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charges pertaining to non-handing over of full charge at the relevant point of time; appointing persons without permission from the Collector/Registrar; as also, returning the money after one and a half years by the respondent

2024 INSC 592

1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NOS. 8546-8549 OF 2024

 [ @ SPECIAL LEAVE PETITION (CIVIL) NOS.12773-76 OF 2021]

THE STATE OF RAJASTHAN & ORS. … APPELLANTS

A1: THE STATE OF RAJASTHAN

A2: DEPUTY SECRETARY, DEPARTMENT OF PERSONNEL

A3: REGISTRAR, COOPERATIVE SOCIETIES, JAIPUR

VERSUS

BHUPENDRA SINGH …RESPONDENT

J U D G M E N T

AHSANUDDIN AMANULLAH, J.

Heard learned counsel for the parties.

2. Leave granted.

 

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3. The present appeals are directed against the common Final

Judgment and Order dated 28.01.2021 (hereinafter referred to as the

“Impugned Judgment”) passed by the Division Bench of the High Court

of Judicature for Rajasthan, Jaipur Bench (hereinafter referred to as

the “High Court”) by which D.B. Special Appeal Writs No.1695/2008,

14/2009, 15/2009 and 65/2009 were dismissed.

BRIEF FACTUAL OVERVIEW:

4. The sole respondent was appointed as Inspector (Executive) in

the year 1960 and later appointed as Assistant Registrar on 05.04.1973

on selection by the Rajasthan Public Service Commission (hereinafter

referred to as the “RPSC”). On 29.04.1976, the respondent granted

permission for construction of godown of Sadulshahar Jamidara Co-operative Marketing Society Ltd. despite the Registrar having issued a direction to consult the Public Works Department to obtain a technical

opinion. The respondent, further, appointed two persons on 04.01.1977,

despite order to get the permission from the Registrar. On 06.05.1977,

the respondent was reverted to the post of Inspector and also directed

to handover charge to Mr. Amar Chand Dhaka but he did not comply

with the same and allegedly obstructed the other person from duty.

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5. On 18.05.1977, the respondent issued an order nominating himself as Administrator of the Bharat Bus Transport Cooperative Society

Limited though he was reverted from that post and charge was taken

over from him by another person. During such period, the respondent

sold 9 shops without adopting the procedure of auction at very low

prices compared to the market value of the said shops. He is further

said to have made irregular payments on 30.05.1977. On 21.06.1977,

he withdrew an amount of Rs.9,025/- (Rupees Nine Thousand TwentyFive) from the account of the Bharat Bus Transport Cooperative Society

Limited as expenses incurred for purchase of stamps though the same

were recovered from the shop-buyers and thus, illegally kept by him.

On 01.08.1977, the Collector of the district asked the respondent to

hand over charge of Administrator of Hanumangarh Society but he did

not hand over the charge and cash balance etc. till 19.08.1977.

6. On 04.10.1979, he was placed under suspension in contemplation of departmental enquiry for having committed various irregularities.

As per the seniority list published on 05.10.1979, the respondent was at

Sl. No.39 as on 01.07.1978. On 07.02.1980, Appeal No.361/79 was

filed by the respondent seeking promotion which was dismissed on the

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ground that there were adverse entries in his Annual Confidential Records (hereinafter referred to as “ACRs”) for the years 1975-1976,

1976-1977 and 1977-1978. However, it was observed that if the said

adverse entries were expunged, the respondent would have a case for

reconsideration.

7. On 03.10.1980, charge sheet under Rule 16 of the Rajasthan

Civil Services (Classification, Control and Appeal) Rules, 1958 (hereinafter referred to as the “1958 Rules”) was issued against the respondent levelling 16 charges including sub-charges. The preliminary statement of the respondent was recorded on 23.05.1983 in connection with

the said enquiry. Examination of witnesses took place on various dates.

In the meantime, on 28.11.1983, in Appeal No.237/82, adverse entries

in the ACR were expunged. On 05.03.1984 and 04.06.1984, detailed

statement of the respondent was also recorded. Finally, the enquiry report was submitted on 19.04.1984. Thereafter, the Departmental Promotion Committee (hereinafter referred to as the “DPC”) in its meeting

held on 21.11.1984 did not find the respondent fit for promotion as he

was under suspension on that day. The respondent had moved the

High Court in Single Bench Civil Writ Petition No.590/1983, wherein

suspension order dated 04.10.1979 against the respondent was pro-

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spectively stayed by the learned Single Judge. The respondent filed Appeal No.358/85 for consideration of his promotion to the posts of

Deputy Registrar with effect from 23.02.1979 and Joint Registrar with

effect from 06.04.1985.

8. After completion of the enquiry and the charges having been

proved, the respondent was removed from service by order dated

25.09.1985. Appeal No.358/85 preferred by the Respondent was partially allowed, by order dated 21.08.1991, directing the appellant to convene the DPC for the vacancies of the year 1984-1985 and review the

case of the respondent for promotion to the post of Deputy Registrar.

The respondent had also moved against his order of removal before the

High Court in Single Bench Civil Writ Petition No.793/1986 wherein

vide order dated 18.12.1991, the order of removal was quashed granting liberty to the appellants to conduct enquiry and proceed after giving

the respondent a copy of the enquiry report and the opinion of the

RPSC. Compliance of the said order was made on 07.04.1992. The respondent submitted written representations on 25.05.1992 and

10.06.1992 denying all the charges levelled against him. On

11.09.1992, the DPC found the respondent suitable for 1980-81 but not

for 1979-80 for which the recommendation was kept in a sealed cover

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in view of pendency of the departmental enquiry. In the challenge to the

decision of the DPC by the respondent in Contempt Petition

No.358/1985, by order dated 08.04.1993, the High Court upheld the decision of the DPC. On 28.09.1993, after affording an opportunity of

hearing to the respondent, an order for his removal was passed. Being

aggrieved, the respondent preferred a contempt petition in the High

Court which was dismissed and the D.B. Special Appeal No.36/94 filed

against the same was also rejected on 04.04.1994.

9. The respondent then filed four writ petitions being SBCWP

Nos.6486/1993; 5651/1994; 5752/1994, and; 846/1995 in the High

Court which were decided by a common judgment dated 22.02.2008,

wherein SBCWP Nos.6486/1993 and 5651/1994 were allowed, while

SBCWP Nos.5752/1994 and 846/1995 were partly allowed, and directions were issued to reconsider the respondent’s case for promotion.

Aggrieved thereby, the appellants preferred D.B. Special Appeal Writs

No.1695/2008, 14/2009, 15/2009 and 65/2009 whereas the respondent

also filed D.B. Special Appeal Writ No.24/2009. The appeal filed by the

respondent was related to his claim for costs. Vide common Final Judgment and Order dated 28.01.2021, all these writ appeals were dis-

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missed, which has given rise to the present four appeals at the instance

of the appellants.

SUBMISSIONS BY THE APPELLANTS:

10. Learned counsel for the appellants submitted that the respondent had a chequered history and proved himself unfit for being retained

in service. It was submitted that even during probation, the respondent

was found unsuitable and was reverted/asked to handover charge to

Mr. Amar Chand Dhaka by order dated 06.05.1977 but he disobeyed

and obstructed him from assuming charge of his office. It was submitted that even earlier, when the Registrar had issued directions to the respondent to consult the PWD for technical opinion with regard to permission for construction of godown of Sadulshahar Jamidara Co-operative Marketing Society Ltd., without doing so, he himself had given

such permission and had even appointed Mr. Dharam Chand and Mr.

Birbal on 04.01.1977 on his own, without permission from the Registrar.

Further, it was submitted that on 18.05.1977, the respondent had issued Order No.995-98 nominating himself as the Administrator of the

Bharat Bus Transport Cooperative Society Ltd. while he was reverted

from that post and charge was taken from him by Mr. Amar Chand

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Dhaka. It was contended that during the said period, the respondent

sold 9 shops at a much lower price than the market price without following the due prescribed procedure. He submitted that on 30.05.1977

also, the respondent made irregular payments and on 21.06.1977, he

embezzled Rs.9025/- by withdrawing the said amount from the account

of the society on the head of expenses of stamps which were recovered

from shopkeepers and the amount was illegally kept with him.

11. Further, it was argued by learned counsel for the appellants that

on 05.07.1977, the respondent prepared a bill of Rs.4,600/- against rent

without obtaining clearance of the Collector and on 06.05.1977, he resumed the post from which he was reverted without authority of law.

Even the said amount of Rs.4,600/- was not paid by the respondent to

the landlord. He submitted that on 21.07.1977, the respondent embezzled Rs.4,000/- by making fake entry of returning deposit of the said

amount to Smt. Ganga Bai in the Cash Book, but kept the amount

without any authority. Similarly, it was submitted that on 25.07.1977, he

received Rs.7,766.83/- and kept it with him, which he returned only at

the time of inspection under compulsion. Further, on 30.07.1977,

learned counsel submitted that the respondent made irregular and

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doubtful entries relating to payments made by him during the period for

which he stood demoted to the post of Inspector. It was submitted that

another glaring example of the respondent committing insubordination

was that despite the order of the Collector, Sh. Ganganagar dated

01.08.1977, directing the respondent to handover charge of Administrator, Hanumangarh Society, he did not handover the cash balance

and other charge till 19.08.1977.

12. Further contention was that the respondent temporarily embezzled an amount of Rs.4,764.36/- of the Bharat Bus Transport Cooperative Society Ltd. and the amount was returned only after the respondent got transferred to Bhilwara. It was submitted that even the

said amount which was due on 18.08.1977 itself was sent by the respondent in the shape of Demand Drafts of Rs.3,000/- on 07.02.1979,

Rs. 764.36/- on 09.02.1979 and Rs.1,000/- on 20.02.1979 i.e., after one

and a half years. He submitted that on 04.10.1978, the respondent took

advance of Rs.2,000/- to purchase material for godown while working

as Administrator of Ravla Sale-purchase Co-operative Society Ltd. but

did not deposit the same and in the meantime, he was transferred to

Bhilwara and upon repeated reminders and correspondence he sent

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the amount under Demand Draft No.738095 on 20.03.1979. Another irregularity pointed out was that the respondent did not take any steps for

new appointment on 28% posts reserved for Scheduled Castes/Scheduled Tribes candidates on the one hand, while on the other hand he appointed one Rajkumar against reserved post on 07.10.1978 as a junior

clerk in violation of the order.

13. Learned counsel submitted that in the background of such conduct, the respondent was placed under suspension in contemplation of

departmental enquiry by order dated 04.10.1979.

14. Learned counsel submitted that on 03.10.1980, a Charge Sheet

under Rule 16 of the 1958 Rules was issued levelling 16 charges

against the respondent, inclusive of sub-charges. During the enquiry,

10 witnesses were examined, who deposed against the respondent,

whereafter, on 05.03.1984 and 04.06.1984, detailed statement(s) of the

respondent was also recorded. The enquiry report was finally submitted

on 19.04.1984. It was contended that, rightly, the DPC in its meeting

held on 21.11.1984 did not find the respondent suitable, on the ground

that he was under suspension at that time. It was submitted that though

on 22.02.1985 the learned Single Judge of the High Court in SBCWP

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No.590/1983 stayed the operation of the order of suspension dated

04.10.1979 against the appellant, but the same was with prospective

effect and Appeal No.358/85 filed by the respondent for considering his

promotion to the post of Deputy Registrar w.e.f. 23.02.1979 and Joint

Registrar w.e.f. 06.04.1985, was partly allowed with the direction to

convene the DPC for the vacancies for the year 1984-85 to review the

case of the respondent for promotion to the post of Deputy Registrar. In

the meantime, during the departmental proceeding against the respondent, charges were proved and by order dated 25.09.1985, he was

removed from service.

15. It was submitted that though the High Court by order dated

18.12.1991 in Single Bench Civil Writ Petition No.793/1986 quashed

the removal order against the respondent, liberty was granted to the appellants to conduct an enquiry after giving him a copy of the enquiry report and the opinion of the RPSC. In compliance of the said order, in

the departmental proceedings, the respondent submitted his written

representation denying all charges and was also heard on his representation. However, learned counsel submitted that on 11.09.1992, the

DPC found him suitable for 1980-1981 but not for 1979-1980, with the

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recommendation kept under sealed cover in view of the pending departmental enquiry. It was submitted that in Contempt Petition

No.358/1985, preferred by the respondent, by order dated 08.04.1993,

the decision of the DPC was found to be proper.

16. Learned counsel submitted that after following all due procedure

under the law and after affording the respondent full opportunity of being heard, the removal order was passed on 28.09.1993, holding that in

light of the serious nature of the charges and partly/fully five charges

having been found to be proved by the enquiry officer, there were sufficient grounds for punishment. The Contempt Petition filed by the respondent was dismissed and Special Appeal No.36/94 before the Division Bench was also rejected.

17. It was submitted that in this background, when the respondent

filed four writ petitions challenging the removal order dated 28.09.1993,

the High Court quashed the removal order on the ground of violation of

principles of natural justice observing that though there was a reference

to the representation filed by the respondent but there was no discussion in the order. Further, as a consequence, the suspension order was

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also quashed holding the respondent entitled for the remaining salary

from the date of his suspension till the date of fresh removal and stating

that the entire period will also be counted for the purpose of pension.

Moreover, the respondent having been found fit for promotion in 1980-

1981 but denied the same on the ground of pendency of departmental

enquiry by keeping the result in a sealed cover, the suspension as well

as the removal order having been quashed, the respondent was held

entitled for consideration for promotion to the post of Deputy Registrar

in the year 1979-1980 and 1980-1981 and all consequential benefits, in

the event he was so promoted.

18. Learned counsel for the appellants submitted that there has

been gross miscarriage of justice since despite five charges having

been proved documentarily, still, on hyper-technicality, the High Court

interfered. Further, it was contended that the view taken by the authorities cannot be said to be perverse as it was also a plausible view. It was

urged that in such matters, the settled law is that where two views are

possible, the one taken by the authorities ought not to be interfered

with, only because there can be another view. Learned counsel submitted that the act of the respondent stood admitted with regard to his conduct of financial irregularity(ies) and insubordination by not obeying or-

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ders relating to his transfer, other directions given for permission of construction granted to a Cooperative society as also acting beyond jurisdiction of assuming power, both in appointing persons as well as appointing himself as an Administrator of a Co-operative Society. It was

submitted that the Division Bench totally erred in not appreciating the

points, both legal and factual, raised by the appellants. It was further

submitted that the Division Bench erroneously held that the enquiry proceedings were vitiated as they were based on no evidence and were

perverse, which finding, learned counsel contended, was itself perverse, as there were documents to prove the charges, which the respondent had not challenged as being forged and/or fabricated. Hence,

it was prayed that these appeals may be allowed.

SUBMISSIONS BY THE RESPONDENT:

19. Per contra, learned counsel for the respondent submitted that

both the learned Single Judge and the Division Bench have concurrently held that the enquiry was vitiated, and it was a case of no evid-

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ence. Thus, this Court may also not interfere in the matter. It was submitted that both the learned Single Judge and the Division Bench

found that the charge relating to temporary embezzlement is illegal as

the same was not proved but still he has been found guilty. Moreover, it

was pointed out that though Charge 1-GA is with regard to embezzlement of Rs.9,025/- of the sale of shops, the Appellate Authority had exonerated the respondent and the Enquiry Officer did not find the respondent guilty of the said charge of embezzlement, but found sale of

those shops irregular which was not even the charge.

20. Similarly, it was pointed out that the learned Single Judge on the

issue of competence of the respondent to sell the shop at a lower price

held that despite the finding of the Enquiry Officer that no loss was

proved, still the charge has been found proved, which is improper and

there cannot be any dispute on this account. He submitted that the order of the learned Single Judge, which has been upheld by the Division

Bench, does not require interference. He, therefore, impressed upon us

that the appeals deserved dismissal.

ANALYSIS, REASONING AND CONCLUSION:

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21. Having considered the matter, the Court finds that the Impugned

Judgment cannot be sustained. On a prefatory note, we would begin by

quoting what the Division Bench has noted on page No.7:

‘It is well settled preposition (sic) of law that

courts will not act as an Appellate Court and re-assess

the evidence led in domestic enquiry, nor interfere on

the ground that another view was possible on the

material on record. If the enquiry has been fairly and

properly held and findings are based on evidence, the

question of adequacy of evidence or reliable nature of

the evidence will be no ground for interfering with the

finding in departmental enquiry. However, when the

finding of fact recorded in departmental enquiry is

based on no evidence or where it is clearly perverse

then it will invite the intervention of the court.’

22. The learned Single Judge held that the findings returned in the

enquiry were without evidence, contrary to the record, and as the

Removal Order based on the same was not reasoned, proceeded to

quash the same. This course of action adopted by the learned Single

Judge has been affirmed by the Division Bench. Surprisingly, despite

noticing the aforesaid position in law relating to non-interference by the

Appellate Court to re-assess the evidence led in an enquiry or to

interfere on the ground that another view was possible on the material

on record, the Division Bench went on to record that the learned Single

Judge had rightly held that the enquiry proceedings were vitiated as

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they were based on no evidence and were perverse, without giving any

reasons of its own as to how the learned Single Judge had arrived at

such a conclusion, namely, that the enquiry was based on no evidence

and the findings rendered therein were perverse. Upon detailed

assistance from both sides on the factual prism, coupled with the

materials on record, we are of the considered opinion that the

judgments delivered by the learned Single Judge and the Division

Bench are unsustainable.

23. The scope of examination and interference under Article 226 of

the Constitution of India (hereinafter referred to as the ‘Constitution’) in

a case of the present nature, is no longer res integra. In State of

Andhra Pradesh v S Sree Rama Rao, AIR 1963 SC 1723, a 3-Judge

Bench stated:

‘7. … The High Court is not constituted in a

proceeding under Article 226 of the Constitution a

Court of appeal over the decision of the authorities

holding a departmental enquiry against a public servant

: it is concerned to determine whether the enquiry is

held by an authority competent in that behalf, and

according to the procedure prescribed in that behalf,

and whether the rules of natural justice are not violated.

Where there is some evidence, which the authority

entrusted with the duty to hold the enquiry has

accepted and which evidence may reasonably support

the conclusion that the delinquent officer is guilty of the

charge, it is not the function of the High Court in a

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petition for a writ under Article 226 to review the

evidence and to arrive at an independent finding on the

evidence. The High Court may undoubtedly interfere

where the departmental authorities have held the

proceedings against the delinquent in a manner

inconsistent with the rules of natural justice or in

violation of the statutory rules prescribing the mode of

enquiry or where the authorities have disabled

themselves from reaching a fair decision by some

considerations extraneous to the evidence and the

merits of the case or by allowing themselves to be

influenced by irrelevant considerations or where the

conclusion on the very face of it is so wholly arbitrary

and capricious that no reasonable person could ever

have arrived at that conclusion, or on similar grounds.

But the departmental authorities are, if the enquiry is

otherwise properly held, the sole judges of facts and if

there be some legal evidence on which their findings

can be based, the adequacy or reliability of that

evidence is not a matter which can be permitted to be

canvassed before the High Court in a proceeding for a

writ under Article 226 of the Constitution.’

(emphasis supplied)

24 The above was reiterated by a Bench of equal strength in State

Bank of India v Ram Lal Bhaskar, (2011) 10 SCC 249. Three learned

Judges of this Court stated as under in State of Andhra Pradesh v

Chitra Venkata Rao, (1975) 2 SCC 557:

‘21. The scope of Article 226 in dealing with

departmental inquiries has come up before this Court.

Two propositions were laid down by this Court in State

of A.P. v. S. Sree Rama Rao [AIR 1963 SC 1723:

(1964) 3 SCR 25: (1964) 2 LLJ 150]. First, there is no

warrant for the view that in considering whether a

public officer is guilty of misconduct charged against

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him, the rule followed in criminal trials that an offence is

not established unless proved by evidence beyond

reasonable doubt to the satisfaction of the Court must

be applied. If that rule be not applied by a domestic

tribunal of inquiry the High Court in a petition under

Article 226 of the Constitution is not competent to

declare the order of the authorities holding a

departmental enquiry invalid. The High Court is not a

court of appeal under Article 226 over the decision of

the authorities holding a departmental enquiry against

a public servant. The Court is concerned to determine

whether the enquiry is held by an authority competent

in that behalf and according to the procedure

prescribed in that behalf, and whether the rules of

natural justice are not violated. Second, where there is

some evidence which the authority entrusted with the

duty to hold the enquiry has accepted and which

evidence may reasonably support the conclusion that

the delinquent officer is guilty of the charge, it is not the

function of the High Court to review the evidence and

to arrive at an independent finding on the evidence.

The High Court may interfere where the departmental

authorities have held the proceedings against the

delinquent in a manner inconsistent with the rules of

natural justice or in violation of the statutory rules

prescribing the mode of enquiry or where the

authorities have disabled themselves from reaching a

fair decision by some considerations extraneous to the

evidence and the merits of the case or by allowing

themselves to be influenced by irrelevant

considerations or where the conclusion on the very

face of it is so wholly arbitrary and capricious that no

reasonable person could ever have arrived at that

conclusion. The departmental authorities are, if the

enquiry is otherwise properly held, the sole judges of

facts and if there is some legal evidence on which their

findings can be based, the adequacy or reliability of

that evidence is not a matter which can be permitted to

be canvassed before the High Court in a proceeding for

a writ under Article 226.

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xxx

23. The jurisdiction to issue a writ of certiorari

under Article 226 is a supervisory jurisdiction. The

Court exercises it not as an appellate court. The

findings of fact reached by an inferior court or tribunal

as a result of the appreciation of evidence are not

reopened or questioned in writ proceedings. An error of

law which is apparent on the face of the record can be

corrected by a writ, but not an error of fact, however

grave it may appear to be. In regard to a finding of fact

recorded by a tribunal, a writ can be issued if it is

shown that in recording the said finding, the tribunal

had erroneously refused to admit admissible and

material evidence, or had erroneously admitted

inadmissible evidence which has influenced the

impugned finding. Again if a finding of fact is based on

no evidence, that would be regarded as an error of law

which can be corrected by a writ of certiorari. A finding

of fact recorded by the Tribunal cannot be challenged

on the ground that the relevant and material evidence

adduced before the Tribunal is insufficient or

inadequate to sustain a finding. The adequacy or

sufficiency of evidence led on a point and the inference

of fact to be drawn from the said finding are within the

exclusive jurisdiction of the Tribunal. See Syed Yakoob

v. K.S. Radhakrishnan [AIR 1964 SC 477: (1964) 5

SCR 64].

24. The High Court in the present case assessed

the entire evidence and came to its own conclusion.

The High Court was not justified to do so. Apart from

the aspect that the High Court does not correct a

finding of fact on the ground that the evidence is not

sufficient or adequate, the evidence in the present case

which was considered by the Tribunal cannot be

scanned by the High Court to justify the conclusion that

there is no evidence which would justify the finding of

the Tribunal that the respondent did not make the

journey. The Tribunal gave reasons for its conclusions.

It is not possible for the High Court to say that no

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reasonable person could have arrived at these

conclusions. The High Court reviewed the evidence,

reassessed the evidence and then rejected the

evidence as no evidence. That is precisely what the

High Court in exercising jurisdiction to issue a writ of

certiorari should not do.

xxx

26. For these reasons we are of opinion that the

High Court was wrong in setting aside the dismissal

order by reviewing and reassessing the evidence. The

appeal is accepted. The judgment of the High Court is

set aside. Parties will pay and bear their own costs.’

(emphasis supplied)

25. In State Bank of India v S K Sharma, (1996) 3 SCC 364, two

learned Judges of this Court held:

‘28. The decisions cited above make one thing

clear, viz., principles of natural justice cannot be

reduced to any hard and fast formulae. As said

in Russell v. Duke of Norfolk [(1949) 1 All ER 109: 65

TLR 225] way back in 1949, these principles cannot be

put in a strait-jacket. Their applicability depends upon

the context and the facts and circumstances of each

case. (See Mohinder Singh Gill v. Chief Election

Commr. [(1978) 1 SCC 405: (1978) 2 SCR 272]) The

objective is to ensure a fair hearing, a fair deal, to the

person whose rights are going to be affected.

(See A.K. Roy v. Union of India [(1982) 1 SCC 271:

1982 SCC (Cri) 152] and Swadeshi Cotton

Mills v. Union of India [(1981) 1 SCC 664].) As

pointed out by this Court in A.K. Kraipak v. Union of

India [(1969) 2 SCC 262] , the dividing line between

quasi-judicial function and administrative function

(affecting the rights of a party) has become quite thin

and almost indistinguishable — a fact also emphasised

by House of Lords in Council of Civil Service

Unions v. Minister for the Civil Service [(1984) 3 All

ER 935 : (1984) 3 WLR 1174 : 1985 AC 374, HL] where

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the principles of natural justice and a fair hearing were

treated as synonymous. Whichever the case, it is from

the standpoint of fair hearing — applying the test of

prejudice, as it may be called — that any and every

complaint of violation of the rule of audi alteram partem

should be examined. Indeed, there may be situations

where observance of the requirement of prior

notice/hearing may defeat the very proceeding —

which may result in grave prejudice to public interest. It

is for this reason that the rule of post-decisional hearing

as a sufficient compliance with natural justice was

evolved in some of the cases, e.g., Liberty Oil

Mills v. Union of India [(1984) 3 SCC 465]. There may

also be cases where the public interest or the interests

of the security of State or other similar considerations

may make it inadvisable to observe the rule of audi

alteram partem altogether [as in the case of situations

contemplated by clauses (b) and (c) of the proviso to

Article 311(2)] or to disclose the material on which a

particular action is being taken. There may indeed be

any number of varying situations which it is not

possible for anyone to foresee. In our respectful

opinion, the principles emerging from the decided

cases can be stated in the following terms in relation to

the disciplinary orders and enquiries: a distinction

ought to be made between violation of the principle of

natural justice, audi alteram partem, as

such and violation of a facet of the said principle. In

other words, distinction is between “no notice”/“no

hearing” and “no adequate hearing” or to put it in

different words, “no opportunity” and

“no adequate opportunity”. To illustrate — take a case

where the person is dismissed from service without

hearing him altogether (as in Ridge v. Baldwin [1964

AC 40: (1963) 2 All ER 66: (1963) 2 WLR 935]). It

would be a case falling under the first category and the

order of dismissal would be invalid — or void, if one

chooses to use that expression (Calvin v. Carr [1980

AC 574: (1979) 2 All ER 440: (1979) 2 WLR 755, PC]).

But where the person is dismissed from service, say,

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without supplying him a copy of the enquiry officer's

report (Managing Director, ECIL v. B.

Karunakar [(1993) 4 SCC 727: 1993 SCC (L&S) 1184:

(1993) 25 ATC 704]) or without affording him a due

opportunity of cross-examining a witness (K.L.

Tripathi [(1984) 1 SCC 43 : 1984 SCC (L&S) 62] ) it

would be a case falling in the latter category —

violation of a facet of the said rule of natural justice —

in which case, the validity of the order has to be tested

on the touchstone of prejudice, i.e., whether, all in all,

the person concerned did or did not have a fair hearing.

It would not be correct — in the light of the above

decisions to say that for any and every violation of a

facet of natural justice or of a rule incorporating such

facet, the order passed is altogether void and ought to

be set aside without further enquiry. In our opinion, the

approach and test adopted in B. Karunakar [(1993) 4

SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704]

should govern all cases where the complaint is not that

there was no hearing (no notice, no opportunity and no

hearing) but one of not affording a proper hearing (i.e.,

adequate or a full hearing) or of violation of a

procedural rule or requirement governing the enquiry;

the complaint should be examined on the touchstone of

prejudice as aforesaid.’

26. In Union of India v K G Soni, (2006) 6 SCC 794, it was opined:

‘14. The common thread running through in all

these decisions is that the court should not interfere

with the administrator's decision unless it was illogical

or suffers from procedural impropriety or was shocking

to the conscience of the court, in the sense that it was

in defiance of logic or moral standards. In view of what

has been stated in Wednesbury case [Associated

Provincial Picture Houses Ltd. v. Wednesbury

Corpn., (1948) 1 KB 223: (1947) 2 All ER 680 (CA)] the

24

court would not go into the correctness of the choice

made by the administrator open to him and the court

should not substitute its decision to that of the

administrator. The scope of judicial review is limited to

the deficiency in the decision-making process and not

the decision.

15. To put it differently, unless the punishment

imposed by the disciplinary authority or the Appellate

Authority shocks the conscience of the court/tribunal,

there is no scope for interference. Further, to shorten

litigations it may, in exceptional and rare cases, impose

appropriate punishment by recording cogent reasons in

support thereof. In the normal course if the punishment

imposed is shockingly disproportionate, it would be

appropriate to direct the disciplinary authority or the

Appellate Authority to reconsider the penalty imposed.’

(emphasis supplied)

27. The legal position was restated by two learned Judges in State

of Uttar Pradesh v Man Mohan Nath Sinha, (2009) 8 SCC 310:

‘15. The legal position is well settled that the

power of judicial review is not directed against the

decision but is confined to the decision-making

process. The court does not sit in judgment on merits

of the decision. It is not open to the High Court to

reappreciate and reappraise the evidence led before

the inquiry officer and examine the findings recorded by

the inquiry officer as a court of appeal and reach its

own conclusions. In the instant case, the High Court fell

into grave error in scanning the evidence as if it was a

court of appeal. The approach of the High Court in

consideration of the matter suffers from manifest error

and, in our thoughtful consideration, the matter requires

fresh consideration by the High Court in accordance

with law. On this short ground, we send the matter back

to the High Court.’

25

28. Turning our gaze back to the facts herein, we find that the

learned Single Judge and the Division Bench acted as Courts of Appeal

and went on to re-appreciate the evidence, which the aboveenumerated authorities caution against. The present coram, in Bharti

Airtel Limited v A S Raghavendra, (2024) 6 SCC 418, has laid down:

‘29. As regards the power of the High Court to

reappraise the facts, it cannot be said that the same is

completely impermissible under Articles 226 and 227 of

the Constitution. However, there must be a level of

infirmity greater than ordinary in a tribunal's order,

which is facing judicial scrutiny before the High Court,

to justify interference. We do not think such a situation

prevailed in the present facts. Further, the ratio of the

judgments relied upon by the respondent in support of

his contentions, would not apply in the facts at hand.’

(emphasis supplied)

29. Evidently, while reappraisal of facts and evidence is not

impermissible by the High Court, the infirmity in the underlying order

has to be greater than ordinary. It is not the respondent’s case that due

to omissions by the appellants in substantive and/or procedural

compliances, prejudice has ensued to him. Let us examine the aspect

independently too. The facts reveal that an earlier removal order was

quashed, and a copy of the Enquiry Report alongwith the RPSC’s

opinion was supplied to the respondent. The respondent, thereafter,

received an opportunity to submit a written representation, which he

26

availed of. Further, he was afforded an opportunity of hearing as well. In

this view, we are unable to find any violation of the principles of natural

justice.

30. Before the Enquiry Officer, 13 witnesses and 75 documents were

exhibited on behalf of the Authority. 3 witnesses deposed in defence of

the delinquent employee-respondent. Considering the evidence on

record, the Enquiry Officer by his report held certain charges levelled

against the respondent to have been proved in full/part. Subsequently,

a fresh Removal Order was passed, agreeing with the conclusions

drawn by the enquiry officer. This Removal Order cannot be said to be

based on ‘no evidence’. On perusal thereof, we find that the Removal

Order is reasoned as on the aspects where the Disciplinary Authority

disagreed with the Enquiry Officer’s report, reasons therefor have been

assigned. On the areas of agreement, the Removal Order bears

discussion on the relevant evidence.

31. It is well-settled that if the Disciplinary Authority accepts findings

recorded by the Enquiry Officer and proceeds to impose punishment

basis the same, no elaborate reasons are required, as explained by

27

three learned Judges of this Court vide Boloram Bordoloi v Lakhimi

Gaolia Bank, (2021) 3 SCC 806:

‘11. ... Further, it is well settled that if the

disciplinary authority accepts the findings recorded by

the enquiry officer and passes an order, no detailed

reasons are required to be recorded in the order

imposing punishment. The punishment is imposed

based on the findings recorded in the enquiry report, as

such, no further elaborate reasons are required to be

given by the disciplinary authority. …’

32. The Removal Order makes it clear that the Disciplinary Authority

has considered the whole material before it and was satisfied to impose

punishment on the respondent.

33. The observation on page 7 by the Division Bench makes it

apparent that it was conscious of the proposition of law but still tried to

make a distinction, which we do not find just and proper. It runs

contrary to the record. Though arguments have been addressed by the

appellants with regard to each and every charge, we would not go

individually into the same as we are not re-appreciating the evidence.

Suffice it would be to say that broadly, the charges were proved based

on the factual position, which, in turn, was based on official

documentation, which at no point of time, the respondent has

28

controverted or denied. The respondent has not alleged that the

documents were non-existent/false/fabricated.

34. The learned Single Judge had also reasoned that there was no

difference between the earlier order of removal and the Removal Order

passed subsequently. The learned Single Judge was of the view that

simple reference to the respondent’s representation had been made,

but without discussion thereon, as such, the Removal Order was

passed mechanically and without reasons. Even though this ground has

not been taken by the respondent qua the Impugned Judgment, we

deem it fit to deal therewith. Upon a comparative overview of both the

orders of removal, the similarities between the two are inescapable.

35. Having said so, we may point out that the respondentemployee’s representation has been considered in the fresh Removal

Order, albeit not in as many words. Going forward, wherever and

whenever the Disciplinary Authorities concerned impose a major

punishment, it will be appropriate for their orders to better engage with

the representations/submissions of the delinquent employees

concerned. However, in the instant case, in view of the evidentiary

material and the process by which a fair opportunity was given to the

29

respondent to present his version, we are dissuaded from upholding the

Impugned Judgment on account of minor deficiency/ies in the process.

As noted hereinbefore, the same have not caused prejudice to the

respondent to the extent warranting judicial interdiction.

36. At this juncture, it would be relevant to point out that on a

specific query to the learned counsel for the respondent apropos the

charges pertaining to non-handing over of full charge at the relevant

point of time; appointing persons without permission from the

Collector/Registrar; as also, returning the money after one and a half

years by the respondent, learned counsel could not controvert the

factual position and only relied upon the judgment rendered by the

learned Single Judge and the Impugned Judgment. Moreover, looking

to the respondent’s conduct, we do not find any arbitrariness or

perversity in the punishment awarded to him.

37. Accordingly, for the reasons recorded above, the Impugned

Judgment is quashed and set aside, and the Removal Order dated

28.09.1993 passed by the Disciplinary Authority is restored.

Consequences in law to follow. However, by way of extraordinary

indulgence, keeping in mind the fact that the respondent has retired

30

and is aged, payments, if any, already made to him in the interregnum,

shall not be recovered by the appellants. The appeals are disposed of

in the above terms. No order as to costs.

………………..........................J.

 [HIMA KOHLI]



 …………………..................…..J.

 [AHSANUDDIN AMANULLAH]

NEW DELHI

AUGUST 08, 2024

whether the High Court is right in reducing the percentage of disability suffered by the appellant from 25% as fixed by the Tribunal, to 20% while determining the compensation payable to him.- No

2024 INSC 598

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8614 OF 2024

(Arising out of SLP (C) No. 16897 of 2024)

(Arising out of Diary No.38687 of 2019)

Rahul ...Appellant

Versus

National Insurance Company Ltd.

and another ...Respondents

J U D G M E N T

R. MAHADEVAN, J.

1. Delay condoned.

2. Leave granted.

3. In the present case, the appellant challenges the final judgment

dated 13.11.2018 passed by the High Court of Karnataka, Dharwad

Bench, (hereinafter shortly referred to as "the High Court"), thereby partly

allowing MFA No.103118/2014 (MV) filed by the Respondent No.1

(hereinafter referred to as "the insurance company").

1

4. Originally, the appellant filed a claim petition in MAC No.1587 of

2013 before the Senior Civil Judge & MACT at Raibag (hereinafter

shortly referred to as "the Tribunal"), seeking a compensation of

Rs.20,00,000/- for the injuries sustained by him in a motor accident that

had occurred on 27.01.2013, while he was travelling as a pillion rider in

the motor cycle bearing registration No.KA-23/EC-6369 insured with the

insurance company. Based on the oral and documentary evidence, the

Tribunal awarded a sum of Rs.5,38,872/- along with interest at 6% p.a.

from the date of petition till deposit, as compensation payable to the

appellant, after taking into account the disability sustained by him at

25%. Aggrieved by the same, the insurance company filed an appeal in

MFA No.103118 of 2014 (MV) before the High Court.

5. After hearing both sides, the High Court re-assessed the

compensation by reducing it to Rs.4,74,072/- by taking into

consideration, disability only at 20% and allowed the appeal in part, by

the final judgment dated 13.11.2018, which is under challenge before us.

6. The learned counsel for the appellant, drawing the attention of

this court to Exs.P56 to 60, medical records pertaining to the appellant,

2

submitted that the appellant sustained three injuries viz., fracture of right

radius, fracture of left radius and fracture of styloid process of ulna, for

which, he had undergone surgery and plates and screws were implanted

in his both hands. The doctor N.Y. Joshi gave Ex.P57, disability

certificate to the effect that the appellant suffered 50% disability, as a

whole. Based on the same, the Tribunal determined the compensation

under the head 'Loss of future income' by taking into account the

disability at 25%. However, the High Court re-determined the

compensation by reducing the disability suffered by the appellant to 20%,

by observing that the doctor who issued the disability certificate had not

been examined before the Tribunal, which is erroneous. It is also

submitted that the appellant, being an agriculturist, is unable to do

agricultural operations, due to the disability suffered by him. Therefore,

the learned counsel sought our interference in the judgment passed by

the High Court and thereby enhance the compensation payable to the

appellant.

7. On the other hand, the learned counsel for the insurance

company submitted that the High Court has awarded a just and fair

compensation to the appellant, considering the facts and circumstances

3

of the case and hence, prayed for dismissal of this appeal.

8. We have heard the learned counsel for the parties and perused

the record.

9. The only issue that arises for our consideration is, whether the

High Court is right in reducing the percentage of disability suffered by the

appellant from 25% as fixed by the Tribunal, to 20% while determining

the compensation payable to him.

10. The factum of accident and the involvement of the motorcycle

insured with the insurance company, are not disputed. From a perusal of

the records, viz., Exs.P56 to P60 - medical records of the appellant, more

particularly, Ex.P56 wound certificate, it is evident that the appellant

sustained the following injuries in the accident:

(i)Displaced fracture upper 1/3rd of the shaft of right radius and

ulnar shafts and bone of the right forearm.

(ii)Fracture of ulnar stoiloid and evidence of angulated fracture of

distal end of left radius.

4

Further, for the above injuries, the appellant underwent a

surgery, in which, plates and screws were implanted in his hands. As per

Ex.P57 disability certificate issued by the doctor, N.Y. Joshi, the appellant

suffered 50% permanent disablement and the said doctor was also

examined as PW2. Considering all these oral and documentary

evidence, the Tribunal has taken the disability of the appellant only at

25% and determined the compensation payable to him. Without

assigning plausible reason, the High Court re-assessed the

compensation by reducing the disability suffered by the appellant to 20%.

We are of the view that the reduction of compensation was not required,

particularly, when there is no basis in support thereof. Therefore, the

judgment passed by the High Court is liable to be interfered with.

11. Accordingly, the impugned judgment dated 13.11.2018 passed

by the High Court in MFA No.103118 of 2014 (MV) is set aside and the

judgment dated 28.06.2014 passed by the Tribunal in MAC No.1587 of

2013 fixing the disability of the appellant at 25% is restored. The

insurance company is directed to deposit the entire compensation along

with interest as determined by the Tribunal, after adjusting the amounts

5

already deposited, before the Tribunal, within a period of four weeks from

the date of receipt of a copy of this judgment. On such deposit being

made, the appellant is permitted to withdraw the same.

12. This Civil Appeal is allowed.

.....................................J.

 (Sudhanshu Dhulia)

.....................................J.

 (R. Mahadevan)

NEW DELHI,

9

th August, 2024.

6

Respondent cannot be made liable for the payment of arrears of property tax which arose prior to the acquisition of ownership,

2024 INSC 596

Civil Appeal No. 7873 of 2024 Page 1 of 14

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7873 OF 2024

RAJKOT MUNICIPAL

CORPORATION … APPELLANT

VERSUS

STATE OF GUJARAT

AND ORS. ... RESPONDENTS

J U D G M E N T

AUGUSTINE GEORGE MASIH, J.

1. This Appeal challenges the Order dated 07.07.2016

(hereinafter referred to as “Impugned Order”) in

Special Civil Application No. 4577 of 2016 passed by

High Court of Gujarat wherein the Appellant herein

being Rajkot Municipal Corporation (hereinafter

referred to as “Appellant-Corporation”) was directed

to refund a portion of the property tax, which was

paid by the Respondent No. 02 herein, namely,

Avenue Supermarts Limited. Respondent No. 02 had

assailed the demand raised by Appellant-Corporation

seeking payment of property tax for the Assessment 

Civil Appeal No. 7873 of 2024 Page 2 of 14

Year (hereinafter referred to as ‘AY’) 2015-16 along

with outstanding arrears of such tax dues amounting

to INR 2,97,02,324/- (Rupees Two Crores NinetySeven Lakhs Two Thousand Three Hundred and

Twenty-Four Only). As a consequence to the nonfulfilment of aforesaid payment of dues by the

predecessor-in-interest holder of the property, the

premises were sealed on 21.03.2016 with prior

indication to the Respondent No. 02.

2. The High Court of Gujarat vide Impugned Order had

allowed the Special Civil Application moved by the

Respondent No. 02 on the ground that the said

Respondent cannot be made liable for the payment of

arrears of property tax which arose prior to the

acquisition of ownership, that is, prior to 03.09.2015.

The High Court deprecated the approach of the

Appellant-Corporation in charging exorbitant

amount of dues from Respondent No. 02 as well as

the uncalled inclusion of further interest and penalty

on such outstanding arrears, which had already been

challenged by the predecessor and had been stayed

by the competent court. Considering the said

circumstances, the High Court directed the 

Civil Appeal No. 7873 of 2024 Page 3 of 14

Appellant-Corporation to retain a portion of the

property tax to the tune of INR 14,85,000/- (Rupees

Fourteen Lakhs and Eighty-Five Thousand Only)

relating to the relevant AY 2015-16 for which

Respondent No. 02 had acquired ownership and

possession, that is, from 03.09.2015 and to refund

the rest of the amount of property tax along with

simple interest at 6 per cent per annum from the date

of recovery till the actual payment of refund. In

compliance with the aforesaid direction qua refund

by the High Court, the Appellant-Corporation has

already refunded such quantum of excessive property

tax to the Respondent No. 02.

3. Aggrieved by the direction to make the refund of

accrued amount of property tax dues, the AppellantCorporation is assailing the Impugned Order before

this Court.

4. It is the case of the Appellant-Corporation that the

Impugned Order directing the refund of property tax

is contrary to the provisions of Sections 139 and 140

of the Gujarat Provincial Municipal Corporation Act,

1949 (hereinafter referred to as “GPMC Act 1949”). It

is argued that a Commissioner, by virtue of Sub-

Civil Appeal No. 7873 of 2024 Page 4 of 14

Section (1) of Section 140 of the GPMC Act 1949, is

empowered to recover such outstanding property tax

dues from an occupier where a person primarily

liable to pay the tax, after being duly served with

demand notice, has failed to make the payment

thereof. Moreover, as per Sub-Section (4) of Section

140 of the GPMC Act 1949, such occupier may credit

the said payment from a person who was primarily

liable to discharge the liability of such dues. Thus, it

was argued that from a cumulative reading of

Sections 139 and 140 of the GPMC Act 1949, the

Appellant-Corporation was justified in recovering

arrears from Respondent No. 02.

5. Per contra, it is contended by Respondent No. 02 that

the property in question which is a commercial

complex known as Shivlink-IV bearing City Survey

No. 5095/1B, 5095/1C(P), Plot No. 68, situated at

Gondal Road, Rajkot, was acquired via Deed of

Conveyance dated 03.09.2015 from its predecessorin-interest, that is, Respondent Nos. 04 and 05.

Respondent No. 02 would be liable for the payment of

property tax from the date of acquisition of ownership

and not for any period before this date, as affirmed 

Civil Appeal No. 7873 of 2024 Page 5 of 14

by the High Court. Respondent No. 02 points out that

Respondent No. 03, the lessee of the property prior to

03.09.2015, has challenged similar tax demands for

earlier years in both civil court and the High Court,

resulting in a stay on recovery actions. Consequently,

it was argued that until the conclusion of

adjudication of such pending appeals pertaining to

the arrears of any period before 03.05.2015, the

Appellant-Corporation cannot make recovery of the

said amount from Respondent No. 02.

6. Furthermore, the Appellant-Corporation as well as

the Respondent Nos. 04 and 05 have relied on Letter

dated 18.01.2016, whereby it was stated that the

Respondent No. 02 had kept INR 2,50,00,000/-

(Rupees Two Crores and Fifty Lakhs only) as a token

of assurance from Respondent Nos. 04 and 05 for

clearing arrears of property tax. As argued, this letter

was intended to ensure that in case of failure of

payment of such arrears by the Respondent Nos. 04

and 05 (predecessor owners), it shall be incumbent

on the Respondent No. 02 (subsequent owner) to

make the payment thereof. Addressing this

argument, Respondent No. 02 contended that mere 

Civil Appeal No. 7873 of 2024 Page 6 of 14

deposit of security amount by Respondent Nos. 04

and 05 would not tantamount to assignment of

liability for payment of tax for a period for which

Respondent No. 02 did not have ownership.

Appellant-Corporation cannot be allowed to ascribe

obligation upon Respondent No. 02 to seek remedy of

refund from Respondent Nos. 04 and 05.

7. Having heard the Senior Counsel for the AppellantCorporation as well as the Respondents, it is

imperative to decipher the undisputed facts along

with the applicable provisions of the GPMC Act 1949.

8. The relevant factual backdrop leading to the present

Impugned Order commenced from the point where

the original owner of the said property, namely, M/s

Platinum Associates (hereinafter referred to as

“original owner”) entered into a Lease Agreement

dated 01.12.2007 with Respondent No. 03 herein,

namely, Reliance Communications Limited for an

office space. Subsequently, the original owner sold

the said property to Prabha Kantilal Pohkiya and

Jyoti Rakesh Gandhi (Respondent Nos. 04 and 05

respectively) vide Conveyance Deed dated

05.12.2007. It needs mention here that Respondent 

Civil Appeal No. 7873 of 2024 Page 7 of 14

No. 03 continued to occupy the premises, thereupon,

Respondent No. 02 purchased the said property from

Respondent Nos. 04 and 05 through a Deed of

Conveyance dated 03.09.2015.

9. Appellant-Corporation had raised several demand

notices for payment of outstanding property tax on

the premises starting from the year 2008. A Notice

dated 29.07.2010 was issued by the AppellantCorporation calling upon the Respondent No. 03,

being in possession of the said property, to pay

outstanding arrears of property tax along with

penalty and other charges to the tune of INR

1,33,48,898/- (Rupees One Crores Thirty-Three

Lakhs Forty-Eight Thousand Eight Hundred and

Ninety-Eight Only) for the period commencing from

01.06.2008. The said demand was assailed by

Respondent No. 03 by filing Municipal Appeal No. 19

of 2010 before the Civil Court, Rajkot, wherein

Respondent No. 03 deposited 75% of the bill amount

in Court. Thereafter, for AY 2011-12, demand notice

was issued to the Respondent No. 03 seeking

payment of property tax for the said AY as well as the

arrears thereof, which was also challenged by 

Civil Appeal No. 7873 of 2024 Page 8 of 14

Respondent No. 03 before Civil Court in Municipal

Appeal No. 1639 of 2011, where again 75% of the bill

amount was deposited. It is pertinent to note that

both these appeals are pending before the Civil Court

with the stay on the deposit of the remaining 25% bill

amounts continues.

10. Similar were the demands for the AYs 2012-13 and

2013-14, which were challenged before the High

Court in Special Civil Application No. 3074 of 2014

on the ground of retrospectively charging of the

arrears of property tax by the Appellant-Corporation.

The said Application was disposed of vide Order

dated 04.04.2014 with a direction to the AppellantCorporation to serve a copy of the demand notices to

the Respondent No. 03 in view of the uncertainty

surrounding receipt of such notice. Further, the

Appellant-Corporation was directed to consider the

objections to be raised by Respondent No. 03 before

issuing fresh bills. The Appellant-Corporation

consequent to the above order proceeded to issue

another demand notice for the AY 2014-15 upon

Respondent No. 03 seeking payment of property tax

inclusive of earlier arrears to the tune of INR 

Civil Appeal No. 7873 of 2024 Page 9 of 14

2,51,09,857/- (Rupees Two Crores Fifty-One Lakhs

Nine Thousand Eight Hundred and Fifty-Seven Only).

Respondent No. 03 then initiated a challenge against

the said demand notices issued for the AYs 2012-13,

2013-14 and 2014-15 before High Court in Special

Civil Application No. 3600 of 2015, wherein the High

Court vide its Order dated 07.07.2016, directed a

stay on the further recovery subject to payment of

INR 60,00,000/- (Rupees Sixty Lakhs Only) as an

interim measure, which would operate pending the

appeal challenging the said recovery for the aforesaid

three AYs. It was clarified that the said direction for

stay would automatically vacate in the event of nonfiling of an appeal assailing the demand for the said

AYs.

11. The present dispute arises from Demand Notice dated

11.03.2016 which was issued by the AppellantCorporation to Respondent No. 02, seeking not only

the payment of property tax for the AY 2015-16 but

also the outstanding dues amounting to INR

2,97,02,324/- (Rupees Two Crores Ninety-Seven

Lakhs Two Thousand Three Hundred and TwentyFour Only). It was also mentioned therein that on

Civil Appeal No. 7873 of 2024 Page 10 of 14

failure to discharge the payment of the said liability,

the said property would be sealed. Because of nondischarge of the demand as raised, the property in

question which was now under the ownership and

possession of Respondent No. 02 with effect from

03.09.2015 was sealed on 21.03.2016 with prior

indication vide affixation of public notice on the said

property. Furthermore, a final notice dated

20.02.2016 was issued by the Appellant-Corporation

for attachment of the said property and for issuance

of warrant of sale owing to failure of payment of the

said outstanding arrears along with penalties and

charges within five days from the date of such notice.

12. It is in pursuance thereto, that the Respondent No.

02 proceeded to deposit the outstanding dues qua the

said property and challenged the aforesaid action of

the Appellant-Corporation before High Court on the

grounds as recorded above.

13. It is evident from the aforementioned factual strata

that the Respondent No. 02 would fall in the category

of Section 139(1)(b)(iii) of GPMC Act 1949 being the

owner of the said property. It is clear and undisputed

that the Respondent No. 02 had purchased the said 

Civil Appeal No. 7873 of 2024 Page 11 of 14

property from Respondent Nos. 04 and 05. Therefore,

till 03.09.2015, the “person primarily liable to make

payment” from a co-joint reading of Sections 139 and

140 of the GPMC Act 1949 was the lessor of the said

property, that is, Respondent Nos. 04 and 05. The

liability prior to 03.09.2015, thus, cannot be foisted

upon Respondent No. 02. The High Court was thus

correct in observing that Respondent No. 02 was

liable to pay property tax from the date of acquisition

of ownership. Further the High Court, had been

conscious enough while directing deduction of the

liability of the tax from Respondent No. 02 for the

relevant period, that is, subsequent to the date of

purchase being 03.09.2015, prior to making refund

of the remaining amount along with interest. It may

be added here that this Impugned Order has been

duly complied with by the Appellant-Corporation and

the amount has already been refunded as evidenced

from Communication dated 25.07.2016 and Letter

dated 28.07.2016.

14. Although considering the above factual matrix the

challenge against the direction for refund in the

Impugned Order in light of the provision of Section 

Civil Appeal No. 7873 of 2024 Page 12 of 14

140 of the GPMC Act 1949, has become a mere

academic exercise, yet we may proceed to look at it

from another perspective. Here, Respondent No. 03,

the lessee of the property, acknowledged the

demands raised by the Appellant-Corporation for the

period prior to 03.09.2015 and even challenged the

same in the statutory appeals. The said challenge

pertaining to the demands for previous three AYs,

that is, from 2012-13 to 2014-15 were disposed of via

an interim stay Order upon deposition of certain

amount. It is apposite to note herein that the

Appellant-Corporation has neither challenged the

said stay Order dated 07.07.2016 passed in Special

Civil Application No. 3600 of 2015 nor has contested

before us that the Respondent No. 02 has not filed

statutory appeals as directed therein. So, the

contention of the Respondent No. 02 that pending

such adjudication of appeals the AppellantCorporation cannot challenge the correctness of

directions of the High Court for refund of the

amounts as deposited by Respondent No. 02 cannot

be faulted with. 

Civil Appeal No. 7873 of 2024 Page 13 of 14

15. Another aspect which cannot be lost sight of is that

75% of the due amounts as per the bills raised by the

Appellant-Corporation for the AYs 2010-11 and

2011-12 stand deposited before Civil Court, Rajkot in

Municipal Appeal Nos. 19 of 2010 and 1639 of 2011,

securing a major portion of the liability subject to

outcome of the appeals where the AppellantCorporation, being a party thereto and is contesting,

cannot be permitted to take double benefit. Moreover,

in case the said appeals get dismissed, the deposited

amount would eventually be paid to the AppellantCorporation. This would result in a situation where

the Appellant-Corporation would have a sum

deposited in its favour equivalent to over and above

the actual outstanding amount. Thence, to obviate

such double payment in favour of the AppellantCorporation and causing disruption in the pending

litigation against the demands accrued prior to

03.09.2015, we are of the opinion that the order

directing refund by the High Court stands justified

considering the peculiarity of the aforesaid facts and

circumstances. 

Civil Appeal No. 7873 of 2024 Page 14 of 14

16. In light of the aforesaid discussion, we do not find any

ground to interfere with the Impugned Order dated

07.07.2016 passed by the High Court. The appeal is,

therefore, dismissed.

17. Pending applications, if any, also stand disposed of.

There will be no orders as to costs.

……………………………….J.

(ABHAY S. OKA)

……………………………………..J.

(AUGUSTINE GEORGE MASIH)

NEW DELHI;

AUGUST 09, 2024.

i) The appeals are allowed; (ii) The impugned judgment and order dated 21st May 2024 passed by the High Court of Delhi in Bail Application Nos. 1557 and 1559 of 2024 is quashed and set aside; (iii) The appellant is directed to be released on bail in connection with ED Case No. HIU-II/14/2022 38 registered against the appellant by the ED and FIR No. RC0032022A0053 of 2022 registered against the appellant by the CBI on furnishing bail bonds for a sum of Rs.10,00,000/- with two sureties of the like amount; (iv) The appellant shall surrender his passport with the Special Court; (v) The appellant shall report to the Investigating Officer on every Monday and Thursday between 10-11 AM; and (vi) The appellant shall not make any attempt either to influence the witnesses or to tamper with the evidence.

2024 INSC 595

1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. OF 2024

[Arising out of SLP(Criminal) No. 8781 of 2024]

MANISH SISODIA …APPELLANT(S)

VERSUS

DIRECTORATE OF ENFORCEMENT …RESPONDENT(S)

WITH

CRIMINAL APPEAL NO. OF 2024

[Arising out of SLP(Criminal) No. 8772 of 2024]

J U D G M E N T

B.R. GAVAI, J.

1. Leave granted. Appeals heard on merits.

2. The present appeals challenge the judgment and order

dated 21st May 2024 passed by the learned Single Judge of

the High Court of Delhi at New Delhi in Bail Application Nos.

1557 and 1559 of 2024, thereby rejecting the said

applications filed by the present appellant for grant of bail.

The aforesaid two applications were filed seeking bail in

connection with ED Case No. HIU-II/14/2022 registered 

2

against the appellant by the Directorate of Enforcement (for

short, ‘ED’) and First Information Report (FIR) No.

RC0032022A0053 of 2022 registered against the appellant

by the Central Bureau of Investigation (for short, ‘CBI’).

3. FIR No. RC0032022A0053 of 2022 came to be

registered by the CBI on 17th August 2022, and ED Case No.

HIU-II/14/2022 came to be registered by the ED on 22nd

August 2022.

4. Since both the cases arise out of similar facts, the latter

being the predicate offence and the former being a case

registered on the basis of the predicate offence, both these

appeals are heard and decided together.

FACTS IN BRIEF:

5. The present case travelled two rounds before the trial

court, the High Court and this Court. This is now the third

round before this Court wherein the appellant is seeking bail

in connection with the aforesaid two cases.

6. On the basis of a letter dated 20th July 2022 addressed

by Shri Vinai Kumar Saxena, the Lieutenant Governor of

Delhi, alleging irregularities in the framing and 

3

implementation of Delhi’s Excise Policy for the year 2021-22,

the Director, Ministry of Home Affairs had directed an

enquiry into the said matter vide Office Memorandum dated

22nd July 2022. On 26th February 2023, the appellant came

to be arrested by the CBI. Subsequently, the appellant was

arrested by the ED on 9th March 2023.

7. After investigation, CBI filed charge-sheet on 25th April

2023 for the offences punishable under Sections 7, 7A, 8 and

12 of the Prevention of Corruption Act, 1988 (for short, ‘PC

Act’) read with Sections 420, 201 and 120B of the Indian

Penal Code, 1860 (for short, ‘IPC’). Upon completion of

investigation, the ED filed a complaint under Section 3 of the

Prevention of Money Laundering Act, 2002 (for short, ‘PMLA’)

on 4th May 2023.

8. The first application for regular bail of the appellant in

CBI matter came to be rejected by the High Court on 30th

May 2023. Subsequently, the first application for regular bail

of the appellant in ED matter came to be rejected by the High

Court on 3rd July 2023. This Court, vide common order

dated 30th October 2023 (hereinafter referred to as “the first

order of this Court”) rejected the regular bail applications of 

4

the appellant in the CBI matter and the ED matter, with

certain observations which we will refer to in the subsequent

paragraphs.

9. Subsequently, in view of the liberty granted by this

Court, the appellant filed second bail application before the

trial court on 27th January 2024. In the said proceedings,

the appellant was granted interim protection. However, by

an order dated 30th April 2024, the trial court rejected the

said bail application on the ground that there was no change

in the circumstances.

10. The appellant thereafter filed second bail application

before the High Court on 2nd May 2024. Vide impugned

judgment and order dated 21st May 2024, the learned Single

Judge of the High Court rejected the said bail application

also.

11. Being aggrieved thereby, the appellant had approached

this Court by filing Special Leave Petition (Criminal) Nos.

7795 and 7799 of 2024.

12. The matter was heard on 4th June 2024. This Court, in

the said order (hereinafter referred to as “the second order of

this Court”) recorded the submissions of the learned Solicitor 

5

General that the investigation would be concluded and final

complaint/charge-sheet would be filed expeditiously and at

any rate on or before 3rd July 2024 and immediately

thereafter, the trial court would be free to proceed with the

trial. This Court recorded the submissions made by the

learned Solicitor General and observed that having regard to

the fact that the period of “6-8 months” fixed by this Court by

order dated 30th October 2023 had not yet come to an end,

disposed of the said petition with liberty to revive his prayer

afresh after filing of the final complaint/charge-sheet.

13. Accordingly, after filing of the final complaint/chargesheet, the appellant has approached this Court by way of the

present appeals. This Court, vide order dated 16th July 2024

had issued notice. In response thereto, counter affidavit has

been filed on behalf of the ED as well as the CBI opposing the

present appeals.

SUBMISSIONS:

14. We have extensively heard Dr. Abhishek Manu Singhvi,

learned Senior Counsel appearing on behalf of the appellant

and Shri Suryaprakash V. Raju, learned Additional Solicitor

General (ASG) appearing on behalf of the respondents.

6

15. A preliminary objection has been raised on behalf of the

learned ASG that the appellant cannot be permitted to file

second set of SLPs to challenge the order of the High Court

dated 21st May 2024 when the earlier SLPs arising out of the

same order were disposed of. He submitted that the liberty

granted by this Court vide order dated 4th June 2024 has to

be construed as a liberty to apply to the trial court afresh. It

is submitted that, only after the appellant approaches the

trial court and in the event he does not succeed before the

trial court, thereafter he approaches the High Court and in

the event he also does not succeed before the High Court,

then only he would be entitled to approach this Court. He

therefore submitted that the present appeals deserve to be

rejected thereby relegating the appellant to approach the trial

court afresh. To buttress his submission, Shri Raju relied on

the judgment of this Court in the case of Kunhayammed

and Others v. State of Kerala and Others1.

16. The said preliminary objection has been opposed by Dr.

Singhvi, learned Senior Counsel appearing on behalf of the

appellant contending that this Court had specifically, vide its

1

(2000) 6 SCC 359 : 2000 INSC 339

7

first order dated 30th October 2023, granted liberty to the

appellant to move a fresh application for bail in case the trial

does not conclude within next 6-8 months and also in case

the trial is protracted and proceeds at a snail’s pace in next

three months. He submitted that, admittedly, the trial has

not been concluded within a period of 6-8 months from the

date of the first order of this Court. He further submitted

that the record would show that the trial was protracted and

proceeded at a snail’s pace in the period of three months

after the first order of this Court was passed. He submitted

that the second order of this Court clearly reserves the right

of the appellant to revive the request afresh after filing of the

final complaint/charge-sheet as assured by the learned

Solicitor General. Dr. Singhvi therefore prays for rejection of

the preliminary objection.

17. On merits, Dr. Singhvi submitted that this Court, vide

its first order dated 30th October 2023, has given various

findings in favour of the appellant. It is submitted that, a

perusal of the same would clearly reveal that at number of

places, this Court has given findings which would show that

the respondents have not been in a position to make out a 

8

prima facie case. Dr. Singhvi further submitted that a

perusal of the record would reveal that even the investigation

in the case is not complete. He therefore submitted that

unless the investigation is complete, the trial cannot proceed.

He submitted that three more supplementary complaints

have been filed on 10th May 2024, 17th May 2024 and 20th

June 2024 in the ED matter and as on 27th July 2024, there

were 40 persons who have been arrayed as accused in the

proceedings with more than 8 complaints. He further

submitted that, in the ED matter, the ED has cited 224

witnesses and produced 32,000 pages of documents. He

further submitted that, in the CBI matter, the CBI has cited

269 witnesses and produced around 37,000 pages of

documents. It is therefore submitted that in all there are 493

witnesses, excluding the ones in the 4th Supplementary

Charge-sheet filed by the CBI, who will have to be examined

and that in total the documents are running into around

69,000 pages.

18. Dr. Singhvi submitted that the ED has deliberately

concealed the documents it acquired during investigation by

putting documents exculpating the accused persons in the 

9

category of “un-relied upon documents”. It is submitted that,

as such, it was necessary for the appellant to inspect such

“un-relied upon documents”. He further submitted that there

was an inordinate delay on the part of the ED and the CBI in

producing the list of “un-relied upon documents”.

19. Dr. Singhvi submitted that, taking into consideration

the voluminous number of witnesses and documents, there

is no possibility of the trial seeing the light of the day and

therefore the appeals filed by the appellant deserve to be

allowed.

20. Shri Raju vehemently opposed the present appeals. He

submitted that this Court, in its first order, after

enumerating various factors on merits of the matter in

paragraph 25 has held that the Court was not inclined to

accept the prayer for grant of bail. It is therefore submitted

that the appeals of the present appellant on merits were

specifically rejected.

21. Shri Raju further submitted that, though the Court

granted liberty to file a fresh application in the circumstances

enumerated in paragraph 29, it was held that the same

would be considered by the trial court on merits without 

10

being influenced by the dismissal of the earlier bail

applications including the said first order. It is therefore

submitted that the trial court as well as the High Court were

required to take into consideration the merits of the matter.

However, the present appellant opposed the consideration of

the application on merits and insisted on consideration of the

application only on the ground of delay in trial. It is

therefore submitted that both the courts have rightly

considered the merits of the matter and after considering the

merits, found that the appellant was not entitled to grant of

bail. He submitted that no interference would be warranted.

22. Shri Raju submitted that the trial court and the High

Court have specifically come to a finding that the appellant

has delayed the pre-charge proceedings by taking recourse to

the provisions of Section 207 of Criminal Procedure Code,

1973 (for short, ‘Cr.P.C.’). He submitted that more than

hundred applications have been filed out of which many are

under Section 207 Cr.P.C. These applications have been

filed only for the purpose of delaying the trial. It is submitted

that though in view of the law laid down by this Court in the 

11

case of P. Ponnusamy v. State of Tamil Nadu2

, such

applications could have been filed only after framing of the

charges, the same have been intentionally filed at a precharge stage of the trial, so as to delay the framing of the

charges. He submitted that though the appellant is entitled

to file an application for discharge, the same has not been

filed only in order to protract the trial. He submitted that the

totality of the circumstances would reveal that it is the

appellant who has been protracting the trial. It is submitted

that as the appellant himself is responsible for protracting

the trial, he cannot be permitted to take the benefit of the

same.

23. The learned ASG submitted that unless the triple

conditions as stipulated under Section 45 of the PMLA are

satisfied, no person accused of an offence shall be released

on bail. It is submitted that, in the present case, this Court

itself by the first order has found that the appellant was not

entitled for bail on merits and as such, the second condition

stipulated under Section 45 of the PMLA that there are

2 2022 SCC OnLine SC 1543 : 2022 INSC 1175

12

reasonable grounds for believing that he is not guilty of such

offence, would not be satisfied in the present case.

24. The learned ASG further submitted that the appellant is

a very influential person having occupied the office of Deputy

Chief Minister of Delhi when the crime was committed. He

submitted that if the appellant is released on bail, there is

every possibility of him influencing the witnesses or

tampering with the evidence.

25. Dr. Singhvi, in rejoinder, has submitted that the

contention that the trial is being delayed due to the

applications being filed by the appellant under Section 207

Cr.P.C. is totally incorrect. He submitted that the said

applications were required to be filed since the prosecution

had not placed on record the documents exculpating the

accused persons by placing the same in the category of “unrelied upon documents”. He submitted that in order to avail

the right of a fair trial and in adherence to the principles of

natural justice as encapsulated in Section 207 Cr.P.C., the

appellant was forced to file such applications. However, each

of these applications were vehemently opposed by the

prosecution. It is submitted that the said material ought to 

13

have been placed on record by the prosecution themselves,

however, for the reasons best known to the prosecution, they

have not done so. He submitted that the appellant has filed

only 14 applications in ED case and 13 applications in CBI

case and that all these applications have been allowed by the

learned trial judge. He lastly submitted that even as per the

prosecution, if the entire “un-relied upon documents” are to

be supplied in digital form, it will take a long time. To

support his submission, Dr. Singhvi places reliance on the

compliance report dated 7th May 2024 filed by the Assistant

Director of ED which would fortify this position.

CONSIDERATION OF PRELIMINARY OBJECTION:

26. We will first deal with the preliminary objection of the

learned ASG with regard to the filing of the second set of

appeals before this Court challenging the order of the High

Court dated 21st May 2024 i.e., on the point of

maintainability.

27. Undisputedly, the appellant had earlier challenged the

same order dated 21st May 2024 vide SLP (Criminal) Nos.

7795 and 7799 of 2024. On doing so, a Division Bench of

this Court passed the order dated 4th June 2024. It will be 

14

apposite to refer to the observations made by this Court in

the said order, which read thus:

“Though, elaborate arguments have been made, we

do not propose to go into the said arguments or

dwell upon it and then record our reasons for the

simple reason that Co-ordinate Bench while

dismissing the appeals vide order dated 30.10.2023,

as noticed hereinabove has granted liberty to the

appellant, i.e., the petitioner herein to move a fresh

application for bail by placing reliance on the

assurance given on behalf of the prosecution that

they would conclude the trial by taking appropriate

steps within next 6-8 months and as such the

liberty was extended to the petitioner herein to move

a fresh application in case of change in

circumstances, or in case the trial is protracted and

proceeds at a snail’s pace in next three months. It

was also observed that if such an application is filed

in the aforesaid circumstances, the same would be

considered by the trial court on merits without

being influenced by the dismissal of the earlier bail

application including the judgment of this Court.

Shri Tushar Mehta, learned Solicitor General on

instructions would submit that the investigation

would be concluded and final complaint/charge

sheet would be filed expeditiously and at any rate

on or before 03.07.2024 and immediately thereafter,

the trial court will be free to proceed with trial. In

the light of the said submissions made and having

regard to the fact that the period of “6-8 months”

fixed by this Court by Order dated 30.10.2023

having not come to an end, it would suffice to

dispose of these petitions with liberty to the

petitioner to revive his prayer afresh after filing of

the final complaint/Charge-sheet as assured by

learned Solicitor General. Needless to state that in

the event of such an application being filed, the

same would be considered on its own merits as 

15

already observed by this Court vide paragraph 29

(supra). Contentions of both parties kept open.

Accordingly, these petitions stand disposed of. All

pending applications consigned to record.”

28. Before considering the submissions of the learned ASG

with regard to maintainability of the present appeals on

account of the second order of this Court, it will be apposite

to refer to certain observations made by this Court in its first

order, which read thus:

“26. However, we are also concerned about the

prolonged period of incarceration suffered by the

appellant – Manish Sisodia. In P. Chidambaram v.

Directorate of Enforcement (2020) 13 SCC 791,

the appellant therein was granted bail after being

kept in custody for around 49 days [P.

Chidambaram v. Central Bureau of

Investigation (2020) 13 SCC 337], relying on the

Constitution Bench in Shri Gurbaksh Singh

Sibbia and Others v. State of Punjab (1980) 2

SCC 565, and Sanjay Chandra v. Central Bureau

of Investigation (2012) 1 SCC 40, that even if the

allegation is one of grave economic offence, it is not

a rule that bail should be denied in every case.

Ultimately, the consideration has to be made on a

case to case basis, on the facts. The primary object

is to secure the presence of the accused to stand

trial. The argument that the appellant therein was a

flight risk or that there was a possibility of

tampering with the evidence or influencing the

witnesses, was rejected by the Court. Again, in

Satender Kumar Antil v. Central Bureau of

Investigation and Another (2022) 10 SCC 51, this

Court referred to Surinder Singh Alias Shingara

Singh v. State of Punjab (2005) 7 SCC 387 and

Kashmira Singh v. State of Punjab (1977) 4 SCC 

16

291, to emphasise that the right to speedy trial is a

fundamental right within the broad scope of Article

21 of the Constitution. In Vijay Madanlal

Choudhary (supra), this Court while highlighting

the evil of economic offences like money laundering,

and its adverse impact on the society and citizens,

observed that arrest infringes the fundamental right

to life. This Court referred to Section 19 of the PML

Act, for the in-built safeguards to be adhered to by

the authorised officers to ensure fairness, objectivity

and accountability. [See also Pankaj Bansal v.

Union of India and Ors. 2023 SCC OnLine SC

1244] Vijay Madanlal Choudhary (supra), also

held that Section 436A of the Code can apply to

offences under the PML Act, as it effectuates the

right to speedy trial, a facet of the right to life,

except for a valid ground such as where the trial is

delayed at the instance of the accused himself. In

our opinion, Section 436A should not be construed

as a mandate that an accused should not be

granted bail under the PML Act till he has suffered

incarceration for the specified period. This Court, in

Arnab Manoranjan Goswami v. State of

Maharashtra and Others (2021) 2 SCC 427, held

that while ensuring proper enforcement of criminal

law on one hand, the court must be conscious that

liberty across human eras is as tenacious as

tenacious can be.

27. The appellant – Manish Sisodia has argued that

given the number of witnesses, 294 in the

prosecution filed by the CBI and 162 in the

prosecution filed by the DoE, and the documents

31,000 pages and 25,000 pages respectively, the

fact that the CBI has filed multiple charge sheets,

the arguments of charge have not commenced. The

trial court has allowed application of the accused for

furnishing of additional documents, which order

has been challenged by the prosecution under

Section 482 of the Code before the High Court. It

was stated at the Bar, on behalf of the prosecution

that the said petition under Section 482 will be

withdrawn. It was also stated at the Bar, by the 

17

prosecution that the trial would be concluded

within next six to eight months.

28. Detention or jail before being pronounced guilty

of an offence should not become punishment

without trial. If the trial gets protracted despite

assurances of the prosecution, and it is clear that

case will not be decided within a foreseeable time,

the prayer for bail may be meritorious. While the

prosecution may pertain to an economic offence, yet

it may not be proper to equate these cases with

those punishable with death, imprisonment for life,

ten years or more like offences under the Narcotic

Drugs and Psychotropic Substances Act, 1985,

murder, cases of rape, dacoity, kidnaping for

ransom, mass violence, etc. Neither is this a case

where 100/1000s of depositors have been

defrauded. The allegations have to be established

and proven. The right to bail in cases of delay,

coupled with incarceration for a long period,

depending on the nature of the allegations, should

be read into Section 439 of the Code and Section 45

of the PML Act. The reason is that the constitutional

mandate is the higher law, and it is the basic right

of the person charged of an offence and not

convicted, that he be ensured and given a speedy

trial. When the trial is not proceeding for reasons

not attributable to the accused, the court, unless

there are good reasons, may well be guided to

exercise the power to grant bail. This would be truer

where the trial would take years.

29. In view of the assurance given at the Bar on

behalf of the prosecution that they shall conclude

the trial by taking appropriate steps within next six

to eight months, we give liberty to the appellant –

Manish Sisodia to move a fresh application for bail

in case of change in circumstances, or in case the

trial is protracted and proceeds at a snail’s pace in

next three months. If any application for bail is filed

in the above circumstances, the same would be

considered by the trial court on merits without

being influenced by the dismissal of the earlier bail 

18

application, including the present judgment.

Observations made above, re.: right to speedy trial,

will, however, be taken into consideration. The

appellant – Manish Sisodia may also file an

application for interim bail in case of ill health and

medical emergency due to illness of his wife. Such

application would be also examined on its own

merits.”

29. A perusal of the aforesaid would reveal that this Court

was concerned about the prolonged period of incarceration

suffered by the appellant. After considering various earlier

pronouncements, this Court emphasised that the right to

speedy trial is a fundamental right within the broad scope of

Article 21 of the Constitution. Relying on Vijay Madanlal

Choudhary and Others v. Union of India and Others3,

this Court observed that Section 436A Cr.P.C. should not be

construed as a mandate that an accused should not be

granted bail under the PMLA till he has suffered

incarceration for the specified period. This Court recorded

the assurance given by the prosecution that they shall

conclude the trial by taking appropriate steps within next 6-8

months. This Court, after recording the said submissions,

granted liberty to the appellant to move a fresh application

for bail in case of change in circumstances or in case the trial

3

(2022) SCC OnLine SC 929 : 2022 INSC 756

19

was protracted and proceeded at a snail’s pace in next three

months. This Court observed that if any application was

filed, the same would be considered by the trial court on

merits without being influenced by the dismissal of the

earlier bail applications including its own judgment. It

further observed that the observations made regarding the

right to speedy trial will be taken into consideration.

30. Since the trial proceeded at a snail’s pace in the period

after three months of the first order of this Court, the

appellant filed the second application for bail before the trial

court. The same came to be rejected by the trial court on

30th April 2024. It can thus be seen that it took a period of

almost three months for the trial court to decide the said

application. By the time the appellant approached the High

Court, a period of more than six months had elapsed from

the date on which the first order of this Court was passed.

The same also came to be rejected on 21st May 2024.

31. When the appellant approached this Court in the

second round and when the second order was passed by this

Court on 4th June 2024, a period of 7 months and 4 days

had elapsed from the date of the first order of this Court. 

20

However, this Court took into consideration the statement of

the learned Solicitor General that the investigation would be

concluded and final complaint/charge-sheet would be filed

expeditiously and at any rate on or before 3rd July 2024 and

thereafter, the trial court would be free to proceed with the

trial. It, after observing that “having regard to the fact that

the period of 6-8 months fixed by this Court in its first order

having not come to an end”, disposed of the petitions with

liberty to the appellant to revive his prayer afresh after filing

of the final complaint/charge-sheet.

32. It could thus be seen that this Court had granted liberty

to the appellant to revive his prayer after filing of the chargesheet. Now, relegating the appellant to again approach the

trial court and thereafter the High Court and only thereafter

this Court, in our view, would be making him play a game of

“Snake and Ladder”. The trial court and the High Court have

already taken a view and in our view relegating the appellant

again to the trial court and the High Court would be an

empty formality. In a matter pertaining to the life and liberty

of a citizen which is one of the most sacrosanct rights 

21

guaranteed by the Constitution, a citizen cannot be made to

run from pillar to post.

33. A careful reading of the second order of this Court dated

4th June 2024 would show that this Court recorded that they

did not propose to go into the arguments or dwell upon it in

view of the liberty granted in the first order of this Court.

Thereafter, this Court noticed the assurance of the learned

Solicitor General that the investigation would be concluded

and final complaint/charge-sheet would be filed at any rate on

or before 3rd July 2024. This Court further observed in its

second order that since the period of 6-8 months fixed by it in

its first order had not come to an end, it was inclined to

dispose of this petition with liberty to the appellant to revive

his prayer. It will be a travesty of justice to construe that the

carefully couched order preserving the right of the appellant to

revive his prayer for grant of special leave against the High

Court order, to mean that he should be relegated all the way

down to the trial court. The memorable adage, that procedure

is a hand maiden and not a mistress of justice rings loudly in

our ears.

22

34. In this respect, we may also gainfully refer to one of the

recent pronouncements by a bench of this Court to which

one of us (B.R. Gavai, J.) was a member in the case of Prabir

Purkayastha v. State (NCT of Delhi)4, which reads thus:

“21. The Right to Life and Personal Liberty is the

most sacrosanct fundamental right guaranteed

under Articles 20, 21 and 22 of the Constitution of

India. Any attempt to encroach upon this

fundamental right has been frowned upon by this

Court in a catena of decisions. In this regard, we

may refer to following observations made by this

Court in the case of Roy V.D. v. State of Kerala3:—

“7. The life and liberty of an individual is

so sacrosanct that it cannot be allowed to

be interfered with except under the

authority of law. It is a principle which

has been recognised and applied in all

civilised countries. In our Constitution

Article 21 guarantees protection of life

and personal liberty not only to citizens of

India but also to aliens.””

35. In our view, the liberty reserved by this Court vide its

second order, to revive the request of the appellant will have

to be construed as a liberty given by this Court to revive his

prayer afresh after filing of the final complaint/charge-sheet.

Undisputedly, the present appeals have been filed after the

final complaint/charge-sheet has been filed by the

4 2024 SCC OnLine SC 934 : 2024 INSC 414

23

respondents. In that view of the matter, we are not inclined

to entertain the preliminary objection and the same is

rejected.

CONSIDERATION AS TO WHETHER THE APPELLANT IS

ENTITLED FOR BAIL:

36. Having rejected the preliminary objection, we will

proceed to consider as to whether in the facts and

circumstances of the present case, the appellant is entitled to

grant of bail or not.

37. Insofar as the contention of the learned ASG that since

the conditions as provided under Section 45 of the PMLA are

not satisfied, the appellant is not entitled to grant of bail is

concerned, it will be apposite to refer to the first order of this

Court. No doubt that this Court in its first order in paragraph

25, after recapitulating in paragraph 24 as to what was

stated in the charge-sheet filed by the CBI against the

appellant, observed that, in view of the aforesaid discussion,

the Court was not inclined to accept the prayer for grant of

bail at that stage. However, certain paragraphs of the said

order cannot be read in isolation from the other paragraphs.

The order will have to be read in its entirety. In paragraph 

24

28 of the said order, this Court observed that the right to bail

in cases of delay, coupled with incarceration for a long

period, depending on the nature of the allegations, should be

read into Section 439 Cr.P.C. and Section 45 of the PMLA.

The Court held that the constitutional mandate is the higher

law, and it is the basic right of the person charged of an

offence and not convicted that he be ensured and given a

speedy trial. It further observed that when the trial is not

proceeding for reasons not attributable to the accused, the

court, unless there are good reasons, would be guided to

exercise the power to grant bail. The Court specifically

observed that this would be true where the trial would take

years. It could thus clearly be seen that this Court, in the

first round of litigation between the parties, has specifically

observed that in case of delay coupled with incarceration for

a long period and depending on the nature of the allegations,

the right to bail will have to be read into Section 45 of PMLA.

38. A Division Bench of this Court in the case of

Ramkripal Meena v. Directorate of Enforcement5 was

considering an application of the petitioner therein who was

5 SLP(Crl.) No. 3205 of 2024 dated 30.07.2024

25

to receive a bribe of rupees five crore and from whom, an

amount of Rs.46,00,000/- was already recovered. In the said

case, the petitioner was arrested on 26th January 2022 in

connection with FIR No. 402/2021 registered against him for

the offences punishable under Sections 406, 420, 120B of

IPC and Section 4/6 of the Rajasthan Public Examination

(Prevention of Unfair Means) Act, 1992. He was released on

bail by this Court vide order dated 18th January 2023.

Thereafter, the petitioner was arrested by the ED on 21st

June 2023. The Court observed thus:

“7. Adverting to the prayer for grant of bail in the

instant case, it is pointed out by learned counsel for

ED that the complaint case is at the stage of

framing of charges and 24 witnesses are proposed

to be examined. The conclusion of proceedings,

thus, will take some reasonable time. The petitioner

has already been in custody for more than a year.

Taking into consideration the period spent in

custody and there being no likelihood of conclusion

of trial within a short span, coupled with the fact

that the petitioner is already on bail in the predicate

offence, and keeping in view the peculiar facts and

circumstances of this case, it seems to us that the

rigours of Section 45 of the Act can be suitably

relaxed to afford conditional liberty to the petitioner.

Ordered accordingly.”

39. In the light of the specific observations of this Court in

paragraph 28 of the first order, we are not inclined to accept 

26

the submission of the learned ASG that the provisions of

Section 45 of the PMLA would come in the way of

consideration of the application of the appellant for grant of

bail.

40. From the first order of this Court, it would be clear that

an assurance was given at the Bar on behalf of the

prosecution that they shall conclude the trial by taking

appropriate steps within next 6-8 months. In view of the

said statement, this Court did not consider the application of

the appellant for bail at that stage, however, granted liberty

to the appellant to move a fresh application for bail in case of

change in circumstances, or in case the trial is protracted

and proceeded at a snail’s pace in next three months.

Though, this Court observed that if any application for bail

was filed on the grounds mentioned in paragraph 29, the

same would be considered by the trial court without being

influenced by the dismissal of the earlier bail applications

including the present judgment, however, it clarified that the

observations made by the Court with regard to right to

speedy trial would be taken into consideration. The liberty

was also granted to the appellant to file an application for 

27

interim bail in case of ill-health and medical emergency due

to illness of his wife.

41. A perusal of the impugned judgment and order would

reveal that though the learned Single Judge of the High

Court has dismissed the applications for bail on merits, on

medical grounds, it has permitted the appellant to visit his

residence to meet his wife in custody once every week.

42. It could thus clearly be seen that this Court expected

the trial to be concluded within a period of 6-8 months. The

liberty was reserved to approach afresh if the trial did not

conclude within the period of 6-8 months. The liberty was

also granted in case the trial proceeded at a snail’s pace in

next three months.

43. A perusal of the material placed on record would clearly

reveal that far from the trial being concluded within a period

of 6-8 months, it is even yet to commence. Though in the

first order of this Court, liberty was reserved to move afresh

for bail if the trial proceeded at a snail’s pace within a period

of three months from the date of the said order, the

commencement of the trial is yet to see the light of the day.

In these circumstances, in view of the first order of this 

28

Court, the appellant was entitled to renew his request. When

the appellant renewed his request, the learned Special Judge

(trial court) as well as the High Court was required to

consider the said applications in the light of the observations

made by this Court in paragraphs 28 and 29 of the first

order. In paragraph 29 of the first order, this Court

specifically observed that though the observations on the

aspect of merit were not binding, the observations of right to

speedy trial were required to be taken into consideration.

44. The learned Special Judge and the learned Single Judge

of the High Court have considered the applications on merits

as well as on the grounds of delay and denial of right to

speedy trial. We see no error in the judgments and orders of

the learned Special Judge as well as the High Court in

considering the merits of the matter. In view of the

observations made by this Court in the first order, they were

entitled to consider the same. However, the question that

arises is as to whether the trial court and the High Court

have correctly considered the observations made by this

Court with regard to right to speedy trial and prolonged

period of incarceration. The courts below have rejected the 

29

claim of the appellant applying the triple test as

contemplated under Section 45 of the PMLA. In our view, this

is in ignorance of the observations made by this Court in

paragraph 28 of the first order wherein this Court specifically

observed that right to bail in cases of delay coupled with

incarceration for a long period should be read into Section

439 Cr.P.C. and Section 45 of the PMLA.

45. The trial court, in its order, has held that the appellant

individually and along with different accused persons have

been filing one or the other applications/making oral

submissions frequently. It further observed that some of

them were frivolous. It was observed that this was apparently

done as a concerted effort for accomplishing the shared

purpose of causing delay in the matter. The trial court

therefore rejected the contention of the appellant that he had

not contributed to delay in proceedings or that the case has

been proceeding at a snail’s pace. However, in the very

subsequent paragraph i.e., paragraph 80, the court observed

that, in order to avoid any delay and considering the time

being taken by the counsel for the accused in inspecting the

“un-relied upon documents”, it had vide order dated 18th

30

April 2024 put a query to the prosecution if the entire “unrelied upon documents” can be provided to the accused

persons in a digitized form. It further recorded that the ED

accepted the suggestion that it would expedite the

proceedings. However, some time was sought to consider the

same. A perusal of the compliance report filed by the

Assistant Director of ED dated 7th May 2024 which could be

found at page 757 of the paperbook, would reveal that the

Cyber Lab has informed that it would take 70-80 days to

prepare one copy (cloning) of the data contained in the said

unrelied digital devices.

46. It could further be seen that, though it has been

submitted on behalf of the ED that hundreds of applications

have been filed for supply of “un-relied upon documents”, the

record would not substantiate the said position. Though

various applications have been filed by different accused

persons, insofar as the present appellant is concerned, he

has filed only 13 applications in the CBI matter and 14 in the

ED matter. It would reveal that some of the applications are

for seeking permission to meet his wife or permission to file

vakalatnama, to put signature on the documents, seeking 

31

permission to sign a cheque etc. Most of the applications are

for supply of missing documents and legible copies under

Section 207/208 Cr.P.C. Some of the applications are for

inspection of the “un-relied upon documents”. It is pertinent

to note that all these applications have been allowed by the

learned trial court. It is further pertinent to note that some

of these orders were also challenged before the High Court

wherein stay was granted. However, a statement was made

on behalf of the prosecution before this Court when the first

order was passed that the said petitions filed under Section

482 Cr.P.C would be withdrawn. The said statement is

recorded in paragraph 27 of the first order of this Court. We

may state that, when we specifically asked the learned ASG

to point out any order wherein the learned trial judge found

any of the applications of the appellant to be frivolous, not a

single order could be pointed out.

47. In that view of the matter, we find that the finding of the

learned trial judge that it is the appellant who is responsible

for delaying the trial is not supported by the record. The

learned Single Judge of the High Court endorses the finding

of the trial court on the ground that the accused persons 

32

have taken three months’ time from 19th October 2023 to 19th

January 2024 for inspection of “un-relied upon documents”

despite repeated directions from the learned trial court to

conclude the same expeditiously. It is to be noted that there

are around 69,000 pages of documents involved in both the

CBI and the ED matters. Taking into consideration the huge

magnitude of the documents involved, it cannot be stated

that the accused is not entitled to take a reasonable time for

inspection of the said documents. In order to avail the right

to fair trial, the accused cannot be denied the right to have

inspection of the documents including the “un-relied upon

documents”.

48. It is further to be noted that a perusal of the second

order of this Court would itself reveal that this Court

recorded the submissions of the learned Solicitor General,

which were made on instructions, that the investigation

would be concluded and final complaint/charge-sheet would

be filed expeditiously and at any rate on or before 3rd July

2024. Accordingly, 8th charge-sheet has been filed on 28th

June 2024 by the ED. It could thus be seen that, even

according to the respondents, the investigation was to be 

33

concluded on or before 3rd July 2024. In that view of the

matter, we find that the contention raised by the learned

ASG is self-contradictory. If the investigation itself was to

conclude on or before 3rd July 2024, the question is how

could the trial have commenced prior to that? If the

investigation itself was to conclude after a period of 8 months

from the date of the first order of this Court, there was no

question of the trial being concluded within a period of 6-8

months from the date of the first order of this Court. We find

that both the High Court and the trial court have failed to

take this into consideration.

49. We find that, on account of a long period of

incarceration running for around 17 months and the trial

even not having been commenced, the appellant has been

deprived of his right to speedy trial.

50. As observed by this Court, the right to speedy trial and

the right to liberty are sacrosanct rights. On denial of these

rights, the trial court as well as the High Court ought to have

given due weightage to this factor.

51. Recently, this Court had an occasion to consider an

application for bail in the case of Javed Gulam Nabi Shaikh 

34

v. State of Maharashtra and Another6 wherein the

accused was prosecuted under the provisions of the Unlawful

Activities (Prevention) Act, 1967. This Court surveyed the

entire law right from the judgment of this Court in the cases

of Gudikanti Narasimhulu and Others v. Public

Prosecutor, High Court of Andhra Pradesh7

, Shri

Gurbaksh Singh Sibbia and Others v. State of Punjab8

,

Hussainara Khatoon and Others (I) v. Home Secretary,

State of Bihar9, Union of India v. K.A. Najeeb10 and

Satender Kumar Antil v. Central Bureau of

Investigation and Another11. The Court observed thus:

“19. If the State or any prosecuting agency

including the court concerned has no wherewithal

to provide or protect the fundamental right of an

accused to have a speedy trial as enshrined under

Article 21 of the Constitution then the State or any

other prosecuting agency should not oppose the

plea for bail on the ground that the crime

committed is serious. Article 21 of

the Constitution applies irrespective of the nature of

the crime.”

52. The Court also reproduced the observations made in

Gudikanti Narasimhulu (supra), which read thus:

6 2024 SCC OnLine SC 1693

7

(1978) 1 SCC 240 : 1977 INSC 232

8

(1980) 2 SCC 565 : 1980 INSC 68

9

(1980) 1 SCC 81 : 1979 INSC 34

10 (2021) 3 SCC 713 : 2021 INSC 50

11 (2022) 10 SCC 51 : 2022 INSC 690

35

“10. In the aforesaid context, we may remind the

trial courts and the High Courts of what came to be

observed by this Court in Gudikanti

Narasimhulu v. Public Prosecutor, High Court

reported in (1978) 1 SCC 240. We quote:

“What is often forgotten, and therefore

warrants reminder, is the object to keep a

person in judicial custody pending trial or

disposal of an appeal. Lord Russel, C.J.,

said [R v. Rose, (1898) 18 Cox]:

“I observe that in this case bail

was refused for the prisoner. It

cannot be too strongly impressed

on the, magistracy of the country

that bail is not to be withheld as a

punishment, but that the

requirements as to bail are merely

to secure the attendance of the

prisoner at trial.””

53. The Court further observed that, over a period of time,

the trial courts and the High Courts have forgotten a very

well-settled principle of law that bail is not to be withheld as

a punishment. From our experience, we can say that it

appears that the trial courts and the High Courts attempt to

play safe in matters of grant of bail. The principle that bail is

a rule and refusal is an exception is, at times, followed in

breach. On account of non-grant of bail even in straight

forward open and shut cases, this Court is flooded with huge

number of bail petitions thereby adding to the huge 

36

pendency. It is high time that the trial courts and the High

Courts should recognize the principle that “bail is rule and

jail is exception”.

54. In the present case, in the ED matter as well as the CBI

matter, 493 witnesses have been named. The case involves

thousands of pages of documents and over a lakh pages of

digitized documents. It is thus clear that there is not even

the remotest possibility of the trial being concluded in the

near future. In our view, keeping the appellant behind the

bars for an unlimited period of time in the hope of speedy

completion of trial would deprive his fundamental right to

liberty under Article 21 of the Constitution. As observed time

and again, the prolonged incarceration before being

pronounced guilty of an offence should not be permitted to

become punishment without trial.

55. As observed by this Court in the case of Gudikanti

Narasimhulu (supra), the objective to keep a person in

judicial custody pending trial or disposal of an appeal is to

secure the attendance of the prisoner at trial.

56. In the present case, the appellant is having deep roots

in the society. There is no possibility of him fleeing away from 

37

the country and not being available for facing the trial. In any

case, conditions can be imposed to address the concern of

the State.

57. Insofar as the apprehension given by the learned ASG

regarding the possibility of tampering the evidence is

concerned, it is to be noted that the case largely depends on

documentary evidence which is already seized by the

prosecution. As such, there is no possibility of tampering

with the evidence. Insofar as the concern with regard to

influencing the witnesses is concerned, the said concern can

be addressed by imposing stringent conditions upon the

appellant.

CONCLUSION:

58. In the result, we pass the following order:

(i) The appeals are allowed;

(ii) The impugned judgment and order dated 21st May

2024 passed by the High Court of Delhi in Bail

Application Nos. 1557 and 1559 of 2024 is quashed

and set aside;

(iii) The appellant is directed to be released on bail in

connection with ED Case No. HIU-II/14/2022 

38

registered against the appellant by the ED and FIR

No. RC0032022A0053 of 2022 registered against the

appellant by the CBI on furnishing bail bonds for a

sum of Rs.10,00,000/- with two sureties of the like

amount;

(iv) The appellant shall surrender his passport with the

Special Court;

(v) The appellant shall report to the Investigating Officer

on every Monday and Thursday between 10-11 AM;

and

(vi) The appellant shall not make any attempt either to

influence the witnesses or to tamper with the

evidence.

59. Pending application(s), if any, shall stand disposed of in

the above terms.

..............................J.

(B.R. GAVAI)

..............................J.

(K.V. VISWANATHAN)

NEW DELHI;

AUGUST 09, 2024.