Case: Managing Director Ecil Hyderabad Etc. Etc Vs. B. Karunakar Etc. Etc

P. B. Sawant, J. (for himself and for M. N. Venkatachaliah, CJI and S. Mohan and B. P. Jeevan Reddy, JJ.) 1. This group of matters is at the instance of various parties, viz., Union of India, Public Sector Corporations, Public Sector Banks, State Governments and two private parties. By an order dated 5th August, 1991 in Managing Director, Electronic Corporation of India v. B. Karunakar (1992 (3) JT (SC) 605, a three Judge Bench of this Court referred that matter to the Chief Justice for being placed before a larger Bench, for the Bench found a conflict in the two decisions of this Court, viz., Kailash Chander Asthana v. State of U.P. 1988 (3) SCC 600 : AIR 1988 SC 1338 ) and Union of India v. Mohd. Ramzan Khan (1991 (1) SCC 588 : AIR 1991 SC 471 ) both delivered by the Benches of three learned Judges. Civil Appeal No. 3056 of 1991 arising out of SLP (Civil) No. 12103 of 1991 along with the other matters in which the same question of law is in issue, has, therefore, been referred to this Bench. 2. The basic question of law which arises in these matters is whether the report of the Inquiry Officer/authority who/which is appointed by the disciplinary authority to hold an inquiry into the charges against the delinquent employee is required to be furnished to the employee to enable him to make proper representation to the disciplinary authority before such authority arrives at its own finding with regard to the guilt or otherwise of the employee and the punishment, if any, to be awarded to him. This question in turn gives rise to the following incidental questions:(i) Whether the report should be furnished to the employee even when the statutory rules laying down the procedure for holding the disciplinary inquiry are silent on the subject or are against it?(ii) Whether the report of the Inquiry Officer is required to be furnished to the delinquent employee even when the punishment imposed is other than the major punishment of dismissal, removal or reduction in rank?(iii) Whether the obligation to furnish the report is only when the employee asks for the same or whether it exists even otherwise?(iv) Whether the law laid down in Mohd. Ramzan Khans case (AIR 1991 SC 471 ) (supra) will apply to all establishments - Government and non Government, public and private sector undertakings?(v) What is the effect of the non furnishing of the report on the order of punishment and what relief should be granted to the employee in such cases?(vi) From what date the law requiring furnishing of the report should come into operation?vii) Since the decision in Ramzan Khans case (AIR 1991 SC 471 ) (supra) has made the law laid down there prospective in operation, i.e., applicable to the orders of punishment passed after 20th November, 1990 on which day the said decision was delivered, this question in turn also raises another question, viz., what was the law prevailing prior to 20th November, 1990? 3. In order to appreciate fully the significance of the basic question, it is necessary to refer briefly to the genesis of the law on the subject of furnishing the report of the Inquiry Officer/authority to the delinquent employee. In this country, the law on the subject has developed along two paths. viz., the statute and the principles of natural justice. We may first refer to the statutory development of the law. It is not necessary to refer to the law prior to the Public Servants (Inquiries) Act, 1850 which for the first time made uniform the law regulating inquiries into the behaviour of public servants who were not removable from their appointments without the sanction of the Government. It provided for a formal and public inquiry into the imputations of misbehavior against the public servant. Either the Government, if it thought fit conducted the prosecution or left it to the accuser to conduct it after requiring him to furnish reasonable security. The Act also provided that the inquiry may be committed either to the Court, Board or any other authority to which the accused public servant was subordinate, or to any other person or persons to be specially appointed as Commissioners for the purpose. S.25 of the Act, however, saved the authority of the Government for suspending or removing any such public servant for any cause without an inquiry under the Act. While the said Act continued to be on the statute book, the Government of India Act, 1919 was enacted and sub-s.. (2) of S. 96B of that Act authorised the Secretary of State in Council to make rules for regulating the classification of the civil services, the methods of their recruitments, their conditions of service, pay and allowances and discipline and conduct. In pursuance of these powers, the Civil Services Classification Rules, 1920 were framed, and R.XIV of the said Rules provided that without prejudice to the provisions of the Public Servants (Inquiries) Act, 1850, in all cases in which the dismissal, removal or reduction in rank of any officer is ordered, the order shall, except when it is based on facts or conclusions, established at a judicial trial, or when the officer concerned has absconded with the accusations hanging over him, be preceded by a properly recorded departmental inquiry. At such an inquiry, a definite charge in writing had to be framed in respect of each offence and explained to the accused. The evidence in support of it and any evidence which the accused may adduce in his defence had to be recorded in his presence and his defence had to be taken down in writing. Each of the charges framed had to be discussed and the finding had to be recorded on each charge. However, there was no provision made in the Rules for hearing the delinquent officer against the action proposed to be taken on the basis of the finding arrived at in the inquiry. All that R. XVI of the Rules provided was that any officer against whom an order was passed and who thought himself wronged thereby would be entitled to prefer at least one appeal against such order. These rules were followed by the Civil Services (Classification, Control and Appeal) Rules, 1930 also framed under S. 96B of the Government of India Act, 1919. R.55 thereof contained the same provisions as those contained in R. XIV of 1920 Rules and made no difference to the earlier position of law on the subject. It cannot, therefore, be gainsaid that the seeds of the law on the subject were laid by S. 240(3) of the Government of India Act, 1935 (the GOI Act,). It stated that the civil servant shall not be dismissed or reduced in rank until he had been given "reasonable opportunity to show cause against action proposed to be taken in regard to him". The expression "against action proposed to be taken" was uniformly interpreted by the courts to mean the stage at which the disciplinary authority had arrived at its tentative conclusion with regard to the guilt of and the punishment to be awarded to the employee. The expression "reasonable opportunity to show cause" was accordingly interpreted to mean an opportunity at that stage to represent to the authority against the tentative findings both with regard to the guilt and the proposed punishment. It was therefore, held that in order that the employee had an effective opportunity to show cause against the finding of guilt and the punishment proposed, he should, at that stage be furnished with a copy of the findings of the inquiring authority. It is in this context that the furnishing of the Inquiry Officers report at that stage was held to be obligatory. It is, however, necessary to note that though the provisions of S. 240(3) of the Government of India Act stated that they would apply only when the employee was sought to be dismissed or reduced in rank which were the major punishments, the same were interpreted to mean that they would also apply when the employee was sought to be removed. These provisions of S. 240(3) of the GOI Act were incorporated bodily in Art. 311(2) of the Constitution with a specific addition of the case of "removal" of the employee to the cases of dismissal and reduction in rank. This addition did not make any difference to the prevailing law, since, as stated earlier, the Courts had already interpreted the provision to include the case of the removal of the employee as well. Probably the specific addition was on account of the interpretation placed by the courts. Art.311(2), however, underwent change with the Constitution (15th Amendment) Act of 1963 which came into force from 6th October, 1963. It explained and expanded the scope of "reasonable opportunity". For the original expression "until he has been given reasonable opportunity of showing cause against the action proposed to be taken in regard to him", the provision "except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges and where it is proposed after such inquiry, to impose on him any such penalty, until he has been given reasonable opportunity of making representation on the penalty proposed, but only on the basis of the evidence adduced during such inquiry" was substituted. Consequent upon this Amendment, necessary changes were made in the proviso to clause (2) of Art. 311 which changes need not detain us here. It would thus be apparent that the 15th Amendment for the first time in terms provided for holding of an inquiry into the specific charges of which information was given to the delinquent employee in advance and in which he was given reasonable opportunity to defend himself against those charges. The Amendment also provided for a second opportunity to the employee to show cause against the penalty if it was proposed as a result of the inquiry. The courts held that while exercising his second opportunity of showing cause against the penalty, the employee was also entitled to represent against the findings on charges, as well. What is necessary to note for our present purpose is that in spite of this change, the stage at which the employee was held to be entitled to a copy of the report, was the stage at which the penalty was proposed, as was the case prior to the said Amendment. The provisions of clause (2) of Art. 311 were further amended by the Constitution (42nd Amendment) Act of 1976. It came into force from 1st January, 1977. It expressly stated that "it shall not be necessary to give such person any opportunity of making representation on the penalty proposed". The words "such person" of course meant the person who was to be dismissed or removed or reduced in rank. In other words, the 42nd Amendment of the Constitution while retaining the expanded scope of the reasonable opportunity at the first stage, viz., during the inquiry as introduced by the 15th Amendment of the Constitution, did away with the opportunity of making representation against the penalty proposed after the inquiry. It is this Amendment to Art. 311(2) which has given rise to the controversy as to whether when the Inquiry Officer is other than the disciplinary authority, the employee is entitled to a copy of the findings recorded by him, before the disciplinary authority applies its mind to the findings and the evidence recorded, or whether the employee is entitled to the copy of the findings of the enquiry Officer only at the second stage, viz., when the disciplinary authority had arrived at its conclusions and proposed the penalty. Upon answer to this question depends the answer to the other question flowing from it, viz., whether the employee was entitled to make representation against such finding before the penalty was proposed even when Art. 311(2) stood as it was prior to the 15th Amendment of the Constitution. 4. It will be instructive to refer briefly to certain authorities on this aspect of the matter. We may first refer to the decision of this Court in Khem Chand v. Union of India, 1958 SCR 1080 : (AIR 1958 SC 300 ) where two questions squarely fell for consideration, viz., what is meant by the expression "reasonable opportunity of showing cause against the action proposed" and at what stage the notice against the proposed punishment was to be served on the delinquent employee. After referring to the decisions of the Judicial Committee in R. Venkata Rao v. Secretary of State for India, (1937 (64) Ind App 55 : AIR 1937 PC 31 ) and of the Federal Court in Secretary of State for India v. I. M. Lall, 1945 FCR 103 : AIR 1945 FC 47, the Court held that the reasonable opportunity envisaged by the provisions of Art. 311(2) as originally enacted was at the following stages: "(a) An opportunity to deny his guilt and establish his innocence, which he can only do if he is told what the charges levelled against him are and the allegations on which such charges are based; b) an opportunity to defend himself by cross examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence; and finally (c) an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority, after the inquiry is over and after applying his mind to the gravity or otherwise of the charges proved against the government servant tentatively proposes to inflict one of the three punishments and communicates the same to the government servant .........." The Court further held that the substance of the protection provided by rules like R. 55 of the Civil Services (Classification, Control and Appeal) Rules promulgated on May 27, 1930 under S.96B of the Government of India Act, 1915 (sic), was bodily lifted out of the said Rules and together with an additional opportunity embodied in 5. 240(3) of the GOI Act was incorporated in Art. 311(2) S0 as to convert the protection into a constitutional safeguard. The Court also held that the opportunity to show cause against the penalty proposed should be given after a stage has been reached where the charges had been established and the competent authority had applied its mind to the gravity or otherwise of the proved charges tentatively and proposed a particular punishment. It was necessary to state so, since in that case no notice was served upon the appellant there when the competent authority accepted the report of the Inquiry Officer and confirmed the opinion that the punishment of dismissal should be inflicted on him, and no cause, therefore, could be shown by him. On the other hand, by the first notice itself which communicated the charges, the appellant was called upon to show cause as to why he should not be dismissed from service, although the notice further called upon the appellant to state in reply whether he wished to be heard in person and whether he would produce his defence. What are the duties of the Inquiry Officer appointed by the disciplinary authority to conduct the inquiry is the next question and this Court in A. N. DSilva v. Union of India (1962) Supp 1 SCR 968 : AIR 1962 SC 1130 at p. 1134) has in terms held that the question of imposing punishment can only arise after inquiry is made and the report of the Inquiry Officer is received. It is for the punishing authority to propose the punishment and not for the inquiring authority to do so. The latter has, when so required, to appraise the evidence, to record its conclusion and if it thinks proper to suggest the appropriate punishment. But neither the conclusion on the evidence nor the punishment which the inquiring authority may regard as appropriate is binding upon the punishing authority. In that case, the charge served upon the delinquent officer by the Inquiry Officer itself incorporated the proposed punishment. Hence it was also observed that in the communication addressed by the Inquiry Officer the punishment proposed to be imposed upon the appellant if he was found guilty of the charges could not properly be set out. Two things, therefore, emerge from this decision, viz., that it is not the function of the inquiry Officer to propose any punishment even after he records findings of guilt against the delinquent employee. Much less can the Inquiry Officer do so at the stage of serving the charges on the employee. Secondly, it is for the disciplinary authority to propose the punishment after receipt of the report of the Inquiry Officer which suggests that before the authority proposes the punishment, it must have applied its mind to the evidence and the findings recorded by the Inquiry Officer. Still further question that was required to be answered was whether when the disciplinary authority issued notice to the employee to show cause against the punishment proposed, the employee had the right also to represent that he was not guilty of the charge itself and the findings recorded against him were wrong. This question was squarely answered by this Court in Union of India v. H. C. Goel (1964 (4) SCR 718 : AIR 1964 SC 364 ). The Court pointed out there that it was well settled that the public servant entitled to the protection of Art. 311 must get two opportunities to defend himself. He must have a clear notice of the charge which he is called upon to meet before the departmental inquiry commences, and after he gets a notice and is given the opportunity to offer his explanation, the inquiry must be conducted according to the rules and consistently with the requirements of natural justice. At the end of the inquiry, the Inquiry Officer appreciates the evidence, records his conclusions and submits his report to the Government concerned. That is the first stage of the inquiry. After the report is received by the Government, the Government is entitled to consider the report and the evidence laid against the delinquent public servant. The Government may agree with the report or may differ, either wholly or partially, from the conclusions recorded in the report. If the report makes a finding in favour of the public servant and the Government agrees with the said finding, nothing more remains to be done, and the public servant who may have been suspended is entitled to be reinstated with consequential reliefs. If the report makes findings in favour of the public servant and the Government disagrees with the said findings and holds that the charges framed against the public servant are prima facie proved, the Government should decide provisionally what punishment should be imposed on the public servant and proceed to issue a second notice against him in that behalf. If the Inquiry Officer makes findings, some of which are in favour of the public servant and some against him, the Government is entitled to consider the whole matter and if it holds that some or all the charges framed against the public servant are, in its opinion, prima facie established against him, then also the Government has to decide provisionally what punishment should be imposed on the public servant and give him notice accordingly. The Court then proceeded to observe that "it would thus be seen that the object of the second notice is to enable the public servant to satisfy, the Government on both the counts, one that he is innocent of the charges framed against him and the other that even if the charges are held proved against him, the punishment proposed to be inflicted upon is unduly severe. This position under Art. 311 of the Constitution is substantially similar to the position which governed the public servants under S.240 of the Government of India Act, 1935". The Court also observed that the decisions in The Secretary of State for India v. I. M. Lal, 1945 FCR 103 : (AIR 1945 FC 47), High Commr. for India and High Commissioner for Pakistan v. I. M. Lal, 75 Ind App 225: (AIR 1948 PC 121 ) and Khem Chand v. Union of India, 1958 SCR 1080 : (AIR 1958 SC 300 ) would show that it had never been suggested that the findings recorded by the Inquiry Officer concluded the matter and the Government which appoints the Inquiry Officer and directs the inquiry is bound by the said finding and must act on the basis that the said findings are final and cannot be reopened. It is obvious that the Inquiry Officer holds the inquiry against the employee as a delegate of the disciplinary authority. The object of the inquiry is plain. It is to enable the Government to hold an investigation into the charges framed against the employee so that the Government can in due course consider the evidence adduced and decide whether the said charges are proved or not. The interposition of the inquiry which is held by a duly appointed Inquiry Officer does not alter the true legal position that the charges are framed by the Government and it is the Government which is empowered to impose punishment on the delinquent public servant. Repelling the contention that the Government is bound to accept the findings of the Inquiry Officer, the Court pointed out that if that argument was valid, the second notice would serve very little purpose. For at the second stage, the opportunity which is intended to be given to the public servant is to show cause not only against the proposed punishment but also against the finding recorded against him and that opportunity would be defeated because the Government cannot alter the said finding even if the employee shows that the findings are incorrect. The Court then went on to add that unless the statutory rule or the specific order under which the officer is appointed to hold an inquiry so required, the Inquiry Officer need not make any recommendations as to the punishment to be imposed. If, however, the Inquiry Officer makes any recommendations in that behalf, the said recommendations like his findings on the merits are intended merely to supply appropriate material for the consideration of the Government. Neither the findings nor the recommendations are binding on the Government. In Avtar Singh v. Inspector General of Police, Punjab, 1968 Serv LR 131 (SC) admittedly the findings of the Inquiry Officer were not communicated to the delinquent employee and he was only orally told that it was proposed to dismiss him. The Court in this context held that every public servant is entitled to have the whole of the matter brought to his notice before he was asked to show cause why particular punishment should not be meted out to him. The Court has explained what it meant by "the whole of the matter" by stating that it is the findings on the charges against him which should be made known to him. In State of Gujarat v. R. G. Teredesai (1970) 1 SCR 251 : (AIR 1969 SC 1294 ) this Court held that the requirement of a reasonable opportunity would not be satisfied unless the entire report of the Inquiry Officer including his views in the matter of punishment were disclosed to the delinquent public servant. The Inquiry Officer is under no obligation or duty to make any recommendations in the matter of punishment and his function merely is to conduct the inquiry in accordance with law, and to submit the records along with his findings. But if he has also made recommendations in the matter of punishment "that is likely to affect the mind of the punishing authority with regard to penalty or punishment to be imposed" it must be disclosed to the delinquent officer. Since such recommendations form part of the record and constitute appropriate material for consideration of the Government it would be essential that that material should not be withheld from him so that he could, while showing cause against the proposed punishment, make a proper representation. The entire object of supplying a copy of the report of the Inquiry Officer is to enable the delinquent officer to satisfy the punishing authority that he is innocent of the charges framed against him and that even if the charges are held to have been proved, the punishment proposed to be inflicted is unduly severe". In General Manager, Eastern Railway v. Jawala Prosad Singh (1970)3 SCR 271 : (AIR 1970 SC 1095 ) it is reiterated that the duty of the Inquiry Officer ends with the making of the report. The disciplinary authority has to consider the record of the inquiry and arrive at its own conclusion on each charge. Even if the inquiry committee makes a report absolving the employee of the charges against him, the disciplinary authority may on considering the entire record come to a different conclusion and impose a penalty. A reference is made in this connection to H. C. Goels case (AIR 1964 SC 364 ) (supra). In Uttar Pradesh Govt. v. Sabir Hussain (1975) Supp SCR 354 : AIR 1975 SC 2045 ), it was held that in the absence of furnishing the copy of the report of the Inquiry Officer, the plaintiff had been denied a reasonable opportunity of showing cause against his removal. It was also held that although S. 240(3) of the GOI Act did not cover a case of "removal", it did not mean that the protection given by the said section did not cover the case of "removal". From the Constitutional stand point "removal" and "dismissal" stand on the same footing except as to future employment. In the context of S. 240(3). removal and dismissal are synonymous terms the former being only species of the latter. The broad test of "reasonable opportunity" is whether in the given case the show cause notice issued to the delinquent servant contained or was accompanied by so much information as was necessary to enable him to clear himself of the guilt, if possible, even at that stage or in the alternative to show that the penalty proposed was much too harsh and disproportionate to the nature of the charge established against him. In Union of India v. Tulsiram Patel (1985) Supp 2 SCR 131 : AIR 1985 SC 1416 ), this Court had specifically to consider the legal position arising out of the 42nd Amendment of the Constitution by which clause (2) of Art. 311 was amended and the part of the said clause, viz., "and where it is proposed, after such inquiry, to impose on him any such penalty until he has been given reasonable opportunity of making representation on the penalty proposed, but only on the basis of the evidence adduced during such inquiry" was deleted. In that decision, this Court has not dealt with the procedure to be followed by the disciplinary authority after the Inquiry Officers report is received by it. The question whether the delinquent employee should be heard by the disciplinary authority to prove his innocence of the charges levelled against him when they are held to have been proved by the Inquiry Officer, although he need not be heard on the question of the proposed penalty was neither raised nor answered. This decision, therefore, is not helpful for deciding the said question. In Secretary, Central Board of Excise and Customs v. K. S. Mahalingam (1986 (3) SCC 35 : AIR 1987 SC 1919 ), again the question did not arise as to whether the report of the Inquiry Officer should be furnished to the delinquent employee as a part of the reasonable opportunity at the first stage, Viz., before the disciplinary authority took its decision on the said report and came to its own conclusions with regard to the guilt or innocence of the employee. The contention raised there was with regard to the non supply of the report to show cause against the penalty proposed. Since it was raised in ignorance of the 42nd Amendment of the Constitution, this Court rejected the said contention. In Ram Chander v. Union of India (1986 (3) SCC 103 : AIR 1986 SC 1173 ) which is a decision of two learned Judges of this Court, it was lamented that after the 42nd Amendment of the Constitution, the question still remained as to the stage when the delinquent Government servant would get the opportunity of showing that he had not been guilty of any misconduct so as to deserve any punishment or that the charges proved against him were not of such a character as to merit the extreme penalty of dismissal or even of removal or reduction in rank and that any of the lesser punishments ought to have been sufficient in his case. The Court, however, felt that it was bound by the majority decision in Tulsiram Patels case (AIR 1985 SC 1416 ) (supra). The Court further went on to observe that in view of the constitutional change and the decision of the majority in Tulsiram Patels case (supra), the only stage at which now a civil servant can exercise the said valuable right was by enforcing his remedy by way of a departmental appeal or revision or by way of judicial review. In Union of India v. E. Bashyan (1988 (3) SCR 209 : AIR 1988 SC 1000 ), the question squarely arose before a Bench of two learned Judges of this Court as to whether the failure to supply a copy of the report of the Inquiry Officer to the delinquent employee before the disciplinary authority makes up its mind and records the finding of guilt would constitute violation of Art. 311(2) of the Constitution and also of the principles of natural justice. It was opined that in the event of failure to furnish the report of the Inquiry Officer, the delinquent employee is deprived of crucial, and critical material which is taken into account by the real authority which holds him guilty, viz., the disciplinary authority. According to the Court, it is the real authority because the Inquiry Officer does no more than act as a delegate and furnishes the relevant material including his own assessment regarding the guilt, to assist the disciplinary authority who alone records the effective finding. The non supply of the copy of the report would, therefore, constitute violation of the principles of natural justice and accordingly will be tantamount to denial of reasonable opportunity within the meaning of Art. 311(2) of the Constitution. It was observed that there could be glaring errors and omissions in the report or it may have been based on no evidence or rendered in disregard to or by overlooking evidence. If the report is not made available to the delinquent employee, this crucial material which enters into the consideration of the disciplinary authority never comes to be known to the delinquent and he gets no opportunity to point out such errors and omissions and to disabuse the mind of the disciplinary authority before he is held guilty. The Court then specifically pointed out that serving a copy of the inquiry report on the delinquent employee to enable him to point out anomaly, if any, before finding of guilt is recorded by the disciplinary authority, is altogether a different matter from serving a second show cause notice against the penalty to be imposed which has been dispensed with by virtue of the amendment of Art. 311(2) by the 42nd Amendment of the Constitution. The Court then found that the said point required consideration by a larger Bench and referred the matter to Honble the Chief Justice for placing it before a larger Bench. 5. Since it is contended that in K. C. Asthana v. State of U.P., (1988 (3) SCC 600 : AIR 1988 SC 1338 ), a Bench of three learned Judges has taken a view that it is not necessary to furnish the report of the Inquiry Officer to the delinquent employee before the disciplinary authority arrives at its conclusions, it is necessary to consider the said authority a little closely. In that case, pursuant to the direction of the High Court, an inquiry was conducted by the Administrative Tribunal under the Uttar Pradesh Disciplinary Proceedings [Administrative Tribunal] Rules, 1947 against the petitioner who was a Munsiff Magistrate. The charge against him was that he had demanded bribe from a plaintiff in a suit pending before him. After completion of the inquiry, the entire matter was considered by the Full Court of the High Court which approved the findings of the Administrative Tribunal holding the writ petitioner guilty. The High Court thereafter requested the Governor to remove the petitioner from service and the impugned order terminating the services of the petitioner was accordingly passed. The petitioner challenged the order under Art.32 of the Constitution. The petitioner had also filed an application under Art.226 of the Constitution before the Allahabad High Court which was dismissed in limine. The appeal against the said order was also heard along with the writ petition. One of the contentions raised before this Court by the counsel for the petitioner was that a copy of the report of the Administrative Tribunal was not made available to the petitioner and this must be held to have vitiated the subsequent proceedings including the impugned order of punishment. In this connection, a reference was made to the Explanation to sub-rule (3) of R.9 of the said Rules providing that a copy of the recommendations of the Tribunal as to the penalty should be furnished to the charged Government servant. As against this, the learned counsel for the respondents - State of U.P. and others pointed out that after the 42nd Amendment of the Constitution the said Explanation was dropped, the Court, therefore, observed as follows [AIR 1988 SC 1338 , Para 5]: "The question of service of copy of the report arose on account of a right of a second show cause notice to the government servant before the 42nd Amendment and since present disciplinary proceeding was held later, the petitioner cannot legitimately demand a second opportunity. That being the position, non service of a copy of the report is immaterial." In this view of the matter, the Court dismissed the writ petition. It would thus be clear that the contention before this Court in that case was that the copy of the report of the inquiring authority was necessary to show cause at the second stage, i.e., against the penalty proposed. That was also how the contention was understood by this Court. The connection was not and at least it was not understood to mean by this Court, that a copy of the report was necessary to prove the innocence of the employee before the disciplinary authority arrived at its conclusion with regard to the guilt or otherwise on the basis of the said report. Hence, we read nothing in this decision which has taken a view contrary to the view expressed in E. Bashyans case (AIR 1988 SC 1000 ) (supra) by a Bench of two learned Judges or to the view taken by three learned Judges in Union of India v. Mohd. Ramzan Khan, (1991 (1) SCC 588 : AIR 1991 SC 471 ). In Mohd. Ramzan Khans case (supra), the question squarely fell for consideration before a Bench of three learned Judges of this Court, viz., that although on account of the 42nd Amendment of the Constitution, it was no longer necessary to issue a notice to the delinquent employee to show cause against the punishment proposed and, therefore, to furnish a copy of the Inquiry Officers report along with the notice to make representation against the penalty, whether it was still necessary to furnish a copy of the report to him to enable him to make representation against the findings recorded against him in the report before the disciplinary authority took its own decision with regard to the guilt or otherwise of the employee by taking into consideration the said report. The Court held that whenever the Inquiry Officer is other than the disciplinary authority and the report of the Inquiry Officer holds the employee guilty of all or any of the charges with proposal for any punishment or not, the delinquent employee is entitled to a copy of the report to enable him to make a representation to the disciplinary authority against it and the non furnishing of the report amounts to a violation of the rules of natural justice. However, after taking this view, the Court directed that the law laid down there shall have prospective application and the punishment which is already imposed shall not be open to challenge on that ground. Unfortunately, the Court by mistake allowed all the appeals which were before it and thus set aside the disciplinary action in every case, by failing to notice that the actions in those cases were prior to the said decision. This anomaly was noticed at a later stage but before the final order could be reviewed and rectified, the present reference was already made, as stated above, by a Bench of three learned Judges. The anomaly has thus lent another dimension to the question to be resolved in the present case. 6. The origins of the law can also be traced to the principles of natural justice, as developed in the following cases: In A. K. Kraipak v. Union of India, (1970 (1) SCR 457 : AIR 1970 SC 150 ), it was held that the rules of natural justice operate in areas not covered by any law. They do not supplant the law of the land but supplement it. They are not embodied rules and their aim is to secure justice or to prevent miscarriage of justice. If that is their purpose, there is no reason why they should not be made applicable to administrative proceedings also especially when it is not easy to draw the line that demarcates administrative enquiries from quasi judicial ones. An unjust decision in an administrative inquiry may have a more far reaching effect than a decision in a quasi judicial inquiry. It was further observed that the concept of natural justice has undergone a great deal of change in recent years. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the inquiry is held and the constitution of the tribunal or the body of persons appointed for that purpose. Whenever a complaint is made before a Court that some principle of natural justice has been contravened, the Court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. The rule that inquiry must be held in good faith and without bias and not arbitrarily or unreasonably is now included among the principles of natural justice. In Chairman, Board of Mining Examination v. Ramjee, (1977 (2) SCR 904 : AIR 1977 SC 965 ), the Court has observed that natural justice is not an unruly horse, no lurking landmine, nor a judicial cure all. If fairness is shown by the decision maker to the man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating. The Courts cannot look at law in the abstract or natural justice as mere artifact. Nor can they fit into a rigid mould the concept of reasonable opportunity. If the totality of circumstances satisfies the Court that the party visited with adverse order has not suffered from denial of reasonable opportunity, the Court will decline to be punctilious or fanatical as if the rules of natural justice were sacred scriptures. In Institute of Chartered Accountants of India v. L. K. Ratna, AIR 1987 SC 71 , Charan Lal Sahu v. Union of India, (1990 (1) SCC 613 : AIR 1990 SC 1480 ), (Bhopal Gas Leak Disaster Case) and C. B. Gautam v. Union of India, 1993 (1) SCC 78 , the doctrine that the principles of natural justice must be applied in the unoccupied interstices of the statute unless there is a clear mandate to the contrary, is reiterated. 7. What emerges from the above survey of the law on the subject is as follows: Since the Government of India Act, 1935 till the 42nd Amendment of the Constitution, the Government servant had always the right to receive report of the Inquiry Officer / authority and to represent against the findings recorded in it when the Inquiry Officer/authority was not the disciplinary authority. This right was however, exercisable by him at the second stage of the disciplinary proceedings viz., when he was served with a notice to show cause against the proposed penalty. The issuance of the notice to show cause against the penalty necessarily required the furnishing of a copy of the inquiry Officers report since, as held by the Courts, the right to show cause against the penalty also implied the right to represent against the findings on the charges. This was considered to be an essential part of the reasonable opportunity, incorporated earlier in S.240 (3) of the GOI Act and later in Art.311(2) of the Constitution as originally enacted. The right to receive the Inquiry Officers report and to show cause against the findings in the report was independent of the right to show cause against the penalty proposed. The two rights came to be confused with each other because as the law stood prior to the 42nd Amendment of the Constitution, the two rights arose simultaneously only at the stage when a notice to show cause against the proposed penalty was issued. If the disciplinary authority after considering the Inquiry Officers report had dropped the proceedings or had decided to impose a penalty other than that of dismissal, removal or reduction in rank, there was no occasion for issuance of the notice to show cause against the proposed penalty. In that case, the employee had neither the right to receive the report and represent against the finding of guilt nor the right to show cause against the proposed penalty. The right to receive the report and to represent against the findings recorded in it was thus inextricably connected with the acceptance of the report by the disciplinary authority and the nature of the penalty proposed. Since the 42nd Amendment of the Constitution dispensed with the issuance of the notice to show cause against the penalty proposed even if it was dismissal, removal or reduction in rank, some courts took the view that the Government servant was deprived of his right to represent against the findings of guilt as well. The error occurred on account of the failure to distinguish the two rights which were independent of each other. While the right to represent against the findings in the report is part of the reasonable opportunity available during the first stage of the inquiry viz., before the disciplinary authority takes into consideration the findings in the report. the right to show cause against the penalty proposed belongs to the second stage when the disciplinary authority has considered the findings in the report and has come to the conclusion with regard to the guilt of the employee and proposes to award penalty on the basis of its conclusions. The first right is the right to prove innocence. The second right is to plead for either no penalty or a lesser penalty although the conclusion regarding the guilt is accepted. It is the second right exercisable at the second stage which was taken away by the 42nd Amendment. The reason why the right to receive the report of the Inquiry Officer is considered an essential part of the reasonable opportunity it the first stage and also a principle of natural justice is that the findings recorded by the Inquiry Officer form an important material before the disciplinary authority which along with the evidence is taken into consideration by it to come to its conclusions. It is difficult to say in advance, to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions. The findings further might have been recorded without considering the relevant evidence on record, or by misconstruing it or unsupported by it. If such a finding is to be one of the documents to be considered by the disciplinary authority, the principles of natural justice require that the employee should have a fair opportunity to meet, explain and controvert it before he is condemned. It is the negation of the tenets of justice and a denial of fair opportunity to the employee to consider the findings recorded by a third party like the Inquiry Officer without giving the employee an opportunity to reply to it. Although it is true that the disciplinary authority is supposed to arrive at its own findings on the basis of the evidence recorded in the inquiry, it is also equally true that the disciplinary authority takes into consideration the findings recorded by the Inquiry Officer along with the evidence on record. In the circumstances, the findings of the Inquiry Officer do constitute an important material before the disciplinary authority which is likely to influence its conclusions. If the Inquiry Officer were only to record the evidence and forward the same to the disciplinary authority, that would not constitute any additional material before the disciplinary authority of which the delinquent employee has no knowledge. However, when the Inquiry Officer goes further and records his findings, as stated above, which may or may not be based on the evidence on record or are contrary to the same or in ignorance of it, such findings are an additional material unknown to the employee but are taken into consideration by the disciplinary, authority while arriving at its conclusion. Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary, authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the Inquiry Officers findings. The disciplinary authority is then required to consider the evidence, the report of the Inquiry Officer and the representation of the employee against it.It will thus be seen that where the Inquiry Officer is other than the disciplinary authority, the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusions on the basis of the evidence, Inquiry Officers report and the delinquent employees reply to it. The second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. If the disciplinary authority decides to drop the disciplinary proceedings, the second stage is not even reached. The employees right to receive the report is thus, a part of the reasonable opportunity of defending himself in the first stage of the inquiry. If this right is denied to him, he is in effect denied the right to defend himself and to prove his innocence in the disciplinary proceedings. The position in law can also be looked at from a slightly different angle. Art.311(2) says that the employee shall be given a "reasonable opportunity of being heard in respect of the charges against him". The findings on the charges given by a third person like the enquiry Officer, particularly when they are not borne out by the evidence or are arrived at by overlooking the evidence or misconstruing it, could themselves constitute new unwarranted imputations. What is further, when the proviso to the said Article states that "where it is proposed after such inquiry to impose upon him any such penalty such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed", it in effect accepts two successive stages of differing scope. Since the penalty is to be proposed after the inquiry, which inquiry in effect is to be carried out by the disciplinary authority (the Inquiry Officer being only his delegate appointed to hold the inquiry and to assist him), the employees reply to the Inquiry Officers report and consideration of such reply by the disciplinary authority also constitute an integral part of such inquiry. The second stage follows the inquiry so carried out and it consists of the issuance of the notice to show cause against the proposed penalty and of considering the reply to the notice and deciding upon the penalty. What is dispensed with is the opportunity of making representation on the penalty proposed and not of opportunity of making representation on the report of the Inquiry Officer. The latter right was always there. But before the 42nd Amendment of the Constitution, the point of time at which it was to be exercised had stood deferred till the second stage viz., the stage of considering the penalty. Till that time, the conclusions that the disciplinary authority might have arrived at both with regard to the guilt of the employee and the penalty to be imposed were only tentative. All that has happened after the 42nd Amendment of the Constitution is to advance the point of time at which the representation of the employee against the enquiry Officers report would be considered. Now, the disciplinary authority has to consider the representation of the employee against the report before it arrives at its conclusion with regard to his guilt or innocence of the charges.Hence it has to be held that when the Inquiry Officer is not the disciplinary authority, the delinquent employee has right to receive a copy of the inquiry Officers report before the disciplinary authority arrives at its conclusions with regard to the guilt or innocence of the employee with regard to the charges levelled against him. That right is a part of the employees right to defend himself against the charges levelled against him. A denial of the Inquiry Officers report before the disciplinary authority takes its decision on the charges is a denial of reasonable opportunity to the employee to prove his innocence and is a breach of the principles of natural justice.

Decision:
0[ds]Two things, therefore, emerge from this decision, viz., that it is not the function of the inquiry Officer to propose any punishment even after he records findings of guilt against the delinquent employee. Much less can the Inquiry Officer do so at the stage of serving the charges on the employee. Secondly, it is for the disciplinary authority to propose the punishment after receipt of the report of the Inquiry Officer which suggests that before the authority proposes the punishment, it must have applied its mind to the evidence and the findings recorded by the InquiryUnion of India v. Tulsiram Patel (1985) Supp 2 SCR 131 : AIR 1985 SC 1416 ), this Court had specifically to consider the legal position arising out of the 42nd Amendment of the Constitution by which clause (2) of Art. 311 was amended and the part of the said clause, viz., "and where it is proposed, after such inquiry, to impose on him any such penalty until he has been given reasonable opportunity of making representation on the penalty proposed, but only on the basis of the evidence adduced during such inquiry" was deleted. In that decision, this Court has not dealt with the procedure to be followed by the disciplinary authority after the Inquiry Officers report is received by it. The question whether the delinquent employee should be heard by the disciplinary authority to prove his innocence of the charges levelled against him when they are held to have been proved by the Inquiry Officer, although he need not be heard on the question of the proposed penalty was neither raised nor answered. This decision, therefore, is not helpful for deciding the saidreason why the right to receive the report of the Inquiry Officer is considered an essential part of the reasonable opportunity it the first stage and also a principle of natural justice is that the findings recorded by the Inquiry Officer form an important material before the disciplinary authority which along with the evidence is taken into consideration by it to come to its conclusions. It is difficult to say in advance, to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions. The findings further might have been recorded without considering the relevant evidence on record, or by misconstruing it or unsupported by it. If such a finding is to be one of the documents to be considered by the disciplinary authority, the principles of natural justice require that the employee should have a fair opportunity to meet, explain and controvert it before he is condemned. It is the negation of the tenets of justice and a denial of fair opportunity to the employee to consider the findings recorded by a third party like the Inquiry Officer without giving the employee an opportunity to reply to it. Although it is true that the disciplinary authority is supposed to arrive at its own findings on the basis of the evidence recorded in the inquiry, it is also equally true that the disciplinary authority takes into consideration the findings recorded by the Inquiry Officer along with the evidence on record. In the circumstances, the findings of the Inquiry Officer do constitute an important material before the disciplinary authority which is likely to influence its conclusions. If the Inquiry Officer were only to record the evidence and forward the same to the disciplinary authority, that would not constitute any additional material before the disciplinary authority of which the delinquent employee has no knowledge. However, when the Inquiry Officer goes further and records his findings, as stated above, which may or may not be based on the evidence on record or are contrary to the same or in ignorance of it, such findings are an additional material unknown to the employee but are taken into consideration by the disciplinary, authority while arriving at its conclusion. Both the dictates of the reasonable opportunity as well as the principles of natural justice, therefore, require that before the disciplinary, authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the Inquiry Officers findings. The disciplinary authority is then required to consider the evidence, the report of the Inquiry Officer and the representation of the employee against it.It will thus be seen that where the Inquiry Officer is other than the disciplinary authority, the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusions on the basis of the evidence, Inquiry Officers report and the delinquent employees reply to it. The second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. If the disciplinary authority decides to drop the disciplinary proceedings, the second stage is not even reached. The employees right to receive the report is thus, a part of the reasonable opportunity of defending himself in the first stage of the inquiry. If this right is denied to him, he is in effect denied the right to defend himself and to prove his innocence in the disciplinarythat has happened after the 42nd Amendment of the Constitution is to advance the point of time at which the representation of the employee against the enquiry Officers report would be considered. Now, the disciplinary authority has to consider the representation of the employee against the report before it arrives at its conclusion with regard to his guilt or innocence of the charges.Hence it has to be held that when the Inquiry Officer is not the disciplinary authority, the delinquent employee has right to receive a copy of the inquiry Officers report before the disciplinary authority arrives at its conclusions with regard to the guilt or innocence of the employee with regard to the charges levelled against him. That right is a part of the employees right to defend himself against the charges levelled against him. A denial of the Inquiry Officers report before the disciplinary authority takes its decision on the charges is a denial of reasonable opportunity to the employee to prove his innocence and is a breach of the principles of naturalthe Article makes it obligatory to hold an inquiry before the employee is dismissed or removed or reduced in rank. The Article, however, cannot be construed to mean that it prevents or prohibits the inquiry when punishment other than that of dismissal, removal or reduction in rank is awarded. The procedure to be followed in awarding other punishments is laid down in the service rules governing the employee. What is further, Art.311(2) applies only to members of the civil services of the Union or an all India service or a civil service of a State or to the holders of the civil posts under the Union or a State. In the matter of all punishments both Government servants and others are governed by their service rules. Whenever, therefore, the service rules contemplate an inquiry before a punishment is awarded, and when the Inquiry Officer is not the disciplinary authority the delinquent employee will have the right to receive the Inquiry Officers report notwithstanding the nature of theIn the view that we have taken, viz., that the right to make representation to the disciplinary authority against the findings recorded in the inquiry report is an integral part of the opportunity of defence against the charges and is a breach of principles of natural justice to deny the said right, it is only appropriate that the law laid down in Mohd. Ramzan Khans case (AIR 1991 SC 471 ) (supra) should apply to employees in all establishments whether Government or non Government, public or private. This will be the case whether there are rules governing the disciplinary proceeding or not and whether they expressly prohibit the furnishing of the copy of the report or are silent on the subject. Whatever the nature of punishment, further, whenever the rules require an inquiry to be held, for inflicting the punishment in question, the delinquent employee should have the benefit of the report of the Inquiry Officer before the disciplinary authority records its findings on the charges levelled against him. Hence question (iv) is answered accordingly.v)The next question to be answered is what is the effect on the order of punishment when the report of the Inquiry Officer is not furnished to the employee and what relief should be granted to him in such cases.The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to a "unnatural expansion of natural justice" which in itself is antithetical to justice.Hence, in all cases where the Inquiry Officers report is not furnished to the delinquent employee in the disciplinary proceedings, the courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the Court! Tribunal, and give the employee an opportunity to show how his or her case was prejudiced because of the non supply of the report. If after hearing the parties, the Court., Tribunal comes to the conclusion that the non supply of the report would have made no difference to the ultimate findings and the punishment given, the Court / Tribunal should not interfere with the order of punishment. The Court / Tribunal should nut mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the Courts / Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Courts/ Tribunals find that the furnishing of the report would have made a: difference to the result in the case that should set aside the order of punishment Where after following the above procedure the Courts/Tribunals sets aside the order of punishment, the proper relief that should be granted is to direct reinstatement of the employee with liberty to the authority, management to proceed with the inquiry, by placing the employee under suspension and continuing the inquiry from the stage of furnishing him with the report. The question whether the employee would be entitled to the back wages and other benefits from the date of his dismissal to the date of his reinstatement if ultimately ordered should invariably be left to be decided by the authority concerned according to law, after the culmination of the proceedings and depending on the final outcome. If the employee succeeds in the fresh inquiry and is directed to be reinstated, the authority should be at liberty to decide according to law how it will treat the period from the date of dismissal till the reinstatement and to what benefits, if any and the extent of the benefits, he will be entitled. The reinstatement made as a result of the setting aside of the inquiry for failure to furnish the report should be treated as a reinstatement for the purpose of holding the fresh inquiry from the stage of furnishing the report and no more, where such fresh inquiry is held. That will also be the correct position init cannot be gainsaid that while Mohd. Ramzan Khans case (AIR 1991 SC 471 ) (supra) made the law laid down there prospective in operation, while disposing of the cases which were before the Court, the Court through inadvertence gave relief to the employees concerned in those cases by allowing their appeals and setting aside the disciplinary proceedings. The relief granted was obviously per incuriam. The said relief has, therefore, to be confined only to the employees concerned in those appeals. The law which is expressly made prospective in operation there cannot be applied retrospectively on account of the said error. It is now well settled that the courts can make the law laid down by them prospective in operation to prevent unsettlement of the settled positions, to prevent administrative chaos and to meet the ends ofhave pointed out that there was no contradiction between the view taken in Mohd. Ramzan Khans case (AIR 1991 SC 471 ) (supra) and the view taken by this court in the earlier cases, and the reliance placed on K. C. Asthanas case (AIR 1988 SC 1338 ) (supra) to contend that a contrary view was taken there was not well merited. It will, therefore, have to be held that notwithstanding the decision of the Central Administrative Tribunal in Premnath K. Sharmas case (1988 (2) ASLJ 449) (supra) and of the Gujarat High Court in H. G. Patels case (1985 (2) 26 Guj LR 1385) (supra) and of the other courts and tribunals, the law was in an unsettled condition till at least 20th November, 1990 on which day the Mohd. Ramzan Khans case was decided. Since the said decision made the law expressly prospective in operation the law laid down there will apply only to those orders of punishment which are passed by the disciplinary authority after 20th November, 1990. This is so, notwithstanding the ultimate relief which was granted there which, as pointed out earlier, was per incuriam. No order of punishment passed before that date would be challengeable on the ground that there was a failure to furnish the inquiry report to the delinquent employee. The proceedings pending in courts/tribunals in respect of orders of punishment passed prior to 20th November, 1990 will have to be decided according to the law that prevailed prior to the said date and not according to the law laid down in Mohd. Ramzan Khans case (AIR 1991 SC 471 ) (supra). This is so notwithstanding the view taken by the different benches of the Central Administrative Tribunal or by the High Courts or by this Court in R. K. Vashists case, (1993 Supp (I) SCC 431) (supra).8. The need to make the law laid down in Mohd. Ramzan Khans case, (AIR 1991 SC 471 ) (supra) prospective in operation requires no emphasis. As pointed out above, in view of the unsettled position of the law on the subject, the authorities/ managements all over the country had proceeded on the basis that there was no need to furnish a copy of the report of the Inquiry Officer to the delinquent employee, and innumerable employees have been punished without giving them the copies of the reports. In some of the cases, the orders of punishment have long since become final while other cases are pending in courts at different stages. In many of the cases, the misconduct has been grave and in others the denial on the part of the management to furnish the report would ultimately prove to be no more than a technical mistake. To reopen all the disciplinary proceedings now would result in grave prejudice to administration which will far outweigh the benefit to the employees concerned. Both administrative reality and public interests do not, therefore, require that the orders of punishment passed prior to the decision in Mohd. Ramzan Khans case (supra) without furnishing the report of the Inquiry Officer should be disturbed and the disciplinary proceedings which gave rise to the said orders should be reopened on that account. Hence we hold as above.