The Supreme Court set aside a termination order of a process technician, holding that an employer cannot automatically dismiss an employee on the basis of a pending criminal case unless it is shown that the employee knowingly suppressed the information. The judgment clarifies the two-pronged enquiry required and reinstates the employee with backwages and interest.
Background & Facts
The Dispute
The appellant, Shatrughna Yadav, was appointed as Technician (Process) by The Fertilizers and Chemicals Travancore Ltd. (F.A.C.T.) on 05.05.2021 on a two-year consolidated-pay contract. At the time of joining, he signed an attestation form declaring that no criminal case was pending against him.
Key Facts
- 03.04.2019: A Non-Cognizable Report (NCR) was registered against the appellant under Sections 323 and 504 IPC.
- 22.03.2022: The District Magistrate, responding to the employer’s verification request, disclosed the NCR.
- 30.04.2022: Respondent issued a show-cause notice demanding reasons why his services should not be terminated for furnishing false information.
- 09.07.2020: Superintendent of Police, District Maharajganj, issued a certificate stating no adverse entry against the appellant.
- 06.06.2023: Appellant submitted a final police report confirming deletion of his name from the accused list.
- 05.08.2023: Respondent issued a termination letter cancelling the appellant’s appointment.
- 2023: Appellant filed Writ Petition No.37484 challenging the termination.
- 04.07.2025: High Court of Kerala upheld the termination order.
- 11.08.2026: Supreme Court delivered the present judgment.
Procedural History
- 05.05.2021: Appointment as Technician (Process).
- 22.03.2022: DM’s letter disclosing NCR.
- 30.04.2022: Show-cause notice issued.
- 09.07.2020: Police character certificate issued (prior to DM’s disclosure).
- 06.06.2023: Final police report submitted.
- 05.08.2023: Termination letter sent.
- 2023: Writ Petition No.37484 filed in High Court.
- 04.07.2025: High Court judgment upholding termination.
- 11.08.2026: Supreme Court judgment delivered.
Parties' Positions
- Appellant: Argues he had no knowledge of the NCR; the attestation was made in good faith; the termination is illegal as the employer did not conduct a proper enquiry.
- Respondent: Contends the appellant deliberately suppressed the pending criminal case; argues that the existence of the NCR makes him unfit for the post.
Relief Sought
The appellant sought quashing of the termination order, reinstatement with all consequential benefits, and payment of backwages.
The Legal Issue
Whether the termination of an employee on the ground of alleged false information in a verification form is permissible when the employee can demonstrate that he had no knowledge of the pending criminal case at the time of making the declaration.
Arguments Presented
For the Appellant
The appellant relied on Avtar Singh and Ravindra Kumar v. State of UP to argue that the enquiry must consider the employee’s knowledge, the nature of the offence, and the specific circumstances before imposing termination. He submitted police certificates dated 09.07.2020 and 09.08.2023 to prove lack of knowledge and absence of evidence.
For the Respondent
The respondent maintained that the appellant’s failure to disclose the NCR, irrespective of his claimed ignorance, rendered him unfit for the post. It emphasized the contractual condition that the appointment was contingent upon clearance of antecedents and argued that the existence of the NCR itself justified termination.
The Court's Analysis
The Court began by noting the settled position articulated in the three-judge bench decision in Avtar Singh, which enumerates the parameters for assessing suppression of information. It reiterated that any information supplied to an employer must be true and that the employer may consider “special circumstances” but must conduct a factual enquiry.
"Termination is therefore not an automatic consequence of the disclosure of criminal antecedents; rather, the specific case of the employee must be considered, and the employer must apply its mind before arriving at a decision."
The Court identified a two-pronged enquiry:
- Fact-finding - Whether the employee actually suppressed or furnished false information, which hinges on the employee’s knowledge at the relevant time.
- Contextual assessment - Whether, assuming suppression, the nature of the offence, the post’s requirements, and other circumstances justify termination.
Applying the first prong, the Court found that the appellant had produced credible documentary evidence - the 09.07.2020 certificate and the 09.08.2023 confirmation of deletion - establishing that he had no knowledge of the NCR. The Court emphasized that “knowledge of a fact is a necessary prerequisite for its non-disclosure” and that a bare claim of ignorance without supporting material would be insufficient. Here, the appellant satisfied the evidentiary burden.
On the second prong, the Court observed that the respondent had not undertaken any enquiry into the nature of the offences (Sections 323 and 504 IPC) nor considered the appellant’s satisfactory performance during his tenure. The termination order was issued mechanically, merely on the basis of the existence of a pending case, without any assessment of seriousness, impact on the post, or the appellant’s subsequent exoneration.
Consequently, the Court held that the termination order failed both prongs and was therefore illegal and without application of mind. It stressed that employers must not rely on a “hard-and-fast rule” but must exercise reasoned discretion, especially where the employee’s knowledge is doubtful.
The Verdict
The Supreme Court allowed the appeal, set aside the termination order dated 05.08.2023, and directed reinstatement of the appellant forthwith with all consequential benefits. Backwages were awarded at 50 % of the salary arrears, to be paid within eight weeks from the date of the judgment; interest at 6 % per annum will accrue from the date the amount became due until actual payment.
What This Means For Similar Cases
Termination Not Automatic on Pending Cases
- Employers cannot dismiss solely because a criminal case is pending; they must first establish that the employee knew of the case.
- The burden of proving knowledge lies on the employer; a mere existence of an NCR is insufficient.
Employer Must Conduct a Fact-Finding Enquiry
- A two-pronged enquiry is mandatory: (i) ascertain actual suppression, (ii) evaluate the offence’s relevance to the post.
- Failure to consider the nature of the offence, the employee’s performance, or subsequent discharge renders termination unlawful.
Burden on Employee to Prove Lack of Knowledge
- Employees must furnish reliable documentary proof (e.g., police certificates) to demonstrate ignorance.
- Without such proof, a claim of ignorance will be treated as a mere plea and will not absolve liability.
Practical takeaways:
- Draft verification forms to specify exactly what information is required.
- Maintain records of any police certificates or clearances.
- Before terminating, conduct a reasoned assessment of the offence’s seriousness and its impact on the role.
- Document the enquiry process to withstand judicial scrutiny.
