In Departmental Enquiry, Document Not Admitted By Employee Must Be Proved Through Witness : Supreme Court

The Supreme Court on Wednesday (April 1) has observed that when the employee doesn't admit the charges labelled against him, he cannot be dismissed from the services based on an employer's unproven documentary evidence. The Court emphasized that employers must prove such documentary evidence through witnesses, so that the employee could have an opportunity to cross-examine the witness.

“Even in a case based solely on documentary evidence, unless the relied upon documents are admitted by the charged employee, a witness would have to be examined to prove those documents and when so examined, the witness would have to be tendered for cross-examination.”, observed a bench of Justice Sanjay Karol and Justice Manoj Misra, while setting aside the dismissal of the U.P. Cooperative Federation Limited's employee who was dismissed from the service.

The Court rejected the Respondent-employer's contention that evasive denial of the charges by the Appellant-employee amounted to admission of the charges. Instead, the Court said that “in a departmental enquiry, unless the charge is admitted, the burden to prove the charge lies on the employer/ department.”, pointing out that the employer's liability to prove the evidence against the delinquent employee could not be brushed aside, when the employee had not admitted the charges.

The case arose from disciplinary proceedings initiated against the Appellant, who was serving as in-charge of a paddy procurement centre under the U.P. Cooperative Federation.

Charges of embezzlement of ₹2,00,850 and shortage in delivery of over 1000 quintals of paddy to a mill were labelled against him. However, the Appellant denied both charges in his reply to the charge-sheet.

Despite the denial, the department proceeded with the enquiry relying solely on documentary records, without examining any witness to prove those documents, thus debarring him an opportunity to cross-examine any person in relation to the evidence relied upon.

Aggrieved by the High Court's decision to justify the disciplinary proceedings and dismissal from the service, the Appellant moved the Supreme Court.

Setting aside the impugned order, the judgment authored by Justice Misra observed that the entire enquiry was conducted in breach of procedural fairness, as when the charges were denied by the Appellant, it was incumbent upon the employer to prove them.

“we find that the department had not produced any witness in the enquiry even though the charges levelled upon the appellant were denied by him. Therefore, in our view, the enquiry stood vitiated. Once the enquiry stood vitiated, the consequential order of punishment/ recovery cannot be sustained.”, the court observed.

Accordingly, the Court set aside the order of dismissal and the recovery imposed on the employee.

However, the employer was granted liberty to conduct a de novo enquiry in accordance with law within a period of six months from the date of this order.

“If the Federation does not hold de novo enquiry as permitted above, the appellant shall be entitled to reinstatement with benefit of continuity in service including arrears of salary after adjusting suspension allowance, if any, paid already. In case the Federation chooses to hold an enquiry, it shall reinstate the appellant and place him under suspension till completion of the enquiry and during this period pay suspension allowance as may be payable in accordance with law. In case de novo enquiry is held, other service benefits including arrears of salary as well as benefits of continuity in service shall depend on the outcome of the enquiry,”, the court noted.

Headnote

Service Law — Disciplinary Enquiry — Principles of Natural Justice — Requirement of Oral Enquiry — Held that even if a case is based solely on documentary evidence, unless the relied-upon documents are admitted by the charged employee, a witness must be examined to prove those documents and be tendered for cross examination - Unless the charged employee accepts guilt in clear terms, an enquiry must be held where the employer leads evidence first, followed by an opportunity for the delinquent to cross-examine witnesses and lead defense evidence - An evasive reply to a departmental charge-sheet does not amount to an admission of guilt; the burden to prove the charge remains with the employer - Failure to produce any witness when charges are denied vitiates the enquiry. [Relied on Chamoli District Co operative Bank Limited & Another vs. Raghunath Singh Rana & Others (2016) 12 SCC 204; Sur Enamel and Stamping Works Ltd. v. Workmen AIR 1963 SC 1914; State of Uttaranchal & Ors. v. Kharak Singh (2008) 8 SCC 236; Paras 13-18]

Supreme Court Observations - The Supreme Court set aside the High Court's judgment, noting several procedural lapses – i. No Admission of Guilt - rejected the respondent's argument that an "evasive" reply constituted an admission under the Evidence Act - A departmental charge-sheet is not a plaint, and the burden of proof lies strictly on the department unless the charge is categorically admitted; ii. Mandatory Oral Enquiry - Relying on Chamoli District Co-operative Bank Limited, Supreme Court held that under Regulation 85 of the 1975 Regulations (and Rule 84 of the 1980 Service Rules), it is mandatory to hold an oral enquiry when charges are refuted; iii. Order of Evidence - The department must lead evidence first to prove the charges before asking the delinquent for a defense. In this case, no witnesses were produced to prove the documents or the charges, rendering the enquiry "vitiated" - The Supreme Court allowed the appeal and set aside the dismissal and recovery orders - The Federation was granted liberty to conduct a de novo enquiry within six months - If no such enquiry is held, the appellant is entitled to reinstatement with full benefits and arrears of salary.

Cause Title: JAI PRAKASH SAINI VERSUS MANAGING DIRECTOR U.P. COOPERATIVE FEDERATION LTD. & ORS.

Citation : 2026 LiveLaw (SC) 315

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Appearance:

For Petitioner(s) : Mr. Rajiv Srivastava, Adv. Ms. Garima Srivastava, Adv. Mr. Arpit Shukla, Adv. Ms. Gargi Srivastava, AOR

For Respondent(s) :Mr. Gaurav Dhingra, AOR Mr. Sunny Choudhary, AOR Mr. Mayur Chaturvedi, Adv. Mr. Ayush Singh, Adv.