered or rejected;

(c) the packets of the marked copy of the electoral roll or, as the case may be, the list maintained under sub-section (1) or sub- section (2) of section 152 ; and

(d) the packets of the declarations by electors and the attestation of their signatures;

shall not be opened and their contents shall not be inspected by, or produced before, any person or authority except under the order of a competent court or tribunal. (2) All other papers relating to the election shall be open to public inspection subject to such fee, if any, as <ORG> may direct.

(3) Copies of the returns by the returning officer forwarded under rule 64 or as the case may be. under sub-rule (3) of rule 84 shall be furnished by the chief electoral officer of the State concerned on payment of a fee of two rupees for each such copy."

The rule makes a clear distinction between ballot papers and other election papers: ballot papers may be inspected only under the order of a competent court or tribunal, but other documents are, subject to certain conditions, open to public inspection.

In this case, on an oral request made by <NAME> all the ballot papers in sealed boxes were lodged with <ORG>. <NAME> claimed in the first instance that the <ORG> was bound to grant an order for inspection, because he had tendered the sealed boxes of ballot papers in evidence, and on that account all the ballot papers were part of the record. The <ORG> rightly rejected this plea, to by the mere production of the sealed boxes pursuant to its order the ballot papers did not become part of the record and they were not liable to be inspected unless the <ORG> was satisfied that such inspection was in the circumstances of the case necessary in the interests of justice.

An election petition must contain a concise statement of the material facts on which the petitioner relies in support of his case. If such material facts are set out the <ORG> has undoubtedly the power to direct discovery and inspection of documents with which a civil court is invest-

ed under the Code of Civil Procedure when trying a suit. But the power which the civil court may exercise in the trial of suits is confined to the narrow limits of 0. II, Code of Civil Procedure. Inspection of documents under 0. II, Code of Civil Procedure may be ordered under rule 15, of documents which are referred to in the pleadings or particulars as disclosed in the affidavit of documents of the other party, and under rule 18(2) of other documents in the possession or power of the other party. The Returning Officer is not a party to an election petition, and an order for production of the ballot papers cannot be made under 0.11 Code of Civil Procedure. But <ORG> is not on that account without authority in respect of the ballot papers. In a proper case where the interests of justice demand it. the <ORG> may call upon the Returning Officer to produce the ballot papers and may permit inspection by the parties before it of the ballot papers. That power is clearly implicit in ss. 100(1)(d)(iii) , 101 , 102 and rule 93 of the Conduct of Election Rules, 1961. This power to order inspection of the ballot papers which is apart from 0.11 Code of Civil Procedure may be exercised, subject to the statutory restrictions about the secrecy of the ballot paper prescribed by ss. 94 and 128(1) . An order for inspection may not be granted as a matter of course: having regard to the insistence upon the secrecy of the ballot papers, the <ORG> would be justified in granting an order for inspection provided two conditions are ful- filled:

(i) that the petition for setting aside an election con-

tains an adequate statement of the material facts on which the petitioner relies in support of his case; and

(ii) the <ORG> is prima facie satisfied that in order to decide the dispute and to do complete justice between the parties inspection of the ballot papers is necessary, But an order for inspection of ballot papers cannot be granted to support vague pleas made in the petition not supported by material facts or to fish out evidence to support such pleas. The case of the petitioner must be set out with pre-

cision supported by averments of material facts. To estab- lish a case so pleaded an order for inspection may undoubt- edly, if the interests of justice require, be granted. But a mere allegation that the petitioner suspects or believes that there has been an improper reception, refusal or rejection of votes will not be sufficient to support an order for inspection.

It must be remembered that the rules framed under the Representation of the People Act , 1951, set up an elaborate machinery relating to the stage of counting of votes by the Returning Officer, and provide ample opportunity to the can- didate who has contested the election or his agents to remain present and to keep an eye on any improper action which may be taken by the Returning Officer. Rule 53 provides for the admission of only certain classes of persons to the place fixed for counting and amongst such persons are expressly included candidates, their election agents and counting agents, who may watch the counting subject to the directions which the returning officer may give. Rule 55 deals with the procedure for scrutiny and opening of ballot boxes. The Returning Officer has to satisfy himself that "none of the ballot boxes has in fact been tampered with" and before any ballot box is opened at the counting table, the counting agents present at that table are allowed to inspect the seal affixed thereon and to satisfy themselves that it is intact. If the Returning Officer is satisfied that any ballot box has in fact been tampered with, he is prohibited from counting the ballot papers contained in that box and he has to follow the procedure prescribed in that behalf in s. 58 . Clause (1) of rule 56 provides for the scrutiny and rejection of ballot papers. Clause (2) sets out detailed provisions relating to, cases in which the Returning Officer shall reject a ballot paper By cl. (3) it is provided that before rejecting any ballot paper under sub-rule (2), the returning officer shall allow each counting agent present a reasonable opportunity to inspect such ballot papers. The Returning Officer has then to record on every ballot paper which he rejects the grounds of rejection. All the rejected ballot papers are required to be put in one bundle. Rule 57 deals with the counting of votes. Each ballot paper which is not rejected is counted as one valid vote. The Returning Officer has to make the entries in a result sheet in Form 20 after counting of the ballot papers contained in all the ballot boxes used at the polling stations. Clause (3) of rule 57 enacts an elaborate set of rules about the entries to be made in respect of the counting and scrutiny of the ballot papers. By rule 60 counting has to be continuous, and rule 63(1) provides that after the completion of the counting, the Returning Officer shall record in the result sheet in Form 20 the total number of votes polled by each candidate and announce the result. By cl. (2) of rule 63 it is provided that after such announcement is made, a candidate or his election agent may apply in writing to the Returning Officer for' a recount of all or any of the ballot papers already counted stating the grounds on which he demands such recount. The Returning Officer must decide the application and record his reasons in support of his decision and he may allow the application in whole or in part or may reject it if it appears to him to be frivolous or unreasonable. After the total number of votes polled by each candidate has been announced, the Returning Officer must complete and sign the result sheet in Form 20 and after such form is completed no application for recount may be entertained. Under rule 64 the declaration of the result of the election is made by declaring elected a candidate who has secured the largest number of valid votes, and the Returning Officer is required to complete and certify the return of election.

There can therefore be no doubt that at every stage in the process of scrutiny and counting of votes the candidate or his agents have an opportunity of remaining present at the counting of votes, watching the proceedings of the Returning Officer, inspecting any rejected votes, and to demand a are- count. Therefore a candidate who seeks to challenge an election on the ground that there has been improper reception, refusal or rejection of votes at the time of counting, has ample opportunity of acquainting himself with the manner in which the ballot boxes were scrutinized and opened, and the votes were counted. He has also opportunity of inspecting rejected ballot papers, and of demanding a re- count. It is in the light of the provisions of s. 83(1) which require a concise statement of material facts on which the petitioner relies and to the opportunity which a defeated candidate had at the time of counting, of watching and of claiming a recount that the application for inspection must be considered.

In the petition filed by <NAME> the material allegations in support of the claim that there had been improper reception, refusal or rejection of votes were contained in paragraphs 6(H), 6(K) and 12. In paragraph 6(H) it was averred that numerous ballot papers cast in favour of the petitioner were wrongly included in the "bundles of the respondents." In paragraph 6(K) it was averred that due to "a deficiency in the supply of sealing ink, marks on some ballot papers, though not quite clear, yet the marks clearly indicating the intention of the voters, were wrongly rejected as invalid by the returning officer." In paragraph 12 it was averred that "the petitioner is confident that if the votes actually cast in favour of the petitioner are counted as votes of the petitioner and if the improperly accepted votes which have been counted in favour of other respondents are taken out, and if the ballot papers are correctly sorted, counted and bundled. the respondent No. 1 will be found to have polled less votes as compared to . . . petitioner. The petitioner further submits that the result of the Election has been materially affected by the improper acceptance and refusal of votes and by the incorrect sorting, counting and bundling of ballot papers." These averments in the petition for setting aside the election on the ground of improper acceptance or rejection of votes were vague, and did not comply with the statutory requirements of s. 83(1)(a) . Paragraph 12 is deficient in the recital of material facts which must be deemed to be within the knowledge of the petitioner, and merely asserts that if the votes actually cast in favour of the petitioner are counted, the total number of valid votes found in his favour would exceed the number of votes received by <NAME>. Having regard to this infirmity the <ORG> was justified in declining to make an order for inspection of the ballot papers unless a prima facie case was made out in support of the claim. The <ORG> has undoubtedly to exercise its discretion if it appears to be in the interests of justice, but the discretion has manifestly to be exercised having regard to the nature of the allegations made. The <ORG> would be Justified ir refusing an order where inspection is claimed with a view to fish out materials in support of a vague plea in the case set out in the petition. The <ORG> was conscious of the true principle: it stated in its order dated August 25, 1962, that nothing was brought to its notice which would justify granting an order for inspection prayed for by the petitioner at that stage. The <ORG> further observed:

"If in future from facts that may be brought to the notice of the <ORG>, it appears that in the interests of justice inspection should be allowed, necessary orders allowing an inspection could always be passed".

Relying upon these observations another application was submitted by <NAME> asking for inspection but no additional materials were placed before the <ORG>. As we have already observed <NAME> led no real evidence at the trial. In his second application for inspection he merely averred that "the petitioner was almost sure" that on inspection and scrutiny of ballot papers, the allegations contained in the various paragraphs would be proved. The allegation of <NAME> that he was satisfied that on inspection and scrutiny of ballot papers he would be able to demonstrate that there had been wrong counting on account of improper reception, refusal or rejection of votes was wholly insufficient to justify a claim for inspection. He had to place before the <ORG> evidence prima facie indicating that an order for inspection was necessary in the interests of justice, which he failed to do.

Reliance was placed before this Court and <ORG> upon the decision of this Court in <NAME> v. <NAME> and others(1) in support of the plea that mere absence of parti- culars will not furnish a ground for declining to grant ins- pection and that a defeated candidate is entitled to establish his case that void votes had been counted and included in the votes of the successful candidate from the evidence collected from inspection of the ballot papers. In <NAME>'s case(1) a petition was filed for setting aside an election of a candidate in a reserved seat in a double member constituency. The principal ground in support of the petition (1) 22 E.L.R. 288.

was that it was incumbent upon the Returning Officer to go into each case of double voting in order to reject one of the two votes cast in contravention of s. 63(1) of the Representation of the People Act, and that the Returning Officer having failed to discharge his duty to reject ballot papers cast in contravention of s. 63 the petitioner believed that the successful candidate "could receive many void votes." The ballot boxes were opened and it was found that 37 void votes were counted in favour of the successful candidate and in view of the disclosure made by the inspection of the ballot papers the petitioner applied for leave to amend the petition by adding a specific averment that 37 void votes had in fact been counted in favour of the successful candidate and that the words "alleges" and "did" be substituted respectively for the words "believes" and "could". Along with the petition for leave to amend he filed a list giving the particulars of the void votes. This application was allowed by the <ORG> but the order was reversed by <ORG> on the ground that the <ORG> had erred in allowing the amendment. In appeal to this <ORG> it was held that in a case like the one before the <ORG>, definite particulars about the number and' nature of the void votes that had been counted could only be supplied after inspection of the ballot papers, and the election petition as originally presented must therefore be regarded as having furnished the material particulars, and the amendment petition must be treated merely as an application for clarification of the pleadings. We do not think that <NAME> case(1) lays down any general principle that a party is entitled without making allegations of material facts in support of his plea to set aside an election to claim an order for inspection of the ballot papers and seek to supply the lacuna in his petition by showing that if all the votes are scrutinized again by the <ORG> it may appear that there had been improper reception, refusal or rejection of votes at the time of counting. To support his claim for setting aside the election the petitioner has to make precise, allegations of material facts which having regard to the elaborate rules are or must be deemed to be within his knowledge. The nature of the allegations must of course depend' upon the facts of each case. But if material facts are not 22 E.L.R.288.

stated, he cannot be permitted to make out a case by fishing out the evidence from an inspection of the ballot papers. In <NAME> case(1) the <ORG> was primarily concerned with the question whether amendment of the petition to set aside an election should be granted. It was alleged by the defeated candidate that there had been contravention of the provisions of s. 63 (1 ) of the Act by the Returning Officer and the election was materially affected on that account. The applicant had stated that he believed that the respondents had received many votes which were void. When the ballot box was opened it was found that among the votes credited to the successful candidate were 37 votes which were void. Thereafter the applicant applied to substitute the words " alleges" for "believes" and "did" for "could". In that case the <ORG> was not concerned to decide whether the order for inspection was properly made: the propriety of the order granting inspection does not appear to have ever been questioned. The principal question raised in the appeal was whether the amendment of the petition should, in the circumstances, be granted and the observation of the <ORG> that "definite particulars about the number and nature of the void votes that had been counted could only be supplied after inspection of the ballot papers" was not intended to be a general statement of the law that whenever an allegation is made in a petition to set aside an election that void votes have been included in the counting of votes received by a successful candidate, definite particulars with regard to the said void votes may only be supplied after the ballot papers are inspected, and that a defeated candidate may claim inspection of the ballot papers without making any specific allegations of material facts and without disclosing a prima facie case in support of the claim made.

In our view <ORG> was in error in interfering with the exercise of discretion by <ORG> which proceeded upon sound principles. The appeal therefore is allowed and the order of <ORG> is set aside. The order of the <ORG> is restored with costs in this <ORG> and <ORG>.

Appeal allowed.

(1) 22 E.L.R. 288