Supreme Court Upholds Dismissal for Postal Assistant Fraud: Union of India vs. M. Duraisamy (2022)

Date of the Judgment: April 19, 2022
Citation: 2022 INSC 401
Judges: M.R. Shah, J. and B.V. Nagarathna, J.
Can a disciplinary authority’s decision to remove a public servant for serious fraud be overturned by a court based on sympathy? The Supreme Court of India addressed this question in a recent case involving a postal assistant who defrauded the department of a significant sum. The court emphasized that while considering the proportionality of punishment, the gravity of misconduct should not be overlooked. The bench, comprising Justices M.R. Shah and B.V. Nagarathna, delivered a unanimous judgment, with Justice M.R. Shah authoring the opinion.

Case Background

The respondent, M. Duraisamy, was working as a Postal Assistant. During his tenure as Sub-Postmaster (SPM) at Veppur Sub-Office (SO) from 2004 to 2007, he committed fraud. He fraudulently withdrew money from 85 Recurring Deposit (RD) accounts and failed to credit deposits in 71 RD accounts, totaling ₹16,59,065. The fraud was discovered following a report from the Postmaster, Srirangam, on June 11, 2007, concerning double payments on RD closures. Further investigation revealed that the respondent had forged depositor signatures to fraudulently close accounts and withdraw ₹52,395. After the fraud was detected, the respondent deposited ₹18,09,041, which included the defrauded amount and penal interest.

Timeline

Course of Proceedings

A departmental enquiry was initiated against the respondent on July 26, 2010. The respondent admitted to the charges in his defense. The Inquiry Officer found all six charges to be proven. The Disciplinary Authority, on January 19, 2011, ordered the respondent’s removal from service, citing the gravity of the offense. The departmental appeal against this order was dismissed. The respondent then challenged the removal order before the Central Administrative Tribunal (CAT), Madras Bench. The Tribunal, on March 26, 2012, partly allowed the application, modifying the punishment to compulsory retirement, citing the respondent’s deposit of the defrauded amount and his 39 years of service. The Union of India then filed a writ petition before the High Court of Judicature at Madras, which was dismissed on August 30, 2016. The High Court upheld the Tribunal’s decision. Consequently, the Union of India appealed to the Supreme Court.

Legal Framework

The respondent was charged with violating Rule 3(1)(i) and 3(1)(ii) of the Central Civil Services (Conduct) Rules, 1964, which mandate:

• “3(1)(i) Every Government servant shall at all times maintain absolute integrity.”
• “3(1)(ii) Every Government servant shall at all times maintain devotion to duty.”

These rules require government servants to maintain absolute integrity and devotion to duty. The charges against the respondent were based on his failure to uphold these standards.

Arguments

Appellants’ Arguments (Union of India and Others):

• The Tribunal and High Court erred in interfering with the Disciplinary Authority’s punishment.
• The respondent committed a serious fraud, defrauding a large sum of money from RD account holders.
• The respondent admitted to the charges and deposited the money only after the fraud was detected.
• The Disciplinary Authority’s decision to remove the respondent was justified given the seriousness of the misconduct.
• The respondent held a position of public trust, and his actions undermined public confidence in the Postal Department.
• The decisions of the Tribunal and High Court were based on sympathy, not on the gravity of the misconduct.
• The High Court cannot set aside a well-reasoned order passed by the Disciplinary Authority only on sympathy or sentiments.
• Relied on the decisions of the Supreme Court in B.C. Chaturvedi v. Union of India [(1995) 6 SCC 749], Chairman & Managing Director, V.S.P. & Others v. Goparaju Sri Prabhakara Hari Babu [(2008) 5 SCC 569], Maruti Udyog Ltd. v. Ram Lal [(2005) 2 SCC 638], State of Bihar v. Amrendra Kumar Mishra [(2006) 12 SCC 561], Regional Manager, SBI v. Mahatma Mishra [(2006) 13 SCC 727], State of Karnataka v. Ameerbi [(2007) 11 SCC 681], State of M.P. v. Sanjay Kumar Pathak [(2008) 1 SCC 456], and Uttar Haryana Bijli Vitran Nigam Ltd. v. Surji Devi [(2008) 2 SCC 310].

Respondent’s Arguments (M. Duraisamy):

• The Tribunal rightly modified the punishment, and the High Court was justified in not interfering.
• The Tribunal provided valid reasons for modifying the punishment from removal to compulsory retirement.
• The respondent voluntarily deposited the entire amount with interest before the departmental enquiry.
• No loss was caused to the department due to the respondent’s actions.
• The respondent had a long service career of 39 years with no prior disciplinary actions.
• Compulsory retirement would allow the respondent to receive retirement benefits, which would not be possible with removal.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether, in the facts and circumstances of the case, the Tribunal and the High Court were justified in interfering with the punishment imposed by the Disciplinary Authority and modifying/substituting the same from removal to that of compulsory retirement.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• B.C. Chaturvedi v. Union of India [(1995) 6 SCC 749]* – The Court followed this authority to emphasize that the High Court cannot substitute the punishment imposed by the Disciplinary Authority based on irrelevant factors such as length of service or academic record. The gravity of the misconduct should be the primary consideration.
• Chairman & Managing Director, V.S.P. & Others v. Goparaju Sri Prabhakara Hari Babu [(2008) 5 SCC 569]* – The Court followed this authority to highlight the limited jurisdiction of the High Court in reviewing the proportionality of punishment imposed by the departmental authority. The Court reiterated that it cannot set aside a well-reasoned order based on sympathy.
• Maruti Udyog Ltd. v. Ram Lal [(2005) 2 SCC 638]* – The Court cited this authority to support the principle that once procedural requirements are met, courts should not interfere with the quantum of punishment.
• State of Bihar v. Amrendra Kumar Mishra [(2006) 12 SCC 561]* – The Court cited this authority to reinforce that sympathy or sentiments are not valid grounds for interfering with disciplinary actions.
• Regional Manager, SBI v. Mahatma Mishra [(2006) 13 SCC 727]* – The Court cited this authority to support the principle that courts should not interfere with punishment if procedural requirements are met.
• State of Karnataka v. Ameerbi [(2007) 11 SCC 681]* – The Court cited this authority to emphasize that the gravity of misconduct should be the primary consideration when determining punishment.
• State of M.P. v. Sanjay Kumar Pathak [(2008) 1 SCC 456]* – The Court cited this authority to support the principle that courts should not interfere with punishment if procedural requirements are met.
• Uttar Haryana Bijli Vitran Nigam Ltd. v. Surji Devi [(2008) 2 SCC 310]* – The Court cited this authority to reinforce that sympathy or sentiments are not valid grounds for interfering with disciplinary actions.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the gravity of the misconduct committed by the respondent. The Court emphasized that the respondent, as a public servant in the post office, held a position of trust, and his actions had severely tarnished the reputation of the department. The fact that the respondent deposited the defrauded amount after the detection of the fraud did not mitigate the seriousness of the offense. The Court also highlighted that neither the Tribunal nor the High Court had adequately considered the nature and gravity of the misconduct. The Court reiterated that sympathy or sentiments should not be the basis for interfering with a well-reasoned order of the Disciplinary Authority.

Logical Reasoning

The court’s reasoning was based on the following points:

• The respondent admitted to the charges of fraud.
• The respondent’s actions violated Rule 3(1)(i) and 3(1)(ii) of the CCS (Conduct) Rules, 1964.
• The Disciplinary Authority followed due process in the inquiry.
• The Tribunal and High Court exceeded their jurisdiction by substituting the punishment.
• The gravity of the misconduct warranted the punishment of removal.
• The respondent’s deposit of the defrauded amount after detection did not negate the seriousness of the misconduct.
• The respondent’s position as a public servant required utmost integrity.
• The misconduct caused loss of goodwill and reputation to the department.

The Court quoted the following from the judgment:

• “Once, a conscious decision was taken by the Disciplinary Authority to remove an employee on the proved misconduct of a very serious nature of defrauding public money, neither the Tribunal nor the High Court should have interfered with the order of punishment imposed by the Disciplinary Authority, which was after considering the gravity and seriousness of the misconduct.”
• “Merely because the respondent-employee had worked for 39 years and in those years, there was no punishment imposed and/or that he voluntarily deposited the defrauded amount along with penal interest and therefore there was no loss to the Government/Department cannot be a ground to interfere with the order of punishment imposed by the Disciplinary Authority and substitute the same from removal to that of compulsory retirement.”
• “What about the loss caused to the department by way of goodwill, name and fame of the department and its reliability amongst the public? By such a misconduct/act on the part of the delinquent officer, the reputation of the department had been tarnished.”

There were no dissenting opinions in this case. The bench of Justices M.R. Shah and B.V. Nagarathna unanimously agreed on the judgment, with Justice M.R. Shah authoring the opinion.

Key Takeaways

• Courts should not interfere with disciplinary actions based on sympathy or sentiments.
• The gravity of misconduct is a primary consideration in determining punishment.
• Public servants holding positions of trust must maintain the highest standards of integrity.
• Depositing the defrauded amount after detection does not negate the seriousness of the offense.
• The reputation and goodwill of a department are also important factors to consider in disciplinary matters.

Directions

The Supreme Court directed that the order of the Disciplinary Authority imposing the punishment of removing the delinquent employee from service is restored.

Development of Law

The ratio decidendi of this case is that the courts should not interfere with the disciplinary actions of the Disciplinary Authority based on sympathy or sentiments. The gravity of the misconduct should be the primary consideration when determining the punishment. The Supreme Court reiterated the principle that the High Court’s jurisdiction to interfere with the quantum of punishment imposed by the disciplinary authority is limited. This judgment reinforces the existing legal position and does not introduce any new legal principle.

Conclusion

The Supreme Court allowed the appeal, setting aside the High Court and Tribunal’s orders. The Court restored the Disciplinary Authority’s decision to remove the respondent from service. The judgment underscores that while considering the proportionality of punishment, the gravity of misconduct should not be overlooked, especially in cases involving public servants holding positions of trust.