Managing Director, ECIL, Hyderabad v B. Karunakar (1993)

It decides the syllabus head on the requirement of supplying the inquiry report and the effect of non-supply, and it decides both halves. The right to the report is absolute; the consequence of denying it is not. The judgment also contains the sentence that states the philosophy of this whole branch of law.

The appeals raised whether a delinquent employee is entitled to a copy of the enquiry officer's report before the disciplinary authority records its findings, whether the right depends on the service rules, whether silence in asking for it is a waiver, and what relief follows if the report was not supplied.

The report must be furnished in every case; but non-supply invalidates the punishment only where the employee shows prejudice.

The right, and its breadth. "the right to make representation to the disciplinary authority against the findings recorded in the enquiry 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". The law "should apply to employees in all establishments whether Government or non-Government, public or private", and "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 punishment, "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 enquiry officer before the disciplinary authority records its findings on the charges levelled against him."

No waiver by silence. "it will not be proper to construe his failure to ask for the report, as the waiver of his right. Whether, therefore, the employee asks for the report or not, the report has to be furnished to him."

The effect of non-supply. It does not automatically invalidate. "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." Then the sentence to carry: "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 neither incantations to be invoked nor rites to be performed on all and sundry occasions." So "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", and where "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." That "amounts to an "unnatural expansion of natural justice" which in itself is antithetical to justice."

The procedure prescribed. Where the report was not furnished, the court or tribunal "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 it concludes "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." Courts "should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present", and "should avoid resorting to short cuts." Only "if the Court/Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment."

The relief. Not reinstatement with back wages, but "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." Back wages "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", and the reinstatement "should be treated as a reinstatement for the purpose of holding the fresh inquiry from the stage of furnishing the report and no more".

Prospectivity. The right was first laid down in Mohd. Ramzan Khan, decided on 20 November 1990, and made prospective. Until that day "the position of law on the subject was not settled by this Court", so earlier orders of punishment are unaffected "notwithstanding the fact that the proceedings arising out of the same were pending in courts after that date", the only exception being where the service rules themselves made supply obligatory. The relief actually granted in Mohd. Ramzan Khan was "obviously per incuriam" and confined to those employees. The justification is frankly consequentialist: "innumerable employees have been punished without giving them the copies of the reports", so "To reopen all the disciplinary proceedings now would result in grave prejudice to administration which will far outweigh the benefit to the employees concerned."

The constitutional footnote. The stage at which the report becomes due shifted because of the Forty-second Amendment, "which abolished the second stage of the inquiry, viz., the inquiry into the nature of" punishment. Before it, the opportunity "had stood deferred till the second notice requiring him to show cause against the penalty, was issued to him"; afterwards the two rights — to prove innocence and to show cause against penalty — came "into sharp focus" as independent and belonging to different stages.

The enquiry report must be furnished to the delinquent employee before the disciplinary authority records its findings, in every establishment and whatever the rules say, and silence is not waiver. Non-supply does not invalidate the punishment unless the employee shows that it caused prejudice, which the court tests by furnishing the report and hearing him on prejudice.

• On the effect of a breach of natural justice: it is the counterweight to Nawabkhan's void rule. Hold the two together: a breach makes the order void, but the court first satisfies itself that a breach causing prejudice has occurred.
• On the exceptions to natural justice: its prejudice test is the useless formality theory in another form, and the two should be cited together.
• On relief: the passage on reinstatement for the purpose of continuing the inquiry is the model order, and it is what an examiner wants when the question asks what the court should do.