Considering the totality of the evidence and circumstances of the case, we are of the view that the High Court has rightly reversed the judgment of the trial court after finding the appellant guilty under Section 302 read with Section 148 of IPC for the murder of Amrita Dome and awarded the sentence of life imprisonment. We, therefore, find no reason to interfere with the judgment of the High Court. The appeal lacks merit and the same is dismissed.

Page 1
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL No.1268 OF 2007
GUIRAM MONDAL .. Appellant
Versus
STATE OF WEST BENGAL .. Respondent
J U D G M E N T
K. S. Radhakrishnan, J
1. The appellant, the 10th accused in Sessions Case No.20 of
1986, was charge-sheeted along with others for the offences
punishable under Section 147, 148, 149, 323 and 302 of the Indian
Penal Code and Section 25/27 of the Arms Act. The Trial Court,
after appreciation of the oral and documentary evidence vide its
judgment dated 22.4.1987 acquitted all the accused persons,
except Accused No.3 Tarun Mondal, who was convicted for the
Page 2
2
offences punishable under Section 148 and 302 of IPC for causing
the murder of Amrita Dome and sentenced him to suffer
imprisonment for life under Section 302 IPC.
2. The State of West Bengal, aggrieved by the order of acquittal,
preferred G.A. No.22 of 1987 before the High Court of Calcutta.
The High Court vide its judgment dated 28.11.2006 partly allowed
the appeal and convicted the appellant along with four others,
while maintaining the order of acquittal passed by the trial Court,
in respect of rest of the accused persons. Tarun Mondal, 3rd
accused, was further found guilty of the murder of Sultan Khan.
3. We are, in this case, concerned only with the appeal filed by
Guiram Mondal, 10th accused. The prosecution case, in short, is
that on 26.4.1984 at about 12 hours the accused persons formed
an unlawful assembly with deadly weapons and took along with
them Amrita Dome and Sultan Khan through a kuchha road in
village Pechaliya and, in the process, assaulted both Amrita Dome
and Sultan Khan. Some of the witnesses, who are relatives of the
deceased Amrita Dome, tried to save him but they were also
Page 3
3
assaulted by the accused persons and the informant Sadananda
Dome (PW1) was shot at by a pipe-gun and he sustained injuries.
While the accused persons were proceeding as such, Amrita Dome
managed to escape from their clutches and took shelter in the
house of Monohar Mondal @ Manu Mondal (PW2). The accused
persons, however, chased Amrita Dome and brought him out of
the house of Manu Mondal and killed him in the passage or
pathway lying between the house of Manu Mondal and his nephew
Sahadeb Mondal. Accused persons after murdering Amrita Dome
left the spot to chase Sultan Khan, who was left injured in front of
Durga temple which was close to the house of Monohar Mondal.
Sultan Khan was also murdered by them and they carried away his
death body to the grazing field and left it there.
4. Sadananda Dome (PW1) then passed this information, which
was recorded in writing by PW 15 on 26.4.1984 at 6.05 PM and the
same was treated as the FIR. The same was sent to the police
station and was received there at 7.25 PM and on the basis of that
FIR a case was registered against the accused persons and they
were charge-sheeted for the offences, already mentioned earlier.
Page 4
4
PW 15, the Investigating Officer visited the place of occurrence
and prepared the sketch map and conducted the inquest in the
presence of PW 10, the Pradhan of the Gram Panchayat and sent
both the dead bodies for post-mortem examination through
constable PW 13.
5. PW 12 Dr. S. Nath, conducted the post-mortem on both the
dead bodies and opined that the death was due to effect of head
injury and associated injuries which were anti mortem and
homicidal in nature. PW 15 on 13.5.1984 arrested various accused
persons including the appellant and were brought before the trial
court. On the side of the prosecution 16 witnesses were
examined. PW 1 Sadananda Dome, the first informant is the
brother of the deceased Amrita Dome. Monohar Mondal, in
whose house the deceased Amrita Dome took shelter, was
examined as PW2. Menoka Dome, wife of deceased Amrita
Dome, was also examined as PW 3 and Sankar Dome, the father of
the deceased Amrita Dome was also examined as PW 5. On the
side of the defence, Joydev Garian DW1 was examined.
Page 5
5
6. Dr. S. Nath was examined as PW12, who conducted the postmortem on the dead bodies on 27.4.1984 deposed that on the
dead body of Amrita Dome he found (1) one incised wound on
right lateral aspect of forehead 2.5” x 2” x .5” (2) one incised
wound in mid-region of forehead 3” x 2” x .5” (3) one incised
would 3” below the midpoint of chin 4” x 2” x 2.5” laryns and
tranches cut off. He also noticed fracture of 4th, 5th ^ 6th ribs on
the right side (2) fracture of 4th and 5th ribs on the right side (3)
right lung was found ruptured. Further, it was also noticed a
fracture of frontal bone. PW 12 has opined that the death was due
to the effects of head injury and associated injury was ante
mortem and homicidal in nature. PW12 conducted the postmortem over the dead body of Sultan Khan and found (1) one
incised would 3” x 2” x 1” on back portion of head (2) one incised
would on left lateral aspect of neck 2” x 1.5” x 1” and (3) one
incised would 4” x 3” x 5” x4” aspect of neck 2” x 1.5” x 1”. He
also found fracture of 4th, 5th, 6th and 7th rib of the right side and
fracture of 4th, 5th and 6th ribs of the left side. He found fracture of
occipital bone and both the lungs were ruptured. In his opinion,
Page 6
6
death was due to head injury and associated injury ante mortem
and homicidal in nature.
7. PW 1, the brother of the deceased Amrita Dome, who is also
an injured witness, had clearly and unequivocally supported the
prosecution case and stated that he had seen the accused persons
armed with deadly weapons like bhojali, axe, pipe gun and dragger
etc. catching hold of his brother Amrita Dome and one Sultan
Khan. Amrita Dome had managed to escape from the clutches of
the accused persons and took shelter in the house of Monohar
Mondal. PW1 also deposed that Sultan Khan in that process was
half dead and lying in front of Durga Temple. PW 1 deposed that
the accused persons took Amrita Dome out of the house of
Monohar Mondal and assaulted with lathi, dagger, bhojali etc. PW
1 stated that he tried to save his elder brother but was shot at by
a pipe-gun which caused injury on his shoulder. PW 1 also noticed
that Kristo Gorain cut the throat of Sultan Khan and thereafter
brought Sultan Khan to a grazing field and left the body there.
Page 7
7
8. We have also gone through the evidence of the eyewitnesses
 PWs 2, 3, 4, 8 and 11 and their versions corroborate
fully the version of PW 1, the first informant and eye-witness,
relating to the incident of assault and murder of Amrita Dome and
Sultan Khan. The specific part played by the various accused
persons, including the appellant, has been narrated by those
witnesses. PW 2 had deposed that on the date of the incident he
was in the cow-shed and as soon as he heard a hue and cry, he
came out and found that some persons, including the appellant,
forcibly taking away Amrita Dome from the house of Manu Mondal.
PW 2 had also requested the accused persons to not to assault
Amrita Dome but was pushed away by the accused persons. Later
he found Amrita Dome dead and the body was lying on the pathway between his house and the house of Sadananda Mondal.
9. PW 3, the wife of Amrita Dome, also fully supported the
prosecution case and also PW8, the mother of the deceased
Amrita Dome and P.W.11, the wife of the brother of the deceased.
The High Court has correctly appreciated the evidence rendered
by those witnesses. The High Court after examining the oral and
Page 8
8
documentary evidence came to the conclusion that the trial court
was completely in error by over-looking some crucial and
important evidence and placed much reliance on non-mention of
name of accused persons in the inquest report. The High Court, in
our view, correctly applied the legal principle that non-mention of
name of the few accused persons in the inquest report is of no
consequence.
10. The inquest report normally would not contain the manner in
which the incident took place or the names of eye-witnesses as
well as names of accused persons. The basic purpose of holding
an inquest is to report regarding the cause of death, namely
whether it is suicidal, homicidal, accidental etc. Reference may
be made to the Judgment of this Court in Pedda Narayana and
others v. State of Andhra Pradesh (1975) 4 SCC 153 and
Amar Singh v. Balwinder Singh and Others (2003) 2 SCC 518.
In Radha Mohan Singh @ Lal Saheb and Others v. State of
U.P. (2006) 2 SCC 450, this Court held that the scope of inquest is
limited and is confined to ascertainment of apparent cause of
death. Inquest is concerned with discovering whether in a given
Page 9
9
case the death was accident, suicidal or homicidal, and in what
manner or by what weapon or instrument the injuries on the body
appear to have been inflicted. The details of overt acts need not
be recorded in the inquest report. The High Court has rightly held
that the manner and approach of the trial court in disbelieving the
prosecution story by placing reliance on the inquest report was
erroneous and bad in law.
11. We also fully agree with the views expressed by the High
Court that the FIR was not anti dated, anti timed or was
subsequently created. The verbal submission of PW 1 was
reduced into writing by PW 15 and the same was treated as the
FIR (Ext.3). The formal FIR was marked ext.3/3. Those documents
would clearly indicate that the incident took place on 26.4.1984 at
about 12 hrs and the FIR was recorded at village Pechaliya at 6.05
PM and after it was sent to the Khairasole police station which was
registered as Khairasole P.S. Case No.10 dated 26.4.1984 at 7.25
P.M. There is nothing to show that the FIR was anti dated, anti
timed or fabricated. Merely because the FIR was placed before the
learned Magistrate on 30.4.1984, three days after registration of
Page 10
10
FIR, it cannot be said that the FIR was anti timed, anti dated and
fabricated. In fact, no question was put to the Investigating Officer
as to the cause of delay in sending FIR to the Magistrate.
12. This Court in State of Jammu and Kashmir v. S. Mohan
Singh and Another (2006) 9 SCC 272 held that the mere delay in
sending the First Information Report to a Magistrate cannot be a
ground to throw out prosecution case if the evidence adduced is
otherwise found credible and trustworthy. We are of the view that
the High Court has rightly held that there is no reason to hold that
the FIR was a fabricated document or anti dated or anti timed.
13. We are also not impressed by the argument of Ms. Rupali S
Ghose, learned counsel appearing for the appellant, that not much
reliance could be placed on the evidence of eye-witnesses as most
of them are relatives of Amrita Dome and not a single independent
witness was examined by the prosecution. In our view, merely
because a witness is a relative of the deceased is not a reason for
discarding his evidence. Many a time, strangers will not come
forward depose as witnesses, even if they have witnessed the
Page 11
11
crime. Further, possibility of influencing such witnesses is also not
uncommon. Evidence of relatives can be acted upon if the court
finds that the evidence of such a witness is reliable and
trustworthy. In this connection reference may be made to the
Judgments of this Court in Seeman @ Veeranam v. State by
Inspector of Police (2005) 11 SCC 142, Alamgir v. State (NCT,
Delhi) (2003) 1 SCC 21, Dalbir Kaur and Others v. State of
Punjab (1976) 4 SCC 158, State of U.P. v. Jodha Singh and
Others (1989) 3 SCC 465, Labh Singh and Others v. State of
Punjab (1976) 1 SCC 181, Visveswaran v. State represented
by SDM (2003) 6 SCC 73.
14. PW2, Monohar @ Manu Mondal, it may be noted, was not a
relative of Amrita Dome. A close scrutiny of the evidence
rendered by the eye-witnesses, some of which are relative of the
deceased, clearly establishes the involvement of the accused.
Further, in the cross examination of the eye witnesses, we have
not noticed any serious contradiction, omission, infirmity, defect or
lacuna which can make their evidence unbelievable and to make
them untrustworthy witnesses. Further, the evidence of eye-
Page 12
12
witnesses have been fully corroborated by the evidence of PW 12,
the autopsy surgeon relating to the nature of injuries and places of
injuries on the person of the deceased. We notice that, earlier, the
appeal was filed by Guiram Mondal along with Kisto Gorain and
Madhusudan Mondal. Appeal was initially dismissed on 17.9.2007
since they had not complied with the orders of this Court dated
19.4.2007 for surrendering. Later, the appellant herein was
arrested and his case was restored on 28.11.2008 by this Court.
15. Considering the totality of the evidence and circumstances of
the case, we are of the view that the High Court has rightly
reversed the judgment of the trial court after finding the appellant
guilty under Section 302 read with Section 148 of IPC for the
murder of Amrita Dome and awarded the sentence of life
imprisonment. We, therefore, find no reason to interfere with the
judgment of the High Court. The appeal lacks merit and the same
is dismissed. 
……………………………..J.
(K.S. Radhakrishnan)Page 13
13
……………………………..J.
(Dipak Misra)
New Delhi,
April 26, 2013

The Appellate Jurisdiction of this Court guaranteed under Section 15Z of the Securities and Exchange Board of India Act, 1992 (for short ‘SEBI Act’) has been invoked challenging a joint order dated 5.10.2012 passed in Appeal Nos. 28 and 29 of 2012 passed by Securities Appellate Tribunal, Mumbai (for short ‘Tribunal’) upholding the order passed by SEBI dated April 18, 2011 restraining the appellant for a period of two years from buying, selling or dealing in securities and the order passed by the adjudication officer dated July 28, 2011 imposing a monetary penalty of 50 lacs under Section 15HA of SEBI Act.

Page 1
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.4112-4113 of 2013
(D.No.201 of 2013)
N. Narayanan .. Appellant
Versus
Adjudicating Officer, SEBI .. Respondent
J U D G M E N T
K. S. Radhakrishnan, J
1. India’s capital market in the recent times has witnessed
tremendous growth, characterized particularly by increasing
participation of public. Investors’ confidence in the capital market
can be sustained largely by ensuring investors’ protection.
Disclosure and transparency are the two pillars on which market
integrity rests. Facts of the case disclose how the investors’
confidence has been eroded and how the market has been abused
for personal gains and attainments.Page 2
2
2. The Appellate Jurisdiction of this Court guaranteed under
Section 15Z of the Securities and Exchange Board of India Act,
1992 (for short ‘SEBI Act’) has been invoked challenging a joint
order dated 5.10.2012 passed in Appeal Nos. 28 and 29 of 2012
passed by Securities Appellate Tribunal, Mumbai (for short
‘Tribunal’) upholding the order passed by SEBI dated April 18,
2011 restraining the appellant for a period of two years from
buying, selling or dealing in securities and the order passed by the
adjudication officer dated July 28, 2011 imposing a monetary
penalty of 50 lacs under Section 15HA of SEBI Act.
3. The appellant was the promoter as well as a whole time
Director of M/s Pyramid Saimira Theatre Limited (PSTL), a
company registered under the Companies Act, 1956. The shares
of PSTL were listed on Bombay Stock Exchange Ltd. (BSE) and
National Stock Exchange (NSE) at the relevant time. The company
was involved in the business of Exhibition (Theatre), Film and
Television, Content Production, Distribution, Hospitality, Food &
Beverage, Animation and Gaming and Cine Advertising etc. The
company had nine Directors, including the appellant herein. ThePage 3
3
investigation department of SEBI noticed that the company had
committed serious irregularities in its books of accounts and
showed inflated profits and revenues in the financial statements
and lured the general public to invest in the shares of the
company based on such false financial statements thereby
violated the provisions of Securities and Exchange Board of India
(Prohibition of Fraudulent and Unfair Trade Practice Relating to
Securities Market) Regulations, 2003 (for short ‘Regulations
2003’). Consequently, a notice was issued to the appellant and to
the other Directors stating that they had violated Section 12A of
SEBI Act and Regulation 3(b), 3(c), 3(d), 4(1), 4(2)(a), 4(2)(e), 4(2)
(f), 4(2)(k), 4(2)(r) of Regulations 2003 and were directed to show
cause why appropriate directions as deemed fit and proper under
Sections 11, 11B and 11(4) of the SEBI Act read with Regulation 11
of Regulations 2003 be not issued against them.
4. The appellant replied to the show cause notice vide letter
dated February 3, 2010 stating that there were no irregularities
and the company’s Managing Director and the Principal Officer
would send a detailed reply in that regard. Later, a notice dated Page 4
4
April 8, 2010 under Rule 4(1) of the SEBI (Procedure for Holding
Inquiry and imposing penalties by Adjudicating Officer) Rules,
1995 was issued to the Directors to show cause why penalty be
not imposed under Section 15HA of the SEBI Act for the alleged
contravention of the provision of the Act.
5. The appellant submitted a detailed reply stating that it was
the Managing Director and Principal Officer of the company who
was in charge of day-to-day affairs of the company including the
operations, finance and accounts, secretarial and compliance,
legal services and technical services. Appellant, it was stated,
though was a whole time Director of the company was only
handling Human Resource Department of the company and was
fully engrossed in the recruitment of personnel, training and team
buildup. Further, it was also stated that he had only relied upon
the auditor’s statements in financial matters and hence was not
personally liable for the violation of the provisions of SEBI Act and
Regulations 2003. Personal hearing was accorded to the appellant
on 30.8.2010. Written Submissions dated 15.9.2010 filed by thePage 5
5
appellant was also considered by SEBI. The Board noticed
following specific violations:-
(a) manipulated accounts by fictitious entries;
(b) made false disclosures to the stock exchange;
(c) did not co-operate with the investigations, and
(d) did not maintain certain books of accounts.
6. On facts, the officer found that all the above-mentioned
violations had been established. Consequently, the Whole Time
Member (WTM) of SEBI, in exercise of powers conferred under
Section 19 of the SEBI, held that the Directors were found guilty
for the violation of Section 12A of SEBI Act, 1992 and Regulation
3(b), 3(c), 3(d), 4(1), 4(2)(a), 4(2)(e), 4(2)(f), 4(2)(k), 4(2)(r) of the
Regulations 2003. WTM of SEBI then, in exercise of the powers
conferred on him under Section 19 read with Sections 11, 11B and
11(4) of the SEBI Act and Regulation 11 of Regulations 2003,
passed an order restraining the appellant and other Directors for a
period of two years and three years respectively from buying,
selling or dealing in securities in any manner whatsoever orPage 6
6
accessing the securities market directly or indirectly and from
being Director of any listed company.
7. The Adjudicating Officer also held that the appellant and
others have violated the provisions of Section 12A of SEBI Act and
Regulation 3(b), 3(c), 3(d), 4(1), 4(2)(a), 4(2)(e), 4(2)(f), 4(2)(k),
4(2)(r) of Regulations 2003 and took the view that the appellant
and other Directors are liable for monetary penalty under Section
15HA of SEBI Act whereby a penalty of 50 lacs was imposed on the
appellant.
8. The above order, as already indicated, was affirmed in an
appeal by the Tribunal, the legality of which is the subject matter
of this appeal.
9. We may before examining various legal issues that arise for
consideration in this appeal wish to indicate that the investigation
had revealed that the financial results contained in the quarterly
report filed with the stock exchanges contained inflated figures of
the company’s revenue profits, security deposits and receivables.Page 7
7
Further, the manipulation in the financial results of the company
resulted in price rise of the scrip of the company and the
promoters pledged their shares to raise substantial funds from
financial institutions.
10. We would like to demonstrate on the facts of this case as well
as law on the point that “market abuse” has now become a
common practice in the India’ security market and, if not properly
curbed, the same would result in defeating the very object and
purpose of SEBI Act which is intended to protect the interests of
investors in securities and to promote the development of
securities market. Capital market, as already stated, has
witnessed tremendous growth in recent times, characterized
particularly by the increasing participation of the public. Investor’s
confidence in capital market can be sustained largely by ensuring
investors’ protection.
11. Before examining the law on the point, we would like to
demonstrate how the company and its Directors had inflated
figures of the company’s revenue profits, security deposits andPage 8
8
receivables which were relied upon by investors for making
investment decisions. Facts would also indicate that the Directors
had pledged their shares and artificially inflated prices of the scrip
based on inflated financial results which enabled them to raise
higher quantum of funds that would not have been possible
otherwise.
12. The quarterly unaudited financial results of the company for
the quarter ended 31st March 2007 to the quarter ended 31st March
2009 shows the following details:
Particulars For the quarter ended (in Rs. Lakh)
March
31,
2007
June 30,
2007
Sept. 30,
2007
Dec. 31,
2007
March
31, 2008
June 30,
2008
Sept. 30,
2008
Dec. 31,
2008
March
31, 2009
Net Sales 6756.8
9
12271.4
3
14418.7
9
23141.8
7
24556.1
2
2501.87 25225.7
2
13794.8
1
8069.04
Other
Income
23.24 13.68 231.75 152.90 144.05 12.94 - 2.08 -
Total
Income
6780.1
3
12285.1
1
14650.5
4
23294.7
7
24700.1
7
25027.8
1
25225.7
2
13796.8
9
8069.04
Total
Expenditur
e
6122.6
0
9936.44 12513.4
2
19718.5
4
22366.9
3
22886.7
2
23478.4
8
12997.5
8
6859.02
Net profit /
loss
583.47 1600.77 1511.31 2986.50 -311.22 1349.72 870.42 -7474.35 -8527.25
Equity 2827.6
4
2827.65 2827.65 2827.65 2827.65 2827.65 2827.65 2827.65 2827.65
Face value
of shares
(in Rs.)
10 10 10 10 10 10 10 10 10Page 9
9
13. The above facts and figures would indicate that the net sales
for the quarter ended June 30, 2007 doubled as compared to the
previous quarter. In the subsequent quarters, till the quarter
ended September 30, 2008, that upward trend had continued and
in the quarter ended December 31, 2008, there was a sudden fall
in the net sales figures (the net sales figures for the quarter ended
December 31, 2008 were down by around 45% as compared to the
previous quarter).
14. The company also showed a loss of Rs.74.74 crore in the said
quarter. For the quarter ended March 31, 2009, the company
again showed a loss of Rs. 85.37 crore. The net profit figures also
surged in sync with the total income upto the quarter ended June
30, 2008 except for the quarter ended March 31, 2008.
15. SEBI, it was pointed out, had verified books of accounts of the
company for the financial year 2007-2008 to ascertain whether
proper books of accounts and supporting documents were
maintained by the company in respect of the theatre income,
theatre receivables and theatre security deposits and whether thePage 10
10
financial disclosures made by the company to the stock exchanges
as per listing agreement reflected true and fair view of the state of
affairs of the company.
16. SEBI’s investigation revealed that for the financial year 2007-
08, total revenue of Rs. 749.30 crore included an income of Rs.
549.58 crore from theatres which is stated as follows:
(In Rs. Crore)
Region From PSTL
Theatres
From Non-PSTL
Theatre
Total Revenue
from Theatres
Tamil Nadu 303.46 41.51 344.97
Andhra
Pradesh
74.66 62.04 136.70
Karnataka 45.86 7.60 53.45
Kerala 12.95 12.95
Others 0.28 1.23 1.52
Total 437.21 112.18 549.58
17. On theatre income of Rs. 303.46 crore from Tamil Nadu
region included consolidated credit entries of Rs.244 crore with
corresponding consolidated debits ‘Theatre Collections Receivable
Account’. The account did not show any income from April 2008
onwards. The journal vouchers in respect of those entries did not
carry any such narration such as daily collection report number,Page 11
11
name of theatre etc. The receivables were adjusted against cost
of content, transferred to advance/security deposit account or
remained unrealized. As on March 31, 2008, the total receivables
of the company from Tamil Nadu region were Rs. 38.58 crore. Out
of that, Rs.2.19 crore was outstanding against 162 theatres and
the balance Rs. 36.39 crore outstanding in one account only which
did not contain the theatre wise break up. Further it was also
noticed that the entire amount of Rs.75 crore from own theatres in
Andhra Pradesh was accounted by single journal voucher which
did not have any other supporting documents in support of those
consolidated entries or journal vouchers, despite assurance to
provide the same. Those facts lead the SEBI to conclude that
those revenues disclosed inflated figures in its annual report for
2007-08 and thereby misled the investors.
18. The company disclosed no stock exchanges on January 30,
2009 that it had entered into agreement with 802 theatres as on
June 30, 2008. Out of 802 agreements, the company could show
only 257 original agreements to SEBI officials which lead SEBI to
conclude that the balance 545 agreements never existed. ThePage 12
12
fictitious revenues had converted to ‘theatre collection
receivables’ which in turn had been converted to ‘security
deposits’. It was noticed security deposits were not genuine but
were created to hide receivables in the balance sheet since
outstanding receivables for a period of six months had to be
compulsorily disclosed in its annual report. The SEBI therefore
concluded the company had made a false corporate
announcement to the effect that it had entered into agreement
with 802 theatres thereby misled the investing public.
19. The appellant’s main defence was that, though he was the
Whole Time Director as well as Promoter of the company, yet was
not involved in the day-to-day management of the company and
that he was looking after the Human Resource Department of the
company. Further, it was also stated that the financial statements,
accounts etc. were prepared and duly audited by the statutory
auditors, verified by the audit committees and reviewed by the
managing Director and that, in the company, the role of each
Director was confined to his field of operation and there was no
justification for holding a Director to be in over-all charge andPage 13
13
control of the affairs of the company. Further, it was also pointed
out that the auditors were well versed in accounts and finance,
therefore, there was no reason for the Directors who have no
expertise or knowledge of the intricacies of the accounts and
finance to suspect them or sit in judgment over their decisions. In
such circumstances, it was contended, that there is no justification
in debarring them from buying, selling or dealing in securities or
accessing securities market or to impose penalty since there is no
mens rea on the part of the appellant in intentionally stating any
untrue statement or preparing false records and that he has no
role as such in preparing the accounts and finance of the
company.
20. The facts and figures as such are not in dispute and the
defence taken is that the statements were duly audited by
statutory auditors and, consequently, it could not be held that the
appellant had violated the provision of SEBI Act or the provisions
of Regulations 2003.Page 14
14
21. Let us now examine the scope of the various provisions
stated to have been violated by the appellant and its
consequences. Section 12A falls in Chapter VA of the SEBI Act
which reads as follows:
“PROHIBITION OF MANIPULATIVE AND DECEPTIVE
DEVICES, INSIDER TRADING AND SUBSTANTIAL
ACQUISITON OF SECURITIES OR CONTROL
Prohibition of manipulative and deceptive devices,
insider trading and substantial acquisition of securities
or control.
12A. No person shall directly or indirectly –
(a) use or employ, in connection with the issue,
purchase or sale of any securities
listed or proposed to be listed on a recognised stock
exchange, any manipulative or
deceptive device or contrivance in contravention of the
provisions of this Act or the rules or the regulations
made thereunder;
(b) employ any device, scheme or artifice to defraud in
connection with issue or dealing in securities which are
listed or proposed to be listed on a recognised stock
exchange; Page 15
15
(c) engage in any act, practice, course of business
which operates or would operate as fraud or deceit
upon any person, in connection with the issue, dealing
in securities which are listed or proposed to be listed on
a recognised stock exchange, in contravention of the
provisions of this Act or the rules or the regulations
made thereunder;
(d) engage in insider trading;
(e) deal in securities while in possession of material or
non-public information or communicate such material
or non-public information to any other person, in a
manner which is in contravention of the provisions of
this Act or the rules or the regulations made
thereunder;
(f) acquire control of any company or securities more
than the percentage of equity share capital of a
company whose securities are listed or proposed to be
listed on a recognised stock exchange in contravention
of the regulations made under this Act.”
22. Section 12A has to be read along with various provisions of
Regulations 2003. Chapter II of Regulations 2003 deals with
prohibition of fraudulent and unfair trade practices relating to the
securities market and Chapter III deals with investigation. SEBIPage 16
16
has also noticed the violation of Regulations 3 and 4 of 2003
Regulations, which read as follows:
“PROHIBITION OF FRAUDULENT AND UNFAIR TRADE
PRACTICES RELATING TO THE SECURITEIS MARKET:
3. Prohibition of certain dealings in securities
No person shall directly or indirectly.
(a) buy, sell or otherwise deal in securities in a
fraudulent manner;
(b) use or employ, in connection with issue,
purchase or sale of any security listed or proposed
to be listed in a recognized stock exchange, any
manipulative or deceptive devise or contrivance
in contravention of the provisions of the Act or the
rules or the regulations made there under;
(c) employ any device, scheme or artifice to
defraud in connection with dealing in or issue of
securities which are listed or proposed to be listed
on a recognized stock exchange;
(d) engage in any act, practice, course of business
which operates or would operate as fraud or
deceit upon any person in connection with any
dealing in or issue of securities which are listed or
proposed to be listed on a recognized stock
exchange in contravention of the provisions of the
Act or the rules and the regulations made there
under:Page 17
17
4. Prohibition of manipulative, fraudulent and unfair
trade practices
(1) Without prejudice to the provisions of
regulation 3, no person shall indulge in a
fraudulent or an unfair trade practice in
securities.
(2) Dealing in securities shall be deemed to be a
fraudulent or an unfair trade practice if it involves
fraud and may include all or any of the following
namely:-
(a)indulging in an act which creates false or
misleading appearance of trading in the
securities market;
(b) …..
(d)…..
(e) any act or omission amounting to
manipulation of the price of a security;
(f) publishing or causing to publish or reporting
or causing to report by a person dealing in
securities any information which is not true
or which he does not believe to be true prior
to or in the course of dealing in securities.Page 18
18
(g) …….
(h) …….
(i) ……..
(j) ……...
(k) an advertisement that is misleading or
that contains information in a distorted
manner and which may influence the
decision of the investors;
(l) …….
(p) …….
(q) …….
(r) planting false or misleading news which
may induce sale or purchase of securities.”
23. The object and purpose of the above-mentioned statutory
provisions are to curb “market manipulation”. Palmer’s
Company Law, 25th Edition (2010), Volume 2 at page 11097
states: “Market manipulation is normally regarded as thePage 19
19
“unwarranted” interference in the operation of ordinary market
forces of supply and demand and thus undermines the “integrity”
and efficiency of the market.” See also Gower & Davies –
Principles of Modern Company Law, 9th Edition (2012) at page
1160.
24. Reference may also be made to the penalty provisions which
is contained in Chapter VI A of the SEBI Act of which we are mainly
concerned with Section 15HA which deals with penalty for
fraudulent and unfair trade practices and Section 15J which deals
with the factors to be taken into account by the adjudicating
officer while adjudging the quantum of penalty. Those provisions
are given below for easy reference:
“15HA. Penalty for fraudulent and unfair trade
practices.- If any person indulges in fraudulent and
unfair trade practices relating to securities, he shall be
liable to a penalty of twenty-five crore rupees or three
times the amount of profits made out of such practices,
whichever is higher.”
“15J. Factors to be taken into account by the
adjudicating officer.-While adjudging quantum of penaltyPage 20
20
under section 15 I, the adjudicating officer shall have
due regard to the following factors, namely:
(a) the amount of disproportionate gain or unfair
advantage, wherever quantifiable, made as a result of
the default;
(b) the amount of loss caused to an investor or group of
investors as a result of the default;
(c) the repetitive nature of the default.”
25. In Sahara India Real Estate Corporation Limited and
Others v. Securities and Exchange Board of India and
Another (2013) 1 SCC 1, this Court has noticed that though the
Indian Companies Act, 1956 was modeled on English Companies
Act, 1948, no efforts have been made to incorporate universally
accepted principles and concepts into our company law. Of late,
however, some efforts have been made by carrying out few
amendments to the Companies Act, 1956, so also in the SEBI Act,
1992 and Rules and Regulations framed therein to keep pace with
the English Companies Act and related legislations. When we
interpret the provisions of the SEBI Act and the Regulations
relating to a company registered under the Companies Act, thePage 21
21
provisions of the Companies Act have also to be borne in mind.
For instance, in SEBI Act, there is no provision for keeping proper
books of accounts by a registered company.
26. Section 209 of the Companies Act says that every company
shall keep at the registered office proper books of accounts.
Books of accounts should be so kept as to give true and fair view
of the state of the company’s affairs and explain transactions. Of
course, the auditors of the company must examine whether the
company has maintained proper cost accounting records as
required by the rules. Companies whose securities are traded on
a public market, it is trite law that the disclosure of information
about the company is crucial for the correct and accurate pricing
of the company’s securities and for the official operation of the
market. Section 210 of the Companies Act states that at every
annual general meeting of the company, the Board of Directors is
required to lay before it a balance-sheet as at the end of and a
profit and loss account for the financial year. Page 22
22
27. Clause 41 of Listing Agreement between the SEBI and the
concerned companies requires the companies to furnish to stock
exchange and to publish unaudited financial result on a quarterly
basis in the prescribed format. Section 55A of the Companies Act
deals with the powers of SEBI which says some of the provisions
referred to therein, so far as they relate to issue and transfer of
securities and non-payment of dividends in the case of listed
companies be administered by SEBI. Further, it is also indicated
that how the books of accounts have to be kept by the company,
so also with regard to audit of account etc. finds a place in the
Companies Act, so also the qualification and disqualification of the
Managing Directors.
28. We notice in this case that the Directors of the company had
clearly violated provisions of Section 12A of SEBI Act read with
Regulations 3 and 4 of 2003 Regulations. Companies whose
securities are traded on a public market, disclosure of information
about the company is crucial for the accurate pricing of the
companies’ securities and also for the efficient operation of the
market.Page 23
23
Corporate Governance and Directors
29. SEBI Act read with Regulations of the Companies Act would
indicate that the obligations of the Directors in listed companies
are particularly onerous especially when the Board of Directors
makes itself accountable for the performance of the company to
share holders and also for the production of its accounts and
financial statements especially when the company is a listed
company.
30. The Directors of the company or the person in charge directly
or indirectly use or employ, in connection with the issue, purchase
or sale of any securities listed in stock exchange, any manipulative
or deceptive device or contrivance in contravention of SEBI Act or
the Regulations made thereunder have necessarily to be dealt with
in accordance with the provisions of the Act and the Regulations
which is absolutely necessary for the investor’s protection and to
avoid market abuse. Page 24
24
31. The facts clearly indicated that the company had made false
corporate announcement stating that it had entered into
agreements with 802 theatres and that false corporate
announcement gave false figures relating to advance, security
deposit and income pertaining to the theatres which were not
inexistence. The deposits shown were turned out to be not
genuine but mere book entries to hide receivables in the balance
sheet.
32. Responsibility is cast on the Directors to prepare the annual
records and reports and those accounts should reflect ‘a true and
fair view’. The over-riding obligation of the Directors is to approve
the accounts only if they are satisfied that they give true and fair
view of the profits or loss for the relevant period and the correct
financial position of the company.
33. Company though a legal entity cannot act by itself, it can act
only through its Directors. They are expected to exercise their
power on behalf of the company with utmost care, skill and
diligence. This Court while describing what is the duty of aPage 25
25
Director of a company held in Official Liquidator v. P.A.
Tendolkar (1973) 1 SCC 602 that a Director may be shown to be
placed and to have been so closely and so long associated
personally with the management of the company that he will be
deemed to be not merely cognizant of but liable for fraud in the
conduct of business of the company even though no specific act of
dishonesty is provide against him personally. He cannot shut his
eyes to what must be obvious to everyone who examines the
affairs of the company even superficially.
34. The facts in this case clearly reveal that the Directors of the
company in question had failed in their duty to exercise due care
and diligence and allowed the company to fabricate the figures
and making false disclosures. Facts indicate that they have
overlooked the numerous red flags in the revenues, profits,
receivables, deposits etc. which should not have escaped the
attention of a prudent person. For instance, profit as on quarter
ending June 2007 was three times more than the preceding
quarter, it doubled in the quarter ending December 2007 over the
preceding quarter. Further, there was disproportionate increase inPage 26
26
the security deposits i.e. Rs. 36.05 crore in September 2007 to Rs.
270.38 crore in December 2007 as compared to increase in the
number of theatres during the same period. They have
participated in the board meetings and were privy to those
commissions and omissions.
Securities Market – Market abuse
35. Prevention of market abuse and preservation of market
integrity is the hallmark of Securities Law. Section 12A read with
Regulations 3 and 4 of the Regulations 2003 essentially intended
to preserve ‘market integrity’ and to prevent ‘Market abuse’. The
object of the SEBI Act is to protect the interest of investors in
securities and to promote the development and to regulate the
securities market, so as to promote orderly, healthy growth of
securities market and to promote investors protection. Securities
market is based on free and open access to information, the
integrity of the market is predicated on the quality and the manner
on which it is made available to market. ‘Market abuse’ impairs
economic growth and erodes investor’s confidence. Market abuse
refers to the use of manipulative and deceptive devices, giving out
incorrect or misleading information, so as to encourage investorsPage 27
27
to jump into conclusions, on wrong premises, which is known to be
wrong to the abusers. The statutory provisions mentioned earlier
deal with the situations where a person, who deals in securities,
takes advantage of the impact of an action, may be manipulative,
on the anticipated impact on the market resulting in the “creation
of artificiality’. The same can be achieved by inflating the
company’s revenue, profits, security deposits and receivables,
resulting in price rice of scrip of the company. Investors are then
lured to make their “investment decisions” on those manipulated
inflated results, using the above devices which will amount to
market abuse.
36. We have, on facts, clearly found that the Directors of the
company have “created artificiality” by projecting inflated figures
of the company’s revenue, profits, security deposits and
receivables and that the manipulation in the financial results of the
company resulted in price rise of the scrip of the company and the
promoters of the company then pledged their shares to raise
substantial funds from financial institutions. The conduct of the
appellant and others was, therefore, fraudulent and the practicesPage 28
28
they had adopted, relating to securities, were unfair, which
attracted the penalty provisions contained in Section 15 HA read
with 15J of the SEBI Act.
Disclosure and Transparency:
37. Gower and Davies on Principles of Modern Company Law, 9th
Edition (2012) at page 751, reiterated their views on the scope
and rationale of annual reporting required under the Companies
Acts, as follows:
“On the basis that “forewarned is forearmed” the
fundamental principle underlying the Companies Act
has been that of disclosure. If the public and the
members were enabled to find out all relevant
information about the company, this, thought the
founding fathers of our company law, would be a sure
shield. The shield may not have proved quite so
strong as they had expected and in more recent times,
it has been supported by offensive weapons.”Page 29
29
38. The Companies Act casts an obligation on the company
registered under the Companies Act to keep the Books of accounts
to achieve transparency. Previously, it was thought that the
production of the annual accounts and it preparation is that of the
Accounting Professional engaged by the company where two
groups who were vitally interested were the shareholders and the
creditors. But the scenario has drastically changed, especially
with regard to the company whose securities are traded in public
market. Disclosure of information about the company is,
therefore, crucial for the accurate pricing of the company’s
securities and for market integrity. Records maintained by the
company should show and explain the company’s transactions, it
should disclose with reasonable accuracy the financial position, at
any time, and to enable the Directors to ensure that the balancesheet and profit and loss accounts will comply with the statutory
expectations that accounts give a true and fair view. Companies
(Amendment) Act, 2000 has added clause (a)(iii) under which SEBI
has also been given the power of inspection of listed companies or
companies intending to get listed through such officers, as may be
authorized by it.Page 30
30
39. So far as the company in question is concerned, books of
accounts were maintained in the Tally accounting software and for
the financial year 2007-08 separate books of accounts were
maintained for each region/unit. Books of accounts were
reportedly maintained by the regions in their respective regional
office and at the end of the year for the preparation of annual
financial statement and for auditing purpose, those books of
accounts were brought to the companies registered office. The
auditors had informed that those books were audited at the
registered office of the company. As already indicated, after the
declaration of financial results on January 31, 2008, containing
inflated profits, revenues for the quarter ended on 31.12.2007, the
Managing Directors of the company, his wife and the appellant had
together pledged 72,75,455 shares of the company with various
banks and financial institutions and raised 97.30 crores as loans.
We have noticed that the Directors and the Chief Financial Officers
of the company had caused to publish forged and misleading
results of the company, various quarterly financial results and the
annual results for the year 2007-08, were reported to the stockexchanges containing inflated figures of the company’s revenue,Page 31
31
profits, security deposits and receivables and those financial
statements which were relied upon by investors in making
investment decisions, which did not reflect a true and fair view of
the state of affairs of the company.
40. The appellant has taken the stand, as already stated, that
even though he was a whole time Director he was not conversant
with the accounts and finance and was only dealing with the
human resource management of the company, hence, he had no
fraudulent intention to deceive the investors. We find it difficult to
accept the contention. The appellant, admittedly, was a whole
time Director of the company, as regards the preparation of the
annual accounts, the balance-sheet and financial statement and
laying of the same before the company at the Annual General
Meeting and filing the same before the Registrar of the Companies
as well as before SEBI, the Directors of the company have greater
responsibility, especially when the company is a registered
company. Directors of the companies, especially of the listed
companies, have access to inside knowledge, such as, financial
position of the company, dividend rates, annual accounts etc.
Directors are expected to exercise the powers for the purposes forPage 32
32
which they are conferred. Sometimes they may misuse their
powers for their personal gain and makes false representations to
the public for unlawful gain.
41. We have indicated, so far as this case is concerned, the
subsequent conduct of pledging their shares at artificially inflated
prices, based on inflated financial results and raising loan on them
would indicate that they had deliberately and with full knowledge
committed the illegality and hence the principle of “acta exteriora
indicant interiora secreta” (meaning external actions reveals inner
secrets) applies with all force, a principle which this Court applied
in Sahara’s case.
42. Above being the factual and legal position, we are of the view
that the SEBI has rightly restrained the appellant for a period of
two years from the date of that order from buying, selling or
dealing with any securities, in any manner, or accessing the
securities market, directly or indirectly and from being Director of
any listed company and that the adjudicating officer has rightly
imposed a penalty of Rs.50 lakhs under Section 15HA of SEBI Act.Page 33
33
The appeals are, therefore, dismissed. However, there will be no
order as to costs.
A word of caution:
43. SEBI, the market regulator, has to deal sternly with
companies and their Directors indulging in manipulative and
deceptive devices, insider trading etc. or else they will be failing in
their duty to promote orderly and healthy growth of the Securities
market. Economic offence, people of this country should know, is
a serious crime which, if not properly dealt with, as it should be,
will affect not only country’s economic growth, but also slow the
inflow of foreign investment by genuine investors and also casts a
slur on India’s securities market. Message should go that our
country will not tolerate “market abuse” and that we are governed
by the “Rule of Law”. Fraud, deceit, artificiality, SEBI should
ensure, have no place in the securities market of this country and
‘market security’ is our motto. People with power and money
and in management of the companies, unfortunately often
command more respect in our society than the subscribers and
investors in their companies. Companies are thriving with
investors’ contributions but they are a divided lot. SEBI has,Page 34
34
therefore, a duty to protect investors, individual and collective,
against opportunistic behavior of Directors and Insiders of the
listed companies so as to safeguard market’s integrity.
44. Print and Electronic Media have also a solemn duty not to
mislead the public, who are present and prospective investors, in
their forecast on the securities market. Of course, genuine and
honest opinion on market position of a company has to be
welcomed. But a media projection on company’s position in the
security market with a view to derive a benefit from a position in
the securities would amount to market abuse, creating artificiality.
SEBI has the duty and obligation to protect ordinary genuine
investors and the SEBI is empowered to do so under the SEBI Act
so as to make security market a secure and safe place to carry on
the business in securities. 
……………………………..J.
(K.S. Radhakrishnan)
……………………………..J.
(Dipak Misra)
New Delhi,Page 35
35
April 26, 2013.

It is a settled legal proposition that, once the Court set asides an order of punishment on the ground, that the enquiry was not properly conducted, the Court should not severely preclude the employer from holding the inquiry in accordance with law. It must remit the concerned case to the disciplinary authority, to conduct the enquiry from the point that it stood vitiated, and to conclude the same in accordance with law. However, resorting to such a course depends upon the gravity of delinquency involved. Thus, the court must examine the magnitude of misconduct alleged against the delinquent employee. It is in view of this, that courts/tribunals, are not competent to quash the charge-sheet and related disciplinary proceedings, before the same are concluded, on the aforementioned grounds. - In the facts and circumstances of the case, as the Tribunal as well as the learned Single Judge have examined all the charges on merit and also found that the enquiry has not been conducted as per the Rules 1981, it was not the cause of the Management Committee which had been prejudiced, rather it had been the other way around. In such a fact-situation, it was not necessary for the Division Bench to permit the respondents to hold a fresh enquiry on the said charges and that too, after more than a decade of the retirement of the appellant. 30. In view of the above, appeal succeeds and is allowed. The impugned judgment and order of the High Court is modified to the extent referred to hereinabove. The appellant shall be entitled to recover all his salary and retirement dues, if not paid already. No costs.

Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3935 of 2013
Shri Anant R. Kulkarni … Appellant
Versus
Y.P. Education Society & Ors. … Respondents
J U D G M E N T
Dr. B.S. Chauhan, J.
1. This appeal has been preferred against the impugned
judgment and order dated 4.10.2011 of the High Court of
Judicature of Bombay in Letters Patent Appeal No.171 of 2011
arising out of Writ Petition No. 1849 of 2003, by way of which
the Division Bench of the High Court upheld the judgment of
the learned Single Judge, as well as that of the School Tribunal
(hereinafter referred to as the ‘Tribunal’), quashing the enquiry
against the appellant, while giving liberty to respondent Nos.1
Page 2
and 2 to hold a fresh enquiry on the charges levelled against the
appellant.
2. Facts and circumstances giving rise to this appeal are
that:
A. The appellant was appointed as Assistant Teacher in the
school run by the respondents on 7.6.1965, and was promoted
as the Head Master of the said school on 21.6.1979. 
B. A new Management Committee came into power in the
year 2000, and began to raise allegations of misconduct against
the appellant, as the appellant had certain apprehensions with
respect to the eligibility of certain office bearers of the
Management Committee. 
C. The respondents-management issued show-cause notice
dated 21.2.2001 to the appellant, under Rule 28 of the
Maharashtra Employees of Private School Rules, 1981
(hereinafter referred to as the ‘Rules 1981’), seeking an
explanation as to why disciplinary proceedings should not be
initiated against him, for his alleged misconduct. The appellant
submitted his reply on 3.3.2001, and also challenged the
2Page 3
eligibility of some of the elected members of the Management
Committee.
D. The Management Committee, vide resolution dated
4.3.2001 took a decision to hold disciplinary proceedings
against the appellant as per the provisions of Rule 36 of the
Rules 1981, and in pursuance thereof, a chargesheet dated
17.5.2001 containing 12 charges of misconduct, was served
upon the appellant. The appellant vide letter dated 1.7.2001,
submitted his clarifications with respect to the said charges that
had been levelled against him.
E. An Enquiry Committee consisting of two members
instead of three, as per the Rules 1981, conducted the enquiry
and submitted its enquiry report on 20.5.2002, making a
recommendation that the appellant be dismissed from service.
The said enquiry report was accepted by the Management
Committee, and the services of the appellant were terminated
vide order dated 24.5.2002 w.e.f. 31.5.2002.
F. Aggrieved, the appellant challenged the said termination
order by filing Appeal No.65 of 2002, before the Tribunal. The
3Page 4
respondents contested the appeal. However, upon reaching the
age of superannuation, the appellant stood retired on 30.9.2002.
G. The Tribunal vide judgment and order dated 19.10.2002
held, that none of the charges levelled against the appellant
stood proved, and that the enquiry had not been conducted
according to the Rules 1981. Thus, the termination order
against the appellant was quashed.
H. Aggrieved, the respondents-management filed Writ
Petition No.1849 of 2003 before the High Court, and the
learned Single Judge decided the said writ petition vide
judgment and order dated 20.4.2011, upholding the judgment of
the Tribunal, and found the enquiry to be entirely defective and
thus, illegal.
I. The respondents-management filed Letters Patent Appeal
No.171 of 2011, and the Division Bench too, upheld the
judgment of the learned Single Judge, as well as that of the
Tribunal, but simultaneously also held, that the respondents
were at liberty to proceed with the enquiry afresh, as regards the
said charges.
Hence, this appeal.
4Page 5
3. Shri C.U. Singh, learned senior counsel appearing for the
appellant, has submitted that the charges have been found to be
vague, and that the enquiry was conducted in violation of the
statutory Rules 1981, and further that none of the charges
reflected embezzlement or mis-appropriation, and cast no doubt
upon the integrity of the appellant whatsoever. As the appellant
stood retired on 30.9.2002, the question of holding a fresh
enquiry in 2011 could not arise. The court does not lack
competence to decide the case on merits even if it comes to the
conclusion that there has been violation of statutory rules,
principles of natural justice or the order also stood vitiated on
some other technical ground. There is no statutory rule
permitting the Management Committee to hold an enquiry
against a person who has retired a decade ago, particularly
when the school is a government-aided school, and the
appellant-employee receives pension from the State. Thus, the
appeal deserves to be allowed.
4. Per contra, Shri Braj Kishore Mishra, learned counsel
appearing for the respondents, has submitted that a person
cannot be allowed to go scot-free simply because he has retired.
5Page 6
An enquiry can be conducted against him, and he can be
punished by withholding either full or part of his pension. No
fault can be found with the impugned judgment and thus, the
appeal is liable to be dismissed.
5. We have considered the rival submissions made by the
learned counsel for the parties and perused the record.
6. The appeal raises the following substantial questions of
law:-
(i) In case the punishment is set aside by the Court/Tribunal
as the enquiry stood vitiated for technical reasons, whether the
employer is entitled to hold the enquiry afresh from the point it
stood vitiated;
(ii) Whether the enquiry can be quashed on the ground of
delay;
(iii) Whether the enquiry can be permitted to be held on
vague and unspecified charges; and
(iv) Under what circumstances enquiry can be conducted
against the delinquent employee who has retired on reaching
the age of superannuation.
6Page 7
In case the punishment is set aside:
7. It is a settled legal proposition that, once the Court set
asides an order of punishment on the ground, that the enquiry
was not properly conducted, the Court should not severely
preclude the employer from holding the inquiry in accordance
with law. It must remit the concerned case to the disciplinary
authority, to conduct the enquiry from the point that it stood
vitiated, and to conclude the same in accordance with law.
However, resorting to such a course depends upon the gravity
of delinquency involved. Thus, the court must examine the
magnitude of misconduct alleged against the delinquent
employee. It is in view of this, that courts/tribunals, are not
competent to quash the charge-sheet and related disciplinary
proceedings, before the same are concluded, on the
aforementioned grounds. 
 (Vide: Managing Director, ECIL, Hyderabad etc.etc. v. B.
Karunakar etc.etc. AIR 1994 SC 1074; Hiran Mayee
Bhattacharyya v. Secretary, S.M. School for Girls & Ors.,
(2002) 10 SCC 293; U.P. State Spinning C. Ltd. v. R.S.
7Page 8
Pandey & Anr., (2005) 8 SCC 264; and Union of India v.
Y.S. Sandhu, Ex-Inspector AIR 2009 SC 161).
Enquiry at belated stage:
8. The court/tribunal should not generally set aside the
departmental enquiry, and quash the charges on the ground of
delay in initiation of disciplinary proceedings, as such a power
is de hors the limitation of judicial review. In the event that the
court/tribunal exercises such power, it exceeds its power of
judicial review at the very threshold. Therefore, a charge-sheet
or show cause notice, issued in the course of disciplinary
proceedings, cannot ordinarily be quashed by court. The same
principle is applicable in relation to there being a delay in
conclusion of disciplinary proceedings. The facts and
circumstances of the case in question, must be carefully
examined, taking into consideration the gravity/magnitude of
charges involved therein. The Court has to consider the
seriousness and magnitude of the charges and while doing so
the Court must weigh all the facts, both for and against the
delinquent officers and come to the conclusion, which is just
8Page 9
and proper considering the circumstances involved. The
essence of the matter is that the court must take into
consideration all relevant facts, and balance and weigh the
same, so as to determine, if it is infact in the interest of clean
and honest administration, that the said proceedings are allowed
to be terminated, only on the ground of a delay in their
conclusion. (Vide: State of U.P. v. Brahm Datt Sharma &
Anr., AIR 1987 SC 943; State of Madhya Pradesh v. Bani
Singh & Anr., AIR 1990 SC 1308; State of Punjab & Ors. v.
Chaman Lal Goyal, (1995) 2 SCC 570; State of Andhra
Pradesh v. N. Radhakishan, AIR 1998 SC 1833; M.V. Bijlani
v. Union of India & Ors., AIR 2006 SC 3475; Union of India
& Anr. v. Kunisetty Satyanarayana, AIR 2007 SC 906; The
Secretary, Ministry of Defence & Ors. v. Prabash Chandra
Mirdha, AIR 2012 SC 2250; and Chairman, LIC of India &
Ors. v. A. Masilamani, JT (2012) 11 SC 533).
Enquiry – on vague charges :
9. In Surath Chandra Chakravarty v. The State of West
Bengal, AIR 1971 SC 752 this Court held, that it is not
permissible to hold an enquiry on vague charges, as the same
9Page 10
do not give a clear picture to the delinquent to make out an
effective defence as he will be unaware of the exact nature of
the allegations against him, and what kind of defence he should
put up for rebuttal thereof. The Court observed as under:–
“The grounds on which it is proposed to take
action have to be reduced to the form of a definite
charge or charges which have to be communicated
to the person charged together with a statement of
the allegations on which each charge is based and
any other circumstance which it is proposed to be
taken into consideration in passing orders has to
be stated. This rule embodies a principle which is
one of the specific contents of a reasonable or
adequate opportunity for defending oneself. If a
person is not told clearly and definitely what the
allegations are on which the charges preferred
against him are founded, he cannot possibly, by
projecting his own imagination, discover all the
facts and circumstances that may be in the
contemplation of the authorities to be established
against him.” (Emphasis added)
10. Where the chargesheet is accompanied by the statement
of facts and the allegations are not specific in the chargesheet,
but are crystal clear from the statement of facts, in such a
situation, as both constitute the same document, it cannot be
held that as the charges were not specific, definite and clear, the
enquiry stood vitiated. Thus, nowhere should a delinquent be
served a chargesheet, without providing to him, a clear, specific
10 Page 11
and definite description of the charge against him. When
statement of allegations are not served with the chargesheet, the
enquiry stands vitiated, as having been conducted in violation
of the principles of natural justice. Evidence adduced should
not be perfunctory, even if the delinquent does not take the
defence of, or make a protest with against that the charges are
vague, that does not save the enquiry from being vitiated, for
the reason that there must be fair-play in action, particularly in
respect of an order involving adverse or penal consequences.
What is required to be examined is whether the delinquent
knew the nature of accusation. The charges should be specific,
definite and giving details of the incident which formed the
basis of charges and no enquiry can be sustained
on vague charges.
(Vide: State of Andhra Pradesh & Ors. v. S. Sree Rama
Rao, AIR 1963 SC 1723; Sawai Singh v. State of Rajasthan,
AIR 1986 SC 995; U.P.S.R.T.C. & Ors. v. Ram Chandra
Yadav, AIR 2000 SC 3596; Union of India & Ors. v. Gyan
Chand Chattar, (2009) 12 SCC 78; and Anil Gilurker v.
11Page 12
Bilaspur Raipur Kshetria Gramin Bank & Anr., (2011) 14
SCC 379).
11. The purpose of holding an enquiry against any person is
not only with a view to establish the charges levelled against
him or to impose a penalty, but is also conducted with the
object of such an enquiry recording the truth of the matter, and
in that sense, the outcome of an enquiry may either result in
establishing or vindicating his stand, and hence result in his
exoneration. Therefore, fair action on the part of the authority
concerned is a paramount necessity.
Enquiry against a retired employee:
12. This Court in NOIDA Entrepreneurs Association v.
NOIDA & Ors., AIR 2011 SC 2112, examined the issue, and
held that the competence of an authority to hold an enquiry
against an employee who has retired, depends upon the
statutory rules which govern the terms and conditions of his
service, and while deciding the said case, reliance was placed
on various earlier judgments of this Court including B.J. Shelat
v. State of Gujarat & Ors., AIR 1978 SC 1109; Ramesh
12Page 13
Chandra Sharma v. Punjab National Bank & Anr., (2007) 9
SCC 15; and UCO Bank & Anr. v. Rajinder Lal Capoor,
AIR 2008 SC 1831.
13. In State of Assam & Ors. v. Padma Ram Borah, AIR
1965 SC 473, a Constitution Bench of this Court held that it is
not possible for the employer to continue with the enquiry after
the delinquent employee stands retired. The Court observed:-
“According to the earlier order of the State
Government itself, the service of the respondent
had come to an end on March 31, 1961. The State
Government could not by unilateral action create
a fresh contract of service to take effect from
April 1, 1961. If the State Government wished to
continue the service of the respondent for a further
period, the State Government should have issued a
notification before March 31, 1961.”
 (Emphasis added)
While deciding the said issue, the Court placed reliance on the
judgment in R.T. Rangachari v. Secretary of State, AIR 1937
PC 27.
14. In State of Punjab v. Khemi Ram, AIR 1970 SC 214,
this court observed:
“There can be no doubt that if disciplinary action
is sought to be taken against a government servant
13Page 14
it must be done before he retires as provided by
the said rule. If a disciplinary enquiry cannot be
concluded before the date of such retirement, the
course open to the Government is to pass an order
of suspension and refuse to permit the concerned
public servant to retire and retain him in service
till such enquiry is completed and a final order is
passed therein.”
15. In Kirti Bhusan Singh v. State of Bihar & Ors., AIR
1986 SC 2116, this Court held as under:
“…. We are of the view that in the absence of such
a provision which entitled the State Government to
revoke an order of retirement……. which had
become effective and final, the order passed by the
State Government revoking the order of retirement
should be held as having been passed without the
authority of law and is liable to be set aside. It,
therefore, follows that the order of dismissal
passed thereafter was also a nullity.”
16. In Bhagirathi Jena v. Board of Directors, O.S.F.C. &
Ors., AIR 1999 SC 1841, this Court observed:
“… There is also no provision for conducting a
disciplinary enquiry after retirement of the
appellant and nor any provision stating that in
case misconduct is established, a deduction could
be made from retiral benefits. Once the appellant
had retired from service on 30-6-1995, there was
no authority vested in the Corporation for
continuing the departmental enquiry even for the
purpose of imposing any reduction in the retiral
14Page 15
benefits payable to the appellant. In the absence of
such an authority, it must be held that the enquiry
had lapsed and the appellant was entitled to full
retiral benefits on retirement.”
17. In U.P. State Sugar Corporation Ltd. & Ors. v. Kamal
Swaroop Tondon, (2008) 2 SCC 41, this Court dealt with a
case wherein statutory corporation had initiated proceedings for
recovery of the financial loss from an employee after his
retirement from service. This Court approved such a course
observing that in the case of retirement, master and servant
relationship continue for grant of retrial benefits. The
proceedings for recovery of financial loss from an employee is
permissible even after his retirement and the same can also be
recovered from the retrial benefits of the said employee.
18. Thus, it is evident from the above, that the relevant rules
governing the service conditions of an employee are the
determining factors as to whether and in what manner the
domestic enquiry can be held against an employee who stood
retired after reaching the age of superannuation. Generally, if
the enquiry has been initiated while the delinquent employee
was in service, it would continue even after his retirement, but
15Page 16
nature of punishment would change. The punishment of
dismissal/removal from service would not be imposed.
19. The case requires to be examined in the light of the
aforesaid legal propositions.
The following charges were framed against the appellant:
(a) Charge No.1:-The first respondent did not submit
dead stock verification report in spite of several
letters.
(b) Charge No.2:-The first respondent did not submit
the documents such as cash books, ledgers and
voucher files in spite of demands made by the
management.
(c) Charge No.3:- relates to not calling School
Committee meeting and causing loss of Rs.48851/-
as no timely approval was obtained for that
expenditure from the school committee.
(d) Charge No.4:- The first respondent did not send
appointment proposal dated 4.9.2000 of Mr.
Ghadge for approval to the Education Officer
(Secondary) Z.P. Solapur and salary of the said
teacher could not be paid .
(e) Charge No.5:- The Respondent prepared budget
2001-2002 and forwarded to the management
directly without obtaining sanction of the School
Committee.
(f) Charge No.6:- The first respondent obstructed
working of the management and the School
Committee on the ground that he had challenged
16Page 17
the election of the office bearers before the Joint
Charity Commissioner, Latur even though there
was no stay/injunction.
(g) Charge No.7:- The first respondent did not attend
any of the 11 meetings of the Managing
Committee in the capacity as a Head Master.
(h) Charge No.8:- The first respondent did not submit
explanation regarding his teaching workload
though asked for by the management as per letter
No. S/167 dated 11.12.2000.
(i) Charge No.9:- The first respondent did not give his
explanation about donation of Rs.4900/ - given by
the Lioness Club of Barsi demanded by the
management as per letter No. S/174 dated
27.12.2000.
(j) Charge No.10:- The respondent did not reply letter
no. S/131 dated 10.10.2000 in respect of Internet
connection.
(k) Charge No.ll:- The first respondent did not explain
excessive telephone bills as stated by him in his
letter no.L/83 dated 26.10.2000.
(1) Charge No.12:- The first respondent did not
submit report as to his activities during two days
on duty leave in the office of Education Officer
(Secondary) Solapur and the Deputy Director of
Education, Pune Region, Pune.
The charges were found proved and punishment was
imposed.
17Page 18
20. The Tribunal examined all the issues involved, and
recorded its specific findings as under:
“The charge No.11 is in respect of excessive telephone
bills. The telephone bill for the academic year 1999-
2000 is Rs.3931/-. According to Management this is
excessive bill. The charge is vague. The explanation
given by appellant that specifically no call was made for
private purpose. The objection regarding call at Chennai
is properly explained that this call was made to the
Institute of Brilliant Tutorials as it was required for the
students of Xth standard for guiding them for career for
Engineering. The Institute by names Brilliant Tutorials is
famous well known academy and some phone calls made
to it are well within the powers of Head Master. The
total bill of Rs.3931/- for a High School during a year
cannot be said to be excessive particularly when many
of the calls are made to Pune and Thane. These calls have
properly been explained that Writ petition was filed
against the school and these calls were made to the
Advocate concerned in connection with the Writ Petition.
Calling such an explanation on every call by the
Management to the Head Master is nothing but over
victimizing or interference of Management in day-to-day
business of the school.
 xx xx xx xx
There is no evidence brought before the Inquiry
Committee to hold guilty for these charges. But the
members seem to have anxious to hold the guilty of the
charges to the appellant. They have based their
conclusion on some thread of evidence ignoring all other
circumstances and evidence in favour of appellant”
The Tribunal further stated as under:
18Page 19
(i) Charge No.1, is in respect of not submitting the
documents papers asked by the Management particularly
pertaining to dead stock.
(ii) Charge No.2 is regarding the Registers and journals
regarding school fees, voucher files etc. The accounts of
school are audited by the authorized auditor. Under these
circumstances, calling these record seems to be only for
finding loop holes. This is a sort of interference of the
Management in day-to-day work of the school, which is
unwarranted. In spite of this, the explanation shows that
there is sufficient compliance of direction and there is no
insubordination.
(iii) Charge No.3, is not calling meetings of school
committee as per code….and the explanation submitted
by appellant not calling the meetings is acceptable.
(iv) Charge No.4, is in respect of not forwarding proposal
of Shikshan Sevek to the Education Officer. The reasons
explained by the appellant are acceptable.
(v) Charge No.5, is in respect of submitting the budget
for the year 2001-2002 to the Management without
approval of school committee. When the Management
has accepted this budget this charge does not survive. As
such when the Management has directly accepted the
budget and budget proposals, this charge ought not to
have been framed at all.
xx xx xx xx
(vii) Charge No.7, is in respect of not attending the
Management council meeting. This charge is also purely
technical. The explanation of the appellant is that
intimation of meeting was given by the Management at
the 11th hour before few hours of the meeting without
providing agenda of the meeting…. The explanation
needs sympathetic consideration and the allegations if at
19Page 20
all considered, cannot be a ground for termination of
appellant’s service.
(viii) Charge No.8, is in respect of workload of about six
hours in a week to be discharged by the Head
Master….Explanation given by the appellant is that the
hard subjects of science and mathematics were given to
new comers as appellant was to retire in near future. He
wanted that new man should be well prepared before
appellant leaves the school. This explanation is
reasonable and acceptable.
In the conclusion, I hold that the evidence on
record is not sufficient to hold the appellant guilty of the
charges. The net result of the scrutiny of the proceedings
is that the inquiry seems to have been initiated on very
technical flaws which lead to only conclusion that it was
pre-determined and pre-judicial inquiry. As explained
above, there is no sufficient proof on record to hold that
the charges are proved.”
21. The Tribunal, as well as the learned Single Judge of the
High Court have recorded a categorical finding of fact to the
effect that initiation of departmental enquiry against the
appellant had been done with malafide intention to harass him.
The charges were not specific and precise; infact, they were
vague and unspecific. Furthermore, the Management committee
had failed to observe the procedure prescribed in Rules 36 & 37
of Rules, 1981. The said Rules 36 & 37, prescribe a complete
procedure for the purpose of holding an inquiry, wherein it is
20Page 21
clearly stated that an inquiry committee should have minimum
three members, one representative from the Management
committee, one to be nominated by the employees from
amongst themselves, and one to be chosen by the Chief
Executive Officer, from amongst a panel of teachers who have
been awarded National/State awards. In the instant case, there
was only a two member committee. The procedure prescribed
under the Rules is based on the Principles of Natural Justice and
fair play, to ensure that an employee of a private school, may
not be condemned unheard. It is pertinent to note that the
Management committee failed to prove even a single charge
against the appellant.
22. Therefore the Tribunal, as well as the learned Single
Judge have both made it clear that the inquiry had not been
conducted in accordance with the provisions of Rules 36 and 37
of the Rules 1981. However, they themselves have dealt with
each and every charge, and have recorded their findings on
merit. The present case is certainly not one where a punishment
has been set aside only on a technical ground, that the inquiry
stood vitiated for want of a particular requirement. Thus, in
21Page 22
light of such a fact situation, the Division Bench has
committed an error by giving liberty to the respondents to hold
a fresh enquiry.
23. The Division Bench after examining the case, held as
under:
(i) If there was defect found in the manner in which
the departmental enquiry was held, liberty should
have been given to the management to hold a fresh
enquiry if so advised, and if the appellant was found
guilty thereafter, punishment could have been
imposed on him as permissible under law.
(ii) Once the Tribunal and the learned Single judge
have found that there was infact, a defect in the
manner in which the enquiry was held, there was no
question of them recording findings on merit to the
effect that the charges were not proved against the
appellant.
(iii) However, before taking any steps towards
holding an enquiry, the management would have to
make payment of the full salary owed to the appellant,
22Page 23
for the period between the date of termination of the
appellant from service, till the date of his retirement.
24. The conclusion reached by the Division Bench that the
Tribunal and the learned Single Judge had found that there was
a defect in the manner in which the enquiry was held, and
therefore there was no question of it recording a finding on
merit to the effect that charges levelled against the appellant
were not proved, is also not sustainable in law. It is always
open for the Court in such a case, to examine the case on merits
as well, and in case the Court comes to the conclusion that there
was infact, no substance in the allegations, it may not permit the
employer to hold a fresh enquiry. Such a course may be
necessary to save the employee from harassment and
humiliation.
25. In the instant case, there is no allegation of
misappropriation/embezzlement or any charge which may cast
a doubt upon the integrity of the appellant, or further, anything
which may indicate even the slightest moral turpitude on the
part of the appellant. The charges relate to accounts and to the
23Page 24
discharge of his functions as the Headmaster of the school. The
appellant has provided satisfactory explanation for each of the
allegations levelled against him. Moreover, he has retired in the
year 2002. The question of holding any fresh enquiry on such
vague charges is therefore, unwarranted and uncalled for.
26. The Education Officer (Secondary), Zilla Parishad,
Solapur, had filed an affidavit before the High Court, wherein it
was stated that a dispute had arisen between the trustees, and in
view thereof, an enquiry was initiated against the appellant. The
respondents terminated the services of the appellant and many
other employees, as a large number of cases had been filed
against the Management Committee without impleading the
State of Maharashtra, though the same was a necessary party, as
the school was a government-aided school. Rules 36 and 37 of
the Rules 1981, which prescribe the procedure of holding an
enquiry have been violated. The charges levelled against the
appellant were entirely vague, irrelevant and unspecific. As per
statutory rules, the appellant was not allowed to be represented
by another employee. Thus, the procedure prescribed under
Rule 57(1) of the Rules 1981 stood violated. No charge sheet
24Page 25
containing the statement of allegations was ever served. A
summary of the proceedings, along with the statements of
witnesses, as is required under Rule 37(4) of the Rules 1981,
was never forwarded to the appellant. He was not given an
opportunity to explain himself, and no charge was proved with
the aid of any documentary evidence. There existed no charge
against the appellant regarding his integrity, embezzlement or
mis-appropriation. Therefore, the question of mis-appropriation
of Rs.4,900/- in respect of a telephone bill remained entirely
irrelevant. Furthermore, the same was not a charge of misappropriation.
The learned Single Judge has also agreed with
the same. The Division Bench though also in agreement, has
given liberty to the respondents to hold a fresh enquiry.
27. We may add that the court has not been apprised of any
rule that may confer any statutory power on the management to
hold a fresh enquiry after the retirement of an employee. In the
absence of any such authority, the Division Bench has erred in
creating a post-retirement forum that may not be permissible
under law.
25Page 26
28. In light of the facts and circumstances of the case, none
of the charges are specific and precise. The charges have not
been accompanied by any statement of allegations, or any
details thereof. It is not therefore permissible, for the
respondents to hold an enquiry on such charges. Moreover, it is
a settled legal proposition that a departmental enquiry can be
quashed on the ground of delay provided the charges are not
very grave.
29. In the facts and circumstances of the case, 
as the Tribunal
as well as the learned Single Judge have examined all the
charges on merit and also found that the enquiry has not been
conducted as per the Rules 1981, it was not the cause of the
Management Committee which had been prejudiced, rather it
had been the other way around.
 In such a fact-situation, it was
not necessary for the Division Bench to permit the respondents
to hold a fresh enquiry on the said charges and that too, after
more than a decade of the retirement of the appellant. 
30. In view of the above, appeal succeeds and is allowed.
The impugned judgment and order of the High Court is
26Page 27
modified to the extent referred to hereinabove. The appellant
shall be entitled to recover all his salary and retirement dues, if
not paid already. No costs. 
 .............................……………………........................J.
 (DR. B.S. CHAUHAN)
 .................……………………................................. J.
 (FAKKIR MOHAMED IBRAHIM KALIFULLA)
NEW DELHI
APRIL 26, 2013
27

Whether the employees of the appellant-Rajasthan State Road Transport Corporation are eligible to claim pensionary benefits under the Pension Scheme in view of the non-compliance with the essential conditions stipulated in the Regulations which govern the said Pension Scheme?

Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5274 OF 2008
Rajasthan State Road Transport Corporation
& others …. Appellants
Vs.
Madu Giri (Dead) through Lrs. & Anr. …. Respondents
 AND
CIVIL APPEAL NO. 952 OF 2009
Rajasthan State Road Transport Corporation
& Another …. Appellants
Vs.
Mohini Devi …. Respondent
J U D G M E N T
M.Y. EQBAL, J.:
1. The short question involved in these appeals is :
  Whether
the employees of the appellant-Rajasthan State Road Transport
Corporation are eligible to claim pensionary benefits under the
Pension Scheme in view of the non-compliance with the essential
conditions stipulated in the Regulations which govern the said
Pension Scheme?
1Page 2
2. Admittedly, the concerned employees [Madugiri and
Yakub Khan, respondents (since deceased) in Civil Appeal No.5274
of 2008 and late Nathu Singh, respondent’s husband in Civil Appeal
No. 952 of 2009] of the appellant-Corporation retired from service
respectively on 31.1.1991, 31.1.1992 and 31.3.1992 and were paid
Contributory Provident Fund (CPF) including the share of employer’s
contribution. On 11.1.1993, the Rajasthan State Road Transport
Corporation Employees Pension Regulations, 1989 (in short “the
Regulations”) came into force. As per clause 3(1) of the said
Regulations, option was given to the existing employees as well as
those employees who retired before coming into force of these
Regulations but before acceptance of option and grant of benefit
condition was placed on the employees to refund the employer’s
share of CPF with interest. The above named employees exercised
their option in favour of the pension scheme under the Regulations,
but did not deposit the amount of employer’s share of CPF with
interest in lumpsum within the stipulated time.
3. Clause 3(1) of the said Regulations reads as under:
“`Option’ means a written consent of the existing regular
employees for pensionary and gratuity benefit along with
the adoption of the General Provident Fund Regulations,
2Page 3
1989 or to continue as member of the existing CPF
scheme covered under the EPF Act, 1952 within a period
of 90 days from the date of publication of RSRTC Pension
Regulations. Any existing employee who does not
exercise the option within specified period of 90 days
shall be deemed to have exercised option in favour of the
Pension and CPF Regulations.
The option once exercised or deemed to have been
exercised shall be considered as final and no
representation in this respect shall be considered valid for
any revision. It will be for the personal responsibility of
the departmental officer to ensure that his option reaches
timely in the office of Dy. G.M. (P&F) RSRTC, Jaipur.
xxx xxx xxx
In case any employee or his nominee obtains the final
refund of CPF between 1st April 1989 and specified
period for exercising option, the employer’s share with
accrued interest time to time shall have to be deposited in
lump sum before granting the option for pension.”
4. As the amount of employer’s share of CPF with interest in
lumpsum was not deposited by the employees within the stipulated
time, their claim for grant of pensionary benefit was rejected by the
appellant-Corporation. The decision of the Corporation was
challenged in the High Court by filing writ petitions which were
disposed of with direction to the Corporation to accept the option
submitted by the employees with regard to grant of pension and to
allow the same to the employees by deducting the amount of excess
3Page 4
provident fund with interest which is said to be granted earlier.
Aggrieved by the orders passed in writ petitions, the appellants herein
filed D.B. Civil Special Appeals (W) before the Division Bench of the
High Court which were dismissed by the orders impugned in these
appeals.
5. After hearing the learned counsel appearing for the
parties and perusing the Regulations, particularly Clause 3(1) as
quoted hereinabove, we are of the considered opinion that the view
taken by the learned Single Judge and also the Division Bench is not
in consonance with the conditions presecribed in the said
Regulations.
6. The learned Single Judge disposed of the writ petition
filed by Madugiri and Yakub Khan, with the following directions:
“Accordingly this petition for writ is disposed of with a
direction to the respondent Rajasthan State Road
Transport Corporation to accept the option submitted by
the petitioners with regard to grant of pension and then
the same be allowed to them by deducting the amount of
excess provident fund with interest which is said to be
granted earlier. The respondent Corporation shall
complete all formalities with regard to grant of pension
and deduction of excess provident fund amount said to be
paid to the petitioners within a period of four months from
4Page 5
the date the petitioners submit a certified copy of this
order to the respondent No.3 along with a representation
for acceptance of pension in terms of this order.”
Similar directions were issued by the learned Single Judge in another
writ petition filed by Mohini Devi.
7. The Division Bench has considered the Regulations but
failed to notice that there is apparent error in the order passed by the
learned Single Judge. Indisputably, the concerned employees retired
from service in 1991 and 1992 and after retirement they were paid
CPF including the share of employer’s contribution. Hence, as per
Clause 3 of the Regulations, no right accrued to the
appellants/employees to claim pensionary benefits without first
depositing the amount and complying with the Regulations.
8. The matter was examined by this Court in Pepsu Road
Transport Corporation, Patiala vs. Mangal Singh and Others
(2011) 11 SCC 702 wherein it was held as under:
“51. The common thread which runs through all these
appeals canvassed before us is that the respondents
have failed to comply with the terms and conditions of the
Regulations, which govern the Pension Scheme. We
5Page 6
have already considered the nature and effect of the
regulations, which are made under a statute. These
statutory regulations require to be interpreted in the same
manner which is adopted while interpreting any other
statutory provisions. The Corporation as well as the
respondents are obliged and bound to comply with its
mandatory conditions and requirements. Any action or
conduct deviating from these conditions shall render such
action illegal and invalid. Moreover, the respondents have
availed the retiral benefits arising out of CPF and gratuity
without any protest.
52. The respondents in all these appeals, before us,
have made a claim for pensionary benefits under the
Pension Scheme for the first time only after their
retirement with an unreasonable delay of more than 8
years. It is not in dispute, in some appeals, that the
respondents never opted for the Pension Scheme for their
alleged want of knowledge for non-service of individual
notices. In other appeals, although the respondents
applied for the option of the Pension Scheme but
indisputably never fulfilled the quintessential conditions
envisaged by the Regulations which are statutory in
nature.”
9. We are, therefore, of the opinion that, in the facts and
circumstances of the case and in view of the law laid down by this
Court in the judgment referred to hereinabove, impugned orders
passed by the learned Single Judge and the Division Bench of the
High Court cannot be sustained in law.
6Page 7
10. For the reasons aforesaid, these appeals are allowed and
the impugned orders are set aside. However, there shall be no order
as to costs.
……………………………..J.
(P. Sathasivam)
……………………………..J.
(M.Y. Eqbal)
New Delhi,
April 26 , 2013.
7Page 8