Hukum Chand Malhotra vs Union of India

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 288 of 1958

Decision Date: 12 December 1958

Coram: S.K. Das, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.N. Wanchoo, M. Hidayatullah

In the matter of Hukum Chand Malhotra versus Union of India, the Supreme Court rendered its judgment on 12 December 1958, and the decision was authored by Justice S.K. Das, who was joined on the bench by Justices Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.N. Wanchoo and M. Hidayatullah. The case is reported in 1959 AIR 536 and in the Supreme Court Reporter Supplement (1) 892, and it is also cited in later cases identified as RF 1971 SC2004 (10) and RF 1980 SC1650 (7). The dispute arose when the petitioner, a government servant, was charged with contravening the service rules by accepting private employment without the required governmental sanction while still holding a public office. An enquiry officer investigated the charge, concluded that the allegation was proved, and submitted a report recommending that a major penalty be considered. On 14 April 1954 the President issued a show‑cause notice to the petitioner invoking Article 311(2) of the Constitution, stating that a provisional opinion was that a major penalty—namely dismissal, removal or reduction—might be imposed, and that the petitioner should be given an opportunity to show cause before any final action was taken. The petitioner responded to the notice, and on 1 October 1954 the President issued an order removing the petitioner from service, the order taking effect from that date. The petitioner contended that the show‑cause notice was defective because it mentioned all three punishments contemplated under Article 311(2) but did not specify which particular penalty would be imposed, thereby failing to satisfy the essential requirement of the constitutional provision and rendering the removal order invalid. The Court examined whether the inclusion of multiple possible penalties, without fixing a specific one, violated the procedural safeguards prescribed by Article 311(2). It held that the notice did not contravene the constitutional provision, observing that there is nothing inherently wrong with a punishing authority tentatively forming the opinion that the proved charge could merit any one of the three major penalties and, on that basis, seeking the servant’s explanation for each alternative. The Court explained that this approach actually affords the servant a fuller opportunity to contest the imposition of any of the possible punishments, an advantage that would be denied if only the severest punishment were mentioned and a lesser penalty were later imposed. Consequently, the Court concluded that the show‑cause notice dated 14 April 1954 complied with Article 311(2) and that the subsequent order of removal dated 1 October 1954 was a valid exercise of the President’s authority under the constitutional and statutory framework governing government servants.

The Court noted earlier authorities such as v. I. M. Lall (1948) L.R. 75 I.A. 225 and Khem Chand v. Union of India [1958] S.C.R. 1080 were explained, and it distinguished Jatindra Nath Biswas v. R. Gupta (1953) 58 C.W.N. 128; Dayanidhi Rath v. B. S. Mohanty, A.I.R. 1955 Orissa 33; and Lakshmi Narain Gupta v. A. N. Puri, A.I.R. 1954 Cal. 335. The judgment concerned a civil appellate jurisdiction matter, specifically Civil Appeal No. 288 of 1958. The appeal was filed by special leave against a judgment and order dated December 3, 1956, of the Punjab High Court (Circuit Bench) at Delhi in Letters Patent Appeal No. 25‑D of 1956, which itself arose from a judgment and order dated April 9, 1956, of the same High Court in Civil Writ No. 8‑D of 1955. Counsel for the appellant were N. C. Chatterjee and R. S. Narula, while the Attorney‑General for India, M. C. Setalvad, together with B. Sen and T. M. Sen, appeared for the respondent. The judgment was delivered on December 12, 1958, by S. K. DAS, J.

The Court observed that the appeal, taken on special leave, presented a single issue for determination: whether the order of the President dated October 1, 1954, that removed the appellant from service with effect from that date, was invalid because it violated the provisions of Article 311(2) of the Constitution. The factual background recorded that the appellant entered permanent Government service on April 4, 1924. In 1947, prior to partition, he held the position of Assistant Secretary in the Frontier Corps of Militia and Scouts in the then North‑Western Frontier Province, a post that was administered by the External Affairs Department of the Government of India and was classified as a Central Service post of Class 11. After partition, the appellant elected to continue his service in India and, in October 1947, was assigned to an office within the Ministry of Commerce of the Government of India. In December 1949, he was transferred to the office of the Chief Controller of Imports in New Delhi to clear certain arrears of work. In August 1951, he was posted as Deputy Chief Controller of Imports in Calcutta and remained in that capacity until September 1952. He then took four months’ leave on average pay, and on the expiry of that leave on January 24, 1953, he was transferred to the position of Section Officer in the Development Wing of the Ministry of Commerce. The appellant regarded this transfer as a demotion in rank and consequently made representations, which did not obtain any relief. As a result, on February 6, 1953, he applied for leave preparatory to retirement, stating that although his normal retirement date was April 1956, he found it difficult to accept the new conditions of service under which he was placed, and he believed that continuing in such conditions would not serve either himself or the interests of the Government and the country.

In February 1953 the appellant submitted an application for leave preparatory to retirement, stating that although his normal retirement was scheduled for April 1956 he found the new conditions of service untenable and therefore requested permission to retire effective 1 May 1953. On 14 February 1953 he amended this application after being informed by the Administrative Branch of the Development Wing that the question of granting retirement was still under consideration because of difficulties in accounting for the period during which he had held the post of Assistant Secretary, Frontier Corps. Consequently, he asked that he might be granted leave on full average pay for four months commencing 15 February 1953 if the decision on retirement was likely to be delayed beyond 1 May 1953, and he revised his prayer to state that leave should be sanctioned for four months from 15 February 1953, or up to the date on which he is permitted to retire, whichever occurred earlier. On 10 March 1953 the appellant was notified that retirement could not be permitted at that stage, but that the Ministry would grant him leave from 16 February to 30 April 1953. He therefore went on leave and, on 25 February 1953, wrote to the Government indicating that he was contemplating joining the service of Messrs Albert David & Co. Ltd., Calcutta, and that he would undertake a two‑month training course with that company. In April 1953 he accepted employment with Messrs Albert David & Co. Ltd. and informed the Government of this on 6 April 1953. On 16 June 1953 he was charged with violating Rule 15 of the Government Servants’ Conduct Rules and Fundamental Rule 11. Rule 15 prohibits a government servant from engaging in any trade or employment without prior governmental sanction, while Fundamental Rule 11 provides that, unless expressly provided otherwise, the whole of a servant’s time is at the disposal of the Government. The Joint Chief Controller of Imports, A.P. Mathur, was directed to conduct an enquiry; the appellant submitted an explanation and the enquiry was held. The Enquiry Officer’s report, dated 12 September 1953, concluded that the appellant had, contrary to the service rules, accepted private employment without prior sanction while still in government service. Accordingly, on 14 April 1954 the appellant was issued a show‑cause notice under Article 311(2) of the Constitution, and because the entire dispute in this case revolves around that notice, the Court deemed it necessary to set out its contents in full.

The Enquiry Officer who was appointed to investigate the specific charges framed against the appellant submitted his report, and a copy of that report was enclosed for the appellant’s information. After a careful review of the report, and especially of the conclusions reached by the Enquiry Officer regarding the charges, the President formed a provisional opinion that a serious penalty – namely dismissal, removal or reduction – should be imposed on the appellant. Before taking any final action, the President intended to give the appellant a chance to show cause against the proposed penalty. The President stated that any representation made by the appellant in this regard would be considered before any action was taken. The President required that any such representation be made in writing and be received by the undersigned within fourteen days of the appellant’s receipt of the letter. The President also asked the appellant to acknowledge receipt of the letter. The letter was signed by the Joint Secretary to the Government of India. The appellant subsequently filed a show‑cause response, and on 1 October 1954 the President issued an order stating that, having taken into account the Enquiry Officer’s report and after consulting the Public Service Commission, the charge against the appellant was proved and that the appellant was therefore removed from service effective from that date. The appellant then filed a petition under Article 226 of the Constitution in the Punjab High Court, contending first that he had not been given a proper opportunity to show cause as required by Article 311 (2) of the Constitution, and second that he had obtained leave preparatory to retirement and had accepted a position with Albert David & Co. Ltd. in a genuine belief that the Government would not object to his taking private employment. The first instance judge, Dulat J., dismissed both contentions, holding that there was no breach of Article 311 (2) and finding, on the facts admitted, that the appellant had indeed taken private employment in violation of the service rules, while also concluding that the appellant’s claim of insufficient opportunity to present evidence lacked merit. The second contention concerning private employment no longer remains before this Court; the only substantive issue left for consideration is the alleged violation of Article 311 (2). Counsel for the appellant, N. C. Chatterjee, submitted that the show‑cause notice dated 14 April 1954 listed all three punishments contemplated under Article 311 (2) but failed to specify which exact punishment was intended, and therefore the notice did not satisfy the essential requirements of Article 311 (2).

In this case, the Court observed that because the show‑cause notice dated 14 April 1954 failed to satisfy the requirements of Article 311(2) of the Constitution, the removal order issued on 1 October 1954 could not be regarded as a valid order. The Court then referred to its earlier decision in Khem Chand v. Union of India, reported in (1) [1958] S.C.R. 1080, where it explained the true scope and effect of Article 311(2). That decision clarified that the “reasonable opportunity” contemplated by Article 311(2) comprises three distinct components: (a) an opportunity for the government servant to deny any alleged guilt and to establish his innocence; (b) an opportunity to defend himself against the charges; and (c) an opportunity to make a representation as to why the proposed punishment should not be imposed. The Court further explained that the third component can be exercised only after the enquiry has concluded, after the competent authority has considered the seriousness of the proven charges, and only after it has tentatively proposed to impose one of the three punishments prescribed in Article 311(2) and communicated that proposal to the servant. The Court noted that it was not contested that the appellant had been given opportunities (a) and (b) as described above. Consequently, the remaining issue for determination was whether the show‑cause notice of 14 April 1954 provided the appellant with a reasonable opportunity to show cause against the proposed action. Counsel for the appellant highlighted two observations made by the Court in Khem Chand’s case (1). First, the Court had observed, with respect to opportunity (c), that a government servant may make his representation only after the enquiry is finished, after the authority has applied its mind to the gravity of the proved charges, after it has tentatively decided to impose one of the three punishments, and after it has communicated that tentative decision to the servant. Counsel for the appellant stressed the Court’s mention of “one of the three punishments.” Second, counsel drew the Court’s attention to observations of the Judicial Committee in High Commissioner for India and High Commissioner for Pakistan v. I. M. Lall (1), which were quoted with approval in Khem Chand’s case (2). The Judicial Committee had observed that, in their opinion, no “action is proposed” within the meaning of the sub‑section until a definite conclusion on the charges has been reached and the actual punishment to follow has been provisionally determined. Counsel for the appellant emphasized the phrase “actual punishment” in that observation. The Court reminded that, in both I. M. Lall’s case (1) and Khem Chand’s case (1), the decisive point was that the government servant was not served with a second notice after the enquiry, which would have allowed him to show cause against the proposed action. In I. M. Lall

In I. M. Lall’s case, a notice was issued simultaneously with the charges. The notice directed the government servant to show cause why he should not be dismissed, removed, reduced, or subjected to any other disciplinary action that the competent authority might deem appropriate. Thus the notice functioned as a combined notice, containing both the charges and the punishments that the authority proposed to impose. The Court held that such a combined notice failed to satisfy the requirements of sub‑section (3) of section 240. In Khem Chand’s case, the report of the Enquiring Officer received approval from the Deputy Commissioner of Delhi. The Deputy Commissioner then imposed the penalty of dismissal without affording the government servant any opportunity to show cause against the proposed action. The Union of India, through its Solicitor‑General, attempted to distinguish I. M. Lall’s case by arguing that the notice in that case invited the servant to show cause against several possible punishments. In contrast, the notice in Khem Chand’s case referenced only a single punishment, namely dismissal. Addressing this argument, the Court observed that a careful reading of the Judicial Committee’s judgment in I. M. Lall’s case demonstrated the decision was not founded on the mere inclusion of multiple punishments. Instead, the Court explained that the true basis of the decision was that the servant should have been given an opportunity to show cause after the charges had been established. The Court further held that the competent authority must also have considered the gravity of the proved charge and tentatively proposed a specific punishment before the show‑cause stage. Consequently, the essential point in both I. M. Lall’s case and Khem Chand’s case was that the government servant was denied a chance to show cause after a stage at which the charges were proved. The authority had also already contemplated the appropriate punishment before the show‑cause notice was issued. It is true that the judgments sometimes used the expressions ‘actual punishment’ or ‘particular punishment’, but those remarks must be understood in the context in which they were made. The Court therefore indicated that a more careful examination of the consequences was required.

In this case, the Court observed that Article 311(2) mandates that, in every instance, the specific punishment to be imposed on the concerned government servant must be identified in the show‑cause notice issued at the second stage of the disciplinary proceeding. The Court explained that the express purpose of issuing a show‑cause notice at this stage is to provide the servant with a reasonable chance to argue why the proposed penalty should not be imposed. For example, when dismissal is proposed, the servant may submit that, although the charges have been established, the extreme penalty of dismissal is not warranted and a lesser sanction such as removal or reduction in rank would be more appropriate. The Court further held that if the authority were required to mention the exact or particular punishment in the second‑stage notice, a further, third notice would become necessary whenever the state government accepts the servant’s representation. Such a requirement would defeat the very objective of the second notice, which is to give the servant an opportunity to respond before a final decision is taken. The Court also referred to the point emphasized by Justice Dulat, noting that even if the notice had only specified dismissal without referencing the alternative punishments, the authority would still retain the power to impose either removal or reduction in rank, and no complaint could be made about either the notice or the ultimate punishment. The Court rejected the argument that listing the two alternative penalties in the notice rendered it invalid, stating that the inclusion of all three possible sanctions actually provided the appellant with a fuller and more adequate chance to show cause against each of them. Emphasising that the present notice was not vague, the Court pointed out that it clearly demonstrated that the punishing authority had seriously considered the appropriate punishment. The notice dated 14 April 1954 expressly stated that the President was provisionally of the opinion that a major penalty—namely dismissal, removal or reduction—should be enforced on the appellant. Consequently, the President had formed a tentative conclusion that the proved charge justified any one of the three penalties mentioned, and invited the appellant to show cause why none of those three should be imposed. The Court found nothing improper in principle with the authority’s tentative view that the established charges could merit any of the three listed punishments.

The Court explained that the authority may mention one of the three major penalties and, on that basis, ask the Government servant to show cause against the punishment that is proposed to be imposed in the alternative. It held that specifying more than one penalty in the alternative does not make the proposed action any less definite; rather, it affords the servant a better opportunity to contest each of the punishments that might be imposed, an opportunity that would be denied if only the severest penalty were mentioned while a lesser penalty not referred to in the notice were later imposed. The Court then turned to the authorities on which the appellant’s counsel relied. The cited cases were Jatindra Nath Biswas v. R. Gupta, Dayanidhi Rath v. B. S. Mohanty and Lakshmi Narain Gupta v. A. N. Puri. In Jatindra Nath Biswas, no second show‑cause notice was issued and the decision proceeded on that basis. Justice Sinha observed that where an enquiry is conducted, the employee must not only be given a chance to contest the case before the enquiry, but also, before any punishment is imposed, must be informed of the enquiry’s result and of the exact punishment proposed to be inflicted. Counsel highlighted the significance of the word “exact”. The Court noted that the Biswas decision was reached on a different footing and was not based on a requirement that a second show‑cause notice contain only one penalty. In Dayanidhi Rath’s case, the Court held that when a tentative punishment of a gravest nature is proposed, the authority may impose a lesser penalty, but if a tentative punishment of a lesser nature is proposed, it would be prejudicial to impose a harsher penalty later. In that case the notice stated that, taking into account the Enquiring Officer’s findings and the servant’s past record, removal from service was proposed; however, another part of the same notice directed the servant to show cause why dismissal should not be imposed for the proved charges. Consequently, two penalties were placed side by side in the same notice, making it difficult to conclude that the authority had carefully considered and tentatively decided on a specific punishment. The Court observed that this was not a situation where the authority merely indicated that either of the two penalties might be imposed in the alternative; instead, one part of the notice expressly proposed removal while another part suggested dismissal.

In the notice under consideration the authority first proposed to remove the Government servant concerned and, in another part of the same notice, stated that the proposed punishment was dismissal. In the case of Lakshmi Narain Gupta the notice similarly required the petitioner to show cause why disciplinary measures such as reduction in rank, withholding of increments and other penalties should not be imposed. The Court noted that rule 49 of the Civil Service (Classification, Control and Appeal) Rules enumerated seven possible penalties and observed that the notice failed to demonstrate that the punishing authority had applied its mind to any particular penalty listed in that rule. On that basis the Court held that the notice did not comply with the requirements of Article 311(2) of the Constitution. However, the Court expressly declined to lay down a rule that any notice mentioning more than one punishment is per se defective, and it warned that if such a rule were implied it would be erroneous. The Court then examined the three decisions relied upon by counsel for the appellant and found that those authorities did not support the extreme position advanced by him. Consequently, the Court concluded that the show‑cause notice dated 14 April 1954 in the present matter did not contravene Article 311(2), because the appellant had been given a reasonable opportunity to show cause against the proposed action. This determination settled the principal controversy before the Court. Counsel for the appellant further pointed out certain reference errors in the order of the President dated 1 October 1954, noting that rule 15 of the Government Servants’ Conduct Rules was incorrectly cited as rule 13 and that paragraph 5 of a specific Government order prohibiting commercial employment within two years of retirement was inapplicable to servants of Class 11. The Court held that these inaccurate references were not of vital importance. Substantively, the order of removal dated 1 October 1954 was founded on the finding that the appellant had violated rule 15 of the Government Servants’ Conduct Rules and rule II of the Fundamental Rules by accepting private employment without Government sanction while still in service. Those violations formed the basis of the enquiry and the removal order. For these reasons the Court found no merit in the appeal, dismissed it and ordered the appellant to pay costs.