Recently, the Supreme Court set aside a Rajasthan High Court order that had reinstated a postal employee removed for misappropriating depositors’ funds, holding that judicial review cannot extend to re-appreciating evidence in disciplinary proceedings. The Court stressed that “mere repayment of embezzled amounts cannot absolve an employee of misconduct.”
Brief Facts:
The case concerned a Branch Post Master who had been serving since 1998. During an annual inspection, authorities discovered irregularities: although the account holders’ passbooks carried stamped entries showing deposits, the corresponding amounts were never entered into the post office records. The sums collected from depositors had instead been used by the employee for his personal needs.
Following a departmental inquiry in which the charges were found proven, the employee was removed from service. His appeal and later challenge before the Tribunal were dismissed. However, the High Court set aside the penalty and ordered his reinstatement, prompting the present appeal before the Apex Court.
Contentions of the Appellant:
The appellant’s counsel argued that the High Court exceeded the scope of judicial review by reassessing evidence and interfering with a punishment imposed after a fair disciplinary process. It was submitted that the respondent had admitted to misappropriating deposits, was provided defence assistance and full opportunity of hearing, and that the claim of undue influence was an afterthought. Counsel maintained that once embezzlement stood proved, the High Court could not substitute its own view on the punishment.
Contentions of the Respondent:
In response, counsel submitted that the High Court’s decision was well-reasoned and required no interference. The respondent maintained that the lapse was a mistake rather than deliberate misappropriation, that any admission of guilt was made under pressure from an Inspector, and that no depositor ever complained. It was argued that the High Court rightly ordered reinstatement.
Observations of the Court:
The Bench noted that the employee was governed by the Gramin Dak Sevak (Conduct and Engagement) Rules, 2011, and that the disciplinary process had been conducted strictly in accordance with the Rules. The respondent had cross-examined all departmental witnesses, raised no procedural objections, and had even deposited the misappropriated amount after being confronted. The Court emphasised that the material on record clearly established that although the passbooks reflected deposits, no entries were made in the official records. The misappropriated money, by the respondent’s own statement, had been “spent for household purposes.”
The Court underscored an important principle, “Mere deposit of the embezzled amount will not absolve an employee of the misconduct. The relationship of a customer with a banker is of mutual trust.” It further held that the High Court erred by venturing into the merits of the factual findings and by reassessing the employee’s admission, something beyond the permissible scope of judicial review.
The Court observed that ignorance of procedural rules could not be pleaded by an employee with more than a decade of experience. The explanation offered was termed “far-fetched” and “an afterthought.”
The decision of the Court:
Allowing the appeal, the Top Court set aside the High Court’s order, restored the findings of the Tribunal, and upheld the penalty of removal from service. The Court concluded that the High Court had “travelled beyond its jurisdiction” and that the disciplinary authority’s decision was justified in light of the established misconduct.
Case Title: Union of India and Ors. vs. Indraj
Case No.: Civil Appeal No.13183 of 2025
Coram: Justice Rajesh Bindal, Justice Manmohan
Advocate for Petitioner: Adv. Brijender Chahar (A.S.G.), Karan Chahar, Piyush Beriwal, Pallav Mongia, Dhruv Sharma, Amrish Kumar (AOR)
Advocate for Respondent: Adv. Rajesh Kumar (AOR), Dhiraj Kumar Sammi, Krishan Kant Kumar
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