Previous enquiry report that was quashed, cannot be relied upon in fresh enquiry [read order]


The earlier enquiry report against an employee in which punishment was quashed, could not and should not be relied upon by the competent authority as basis in fresh enquiry for holding the employee guilty of the charge and to award punishment. This was held by a two-judge bench of the Supreme Court, comprising Justices J. Chelameswar and Prafulla C. Pant in their order dated 29 November 2016 in the case of Bindeshwari Chaudhary v. State of Bihar & Ors. [Civil Appeal No. 3829 OF 2011].

The appellant in this case was posted as Executive Engineer with Irrigation Department of State of Bihar, in the District of Singhbhum. He was alleged to have released advance payments to a contractor, on the basis of a bank guarantee which was initially confirmed by the Punjab & Sindh Bank, Jamshedpur, from where it was apparently issued, however, afterwards, the new branch manager of the said bank informed the appellant that no such bank guarantee has been issued by the bank. The CBI had conducted investigation in the matter in pursuance to the fraudulent/forged bank guarantee furnished by the contractor, and filed a charge sheet against the bank manager and the Senior Accounts Clerk of the Irrigation Department who received the bank guarantee from the contractor and verified.

The appellant has pleaded that he is not accused in the said charge sheet, still on 18.06.1993, after the departmental enquiry was earlier dropped, the respondent authorities awarded punishment against the appellant withholding his three increments with cumulative effect, and also ‘censured’ for the year 1989-90. He filed a writ petition in the high court challenging the above order of punishment. The said writ petition was allowed on 23.03.1995 by the High Court holding that withholding of three increments with cumulative effect is a major punishment, and could not have been awarded without resorting to regular departmental enquiry. However punishment of “Censure’ was not interfered with by the High Court.

On 20th May, 1995, the respondent authorities initiated fresh departmental enquiry against the appellant, and second charge sheet was served on him relating to the same allegations of release of unsecured advance of Rs. 14.5 lacs to the contractor against the order of Superintending Engineer. In this enquiry, on 24.09.1997, appellant was awarded punishment of withholding of 100% pension and gratuity, since meanwhile he had retired. A Writ Petition filed by him before the High Court challenging the order of withholding of pension and gratuity was dismissed. Aggrieved by said order, Letters Patent Appeal was filed by the appellant which was disposed of by the High Court vide impugned order dated 20.05.2008 restricting withholding of gratuity and pension to the extent of 50 percent.

In appeal, the Supreme Court noted that the first charge sheet was revoked consequent to order passed by the High Court, whereby the suspension order issued against the appellant was quashed. By the same order departmental enquiry was also dropped. Fresh charge sheet was eserved on the appellant in the same matter. When High Court in earlier round quashed the major punishment of withholding of three increments with cumulative effect, it did not disturb the minor punishment ‘censure’ awarded against the employee. However, the High Court did observe that action can be taken in accordance with law. The communication sent by the appellant to the Branch Manager of the Bank, and reply confirming bank guarantee received from the Bank are not disputed. It is also not disputed that after investigation C.B.I. found evidence against the then Branch Manager, and Senior Accounts Clerk of the appellant, as the persons responsible with the contractor, in the matter. It is also nobody’s case that the appellant caused pecuniary loss to the exchequer. In the light of above, the Supreme Court observed that the appellant was bona fide in making the payment in question to the contractor, as he did make enquiries from the bank concerned before releasing mobilizing advance to the contractor.

The Supreme Court further noted that the Enquiry Report in the fresh enquiry shows that though it is mentioned that charge is proved against the appellant in the enquiry, but the finding is based on earlier enquiry report. The earlier enquiry report was in question in a previous writ petition before high court in which punishment of withholding of three increments with cumulative effect was quashed. The authorities could not and should not have relied upon said enquiry report as basis in fresh enquiry for holding the appellant guilty of the charge and to award punishment of withholding of pension and gratuity. In the circumstances, the Supreme Court held that that there was no sufficient reason for the respondent authorities to exercise the powers under Rule 43 (b) read with Rule 139 of Bihar Pension Rules as neither there was pecuniary loss to the State, nor the present case is of a grave misconduct on the part of the appellant. Accordingly, allowing the appeal, the Supreme Court quashed the orders of the respondents imposing penalty on the appellant.

Read full order of the court:


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