JUDGMENT [ENTITY], J.
1. This appeal and the cross objection arise out of an oral judgment and order of a learned Single Judge of this Court dated 4th September 1996, (since reported in [PRECEDENT]) allowing the Writ Petition filed by respondent No. 1 herein against his dismissal from service but substituting the impugned departmental order passed by the Appellant with only compensation. The Appellant is aggrieved by that part of the order passed by the learned Single Judge which interferes with their disciplinary order and that is why it has filed this appeal. The respondent No. 1, on the other hand, is aggrieved by that part of the order passed by the learned Single Judge not granting the full relief of reinstatement with full backwages which the respondent No. 1 had sought in the said writ petition. That is why the respondent No. 1 has filed the cross objection.
2. The short facts leading to this appeal are as follows :
The respondent No. 1 was working as an Acting Deputy Manager in-charge of Oil Movement and Storage Department under the Appellant at its refinery situated in Chembur, Mumbai. The Appellant is a statutory Corporation set up under the [ACT] and also incorporated under the [ACT]. Dealing in petroleum products is its principal activity. The respondent No. 2 is [ENTITY] through the Secretary, Ministry of Petroleum and Natural Gas, but the respondent No. 2 does not have much role in this matter.
3. It so happened that on 14th March, 1986 when the respondent No. 1 was on duty, the police intercepted an oil tanker bearing No. MCU-1914 which had gone out of the Chembur Refinery of the Appellant and it was found that the tanker was carrying excess quantity of oil as against what it was officially supposed to carry. The investigation followed and the respondent No. 1 was arrested along with some other 50 employees by the State C.I.D. on 24th November, 1986 on the charge of theft of petroleum products of the Appellant and other related offences. Some of the employees gave statements of confession to the police and the investigation led to the prosecution of the employees including the respondent No. 1. It is material to note that subsequently the respondent No. 1 was discharged by the concerned criminal Court on 6th July 1989 for lack of necessary evidence.
4. In a parallel proceeding at the departmental level, the Appellant charge-sheeted the respondent No. 1 on 17th December, 1986 for the misconduct of
(a) fraud and dishonesty with the business of the Corporation;
(b) acting in a manner prejudicial to the interest of the Corporation; and
(c) commission of the act which amounts to criminal offence involving moral turpitude.
The allegation against the respondent No. 1 was that he had signed the shift gate pass in respect of earlier mentioned tanker and that the respondent No. 1 was a party to the fraud of creating convenient record leading to the theft of the oil product. The respondent No. 1 was suspended during the inquiry. He submitted his explanation on 29th December 1986 denying the allegations against him. That was followed by departmental inquiry.
5. In the departmental inquiry, the Appellant Management sought to produce the allegedly confessional statements made by some of the employees during the course of the criminal proceedings either before the police or before the Judicial Magistrate. Two of such witnesses appeared, i.e. one Shri [ENTITY] and Shri [ENTITY], but did not give any deposition in the departmental inquiry, The third witness Shri [ENTITY] declined to appear in the inquiry. The Appellant Management examined two more witnesses, namely one Shri [ENTITY] to prove certain documents and Shri [ENTITY], Sub-Inspector of Police, who had carried out the investigation and before whom Shri [ENTITY] had made the confession. The confessional statements made by three employees were tendered in the departmental inquiry. The respondent No. 1 - delinquent employee cross-examined the two officers. The cross-examination was mainly on the aspect as to how the statements were given by the fellow employees to the Police Officer concerned and as to whether they were given under coercion, etc. The respondent No. 1 did not examine himself in defence. The Inquiry Officer thereafter submitted his report dated 25th February 1992 holding that the charges levelled against the respondent No. 1 were proved on the basis of the evidence on record. It is relevant to note that a copy of the inquiry report was not furnished to the respondent No. 1 until he was subsequently dismissed from service. Thereafter the papers were put up before the Disciplinary Authority which concurred with the finding of the Inquiry Officer and, therefore, issued an order on 7th April 1992 dismissing the respondent No. 1 from the services of the Appellant Corporation.
6. The respondent No. 1 filed a departmental appeal to the Appellate Authority. The appeal was considered by the Chairman-cum-Managing Director of the Appellant. He concurred with the finding and the order given by the Disciplinary Authority by his order passed on 20th October, 1992. The detailed order passed by the Appellate Authority declined to interfere into the order passed by the Disciplinary Authority.
7. The respondent No. 1 thereafter filed [CASE NUMBER] to challenge the order of dismissal passed by the Appellant. He, however, confined this petition only to the original order of dismissal dated 7th April 1992. In para 8 of this petition, he mentioned that he did carry an appeal to the Appellate Authority and that the same was dismissed, but the prayers of the petition did not challenge the appellate order specifically.
8. The Division Bench, which heard the petition, took the view that the original order of dismissal had merged into the appellate order and it was the appellate order which was governing the field. Inasmuch as the appellate order was not challenged, the Division Bench declined to entertain the petition. The order passed by the Division Bench (Smt. [ENTITY], Actg. C. J., as she then was, and [ENTITY], J.) on 7th September 1993 reads as follows :
"The petitioner challenges in this petition the order of dismissal from service dated 7-4-1992 on the ground that no show cause notice was issued to him before imposing punishment. He points out that on similar ground [CASE NUMBER] has been admitted by another Division Bench of this Court. In the present case, however, the petitioner preferred an appeal under the [ACT] framed by Hindustan Petroleum Corporation Limited. The appeal was dated 8-6-1992. The Appellate Authority has passed a detailed speaking order dated 20-10-1992 under which he has considered each of the points raised by the petitioner and has dismissed the appeal and has held that there is no ground to resist the punishment awarded by the Disciplinary Authority. The order of the Disciplinary Authority has, therefore, now merged with the order of the Appellate Authority. This order is not challenged in the present petition. In view thereof, this petition cannot be equated with [CASE NUMBER]. Petition dismissed."
9. The respondent No. 1 carried the matter in appeal to the Apex Court, but he withdrew the appeal and, as recorded by the Apex Court in [CASE NUMBER], the S.L.P. was allowed to be withdrawn with liberty to avail of another remedy. The order passed in the S.L.P. on 5th September 1994 is as follows :
"Special Leave Petition is dismissed as withdrawn as the learned counsel says the petitioner will avail himself of other remedy."
That is how the respondent No. 1 thereafter filed present [CASE NUMBER].
10. When the petition was finally heard before a learned Single Judge, it was canvassed by the Appellant that the dismissal of the writ petition filed by the respondent No. 1 and withdrawal of the appeal therefrom operate as res judicata and the respondent No. 1 cannot be permitted to re-agitate same cause once over. The second submission of the Appellant undoubtedly was that it had conducted a fair and proper inquiry and, in the facts of the case as they stood, the misconduct had been duly proved in the departmental inquiry. As against the submission of the Appellant, it was canvassed on behalf of the respondent No. 1 that the order passed by the Appellate Authority was not challenged in the earlier writ petition and, therefore, the dismissal of that petition or withdrawal of the S.L.P. will not operate as res judicata. It was further submitted on behalf of the respondent No. 1 that the inquiry was vitiated inasmuch as the evidence relied upon by the Appellant was a hear-say evidence, the misconduct could not be said to be proved.
11. The learned Single Judge, who heard the matter, came to the conclusion that this was not a case of res judicata and the dismissal of the earlier writ petition will not operate as a bar to the entertaining of the present writ petition. The learned Judge also held that the misconduct was not duly proved in the departmental inquiry. To this extent, he held in favour of the respondent No. 1 and that is how he allowed the petition filed by the respondent No. 1. However, the learned Judge came to the further conclusion that this was a case of loss of confidence and that the respondent No. 1 could not be reinstated. The learned Judge, therefore, substituted the punishment of dismissal for misconduct into one of appropriate monetary compensation to the respondent No. 1 while declining him the benefit of reinstatement. Being aggrieved by this oral judgment and order that the present appeal and subsequently the cross objection have been filed as stated earlier.
12. Three points arise in this appeal for determination and they are
(A) Whether the order passed by the High Court in an earlier writ petition and the order passed by the Apex Court in the appeal therefrom would operate as res judicata in any manner?
(B) Whether the learned Single Judge erred in coming to the conclusion that the misconduct alleged against the respondent No. 1 had not been duly proved?
(C) Whether the learned Single Judge erred in substituting the punishment of dismissal with merely some monetary compensation?
13. When we turn to the first question regarding res judicata, what we find is that the learned Single Judge has come to the conclusion as can be seen from para 9 of the impugned order that the decision rendered by the earlier Division Bench was not a decision on the merits of the case and that the petition was dismissed on technical ground. Mr. [ENTITY], learned counsel appearing for the Appellant, tried to assail this finding whereas Mr. [ENTITY], learned counsel appearing for the respondent No. 1 - employee, very much defended it. The counsel referred us to various judgments on this controversy.
14. The principal judgments to which our attention was drawn are as follows:
Firstly, we have the judgment of a [ACT] Bench of the Apex Court in the case of [ENTITY] v. State of U.P., of this judgment, the Supreme Court had following to say with respect to "application of this doctrine to the writ petition.
"Thus, on general considerations of public policy there seems to be no reason why the rule of res judicata should be treated as inadmissible or irrelevant in dealing with petitions filed under [SECTION] of the [ACT]. "It is true that the general rule can be invoked only in cases where a dispute between the parties has been referred to a Court of competent jurisdiction, there has been a contest between the parties before the Court, a fair opportunity has been given to both of them to prove their case, and at the end the Court has pronounced its judgment or decision. Such a decision pronounced by a Court of competent jurisdiction is binding between the parties unless it is modified or reversed by adopting a procedure prescribed by the [ACT]."
15. The second relevant judgment is in the case of [PRECEDENT], of this judgment, the Apex Court dealt with the question as to whether an order of the Apex Court dismissing an S.L.P. in limine could be a bar to a subsequent writ petition filed in the High Court and as to whether the matters agitated in the petition were either explicitly or implicitly decided against the respondent. The Apex Court held that the technical rule of res judicata, although a wholesome one, could not be applied merely on an uncertain assumption that the issue must have been dealt with earlier. The Court thereafter said that it was not safe to extend the principle of res judicata to such an extent so as to found it on mere guesswork. The Court further observed in the very para as follows :
"Of course, a second writ petition on the same cause of action either filed in the same High Court or in another will not be maintainable because the dismissal of one petition will operate as a bar in the entertainment of another writ petition. Similarly even if one writ petition is dismissed in limine by a non-speaking one word order 'dismissed', another writ petition would not be maintainable because even the one word order, as we have indicated above, must necessarily be taken to have decided impliedly that the case is not a fit one for exercise of the writ jurisdiction of the High Court. Another writ petition from the same order or decision will not lie. But the position is substantially different when a writ petition is dismissed either at the threshold or after contest without expressing any opinion on the merits of the matter, then no merit can be deemed to have been necessarily and impliedly decided and any other remedy of suit or other proceeding will not be barred on the principle of res judicata."
16. Third authority cited before us was in the case of [PRECEDENT], . It is material to note however that this was a case where an S.L.P. was specifically withdrawn in the Apex Court and thereafter the writ petition was filed. It was sought to be objected on the ground of res judicata. Inasmuch as this was a case of withdrawal of a petition, the Court held that the permission to withdraw an S.L.P. cannot be equated with an order of dismissal of the petition.
17. The fourth relevant judgment in this behalf is in the matter of [PRECEDENT], . This was in the context of annual notice demanding tax. The Apex Court held that the tax liability for each year was different and the ground of challenge would also be different and therefore principles of res judicata could not be raised.
18. Mr. [ENTITY] relied upon the judgment of the Apex Court in the case of [PRECEDENT], , wherein the Apex Court held that it is not permissible to obtain a second judgment for the same civil relief on the same cause of action for otherwise the spirit of contentiousness may give rise to conflicting Judgments of equal authority. He then relied upon the decision in the case of [PRECEDENT], to the effect that the withdrawal of a petition under [SECTION] without permission to institute fresh petition will be hit by principles of public policy under [SECTION] of [ACT]. This will also discourage the litigants from indulging into bench-hunting tactics. The emphasis of the. Apex Court was more on estoppel in this judgment rather than res judicata.
19. Having taken an overview of the judgments, Mr. [ENTITY] submitted that if a writ petition is now permitted to be re-agitated, it will mean that a party will first challenge an original order against him and subsequently challenge the appellate order. He submitted that the principle of constructive res judicata was meant to prevent abuse of the process of law and it was based on the public policy of not permitting matters to be re-agitated once over. In the present case, the respondent No. 1 could have amended his own petition and challenged the appellate order or could have as well withdrawn the S.L.P. filed in the Supreme Court with liberty. He having not done either, should not have been permitted by the learned Single Judge to re-agitate the same cause through a newly filed writ petition. He submitted that the cause was one and the same and that is an aspect which ought to be kept in mind.
20. Mr. [ENTITY], learned counsel for the respondent No. 1, on the other hand, submitted that when it comes to res judicata or constructive res judicata, [SECTION] of the [ACT] lays down that the Court will not try any suit or the matter directly and substantially in issue in a formal suit between the same parties. In the present case, the appellate order was not challenged in the earlier writ petition though a reference was made thereto. The appellate order was not directly and substantially in issue in the earlier writ petition. He, therefore, submitted that the learned Single Judge was right in coming to the conclusion that the petition could not be dismissed only on such a technical ground.
21. Having heard both the counsel, what we find from the above quotation in the case of [ENTITY] (supra) is that the principles of res judicata will apply where a dispute between the parties has been referred to a Court of competent jurisdiction and there has been a contest between them before the Court leading to a decision. In the present case, the appellate order had not been put into contest when the earlier writ petition was filed and was dismissed by the Division Bench (in those days the writ petitions were assignable to a Division Bench in this Court, which rule has subsequently been changed). In Cochin Port Trust (supra), what the Apex Court held was that a second writ petition on the same cause of action will not be maintainable. Now, in the instant case, the earlier Division Bench itself had said that the original order of dismissal had merged into the appellate order and that the appellate order had not been challenged. The appellate order had given the detailed reasons. Mr. [ENTITY] submitted that the dismissal itself gave a cause of action and if not by res judicata, the respondent No. 1 was hit by doctrine of estoppel and acquiescence inasmuch as he had chosen not to challenge the appellate order. The respondent No. 1 was, therefore, estopped from agitating it now. Mr. [ENTITY], on the other hand, submitted that cause of action is supposed to be a bundle of facts. In the instant case, the appellate departmental order was an order holding the field. When the earlier Division Bench mentioned that the original order had merged into the appellate order, it was clearly indicated that it was the appellate order which was to be challenged and not the original one.
22. What we find in this matter is that the order passed by the earlier Division Bench pointed out the error on the part of the respondent No. 1 in challenging only the original order. It was, therefore, that they had dismissed the writ petition. It impliedly indicated an expectation that the respondent No. 1 should challenge the appellate order in case he was aggrieved by his dismissal. This expectation was bordering into an opportunity to take recourse to such an action. It is this order which is left undisturbed by the Apex Court and the Apex Court has allowed the S.L.P. to be withdrawn with liberty to avail of another remedy. In our view, the order passed by the Division Bench earlier as well as the order passed by the Apex Court could not be read as non-suiting the respondent No. 1 since the orders of the Courts are not expected to cause injustice. In the circumstances, we reject the submission of Mr. [ENTITY] that the learned Single Judge had erred in not applying the principles analogous to res judicata.
23. Then we come to the second point for determination as to whether the learned Single Judge had erred in coming to the conclusion that the misconduct alleged against the respondent No. 1 had not been duly proved. As far as this aspect is concerned, what is to be seen is that in the departmental inquiry, the Appellant Corporation examined two witnesses, namely one Shri [ENTITY] and Shri [ENTITY], Sub-Inspector of Police who carried out the investigation and before whom one Shri [ENTITY] had made confessional statement. Both these witnesses were asked about the manner in which the statements were recorded. On being put to them that the statement was recorded under duress, they denied it. It was also stated that the statements were explained to them and then only they had been signed. Mr. [ENTITY], therefore, submitted that though these confessional statements were subsequently retracted in the prosecution, there was nothing wrong in reading them in the departmental proceedings although those persons did not turn up for being available for cross-examination.
24. A reliance was placed upon two judgments of the Apex Court in this behalf. Firstly, in the case of [PRECEDENT], , wherein the Apex Court held that where more persons than one are being tried together, the confession made by one of them affecting himself and anyone of his co-accused can be taken into consideration by the Court not only against the maker of the confession but also against his co-accused. It is, however, material to note that in this judgment, the Court has also given a caution, namely that the amount of credibility to be attached to a retracted confession would depend upon the circumstances of each particular case. Another judgment which is relevant in this behalf is in the case of [PRECEDENT], , wherein it is laid down that a retracted confession may form the legal basis of a conviction if the Court is satisfied that it was true and was voluntarily made. Here also, there is a caution, namely that it has to be corroborated in material particulars. Mr. [ENTITY], therefore, submitted that in the instant case where the fellow employee did not turn up for being available for cross-examination, that should not deter the Court from looking into the material which is on record.
25. The dicta of the Apex Court in the case of State of Haryana v. [ENTITY], was then pressed into service by the Appellant. In that matter, four passengers were found to be without ticket and there were 11 more who claimed that they, had paid the fare but did not have the tickets. They had not turned up at the time of the inquiry, but the inspector who recorded their statements was available. His evidence was found to be sufficient to establish the misconduct of dishonesty. Mr. [ENTITY] submitted that in the facts of the present case, there was a chain among all the employees concerned. Action was taken against all of them. The men on the spot had given their confession. They however had not made themselves available for cross examination. The statements made by those employees involved the Appellant also. In Mr. [ENTITY]'s submission, that was enough for holding the respondent No. 1 guilty.
26. He further emphasised that the respondent No. 1 had filed a reply to the charge-sheet on 29th December 1986. In that he had taken a two-fold plea that firstly the so-called loss was within permissible range and there was no restriction on the quantity of the product to be loaded. Thus, the respondent No. 1 had sought to defend the incident on merit. If that was so, he ought to have given his own evidence in defence. He has chosen not to give any deposition. This shows the guilty mind. In Mr. [ENTITY]'s submission, the material on record was sufficient to come to the conclusion which the Inquiry Officer had arrived at. He submitted that such incidents were occurring over a period, and it is only when a clue was obtained that the Management had taken an action. The Appellant Management had taken a uniform action against all the employees and against all similarly situated high officers also and nobody deserves to be shown any leniency. In his submission, the material on record had to be examined as to whether it was sufficient to establish the misconduct and in his view, that was not done. Mr. [ENTITY] relied upon another judgment in the case of [ENTITY] v. Management, State Bank of India, in this behalf, where the complaint of wrongful withdrawal by a bank employee was substantiated by circumstantial evidence.
27. Mr. [ENTITY], learned counsel for the respondent No. 1, on the other hand, submitted that the authorities relied upon by Mr. [ENTITY] will not help him. In [ENTITY]'s case (supra), the evidence of Mr. [ENTITY], the Inspector of Crime Branch, was very much available and he was examined in the inquiry. Similarly the two authorities on the retracted confession being used did not deal with the situation where the persons concerned were not available for cross examination. Here, what had happened was that the statements made by fellow accused employees, who were on the spot making a confession, were subsequently retracted by them. Mr. [ENTITY] had pointed out that one of the employees had stated in his retracted statement that the respondent No. 1 had his share in these transactions and when he was confessing on his own involvement also, the statements must be given a due weightage. What we must remember in this behalf is that these statements were sought to be used against a superior officer, who was not on the spot and those fellow employees were not available for cross-examination. Mr. [ENTITY] submitted that the learned Single Judge had rightly relied upon the two judgments cited by him. Firstly, in the case of [PRECEDENT], , where the Apex Court held that though a Tribunal is not bound by formal rules relating to procedure and evidence, it cannot rely on evidence which is purely hearsay. The second judgment relied upon by the learned Single Judge was in the case of [PRECEDENT], , where the Apex Court held that the principle that a fact sought to be proved must be supported by statements made in the presence of the persons against whom the inquiry is held is one of the basic principles which cannot be ignored on the mere ground that domestic tribunals are not bound by the technical rules or procedure contained in the [ACT].
28. We have examined the rival submissions. There is no difficulty in accepting that in a departmental inquiry, strict principles of evidence will not apply. However, the facts in the case of [ENTITY] and [ENTITY] (supra) have to be closely scrutinised. In [ENTITY]'s case, there was direct evidence against the delinquent with respect to the unjustified withdrawal. In [ENTITY]'s case, the Inspector who found the passengers without tickets was examined in the inquiry. In the present case, we are concerned with the deposition of sub-ordinate employees who were on the spot and who were undoubtedly involved in the misconduct. They gave confessional statements to the police which they later on retracted. In those statements, they attributed involvement of respondent No. 1, who was not the person on the spot though he was on duty on the same day. These fellow employees were not made available for cross examination to the respondent No. 1. It is true that apart from denying his own involvement, the respondent No. 1 did make some more positive assertions in his explanation to the charge-sheet, namely that the excess quantity was within permissible range or that there was no restriction on the quantity of the products to be loaded. However, his not giving any deposition in defence cannot be read against him. The responsibility to prove the misconduct is on the Management. The Management must stand or fall on the basis of the evidence which it has led before the Inquiry Officer. In the facts of the present case, howsoever the charge may be serious and although there is an involvement of good number of employees, on the basis of the material on record it is not possible to say that the misconduct was established against the respondent No. 1 by a procedure acceptable in law. We, therefore, do not find any error on the part of the learned Single Judge in coming to the conclusion that the misconduct was not established.
29. There was also a grievance, namely that inquiry report was not made available to respondent No. 1. As far as this aspect is concerned, it has been well laid down by the Apex Court in [PRECEDENT], that it amounts to violation of principles of natural justice. The action of the Appellant will stand vitiated even on that ground.
30. In view of our findings on the first two points for determination, the appeal filed by the Appellant Management must fail. That however takes us to the last point for determination, namely as to whether the learned Single Judge was right in not granting reinstatement but awarding compensation in lieu thereof. As far as this aspect is concerned, we may rely on the judgment in the case of [PRECEDENT] wherein the Apex Court had relied upon the principles of loss of confidence to deny reinstatement. The present case is undoubtedly one where there were quite many suspicious circumstances. It is no use for the respondent No. 1 to say that he had examined the requisite number of vehicles as per his duty regulations on the particular day. Acts of pilferage were going on in the refinery for quite many years. Ten such incidents have taken place from January 1985 to 14th March 1986. The respondent No. 1 does not appear to have lodged any complaint. Even from his explanation, his defence is two-fold. Firstly, that he was of course not involved and secondly that the allegation was defendable. This was not something which was expected of a superior officer. The Management having taken action against all the employees can certainly come to a conclusion that they have no confidence in such an officer. The fact also remains that the fellow employees have been involved in the chain leading to the pilferage. It is one thing to say that the misconduct is not established, but it is another thing to say that in a situation like this, the Management can certainly lose its confidence in such an officer particularly where he is in a higher position. The learned Judge was, therefore right in coming to the conclusion that reinstatement was not required. The cross objection filed by the respondent No. 1 will therefore stand dismissed.
31. The learned Judge had awarded a compensation of 4 years salary including allowances as were admissible to the respondent No. 1. The Appellant Management had relied upon the formula laid down in [PRECEDENT], of compensation equivalent to 3.33 years salary. The Appellant had released similar amounts to other employees also. This being the position, when a notice of motion was moved in this appeal, by an order passed on 7th April 1997 a Division Bench permitted the respondent No. 1 to withdraw the sum equivalent to 3.33 years salary out of the salary of 4 years which was deposited by the Appellant herein. In our view, that should suffice by way of compensation to the respondent No. 1, particularly from the point of view of parity. On the basis of this view that we are taking, the operative order passed by the learned Single Judge will stand modified to this limited extent, namely that the respondent No. 1 will be entitled to compensation only to the amount equivalent to 3.33 years last drawn salary, which he has already withdrawn. The rest of the amount has been invested by this Court. The Prothonotary and Senior Master will release that amount with interest to the Appellant on an authenticated copy of this order being produced. The respondent No. 1 has given a security while withdrawing the amount which he has already withdrawn. That security will stand discharged. As far as the Appellant is concerned, the Appellant has given a bank guarantee to assure payment of balance amount, if held due, to the respondent No. 1. That bank guarantee will also stand discharged.
32. The appeal and the cross objection stand disposed of with the aforesaid modification in the operative order passed by the learned Single Judge. In the facts of the case, there will be no order as to costs.
33. Parties to act on an ordinary copy of this copy duly authenticated by the Personal Secretary.