ORDER
A.P. Shah, J.
1. This petition under Article 226 of the Constitution takes exception to the order dated 7th April, 1992 passed by the disciplinary authority dismissing the petitioner from service as well as the order of the appellate authority dated 20th October, 1992 confirming the said order of dismissal. Briefly, the facts are that the petitioner was in the employment of the respondent No. 1 Hindustan Petroleum Corporation Limited and at the material time was working as Deputy Manager (Acting), Oil Movement & Storage Department. The petitioner’s duly included carrying out random checking of the weight of the tankers that were loaded in the refinery. On 14th February, 1986 the petitioner was on duty in the shift described as 8 x 4 shift. As part of his duty, the petitioner had carried out random checking of 8 tankers on that day and had countersigned on the weighment slips in respect of the said 8 tankers. On the same day another tanker bearing registration No. MCU-1914 was also loaded in the refinery. The said tanker was weighed and was allowed to go out. It transpired that excess quantities of carbon oil had been loaded on to the said tanker which were not mentioned in the weighment slip. The said tanker was intercepted by the police while carbon oil was being illegally transferred from it to another tanker since the police had received certain prior information and on that information they were keeping watch on tanker No. MCU-1914. During the investigation, the petitioner was arrested by the CID in connection with theft of products of the respondent No. 1 and other related offences. Besides the petitioner, about 50 other employees of respondent No. 1 were arrested by the police for similar offences. Later on the petitioner was released on bail.
2. By charge-sheet dated 17th December, 1986 the petitioner was charge- sheeted by the respondent No. 1 as per the Conduct, Discipline & Appeal Rules that while the petitioner was on duty on 14th March, 1986 in 8 x 4 shift gate-pass was signed and
issued in respect of tanker No. MCU-1914 and the billing to the customer was also based on the quantity recorded on the gate-pass/weighment slip and further that they had received a letter from the police about the arrest of the petitioner under section 379 read with sections 120B, 411, 413 and 414 of the Indian Penal Code. The respondent No. 1 by this chargesheet charged the petitioner that as per para 114 of the service rules, the loading of excess CBFS had resulted in a loss to the Corporation and amounted to acts of serious misconduct, namely, (i) fraud, dishonesty in connection with the business of the Corporation: (ii) acting in a manner prejudicial to the interest of the Corporation: and (iii) commission of the act which amounts to a criminal offence involving moral turpitude. It was alleged that the petitioner had signed the shift gate-pass in respect of the said tanker. The petitioner was suspended during the pendency of the inquiry and asked to submit his explanation. By his letter dated 29th December, 1986 the petitioner submitted his explanation denying the charges levelled against him. As the explanation submitted by the petitioner was not found satisfactory, it was decided to hold a departmental enquiry to investigate the charges levelled against the petitioner.
It may be stated at this stage that during the pendency of the departmental enquiry, the Metropolitan Magistrate, 25th Court, Mazgaon, by his judgement and order dated 6th July, 1989 discharged the petitioner as according to the learned Magistrate, there was no admissible evidence against the petitioner.
3. At the departmental enquiry the employees who had allegedly made confessional statements before the police and the Judicial Magistrate who implicated the petitioner were cited as department’s witnesses. Two of the said witnesses appeared pursuant to the summons sent by the Enquiry Officer and stated that they were unable to depose till the enquiry against them was over. The 3rd witness, one Mr. P.V. Dhuri, who had also allegedly made a confessional statement before the police, declined to appear in the enquiry. The petitioner had raised an objection before the Enquiry Officer that the statements alleged to be the confession of the three co-accused could not be used against him as these persons had neither deposed nor been cross-examined in the enquiry. However, this objection was overruled by the Enquiry Officer holding that even hearsay evidence was permissible. Finally, the management examined only two witnesses in support of the chargesheet, namely, Mr. Ram Mohan Rao, who was examined as a formal witness to prove certain documents, and Mr. A.L. Khillari, Sub-Inspector of Police, who had carried out the investigation and before whom accused P.V. Dhuri had made confessional statement. The Enquiry Officer submitted his report dated 25th February, 1992 holding that the charges levelled against the petitioner were proved by the evidence on record. It is an admitted position that copy of the enquiry report was not furnished to the petitioner till the petitioner was dismissed from service by the impugned order.
The disciplinary authority concurred with the findings of the Enquiry Officer and came to the conclusion that the petitioner was not a fit person to be retained in service of the Corporation and therefore by impugned order dated 7th April, 1992 the petitioner was dismissed from the services of the Corporation.
5. The petitioner filed an appeal before the appellate authority. The appeal was considered by the Chairman & Managing Director of respondent No. 1 being the appellate authority. After considering the enquiry report and the other material on record the appellate authority found no reason to interfere with the order passed by the disciplinary authority and by an order dated 20th October, 1992, dismissed the appeal filed by the petitioner.
6. Aggrieved by the order of dismissal, the petitioner filed writ petition being Writ Petition No. 1602 of 1993 before this Court challenging the original order of dismissal dated 7th April, 1992 without challenging the order dated 20th October, 1992 passed by the appellate authority. The writ petition was dismissed by Sujata Mahohar, Acting C.J. (as she then was) and Chaudhari, J., by order dated 7th September, 1993 on the ground that the petitioner had preferred an appeal and the appeal had also been dismissed by a speaking order and the appellate order had not been challenged in the writ petition. It will be useful to reproduce the order of the Appeal Bench which runs as follows:
“The petitioner challenges in this petition the order of dismissal from service dated 7-4-1992 on the ground that no show cause notice was issued to him before imposing punishment. He points out that on similar ground Writ Petition No. 794 of 1993 has been admitted by another Division Bench of this Court. In the present case, however, the petitioner preferred an appeal under the Conduct, Discipline and Appeal Rules for Management Employees framed by Hindustan Petroleum Corporation Limited. The appeal was dated 8-6-1992. The appellate authority has passed a detailed speaking order dated 20-10-1992 under which he has considered each of the points raised by the petitioner and has dismissed the appeal and has held that there is no ground to resist the punishment awarded by the Disciplinary Authority. The order of the Disciplinary Authority has, therefore, now merged with the order of the appellate authority. This order is not challenged in the present writ petition. In view thereof, this petition cannot be equated with Writ Petition No. 794 of 1993. Petition dismissed.”
6. Against the order of this Court, the petitioner filed special leave petition before
the Hon’ble Supreme Court being SLP (Civil) No. 14352 of 1994 but however on the
advise of his Advocate the petitioner withdrew the SLP with liberty to avail another
remedy and has now filed the present petition challenging the orders of both the
disciplinary authority as well as the appellate authority.
7. Mr. Singhvi, learned Counsel for the petitioner raised the following contentions before me:
(i) that the chargesheet framed against the petitioner was completely vague
and no charge was disclosed in the chargesheet and therefore the entire
enquiry is vitiated;
(ii) that the report of the Enquiry Officer which is solely based upon the
hearsay evidence i.e. the confessional statements of the co-accused is
completely illegal and perverse; and
(iii) that the respondents have failed to supply copy of the report of the Enquiry
Officer resulting in violation of principles of natural justice.
8. Before dealing with the contentions of Mr. Singhvi, it will be necessary to note the defence raised by the respondents. On behalf of the respondents C.R. Ramchandran, General Manager (IR & A) has filed affidavit in reply. In contesting the prayers made in the petition, a preliminary objection is raised in the affidavit in reply that the present petition is barred by principles of res judicata. It is contended that in view of the summary dismissal of the earlier writ petition, the present writ petition is not maintainable. It is next contended that the report of the Enquiry Officer cannot be said to be based on no legal evidence. It is pointed out that the Corporation examined two witnesses namely, Mr. Ram Mohan Rao and Mr. A.L. Khillari, the Sub-Inspector of Police who had carried out the investigation and before whom accused P.V. Dhuri made
confessional statement. It is pointed out that both the witnesses were cross-examined by the petitioner. It is also pointed out that the petitioner did not examine himself in the enquiry. In these circumstances, it is contended that no fault can be found with the report of the Enquiry Officer. It is denied that the chargesheet issued to the petitioner contained only vague charge, as alleged. It is stated that as a matter of fact the petitioner had clearly understood the charges and allegations and indeed submitted a detailed explanation to the charges. It is pointed out that the petitioner never raised the ground that the charges were vague or that there was no definite charge framed on the basis of the allegations against the petitioner or that he did not understand the same but on the contrary, the petitioner submitted a detailed explanation. It is maintained that the Enquiry Officer’s report was based on legal evidence. It is stated that even hearsay evidence is permissible in the enquiry. It is also stated that this Court while exercising its jurisdiction under Article 226 could not re-appreciate the evidence led at the enquiry which is accepted by the disciplinary authority as well as the appellate authority.
9. First it will be necessary to decide the preliminary objection raised by
respondent No. 1 that the present petition is barred by res judicata. Mr. Talsania,
learned Counsel for respondent No. 1 strenuously contended that the dismissal of the
earlier petition would operate as res judicata. Mr. Talsania urged that adjudication is
conclusive and final not only as to actual matter determined but as to every other
matter which the parties might and ought to have litigated and have had it decided as
incidental to or essentially connected with the subject matter of litigation and every
matter coming within the legitimate purview of the original action both in respect of the
matters of claim or defence. Mr. Talsania urged that the present petition is clearly
barred by the principles of constructive res judicata. He placed heavy reliance on the
judgement of the Supreme Court in Forward Construction Co. v. Prabhat Mandal
(Regd.), Andheri, . I do not find any merit in the preliminary
objection of Mr. Talsania. We have already seen that the previous petition was
dismissed by the Division Bench only on the ground that the order of the disciplinary
authority has merged in the order of the appellate authority and as the petitioner has
not challenged the order of the appellate authority, the petition was not maintainable.
It was not a decision on the merits of the case. The dismissal was based on technical
objection that the petitioner has not challenged the appellate authority’s order. It is well
settled that a dismissal on technical ground does not operate as res judicata. The
dismissal of the earlier petition was not on merits of the case but on account of a
technical defect. Under the circumstances, the doctrine of res judicata has no
application to this case.
10. In my opinion, the reliance placed on the judgment of the Supreme Court in Prabhat Mandal’s case is equally misplaced. There the petition challenging the commercial use of a plot reserved for bus depot was dismissed on merit. Two questions arose before the Supreme Court. The first was whether the principles of res judicata can be applied to a public interest litigation. Secondly, the question was whether the petition was barred by constructive res judicata. The Supreme Court held that the principle underlying section 11 is equally applicable to public interest litigation as well but it must be proved that the previous litigation was the public interest litigation not by way of a private grievance and it has to be a bona fide litigation in respect of a right which is common and is agitated in common with others. As regards the question whether a second petition on new ground is maintainable, the Supreme Court held that merely because the ground which is raised in the second petition is not agitated in the first petition cannot be a ground for holding that the principles of res
judicata was not applicable. It was held by the Supreme Court that it will be a case of constructive res judicata. However, here we are dealing with a completely different situation. In the present case tha earlier petition was dismissed on technical ground that the appellate order was not challenged. Now the petitioner has challenged both the orders i.e. the order of the disciplinary authority as well as the appellate order. In these circumstances, the question of application of section 11 does not arise. I have, therefore, no hesitation to reject the preliminary objection that the petition is barred by res judicata.
11. Coming then to the merits, I propose to first deal with the 2nd submission of Mr. Singhvi because, in my opinion, it really goes to the root of the case. The argument of Mr. Singhvi is that a finding of guilt in the domestic enquiry cannot be based solely on hearsay evidence without there being any direct or circumstantial evidence in support of such finding. The Counsel argues that apart from the confessional statements, there is absolutely no evidence to connect the petitioner to the alleged pilferage of the products on 14th February, 1986. I find considerable substance in the arguments of Mr. Singhvi. On careful perusal of the report of the Enquiry Officer it is clearly seen that the report is based only on the confessional statements of the co-accused. There are two confessional statements made before the Magistrate. Both were retracted subsequently. The third is a confessional statement made before the police. It is true that in these statements the petitioner’s name has been implicated even though no role is attributed to the petitioner in respect of the incident of 14th February, 1986. The two co-accused have stated that the petitioner was also involved in the pilferage of the goods from the refinery. The 3rd statement which is made before the police speaks about the modus operandi adopted by the concerned employees in pilferage of the material. Now, admittedly, none of these persons were made available for cross-examination. They were initially cited as witnesses but as already indicated, they were not available for cross-examination. Barring these confessional statement there is not an iota of material against the petitioner in respect of any of the charges framed against him. The management has chosen to rely solely upon the evidence of Mr. Khillari in whose presence the confessional statements were made. Now the statement of Mr. Khillari may be admissible in order to show that the statements were actually made by the concerned persons. But as far as the truth….. contents of the
said statements is concerned, the evidence of Mr. Khillari is clearly hearsay.
12. Hearsay evidence is defined by Halsbury’s Laws of England (Fourth Edition) Volume 17 as evidence given by a testifying witness of a statement made by some other person, when such evidence is tendered to prove the truth of the statement. Phipson says that oral or written statements made by persons who are not parties and who are not called as witnesses are inadmissible to prove the truth of the matter stated (Phipson’s Evidence – para 632). Several reasons are commonly given to justify the hearsay rule but the main reason is hearsay statements when related to the Court emanate originally from persons not under oath nor subject to cross-examination, “the greatest legal engine ever invented for the discovery of truth”. Thus the basis for this hearsay objection is that the opponent is unable to confront and cross-examine the “real” witness – the declarant- and to expose weaknesses in his statement.
13. The question as to the admissibility of hearsay evidence in a departmental enquiry was considered by the Constitutional Bench of the Supreme Court in a slightly different context in the case of Jagannath Prasad Sharma v. State of Uttar Pradesh, . In that case the appellant appearing befpre the Supreme Court was a policy officer. There were complaints received against him by the Chief Minister
and the Inspector General of Police, U.P., charging the appellant with immorality, corruption and gross dereliction of duty. An enquiry was held into the conduct of the appellant by the Superintendent of Police, Anti-Corruption Department The report of the Superintendent of Police was forwarded to the Government of U.P., and the Governor acting under Rule 4 of the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 referred the case for enquiry to a Tribunal appointed under Rule 3 of the Tribunal Rules on charges of corruption, personal immorality and failure to discharge duties properly. The Tribunal framed 3 charges against the appellant and after a detailed survey of the evidence recommended that the appellant be dismissed from service. Accordingly, the Governor issued dismissal order of the appellant. It appears that under section 46 of the Indian Police Act, the Uttar Pradesh Government has also framed rules called Police Regulations. Chapter 32 containing Regulations 477 to 507 provided for departmental punishment and criminal prosecution of police officers. Thus the authorities had two alternative modes of enquiry; one under the Police Regulations and the other under the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947.
14. It was argued before the Supreme Court that even if the Governor was vested with power to dismiss a police officer, out of the two alternative modes of enquiry, a mode prejudicial to the appellant having been adopted, the proceedings of the Tribunal which enquired into the charges against him were void, as the equal protection clause of the Constitution was violated. In this behalf it was pointed out that whereas the Tribunal could admit evidence which is hearsay, the oral evidence under the Police Regulations must be direct evidence. In para 15 of the judgment the Supreme Court observed.
“Regulation 490 of the Police Regulations sets out the procedure to be followed in an enquiry by the police functionaries, and Rules 8 and 9 of the Tribunal Rules set out the procedure to be followed by the Tribunal. There is no substantial difference between the procedure prescribed for the two forms of enquiry. The enquiry in its true nature is quasi-judicial. It is manifest from the very nature of the enquiry that the approach to the materials placed before the enquiring body should be judicial. It is true that by Regulation 490, the oral evidence is to be direct, but even under R. 8 of the Tribunal Rules, the Tribunal is to be guided by rules of equity and natural justice and is not bound by formal rules of procedure relating to evidence. It was argued that whereas the Tribunal may admit on record evidence which is hearsay, the oral evidence under the Police Regulations must be direct evidence and hearsay is excluded. We do not think that any such distinction was intended. Even though the Tribunal is not bound by formal rules relating to procedure and evidence, it cannot rely on evidence which is purely hearsay, because to do so in an enquiry of this nature would be contrary to rules of equity and natural justice.”
15. The next judgment which is required to be considered is the judgment of the two Judges Bench in Central Bank of India v. P.C. Jain, . In that case the question of applicability of hearsay rule to domestic inquiry directly fell for consideration of the Supreme Court. Bhargava, J., observed:
“It is true that in numerous cases, it has been held that domestic Tribunals, like an Enquiry Officer, are not bound by the technical rules about evidence contained in the Indian Evidence Act; but it has nowhere been laid down that even substantive rules which would form part of principles of natural
justice, also can be ignored by the domestic Tribunals. The principle that a fact sought to be proved must be supported by statements made in the presence of the persons against whom the enquiry is held and that statements made behind the back of the person charged are not be treated as substantive evidence, is one of the basic principles which cannot be ignored on the mere ground that domestic Tribunals are not bound by the technical rules of procedure contained in the Evidence Act. In fact, learned Counsel for the appellant Bank was unable to point out any case at all where it may have been held by this Court or by any other Court that a domestic Tribunal will be justified in recording its findings on the basis of hearsay evidence without having any direct or circumstantial evidence in support of those findings.”
16. The question of admissibility of the hearsay evidence in departmental proceedings was considered by the Division Bench of this Court in an unreported judgment delivered on 30th June, 1977 in Special Civil Application No. 1940 of 1972. The Division Bench observed that it is not always necessary for a witness to be examined by the department in the presence of the delinquent employee and his statement recorded earlier may be taken on record. But if the department wanted to rely upon that statement as against the delinquent employee, it is ultimately the rule of natural justice that the delinquent employee must be given an opportunity for contesting the validity of each of the statements recorded earlier. It was found by the Division Bench that such a procedure was not followed and thus there is contravention of the basic rule of natural justice. After referring to the decisions Of the Supreme Court in State of Madhya Pradesh v. Chintaman Sadashiv Waishampayan, A.I.R. 1961 S.C. 1623. and the Central Bank of India v. Prakash Chand Jain (supra), the Bench observed that the right to cross examine the witnesses who give evidence against the delinquent is a very valuable right and if it appears that effective exercise of this right has been prevented by the Enquiry Officer by not giving to the delinquent the relevant documents to which he is entitled, that inevitably would mean that the enquiry had not been held in accordance with the rules of natural justice.
17. Mr. Talsania strenuously contended that in recent judgments the Supreme Court has taken a view contrary to the one expressed in P.C. Jain’s case. He brought to my notice the judgment of the Supreme Court in the case of State of Haryana v. Rattan Singh, . There the respondent was working as a conductor with the Haryana Roadways, which was a State Transport Undertaking. The respondent while on duty on a bus of the undertaking on its trip from Palval to Khodulpat, was the conductor whose vehicle was overtaken by the flying squad. The squad stopped the bus and its inspector discovered that four passengers had alighted at Kamani Khade without tickets and that 11 passengers travelling in the bus also did not have the tickets although they claimed to have paid the tares. The respondent was charge-sheeted and after an enquiry was terminated from the services of the undertaking. The respondent filed a suit for a declaration that the order of termination was a nullity. He must, therefore, be given a declaration of continuance in service. The lower Court set aside the order of dismissal mainly on the ground that none of the 11 passengers have been examined at the domestic enquiry. The judgement of the lower Court was upheld by the lower Appellate Court. The High Court dismissed the second appeal in limine. The Supreme Court held that the examination of the passengers was not necessary. In this context the Supreme Court observed in para 4 as follows:
“It is well settled that in a domestic enquiry the strict and sophisticated rules of evidence under the Indian Evidence Act may not apply. All materials which are logically probative for a prudent mind are permissible. There Is no allergy to hearsay evidence provided it has reasonable nexus and credibility. It is true that departmental authorities and administrative Tribunals must be careful in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Indian Evidence Act. For this proposition it is not necessary to cite decisions nor text books, although we have been taken through case law and other authorities by Counsel on both sides. The essence of a judicial approach is objectivity, exclusion of extraneous materials or considerations and observance of rules of natural justice. Of course, fairplay is the basis and if perversity or arbitrariness, bias or surrender of independence of judgment vitiate the conclusions reached such finding, even though of a domestic Tribunal, cannot be held good. However, the courts below misdirected themselves, perhaps, in insisting that passengers who had come in and gone out should be chased and brought before the Tribunal before a valid finding could be recorded. The residuum’ rule to which Counsel for the respondent referred, based upon certain passages from American Jurisprudence does not go to that extent nor does the passage from Halsbury insist no such rigid requirement. The simple point is, was there some evidence or was there no evidence – not in the sense of the technical rules governing regular Court proceedings but in a fair commonsense way as men of understanding and worldly wisdom will accept. Viewed in this way, sufficiency of evidence in proof of the finding by a domestic Tribunal is beyond scrutiny. Absence of any evidence in support of a finding is certainly available for the Court to look into because it amounts to an error of law apparent on the record. We find, in this case, that the evidence of Chamanlal, Inspector of the flying squad, is some evidence which has relevance to the charge levelled against the respondent. Therefore we are unable to hold that the order is invalid on that ground.”
18. Mr. Talsania also brought to my notice the judgement of the Supreme Court in J.D. Jain v. Management, State Bank of India, . There the appellant was working as a cashier in a branch of State Bank of India. The complainant had a Saving Bank account in that branch. When he received his pass book from the counter clerk he found that on an earlier occasion he had withdrawn only Rs. 500 but there was a debit entry of Rs. 1500 and he complained of the matter to the Ledger Clerk. The matter was taken to the supervisor before whom also the complaint was repeated. On scrutiny it was disclosed that the complainant had given a letter of authority on the occasion to the appellant for withdrawal of Rs. 500 and the appellant had withdrawn Rs. 1,500 by inserting the necessary figure. An Enquiry Officer was appointed and his finding was that the appellant had fraudulently altered the amount in the letter of authority. Order discharging him from service was passed. The matter was referred to the Central Government Industrial Tribunal. The Tribunal held that in the absence of evidence of complainant the evidence recorded was hearsay and therefore the appellant could not be held guilty. The High Court set aside the award of the Tribunal in writ petition. The Supreme Court held as follows:
“The Tribunal has committed an error in holding that the finding of the domestic enquiry was based on ‘hearsay’ evidence. The law is well-settled that the strict rules of evidence are not applicable in a domestic enquiry. The word ‘hearsay’ is used in various senses. Sometimes it means whatever a person is heard to say; sometimes it means whatever a person declares on information given by someone else. For the purpose of a departmental enquiry, complaint, certainly not frivolous, but substantiated by circumstantial evidence, is enough. What the Bank sought to establish in the domestic enquiry was that the complainant had made a verbal complaint with regard to the withdrawal of excess money by the appellant in presence of the four witnesses against his advice. On the complaint, the evidence of these four witnesses is direct as the complaint is said to have been made by the complainant in their presence and hearing; it is therefore, not hearsay. No rule of law enjoins that a complaint has to be in writing as insisted by the Tribunal.”
19. There cannot be any dispute that in a domestic enquiry strict and sophisticated rules of evidence under the Evidence Act do not apply. In the words of Krishna Iyer, J., there is no allergy to hearsay evidence provided it has reasonable nexus and credibility. The same view has been reiterated by the Supreme Court in J.D. Jain’s case. But the question arising in the present petition is whether the Enquiry Officer will be justified in recording his finding solely on the basis of hearsay evidence in the absence of any direct or circumstantial evidence against the delinquent. In P.C. Jain’s case the Supreme Court clearly indicated that a domestic Tribunal will not be justified in recording its finding on the basis of hearsay evidence without having any direct or circumstantial evidence in support of its finding. Even the decision of the Constitutional Bench in Jagannath Prasad Sharma’s case clearly lays down that though a Tribunal dealing with domestic enquiry is not bound by formal rules relating to procedure and evidence, it cannot base its finding on evidence which is purely hearsay because to do so in an enquiry of this nature would be contrary to the rules of equity and natural justice. The two decisions relied upon by Mr. Talsania are clearly distinguishable. In Rattan Singh’s case, the inspector, who found the passengers without ticket, was examined at the enquiry. His evidence was clearly available to corroborate the statements of the passengers. It is in these circumstances, the Supreme Court came to the conclusion that it was not necessary to call the passengers as witnesses. In this context, the Supreme Court observed that the evidence of Chamanlal, the inspector of the flying squad, is some evidence which has relevance to the charge levelled against the delinquent and, therefore, it cannot be said that the order is invalid for absence of any evidence. As regards the judgment in J.D. Jain’s case it is clearly seen that the Supreme Court came to the conclusion that there was direct evidence against the delinquent. Moreover, the Supreme Court also came to the conclusion that the evidence of the witnesses on the verbal complaint cannot be said to be hearsay evidence. It is, therefore, not possible to agree with Mr. Talsania that the Supreme Court has taken a view contrary to the one expressed in P.C. Jain’s case in its latter judgements in Rattan Singh and J.D. Jain.
20. Turning then to the facts of the present case it is seen that the Enquiry Officer has based his evidence solely on the basis of hearsay evidence. He has solely relied upon the confessional statements for recording a finding that the petitioner was involved in bribery although no such charge was framed against the petitioner. He has
also proceeded on erroneous assumption that the responsibility of disproving such statements lies with the charged employee. The Enquiry Officer has also erroneously assumed that the tanker which was intercepted by the police was cleared under the signature of the petitioner. This mistake, was brought to the notice of the appellate authority when it was conceded by the management that the observations of the Enquiry Officer were not correct. Mr. Singhvi is therefore right in his contention that the report of the Enquiry Officer is based on no evidence. Mr. Talsania argued that even assuming that the actual involvement of the petitioner in the conspiracy is not established, the petitioner being-in-charge of the department was liable for negligence. It is not possible to accede to the contention of Mr. Talsania for the simple reason that no such charge was framed against the petitioner. It was not even remotely suggested that he was guilty in fiduciary capacity as in charge of the department. In these circumstances, the impugned orders are liable to be set aside.
21. In view of the above findings it is not really necessary to deal with the other submissions of Mr. Singhvi although it is necessary to record that the submission of Mr. Singhvi that there is violation of principles of natural justice on account of the failure of the respondents to supply copy of the report of the Enquiry Officer, is fully supported by the judgement of the Supreme Court in Managing Director, ECIL, Hyderabad v. B. Karunakar, . Now it is necessary to turn to the next question as to whether the petitioner is entitled to the order of reinstatement when the termination is unsustainable in law and void. It is well settled that in the sphere ot employer-employee relations in public sector undertakings, to which article 227 of the Constitution of India is attracted, it cannot be posited that reinstatement must invariably follow as a consequence of holding that an order of termination of service of an employee is void. In O.P. Bhandari v. India Tourism Development Corpn., Ltd., the Supreme Court observed that it is in public interest that public sector undertaking or their Board of Directors are not compelled and obliged to entrust their managements to personnel in whom, on reasonable grounds, they have no trust or faith and with whom they are in bona fide manner unable to function harmoniously as a team working arm-in-arm with success in attaining their common goal. It was held that these factors are required to be taken into account by the Court at the time passing the consequential order, for the Court has full discretion in the matter of granting relief, and the Court can sculpture the relief to suit the needs of the matter at hand.
22. So far as the facts of this case are concerned. I am satisfied that this is a fit case for granting compensation in lieu of reinstatement, instead of granting reinstatement. For, Mr. Talsania rightly pointed out that even assuming that the charge against the petitioner is not established in the domestic enquiry, the respondents have completely lost confidence in the petitioner, particularly, having regard to the damaging allegations made against the petitioner by the co-workers. It is not possible to say that the apprehension of the respondents is completely ill-founded. In my opinion, direction for reinstatement may not be in the interest of the petitioner as he will not be able to work in the atmosphere of suspicion and mistrust. Therefore, this Court is of the opinion, that compensation in lieu of reinstatement, and not reinstatement, is warranted in the circumstances of the present case. As regards the quantum of compensation, Mr. Talsania urged that the formula laid down in O.P. Bhandari’s case of compensation equivalent to 3.33 years salary (including allowances as admissible) on the basis of the last pay and allowances drawn by the petitioner would be reasonable amount to award in lieu of reinstatement. On the other hand, Mr. Singhvi contended that considering the fact that even though the petitioner is shown to be working in the managerial cadre,
his position is no different than class II employee and keeping in mind the low pay scale received by the petitioner, compensation may be awarded for the entire remainder period. Mr. Singhvi also contended that the compensation may be fixed on the basis of revised pay scales and the petitioner should be permitted to opt for the pension scheme. In my considered opinion, the compensation equivalent to four years salary (including allowances as admissible) on the basis of revised pay scales and allowances would be proper compensation. In the result, petition is allowed. The impugned orders are quashed and set aside. The respondent Corporation shall pay to the petitioner by way of compensation salary including usual allowances for a period of four years on the basis of last revised pay scales notified on 24th January, 1996 within two months from today. The respondents shall also pay to the petitioner within the said period the differential salary from the date of the order of suspension till the date of termination. The petitioner shall be entitled to pensionary benefits and for that purpose the petitioner shall be deemed to have retired on superannuation. No order as to costs. Certified copy expedited.
23. Order accordingly.