The Supreme Court of India has set aside the dismissal and recovery order imposed on an employee of the U.P. Cooperative Federation, holding that the inquiry conducted against him was vitiated due to non-compliance with principles of natural justice.

The bench of Justices Sanjay Karol and Manoj Misra has observed that a valid disciplinary inquiry must include examination of witnesses. The charged employee must be given an opportunity to cross-examine witnesses. Even in documentary cases, documents must be proved through witnesses unless expressly admitted.

The appellant, Jai Prakash Saini, was working as the in-charge of a paddy procurement centre under the U.P. Cooperative Federation. He faced allegations of financial irregularities, including: short delivery of 1,093.60 quintals of paddy out of 1,946.60 quintals procured, and alleged embezzlement of ₹2,00,850 by falsely showing procurement of 5,000 sacks of de-husked paddy.

Following a departmental inquiry, the charges were held to be proved, leading to his dismissal from service and a recovery order. His challenge before the Allahabad High Court was unsuccessful, prompting him to approach the Supreme Court.

The central issue before the Court was whether a disciplinary inquiry conducted without examining witnesses or holding a proper oral hearing violates the principles of natural justice when the charges are denied by the employee.

The Court noted that the employer admitted that no witnesses were examined during the inquiry. Despite denial of charges by the employee, no meaningful oral hearing was conducted.

The Court clarified that in disciplinary proceedings, unless charges are expressly admitted, the burden lies on the employer to prove them through evidence.

Rejecting the Federation’s argument that the employee’s reply amounted to an admission, the Court observed that a departmental charge-sheet is not akin to a plaint, and an evasive reply cannot be treated as an admission of guilt.

Failure to follow these steps renders the inquiry invalid.

The Court set aside the dismissal and recovery order.

The court granted liberty to the Federation to conduct a fresh (de novo) inquiry within six months.

The court directed that if no fresh inquiry is initiated within the stipulated period, the employee shall be reinstated with full continuity of service and back wages (after adjustment of suspension allowance). If a fresh inquiry is initiated, the employee may be reinstated and placed under suspension during the proceedings, with entitlement to suspension allowance.

Case Details

Case Title: Jai Prakash Saini Versus Managing Director, U.P. Cooperative

Federation Ltd. & Ors. 

Citation: JURISHOUR-585-SC-2026

Case No.:  SLP (C) No. 2900/2020

Date: 01/04/2026

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