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The domestic enquiry found the delinquent employee guilty of all the charges. The enquiry report was accepted by the Disciplinary Authority and there is no grievance on behalf of the respondent-workman that statutory provisions/principles of natural justice have not been observed while conducting the enquiry. The Disciplinary Authority imposed the punishment of dismissal from service which cannot be held to be disproportionate or non-commensurate to the delinquency. The Labour Court after reconsidering the whole case came to the conclusion that the enquiry has been conducted strictly in accordance with law in a fair manner and charges have rightly been proved against the delinquent 1

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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9933 OF 2011

(Arising out of SLP(C) No.7083 of 2010)
The Divisional Controller, KSRTC …. Appellant
Versus
M.G. Vittal Rao …. Respondent

J U D G M E N T
Dr. B.S. CHAUHAN, J
1. Leave granted.
2. This appeal has been preferred against the judgment and order
dated 27.10.2009 passed by the High Court of Karnataka at Bangalore in
Writ Appeal No.702 of 2009, by which it has dismissed the appeal
preferred by the appellant against the judgment and order dated 27.1.2009
passed by the learned Single Judge allowing the writ petition No. 14354
of 2007 of the respondent-workman against the Award of the Labour
Court dated 17.2.2005.
3. Facts and circumstances giving rise to this appeal are:-
(A) The respondent employee while working as helper in the
appellant-Corporation in 1986 was subjected to disciplinary
proceedings vide charge-sheet dated 4.2.1987 which contained
the article of charges mainly on the allegations that on
3.10.1986 the respondent stayed away beyond his duty hours at
his place of employment i.e., Divisional Workshop and opened
the door of the blacksmith Section with the aid of a duplicate
key and pulled the gas cylinder trolley and equipment from
blacksmith Section to the cash room alongwith four other
employees of the appellant-Corporation and opened the inner
door of the cash room by cutting the padlock and used the gas
cylinder equipment for committing the theft from cash chest.
(B) The Divisional Traffic Officer was appointed as the enquiry
officer by the Disciplinary Authority vide order dated
11.11.1993 to enquire into the charges leveled against the
respondent in the disciplinary proceedings. During the course
of enquiry, the management witnesses clearly stated that the
respondent was present at the place of incident. On the basis of

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the material produced on behalf of the management, the enquiry
officer found the charges leveled against the respondent proved
and accordingly the enquiry report was filed.
(C) The Disciplinary Authority after considering the material on
record concurred with the findings recorded by the Inquiry
Officer and after completing the legal formalities imposed the
punishment of dismissal of the respondent from service w.e.f.
14.2.1997.
(D) The respondent raised the industrial dispute. Thus, the State
Government made a Reference to the Principal Labour Court
for adjudication of the dispute and the same came to be
registered as Reference No.6 of 1999. On the basis of
pleadings, the Labour Court framed various issues for its
consideration, inter-alia, as to whether the departmental enquiry
conducted against the respondent was fair and proper.
(E) The Labour Court by its order dated 20.11.2004 arrived at the
conclusion that the departmental enquiry conducted against the
respondent was fair and proper. By its award dated 17.2.2005,
the Court answered the reference in negative holding that there
was sufficient evidence before the enquiry officer to hold that
the respondent with his colluders had actively involved in
breaking and opening the door of the cash room and drilling the
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cash chest to commit the theft. The respondent was caught red
handed and hence the charges were rightly held to be proved.
(F) Being aggrieved by the said award of the Labour Court, the
respondent filed W.P. No.14354 of 2007(LK) before the High
Court which stood allowed by the learned Single Judge vide
order dated 27.1.2009 to the extent that the order of the
dismissal was modified into an order of termination. The
management was directed to pay the terminal benefits since the
respondent had retired from service. However, the learned
Single Judge arrived at the conclusion that the respondent was
not entitled to any wages or other monetary benefits till the date
of his termination.
(G) Being aggrieved by the said order of the learned Single Judge,
the respondent filed a Writ Appeal No.702 of 2009 (L-KSRTC)
under Section 4 of the Karnataka High Court Act. The Division
Bench vide impugned judgment and order dated 27.10.2009
allowed the appeal filed by the respondent quashing the award
of the Labour Court and reversing the order of the learned
Single Judge. The Division Bench proceeded to hold that the
respondent was entitled to be reinstated into service with all
consequential benefits. However, since the respondent had
retired from service, he was entitled to 50% of the backwages
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for the periods from 14.2.1997 (i.e. the date of dismissal) till the
date of his retirement (i.e. 31.7.2007). He was also entitled to
consequential benefits of retirement.
Hence, this appeal.
4. Mr. S.N. Bhat, learned counsel appearing for the appellant has
submitted that the Labour Court rejected the contention on behalf of the
respondent-workman that he was entitled for re-instatement and all other
consequential reliefs in view of the fact that he stood acquitted by the
Criminal Court. However, the learned Single Judge as well as the
Division Bench in appeal have accepted his contention and granted the
reliefs. The standard of proof in domestic enquiry and criminal
proceedings are different and mere acquittal by the Criminal Court does
not entitle the delinquent for exonerating in the disciplinary proceedings.
Thus, the appeal deserves to be allowed.
5. On the contrary, Mr. V.N. Raghupathy, learned counsel appearing
for the respondent-workman has made all attempts to defend the
judgments of the learned Single Judge as well as the Division Bench
contending that as the workman has been acquitted in the criminal
proceedings, the order of dismissal as a consequence of domestic enquiry
deserves to be set aside. In the facts and circumstances of the case, no
interference is warranted.
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6. We have considered the rival submissions advanced on behalf of
the parties and perused the record.
7. It is evident from the record that when the respondent-workman
was facing disciplinary proceedings at the same time he had also faced
the criminal trial for the offences punishable under Sections 457 , 381
read with Section 34 of the Indian Penal Code, 1860 (hereinafter called as
`IPC’). The Metropolitan Magistrate convicted the delinquent employee
holding him guilty of the said charges and sentenced him with a simple
imprisonment for a period of six months and a fine of Rs. 500/-. The
respondent-workman filed appeal against the said order of conviction.
However, the appeal was also dismissed by the Appellate Court vide
judgment and order dated 5.4.1994. The delinquent employee along with
other co-accused preferred Criminal Revision No. 299 of 1994 before the
High Court which was allowed vide judgment and order dated 9.7.1997.
Thus, the High Court acquitted the said delinquent employee of all the
charges leveled against him.
Thus, the question does arise as to whether in this backdrop the
respondent-employee is entitled for the relief granted by the High Court.

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DEPARTMENTAL ENQUIRY AND ACQUITTAL IN

CRIMINAL CASE

8. The question of considering reinstatement after decision of
acquittal or discharge by a competent criminal Court arises only and only
if the dismissal from services was based on conviction by the criminal
Court in view of the provisions of Article 311 (2) (b) of the Constitution
of India, 1950, or analogous provisions in the statutory rules applicable in
a case. In a case where enquiry has been held independently of the
criminal proceedings, acquittal in a criminal Court is of no help. The law
is otherwise. Even if a person stood acquitted by a criminal Court,
domestic enquiry can be held, the reason being that the standard of proof
required in a domestic enquiry and that in a criminal case are altogether
different. In a criminal case, standard of proof required is beyond
reasonable doubt while in a domestic enquiry it is the preponderance of
probabilities that constitutes the test to be applied. In Nelson Motis v.
Union of India & Anr., AIR 1992 SC 1981, this Court held :

“The nature and scope of a criminal case are very

different from those of a departmental disciplinary

proceeding and an order of acquittal, therefore, cannot

conclude the departmental proceeding.”

9. In State of Karnataka & Anr. v. T. Venkataramanappa, (1996)
6 SCC 455, this Court held that acquittal in a criminal case cannot be held

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to be a bar to hold departmental enquiry for the same misconduct for the
reason that in a criminal trial, standard of proof is different as the case is
to be proved beyond reasonable doubt but in the departmental
proceeding, such a strict proof of misconduct is not required.

10. In State of Andhra Pradesh v. K. Allabaksh, (2000) 10 SCC 177,
while dismissing the appeal against acquittal by the High Court, this
Court observed as under:-

“That acquittal of the respondent shall not be construed as

a clear exoneration of the respondent, for the allegations

call for departmental proceedings, if not already initiated,

against him.”

11. While dealing with a similar issue, a three-Judges Bench of this
Court in Ajit Kumar Nag v. General Manager (PJ) Indian Oil
Corporation Ltd., (2005) 7 SCC 764, held as under:-

“In our judgment, the law is fairly well settled. Acquittal

by a criminal Court would not debar an employer from

exercising power in accordance with the Rules and

Regulations in force. The two proceedings, criminal and

departmental, are entirely different. They operate in

different fields and have different objectives. Whereas the

object of criminal trial is to inflict appropriate punishment

on the offender, the purpose of enquiry proceedings is to

deal with the delinquent departmentally and to impose

penalty in accordance with the service rules. In a criminal

trial, incriminating statement made by the accused in

certain circumstances or before certain officers is totally

inadmissible in evidence. Such strict rules of evidence and

procedure would not apply to departmental proceedings.

The degree of proof which is necessary to order a

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conviction is different from the degree of proof necessary

to record the commission of delinquency. The rule relating

to appreciation of evidence in the two proceedings is also

not similar. In criminal law, burden of proof is on the

prosecution and unless the prosecution is able to prove the

guilt of the accused “beyond reasonable doubt”, he

cannot be convicted by a Court of law. In a departmental

enquiry, on the other hand, penalty can be imposed on the

delinquent officer on a finding recorded on the basis of

“preponderance of probability.”

12. The issue as to whether disciplinary proceedings can be held at the
time when the delinquent employee is facing the criminal trial, has also
been considered from time to time. In State of Rajasthan v. B.K. Meena
& Ors., AIR 1997 SC 13, this Court while dealing with the issue
observed as under:-

“It would be evident from the above decisions that each

of them starts with the indisputable proposition that

there is no legal bar for both proceedings to go on

simultaneously and then say that in certain situations, it

may not be `desirable’, `advisable’ or `appropriate’ to

proceed with the disciplinary enquiry when a criminal

case is pending on identical charges………..The only

ground suggested in the above decisions as constituting

a valid ground for staying the disciplinary proceedings is

that `the defence of the employee in the criminal case

may not be prejudiced’. This ground has, however, been

hedged in by providing further that this may be done in

cases of grave nature involving questions of fact and

law. In our respectful opinion, it means that not only the

charges must be grave but that the case must involve

complicated questions of law and fact. Moreover,

`advisability’, `desirability’ or `propriety’, as the case

may be, has to be determined in each case taking into

consideration all the facts and circumstances of the

case…………One of the contending considerations is that
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the disciplinary enquiry cannot be – and should not be –

delayed unduly. So far as criminal cases are concerned,

it is well known that they drag on endlessly where high

officials or persons holding high public offices are

involved. They get bogged down on one or the other

ground. They hardly ever reach a prompt

conclusion……….If a criminal case is unduly delayed that

may itself be a good ground for going ahead with the

disciplinary enquiry even where the disciplinary

proceedings are held over at an earlier stage. The

interests of administration and good government demand

that these proceedings are concluded expeditiously. It

must be remembered that interests of administration

demand that undesirable elements are thrown out and

any charge of misdemeanour is enquired into promptly.

The disciplinary proceedings are meant not really to

punish the guilty but to keep the administrative

machinery unsullied by getting rid of bad elements. The

interest of delinquent officer also lies in a prompt

conclusion of the disciplinary proceedings. If he is not

guilty of the charges, his honour should be vindicated at

the earliest possible moment and if he is guilty, he should

be dealt with promptly according to law. It is not also in

the interest of administration that persons accused of

serious misdemeanour should be continued in office

indefinitely, i.e., for long periods awaiting the result of

criminal proceedings. It is not in the interest of

administration. It only serves the interest of the guilty

and dishonest……..” (Emphasis added)

13. In Capt. M. Paul Anthony v. Bharat Gold Mines Ltd., AIR 1999
SC 1416, this Court held that there can be no bar for continuing both the
proceedings simultaneously. The Court placed reliance upon a large
number of its earlier judgments, including Delhi Cloth and General
Mills Ltd. v. Kushal Bhan, AIR 1960 SC 806; Tata Oil Mills Co. Ltd.
v. The Workmen, AIR 1965 SC 155; Jang Bahadur Singh v. Baij Nath

1
Tiwari, AIR 1969 SC 30; Kusheshwar Dubey v. M/s. Bharat Coking
Coal Ltd. & Ors., AIR 1988 SC 2118; Nelson Motis (Supra); and B.K.
Meena (Supra), and held that proceedings in a criminal case and
departmental proceedings can go on simultaneously except where both
the proceedings are based on the same set of facts and the evidence in
both the proceedings is common. In departmental proceedings, factors
prevailing in the mind of the disciplinary authority may be many, such as
enforcement of discipline or to investigate level of integrity of
delinquent or other staff. The standard of proof required in those
proceedings is also different from that required in a criminal case.
While in departmental proceedings, the standard of proof is one of
preponderance of probabilities, in a criminal case, the charge has to be
proved by the prosecution beyond reasonable doubt. Where the charge
against the delinquent employee is of a grave nature which involves
complicated questions of law and fact, it is desirable to stay the
departmental proceedings till conclusion of the criminal case. In case
the criminal case does not proceed expeditiously, the departmental
proceedings cannot be kept in abeyance for ever and may be resumed and
proceeded with so as to conclude the same at an early date. The purpose
is that if the employee is found not guilty his cause may be vindicated,
and in case he is found guilty, administration may get rid of him at the
earliest.
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However, while deciding the case, taking into consideration the
facts involved therein, the Court held:

“Since the facts and the evidence in both the

proceedings, namely, the departmental proceedings and

the criminal case were the same without there being any

iota of difference, the distinction, which is usually drawn

as between the departmental proceedings and the

criminal case on the basis of approach and burden of

proof, would not be applicable to the instant case.”

14. In State Bank of India & Ors. v. R.B. Sharma, AIR 2004 SC
4144, same view has been reiterated observing that both proceedings can
be held simultaneously, except where departmental proceedings in
criminal case are based on same set of facts and evidence in both the
proceedings is common. The Court observed as under:-

“The purpose of departmental inquiry and of prosecution

are to put a distinct aspect. Criminal prosecution is

launched for an offence for violation of duty. The

offender owes to the society, or for breach of which law

has provided that the offender shall make satisfaction to

the public. So crime is an act of commission in violation

of law or of omission of a public duty. The departmental

inquiry is to maintain discipline in the service and

efficiency of public service.”

15. While deciding the said case a very heavy reliance has been placed
upon the earlier judgment of this Court in Depot Manager, Andhra
Pradesh State Road Transport Corporation v. Mohd Yousuf Miya &
Ors., AIR 1997 SC 2232, wherein it has been held that both proceedings

1
can be held simultaneously unless the gravity of the charges demand
staying the disciplinary proceedings till the trial is concluded as
complicated questions of fact and law are involved in that case.

16. A similar view has been reiterated by this Court in Senior
Superintendent of Post Offices v. A. Gopalan, AIR 1999 SC 1514;
Kendriya Vidyalaya Sangathan & Ors. v. T. Srinivas, AIR 2004 SC
4127; Krishnakali Tea Estate v. Akhil Bhartiya Chah Mazdoor Sangh
& Anr., (2004) 8 SCC 200; Commissioner of Police Delhi v. Narendra
Singh, AIR 2006 SC 1800; South Bengal State Transport Corporation
v. Span Kumar Mitra & Ors., (2006) 2 SCC 584; and Punjab Water
Supply & Sewerage Board v. Ram Sajivan, (2007) 9 SCC 86.

17. In Union of India & Ors. v. Naman Singh Shekhawat, (2008) 4
SCC 1, this Court held that departmental proceeding can be initiated after
acquittal by the Criminal Court. However, the departmental proceeding
should be initiated provided the department intended to adduce any
evidence which could prove the charges against the delinquent officer.
Therefore, initiation of proceeding should be bona fide and must be
reasonable and fair.

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18. In Pandiyan Roadways Corpn. Ltd. v. N. Balakrishnan, (2007)
9 SCC 755, this Court re-considered the issue taking into account all
earlier judgments and observed as under:
“There are evidently two lines of decisions of this Court

operating in the field. One being the cases which would

come within the purview of Capt. M. Paul Anthony v.

Bharat Gold Mines Ltd (supra), and G.M. Tank v. State

of Gujarat, (2006) 5 SCC C446. However, the second line

of decisions show that an honourable acquittal in the

criminal case itself may not be held to be determinative in

respect of order of punishment meted out to the delinquent

officer, inter alia, when: (i) the order of acquittal has not

been passed on the same set of facts or same set of

evidence; (ii) the effect of difference in the standard of

proof in a criminal trial and disciplinary proceeding has

not been considered (See: Commr. of Police v. Narender

Singh, (supra) or; where the delinquent officer was

charged with something more than the subject-matter of

the criminal case and/or covered by a decision of the civil

court (See: G.M. Tank, (supra), Jasbir Singh v. Punjab

& Sind Bank, (2007) 1 SCC 566; and Noida

Entrepreneurs’ Assn. v. Noida, (2007) 10 SCC 385, para

18)………..We may not be understood to have laid down a

law that in all such circumstances the decision of the civil

court or the criminal court would be binding on the

disciplinary authorities as this Court in a large number of

decisions points out that the same would depend upon

other factors as well. (See: e.g. Krishnakali Tea Estate

(supra); and Manager, Reserve Bank of India v. S. Mani,

(2005) 5 SCC 100). . Each case is, therefore, required to

be considered on its own facts.”

(See also: Ram Tawekya Sharma v. State of Bihar & Ors., (2008) 8

SCC 261; and Roop Singh Negi v. Punjab National Bank & Ors.,

(2009) 2 SCC 570).

1
19. Thus, there can be no doubt regarding the settled legal proposition
that as the standard of proof in both the proceedings is quite different, and
the termination is not based on mere conviction of an employee in a
criminal case, the acquittal of the employee in criminal case cannot be the
basis of taking away the effect of departmental proceedings. Nor can such
an action of the department be termed as double jeopardy. The judgment
of this Court in Capt. M. Paul Anthony (supra) does not lay down the
law of universal application. Facts, charges and nature of evidence etc.
involved in an individual case would determine as to whether decision of
acquittal would have any bearing on the findings recorded in the domestic
enquiry.

LOSS OF CONFIDENCE

20. Once the employer has lost the confidence in the employee and the
bona fide loss of confidence is affirmed, the order of punishment must be
considered to be immune from challenge, for the reason that discharging
the office of trust and confidence requires absolute integrity, and in a case
of loss of confidence, reinstatement cannot be directed. (Vide: Air India
Corporation Bombay v. V.A. Ravellow, AIR 1972 SC 1343; Francis
Kalein & Co. Pvt. Ltd. v. Their Workmen, AIR 1971 SC 2414; and
Bharat Heavy Electricals Ltd. v. M. Chandrashekhar Reddy & Ors.,
AIR 2005 SC 2769).

1
In Kanhaiyalal Agrawal & Ors. v. Factory Manager, Gwaliar
Sugar Co. Ltd., AIR 2001 SC 3645, this Court laid down the test for loss
of confidence to find out as to whether there was bona fide loss of
confidence in the employee, observing that, (i) the workman is holding
the position of trust and confidence; (ii) by abusing such position, he
commits act which results in forfeiting the same; and (iii) to continue him
in service/establishment would be embarrassing and inconvenient to the
employer, or would be detrimental to the discipline or security of the
establishment. Loss of confidence cannot be subjective, based upon the
mind of the management. Objective facts which would lead to a definite
inference of apprehension in the mind of the management, regarding
trustworthiness or reliability of the employee, must be alleged and
proved.

(See also: Sudhir Vishnu Panvalkar v. Bank of India, AIR 1997 SC

2249).

21. In State Bank of India & Anr. v. Bela Bagchi & Ors., AIR 2005
SC 3272, this Court repelled the contention that even if by the
misconduct of the employee the employer does not suffer any financial
loss, he can be removed from service in a case of loss of confidence.
While deciding the said case, reliance has been placed upon its earlier

1
judgment in Disciplinary Authority-cum-Regional Manager v.
Nikunja Bihari Patnaik, (1996) 9 SCC 69.

22. An employer is not bound to keep an employee in service with
whom relations have reached the point of complete loss of
confidence/faith between the two. (Vide: Binny Ltd. v. Their Workmen
& Anr., AIR 1972 SC 1975; The Binny Ltd. v. Their Workmen, AIR
1973 SC 1403; Anil Kumar Chakraborty & Anr. v. M/s.
Saraswatipur Tea Company Ltd. & Ors., AIR 1982 SC 1062;
Chandu Lal v. The Management of M/s. Pan American World
Airways Inc., AIR 1985 SC 1128; Kamal Kishore Lakshman v.
Management of M/s. Pan American World Airways Inc. & Ors., AIR
1987 SC 229; and M/s. Pearlite Liners Pvt. Ltd. v. Manorama Sirsi,
AIR 2004 SC 1373).

In Indian Airlines Ltd. v. Prabha D. Kanan, AIR 2007 SC 548,
while dealing with the similar issue this Court held that “loss of
confidence cannot be subjective but there must be objective facts which
would lead to a definite inference of apprehension in the mind of the
employer regarding trustworthiness of the employee and which must be
alleged and proved.”

1
In case of theft, the quantum of theft is not important and what
is important is the loss of confidence of employer in employee. (Vide:
A.P. SRTC v. Raghuda Shiva Sankar Prasad, AIR 2007 SC 152).

23. The instant case requires to be examined in the light of the
aforesaid settled legal proposition and keeping in view that judicial
review is concerned primarily with the decision making process and not
the decision itself. More so, it is a settled legal proposition that in a case
of misconduct of grave nature like corruption, theft, no punishment other
than the dismissal may be appropriate. (Vide: Pandiyan Roadways
Corpn. Ltd. (supra); and U.P. State Road Transport Corporation v.
Suresh Chand Sharma, (2010) 6 SCC 555).
24. The domestic enquiry found the delinquent employee guilty of all
the charges. The enquiry report was accepted by the Disciplinary
Authority and there is no grievance on behalf of the respondent-workman
that statutory provisions/principles of natural justice have not been
observed while conducting the enquiry. The Disciplinary Authority
imposed the punishment of dismissal from service which cannot be held
to be disproportionate or non-commensurate to the delinquency. The
Labour Court after reconsidering the whole case came to the conclusion
that the enquiry has been conducted strictly in accordance with law in a
fair manner and charges have rightly been proved against the delinquent

1
employee. However, considering the difference in the standard of proof
required in domestic enquiry, vis-`-vis that applicable to a criminal case,
the Labour Court repelled the argument of respondent-workman that once
he stood acquitted he was entitled for all reliefs including re-instatement
and back wages. The learned Single Judge as well as the Division Bench
had simply decided the case taking into consideration the acquittal of
delinquent employee and nothing else.
25. In view of the aforesaid settled legal propositions that there is no
finding by the High Court that the charges leveled in the domestic
enquiry had been the same which were in the criminal trial; the witnesses
had been the same; there were no additional or extra witnesses; and
without considering the gravity of the charge, we are of the view that the
award of the Labour Court did not warrant any interference.
Be that as it may, the learned Single Judge had granted relief to
the delinquent employee which was not challenged by the present
appellant by filing writ appeal. Therefore, the delinquent employee is
entitled for the said relief.
26. In view of the above, we dispose of the appeal holding that the
delinquent employee shall be entitled only to the relief granted by the
writ court and the judgment and order of the court in writ appeal is set

1
aside. The benefit of the judgment of the learned Single Judge may be
made available to the delinquent employee within a period of 4 months
from the date of production of the certified copy of the order before the
appellant. There shall be no order as to costs.

……………………….J.

(Dr. B.S. CHAUHAN)

……

…………………..J.

(T.S. THAKUR)
New Delhi,

November 18, 2011

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