JUDGMENT : ( 1. ) THIS petition under Article 226 of the Constitution of India has been directed against the order dated 31-1-1984 (Annexure-A)dismissing the petitioner from service as well as against the order dated 12-11-1984 (Annexure-H) dismissing his departmental appeal. ( 2. ) AT the relevant time, the petitioner was working as Field Supervisor at beera, District Rewa, in the branch of Rewa-Sidhi Gramin Bank-respondent no. 1 (hereinafter referred to as the respondent-Bank ). It has not been disputed that the respondent-Bank is an agency and instrumentality of the State and falls within the definition of State under Article 12 of the Constitution of India. On 4-2-1983 the petitioner was charge-sheeted that he had accepted illegal gratification amounting to Rs. 100/- on 16-12-1981 from one Mohd. Jalaluddin in connection with the adjustment of a sum of Rs. 1,000/- as subsidy granted by district Rural Development Authority. The currency notes of Rs. 100/- were alleged to have been recovered from the person of the petitioner in a trap operation conducted through Inspector of the State Vigilance Office, Rewa, but the petitioner was not prosecuted in the Criminal Court. The petitioner denied the charges and submited his reply that he was not authorised to adjust the subsidy amount against loan, Bank Circular dated 13-11-1981, which was a power expressly conferred exclusively on the Branch Manager. ( 3. ) THE management held an enquiry against the petitioner wherein the witnesses, whose statements were recorded by the Vigilance Inspector during the trap operation, were produced in evidence. Those witnesses were not examined-in-chief, but the Enquiry Officer allowed them to affirm their statements made before the Inspector, Vigilance and the representative of the petitioner was allowed to cross-examine the witnesses on their previous statements made to the inspector. The Management was represented by Mr. James Kurian, Inspector, cbi/spe, Jabalpur and the petitioner was represented by a co-employee mr. G. P. Dube. The Enquiry Officer found the charge of illegal gratification proved and on that basis the petitioner was dismissed from service by order dated 31-1-1984 (Annexure-A ). The petitioner preferred an appeal before the Board of directors of respondent-Bank, but the same was dismissed by order dated 12-11-1984 (Annexure-H ). G. P. Dube. The Enquiry Officer found the charge of illegal gratification proved and on that basis the petitioner was dismissed from service by order dated 31-1-1984 (Annexure-A ). The petitioner preferred an appeal before the Board of directors of respondent-Bank, but the same was dismissed by order dated 12-11-1984 (Annexure-H ). These are the two orders which have been challenged by the petitioner in this petition on the ground that the statements of the witnesses recorded by the CBI Inspector under section 161 of the Code of criminal Procedure could not have been used by the Enquiry Officer in the evidence and thus the whole enquiry proceedings were vitiated as the same has resulted in denial of proper opportunity to the petitioner to effectively cross-examine the witnesses, and to expose their falsehood. It has also been alleged that a copy of the enquiry report was not supplied to the petitioner as a part of reasonable opportunity before imposing punishment and that the petitioner was seriously prejudiced as the Management was represented by a c. B. I. Inspector in the enquiry proceedings while the petitioner was represented only by a co-employee, who had no legal knowledge. The petitioner had also alleged that his appeal has been decided by cryptic order (Annexure-H) without application of mind and without giving reasons. ( 4. ) THE respondents have contested the petition by filing a common return in which it has been stated that after enquiry and investigation, the C. B. I had recommended a regular departmental enquiry under the Rewa-Sidhi Gramin bank (Staff) Service Regulations, 1980 and, therefore, the respondents initiated departmental proceedings under the said Regulations. The respondents have asserted that during the enquiry, the Presenting Officer of the department Shri kurian had given the list of the witnesses to be examined on behalf of the management in the enquiry and had also filed documents comprising of the statements of witnesses examined by the C. B. I. Inspector during investigation and the copies of all such statements were supplied to the petitioner on 6-6-1983, when the Enquiry Officer had explained the charges to the petitioner. It has been further stated that the Enquiry Officer had apprised the witnesses of their statements recorded by C. B. I. and after they admitted the same as correct the same were accepted as their statements in the enquiry and thereafter the defence representative was allowed to cross-examine the witnesses without any objection on behalf of the petitioner. The objection on behalf of the petitioner for admitting the statements of witnesses recorded by the C. B. I. Inspector was raised only on 1-9-1983 when the complainant Jalaluddin was to be examined which was rightly ruled out by the Enquiry Officer. The respondents have alleged that because the copies of the statements of the witnesses recorded by the C. B. I. Inspector were supplied to the petitioner and their statements were admitted in evidence after the same were read over to them and they accepted the same in the presence of the petitioner which did not cause any prejudice or illegality and therefore it cannot be said that the trial was vitiated. ( 5. ) LEARNED counsel for the petitioner contended before us that in the departmental enquiry no witnesses on behalf of the Management were made to depose before the Enquiry Officer in the presence of the petitioner. But their statements recorded peviously by the C. B. I. Inspector were admitted in evidence and then the representative of the petitioner was allowed to cross-examine the witnesses on their previous statements which had caused a great prejudice to the petitioner as the same did not amount to reasonable opportunity but oppose to the principle of natural justice. He urged that though the copies of the statements of the witnesses recorded by the C. B. I. Inspector during the investigation were supplied to the petitioner but the petitioner was not given to understand that those statements will be taken as statements of the witnesses on behalf of the management and, therefore, their statements were not studied from the point of view that the petitioner would be required to cross-examine those witnesses on their earlier statements particularly when the petitioner was not represented by a law knowing person whereas the department was represented by a C. B. I. Inspector. ( 6. ( 6. ) THE respondents have filed the photostat copies of the enquiry proceedings with effect from 194-1983 onwards as well as the photostat copies of the statements of the witnesses examined in the enquiry which are collectively marked as Annexure-R-6 (from page 81 to 129 in the paper book ). On perusal of the enquiry proceedings and the statements of the witnesses, it may be seen that the statements of witnesses, namely, D. D. Maheshwari (M. W. 1), Dhanpal agrawal (M. W. 2) and Ram Kumar Shrivastava (M. W. 3) were recorded on 18-7-1983 and the statement of complainant Mohd. Jalaluddin was recorded on 1-9-1983. The previous statements of the above-named witnesses recorded by the c. B. I. Inspector during the investigation were read out by the Presenting Officer and the witnesses accepted to have given the said statements and in token of their having given the said statements put their signatures in the presence of the enquiry Officer and the petitioners representative and hence the Enquiry officer treated the same as their statements in the enquiry proceedings on behalf of the department and thereafter the petitioners representative was allowed to cross-examine those witnesses. When the statements of the complainant jalaluddin previously recorded by the C. B. I. was sought to be admitted as his statement in the enquiry proceedings on behalf of the management, an objection was raised regarding its admissibility and a request was made that his statement should be recorded before the Enquiry Officer in the presence of the petitioner but the said objection was ruled out. ( 7. ) ON 1-9-1983, the statements of S. K. Gupta (M. W. 8), Mathura Singh (M. W. 9), Mata Sewak Pandey (M. W. 10), Ravindra Pratap Singh (M. W. 11) Sadhulal (M. W. 12) and Special Police Inspector Lok Ayukta K. K. Shrivastava (M. W. 13) were also recorded by the Enquiry Officer. ( 7. ) ON 1-9-1983, the statements of S. K. Gupta (M. W. 8), Mathura Singh (M. W. 9), Mata Sewak Pandey (M. W. 10), Ravindra Pratap Singh (M. W. 11) Sadhulal (M. W. 12) and Special Police Inspector Lok Ayukta K. K. Shrivastava (M. W. 13) were also recorded by the Enquiry Officer. But, it may be pointed out that a perusal of their statements will go to show that neither the enquiry officer nor the Presenting Officer on behalf of the Management read out their previously recorded statements nor the witnesses themselves read out their previously recorded statements but they simply said that the statements given by them to c. B. I. be deemed to be correct and the Enquiry Officer admitted their previously recorded statements in the examination-in-chief as statements on behalf of the management and then required the petitioners representative to cross-examine the witnesses; the Enquiry Officer relied on the said statements and based his findings on the same. In view of the aforesaid facts and circumstances, the question which arises for consideration of this Court is whether the failure of the enquiry Officer to record the statements of all the witnesses in the presence of the petitioner, a delinquent officer, and admitting in evidence the previously recorded statements of the witnesses by the C. B. I. Inspector amount to denial of proper opportunity to the petitioner to defend himself and the said procedure was opposed to the principle of natural justice which vitiated the trial. ( 8. ) A similar question came up for consideration of the Supreme Court in the case of State of Mysore vs. Shivabasappa, AIR 1963 SC 375 . In the the supreme Court case (supra) on a complaint being made against a Police inspector, another Inspector of C. I. D. made a preliminary investigation against him and recorded the statements of number of witnesses and submitted his report recommending further action. On the basis of that report, the Deputy superintendent of Police initiated departmental proceedings against the Police inspector in which the Deputy Superintendent of Police recalled the witnesses who had been examined by the C. I. D. Inspector in preliminary investigation, brought on record the previous statements given by the witnesses and then allowed the delinquent Officer to cross-examine them. On the basis of that report, the Deputy superintendent of Police initiated departmental proceedings against the Police inspector in which the Deputy Superintendent of Police recalled the witnesses who had been examined by the C. I. D. Inspector in preliminary investigation, brought on record the previous statements given by the witnesses and then allowed the delinquent Officer to cross-examine them. The Deputy superintendent of Police found the charges proved and on that basis the Police inspector was dismissed from service. The order of dismissal was challenged in the High Court of Mysore, the High Court quashed the order holding that the enquiry proceedings were held in violation of rules of natural justice. The State of Mysore went up in appeal before the Supreme Court and the Supreme Court set aside the order of High Court and maintained the dismissal. Their Lordships of the Supreme Court observed that for a correct appreciation of the position, it is necessary to repeat what has often been said that tribunals exercising quasi-judicial functions are not Courts and that therefore they are not bound to follow the procedure prescribed for trial of actions in Courts nor are they bound by strict rules of evidence. They can, unlike Courts, obtain all information and material for the points under enquiry from all sources, and through all channels, without being fettered by rules and procedure which govern proceedings in court. The only obligation which the law casts on them is that they should not act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain it and where such an opportunity had been given, the proceedings are not open to attack on the ground that the enquiry was not conducted in accordance with the procedure followed in Courts. In the said case, Their Lordships while emphasising that in the departmental proceedings it was necessary to follow the rules of natural justice in paragraph No. 6 of the report (page 378 column 2), observed as follows : - "discussing next what those rules required, it was observed that the person against whom a charge is made should know the evidence which is given against him, so that he might be in a position to give his explanation. When the evidence is oral, normally the examination of the witness will in its entirety, take place before the party charged, who will have full opportunity of cross-examining him. The position is the same when a witness is called, the statement given previously by him behind the back of the party is put to him, and admitted in evidence, a copy thereof is given to the party, and he is given an opportunity to cross-examine him. To require in that case that the contents of the previous statement should be repeated by the witness word by word, and sentence by sentence, is to insist on bare technicalities, and rules of natural justice are matters not of form but of substance. In our opinion they are sufficiently complied with when previous statements given by witnesses are read over to them, marked on their admission, copies thereof given to the person charged, and he is given an opportunity to cross-examine them. " Thus, in the case of State of Mysore (supra), Their Lordships did emphasise that to see that the rules of natural justice are complied with and the delinquent officer has a fair opportunity to explain and defend himself, it was necessary that the previous statements given by the witnesses which are to be used in the departmental enquiry should be read over to them and marked on their admission while in the case before us, no such procedure was adopted in respect of the witnesses who were examined by the Enquiry Officer on 1-9-1983 as discussed in paragraph No. 7 above. ( 9. ) A similar question again came up for consideration of their Lordships of the Supreme Court in the case of Mis. ( 9. ) A similar question again came up for consideration of their Lordships of the Supreme Court in the case of Mis. Kesoram Cotton Mills Ltd. vs. Gangadhar, air 1964 SC 708 , in which Honble K. N. Wanchoo, J. (as he then was) and also one of the members of the Bench in the case of State of Mysore (supra), speaking for the Court ruled that where in a domestic enquiry lawyers are not permitted, something more than a mere reading of the statements to be used will have to be required in order to safeguard the interest of the delinquent worker and in such a case to read over a prepared statement of a witness in a few minutes and then ask the workmen to cross-examine would make a mockery of the opportunity, that the rules of natural justice require that the workmen should have to defend themselves and observed as follows : therefore, when one is dealing with domestic inquiries in industrial matters, the proper course for the management is to examine the witnesses from the beginning to the end in the presence of the workman at the enquiry itself. Oral examination always takes much longer than a mere reading of a prepared statement of the same length and brings home the evidence more clearly to the person against whom the inquiry is being held. Generally speaking therefore the Court should expect a domestic inquiry by the management to be of this kind. Even so, the main principles of natural justice cannot change from tribunal to tribunal and therefore it may be possible to have another method of conducting a domestic inquiry (though this should not be the rule but the exception ). " ( 10. ) IN yet another case, M/s. Khardah and Co. Even so, the main principles of natural justice cannot change from tribunal to tribunal and therefore it may be possible to have another method of conducting a domestic inquiry (though this should not be the rule but the exception ). " ( 10. ) IN yet another case, M/s. Khardah and Co. Ltd. vs. The Workmen, AIR 1964 SC 719 , Their Lordships of the Supreme Court again considered the earlier decision in the case of State of Mysore (supra), (in paragraph 8 of their report)wherein it has been observed that if the deposition of a witness has been recorded by the Enquiry Officer in the absence of the public servant and a copy thereof is given to him and an opportunity is given to him to cross-examine the witness after he affirms in a general way the truth of his statement already recorded, that would conform to the requirements of natural justice; Their Lordships observed that those observations must be applied with caution to enquiries held by domestic Tribunals against the industrial employees and that in such enquiries, it is desirable that all witnesses on whose testimony the management relies in support of its charge against the workman should be examined in his presence. Recording evidence in the presence of workman concerned serves a very important purpose inasmuch as the witness knows that he is giving evidence against a particular individual who is present before him, and therefore, he is cautious in making his statement. Besides, when evidence is recorded in the presence of the accused persons, there is no room for persuading the witness to make convenient statements, and it is always easier for an accused persons to cross-examine the witness if his evidence is recorded in his presence. Their lordships further observed that they would discourage the idea of recording statements of witnesses ex parte and then producing the witnesses before the employee concerned for cross-examination after serving him with such previously recorded statements even though the witnesses concerned make a general statement on the latter occasion that their statements already recorded correctly represent what they stated. Their Lordships emphasised that unless there are compelling reasons to do so, the normal procedure should be followed and all evidence should be recorded in the presence of the workman who stands charged with the commission of acts constituting misconduct. ( 11. Their Lordships emphasised that unless there are compelling reasons to do so, the normal procedure should be followed and all evidence should be recorded in the presence of the workman who stands charged with the commission of acts constituting misconduct. ( 11. ) ADMITTEDLY, the statements of the material witnesses were recorded by the Police Officer during investigation of the complaint made by the complainant jalaluddin and those very statements were brought on record by the Enquiry officer in the departmental enquiry against the petitioner. When a Police Officer makes investigation under Chapter XII of the Code of Criminal Procedure, section 161 thereof empowers him to examine witnesses who may be acquainted with the facts of the case but without oath or affirmation and the statements so recorded are not signed by the witnesses making it. The use of such statements is further controlled by the provisions contained in section 162 of the Code inasmuch as the statement or any part thereof cannot be used for any purpose in any inquiry or trial in respect of any offence under the investigation except by the accused and with the permission of the Court by the prosecution to contradict such witness in the manner as provided by section 145 of the Evidence Act. The object is to protect the accused from overzealous Police Officers as well as from untruthful witnesses and to recognise the danger of placing confidence on a statement which is more or less imperfectly and inaccurately recorded by the police Officers who are unacquainted with the law of evidence. Another object of sections 161 and 162 of the Code is to encourage the free disclosure of information and to protect the person making the statement from a supposed unreliability of Police testimony as to the alleged statement, yet another intention is to protect the accused himself against the user of the statement of witnesses made before the Police presumably on the assumption that the statements were not made under circumstances inspiring confidence. In these circumstances, indeed, it would be hazardous to accept and admit in evidence those previously recorded statements of witnesses by Police most of which were not even read out to the witnesses nor the witnesses themselves cared to go through the same before saying that the statements given by them to the Police be deemed to be the statements given by them in the inquiry proceedings. It need not be re-emphasised that when the evidence is recorded in the presence of the accused person, then there is little scope for persuading the witness to make convenient statement and the witness is cautious in making the statement and he would hesitate in making exaggerated and untruthful statements, which he could conveniently do at the back of the accused. ( 12. ) THUS after examining the aforesaid facts and circumstances of the case and the decisions of the Supreme Court, it is now clear that normally the evidence on which the charges are sought to be proved must be led in the enquiry itself in the presence of the delinquent officer and unless there are compelling reasons the enquiry authority should not bring on record the previously recorded statements of the witnesses or to record statements of witnesses before itself ex parte and then produce the witnesses before the delinquent Officer concerned for cross-examination after furnishing him a copy of those previously recorded statements. In the present case, neither the record of the departmental enquiry nor the return filed by the respondents goes to show any reasons which compelled the Enquiry Officer to resort to the aforesaid procedure, that is to say, to take on record the previously recorded statements of the witnesses by the c. B. I. Inspector and to accept and rely on the same, instead of recording the evidence of the witnesses in the enquiry proceedings in the presence of the petitioner, even though the said previously recorded statements were neither read over to most of the witnesses nor the witnesses read the same by themselves before saying that those statements be treated as their statements in the enquiry proceedings. Since the Enquiry Officer in his report well as the disciplinary authority had formed the opinion that the misconduct was established against the petitioner on the basis of collective consideration of the evidence of those witnesses who had their previously recorded statements accepted to be their correct statements as well as the evidence of those witnesses to whom their previously recorded statements were neither read out nor they themselves read the same yet accepted the same as their statements. That being so, the Enquiry officer was not justified in bringing on record the previously recorded statements even of those witnesses who had neither themselves read the statements nor the same were read out to them by Enquiry Officer or by the Presenting Officer. The disciplinary authority also should not have relied on such statements while passing the impugned order of termination of petitioners service. Thus, it is established beyond doubt that the Enquiry Officer violated the well settled principles of natural justice which vitiated the whole proceedings and consequently the order of the petitioners dismissal was also bad and could not be sustained in law. Since the petition succeeds on the aforesaid ground it is not necessary for us to go into other grounds raised by the learned counsel for the petitioner. ( 13. ) IN the result, the petition succeeds and is hereby allowed. The impugned order dated 31-1-1984 (Annexure-A) and order dated 12-11-1984 (Annexure-H) are quashed and the petitioner is reinstated. The respondents shall however be free, if so advised, to initiate a fresh enquiry against the petitioner in accordance with law. In the circumstances of the case, we make no order as to costs of this petition. The outstanding amount of security, if any, be refunded to the petitioner. Petition allowed.