SC: Enquiry Must Include Evidence, Cross Exam; De Novo If No Admission

A bench of Justices Manoj Misra and Sanjay Karol heard an appeal by a dismissed employee of the U.P. Cooperative Federation challenging the Allahabad High Court’s dismissal of his writ petition which had impugned an order of dismissal and recovery of Rs.9,53,433. The primary question before the Court was whether the departmental enquiry complied with the Service Rules and the principles of natural justice where no witness was produced by the employer despite the denial of charges.

The Court allowed the appeal, set aside the High Court order and held that the departmental enquiry was vitiated because the Federation did not lead any evidence when the charges were denied. The Court observed that an enquiry must ordinarily begin with the employer leading evidence and making witnesses available for cross‑examination before the charged employee is called upon to offer his defence. 

The Court, in its reasoning, observed: “From the decisions of this Court in Sur Enamel (supra) and Kharak Singh (supra), followed in Chamoli District Cooperative (supra), which deals with similar service rules as are applicable here, it is now settled that unless the charged employee accepts his guilt in clear terms, an enquiry on the charges drawn against him would have to be held. In the enquiry, the employer /department would have to take steps first to lead evidence against the workmen / delinquent charged and give an opportunity to him to cross examine those witnesses. Only thereafter, the workmen / delinquent shall be asked whether he wants to lead any evidence and/ or submit an explanation about the evidence led against him. Even in a case based solely on documentary evidence, unless the relied upon documents are admitted by the charged employee, a witness would have to be examined to prove those documents and when so examined, the witness would have to be tendered for cross-examination.” The Court also noted succinctly that “the enquiry stood vitiated.”

Background

The appellant had been posted as in‑charge of a paddy procurement centre of the U.P. Cooperative Federation and faced a charge‑sheet alleging short delivery of 1,093.60 quintals of paddy to a contractor and a supplementary charge of embezzlement of Rs.2,00,850. A departmental enquiry resulted in findings against him, dismissal from service and directions for recovery. The appellant challenged the order before the High Court on grounds that the enquiry violated the extant Service Rules and principles of natural justice because no oral enquiry was held, no date, place or time was fixed for witness examination, and no witnesses were produced to prove the charges. The High Court rejected the challenge, relying on the enquiry report and show‑cause proceedings and held that the petitioner had been given an opportunity of hearing.

On appeal, the Federation conceded in pleadings and in written submissions that no witness had been examined in the enquiry. The Federation argued that the appellant’s replies were evasive and, by construing them as admissions, it was not necessary to lead evidence (relying on Section 58 of the Evidence Act). The Supreme Court rejected that contention, holding that an evasive response to a charge sheet did not equate to a categorical admission and that a departmental charge requires the employer to prove the case if the charge was denied. The Court relied on its precedents including Sur Enamel, State of Uttaranchal v. Kharak Singh and Chamoli District Co‑operative Bank Ltd. v. Raghunath Singh Rana to reiterate the settled principle that the employer must first lead evidence and permit cross‑examination before the charged employee is called to lead defence evidence.

Result and directions issued were precise: the appeal was allowed; the order of dismissal and recovery was set aside. The Federation was at liberty to hold a de novo enquiry within six months; if it chose not to do so the appellant would be entitled to reinstatement with continuity of service and arrears after adjustment of any suspension allowance already paid. If a de novo enquiry was held, the Federation was to reinstate the appellant and place him under suspension during the enquiry with payment of suspension allowance as per law; other service benefits would depend on the outcome of that enquiry. The Court made no order as to costs and disposed of pending applications.

Case Details:
NeutralCitation: 2026 INSC 305
Case Title: Jai Prakash Saini v. Managing Director, U.P. Cooperative Federation Ltd. & Ors.

Source: 2026 CaseBase(SC) 268