V.M. SAUDAGAR (DEAD) V. THE DIVISIONAL COMMERCIAL MANAGER, CENTRAL RAILWAY 2025 INSC 1257:

DATE: 27/10/2025

COURT: Supreme Court of India

BENCH: Justice Sanjay Karol and Justice Prashant Kumar Mishra

FACTS:

The appellant, who served as a Travelling Ticket Examiner (TTE) with the Central Railway, Nagpur, was subjected to a surprise vigilance check on 31 May 1988 while on duty aboard the 39-Down Dadar–Nagpur Express. During the check, the vigilance team alleged that the appellant had demanded illegal gratification from passengers Rs. 25 from Hemant Kumar, Rs. 20 from Dinesh Choudhary, and Rs. 5 from Rajkumar Jaiswal for allotting berths. It was also alleged that he was found with excess undeclared cash of Rs. 1,254, failed to recover a fare difference of Rs. 18 from a passenger, and had forged his duty card pass to extend its validity without authorization. Based on these allegations, a charge sheet dated 3 July 1989 was issued under the Railway Services (Conduct) Rules, 1966, and an inquiry was conducted. The Enquiry Officer held all charges proved, leading to the appellant’s dismissal on 7 June 1996 by the Disciplinary Authority, which was later upheld in departmental appeal.

Aggrieved, the appellant approached the Central Administrative Tribunal (CAT), Mumbai Bench, Camp Nagpur, through Original Application No. 431 of 1997. On 21 March 2002, CAT quashed the dismissal order and directed reinstatement with all consequential benefits, holding that the charges were unsubstantiated. The Railway authorities challenged this before the Bombay High Court (Nagpur Bench) in Writ Petition No. 2461 of 2002. The High Court reversed the CAT’s order on 21 September 2017, upholding the dismissal and observing that the Enquiry Officer’s findings were supported by evidence. During the pendency of the matter, the appellant passed away, and his legal heirs pursued the appeal before the Supreme Court.

ISSUES:

The main issue before the Supreme Court was whether the Central Administrative Tribunal was justified in setting aside the appellant’s dismissal from service on the ground that the departmental inquiry was unfair and unsupported by evidence, or whether the High Court correctly reinstated the dismissal by holding that the disciplinary findings were based on sufficient material and not open to judicial review.

JUDGEMENT WITH REASONING:

The Supreme Court allowed the appeal, setting aside the High Court’s judgment and restoring the CAT’s order directing reinstatement of the appellant with all consequential monetary and pensionary benefits to his legal heirs. The Court held that the charges against the appellant were not conclusively proved, the departmental inquiry was perverse, and the findings of guilt were based on unreliable and untested evidence. It directed the Railway authorities to release all dues to the legal heirs within three months.

The Supreme Court found that the disciplinary proceedings suffered from serious procedural lapses and lack of evidentiary support. The Court noted that the key complainant, Hemant Kumar, whose written complaint formed the foundation of the bribery charge, was never examined during the inquiry, thus denying the appellant an opportunity for cross-examination. The other two passengers, Dinesh Choudhary and Rajkumar Jaiswal, did not support the charges and, in fact, provided testimony favourable to the appellant. Despite this, the Enquiry Officer relied heavily on Hemant Kumar’s untested written statement and misinterpreted the other witnesses’ statements, rendering the findings perverse. The Court emphasized that in disciplinary proceedings, findings must be based on legally admissible and tested evidence. Reliance on statements of non-examined witnesses violates the principles of natural justice and renders the inquiry unsustainable.

Regarding the remaining charges, the Court held that none were proved through reliable evidence. The alleged possession of Rs. 1,254 as excess cash did not constitute misconduct since there was no rule restricting the amount of cash a TTE could carry, and the appellant had deposited the amount into the Railway Sundry Account on the same day. The alleged failure to collect Rs. 18 as fare difference was unsupported, as the relevant passenger and receipt book were never produced. As to the forgery of the duty pass, even the Enquiry Officer did not conclusively find the charge proved, and no expert handwriting analysis was obtained. The Court further criticized the High Court for failing to appreciate that the CAT’s interference was justified given the perversity of the Enquiry Officer’s findings. Observing that the proceedings pertained to an incident more than three decades old and that the appellant had passed away, the Court deemed it just to restore the CAT’s decision and directed immediate release of all consequential benefits to his legal heirs.

ANALYSIS:

This case highlights the Supreme Court’s consistent stance on upholding the principles of natural justice and fair play in disciplinary proceedings against public servants. The Court reaffirmed that departmental inquiries must be conducted based on credible, tested, and admissible evidence. The reliance on the written statement of Hemant Kumar, who was never examined during the inquiry was a significant procedural lapse, as it deprived the appellant of the opportunity to cross-examine a crucial witness. Moreover, the statements of the two other passengers, who directly contradicted the charge of bribery, were ignored or misinterpreted by the Enquiry Officer. Such conduct, according to the Court, rendered the inquiry findings perverse and unsustainable in law. The ruling underscores that judicial review under service law is warranted when disciplinary findings are based on conjecture or lack evidentiary support, especially where the inquiry process violates natural justice.

Further, the Supreme Court’s decision reinforces that mere suspicion or procedural compliance cannot substitute for substantive proof of misconduct. Each of the remaining charges, possession of excess cash, failure to recover fare, and forgery of the duty pass was found unsupported by evidence or contrary to procedural fairness. By restoring the CAT’s decision, the Court sent a strong message that administrative authorities must exercise disciplinary powers responsibly and ensure fair treatment of employees. The judgment also demonstrates the Court’s humane approach, recognizing that prolonged litigation and the employee’s death warranted immediate relief to his legal heirs. Overall, the decision strengthens jurisprudence on fairness in public employment, emphasizing that punishment cannot rest on unverified or misinterpreted evidence.