JUDGMENT Y. B. Suryavanshi, J. 1. The petitioner Nazir Khan Pathan, Ex. Godown Keeper of M. P. Rajya Bhandar Grah Nigam (for short the 'Nigam'), branch at Khachrod, Ujjain in this petition under Articles 226/227 of the Constitution of India is challenging the orders dated 28-4-1988 (Annexure XII) passed by the Managing, Director of the 'Nigam' dismissing the petitioner's services as also the orders dated 26-5-1988 (Anexxure XIV) by appellate Authority/Chairman of the said 'Nigam' dismissing the appeal in three words which are: ^^fopkjksijkar fujLr** on the grounds that both the orders are illegal and without jurisdiction and also totally contrary to the principles of natural justice. 2. According to the petitioner, Respondent No. 1 Nigam' is a statutory body constituted under the provisions of M. P. Agricultural Warehouse Act, 1947 and is financed and totally controlled by the State of M. P. and is 'State' or "instrumentality of State" under Article 12 of the Constitution of India. Undisputedly the petitioner was in charge Godown Keeper of the Godown of the 'Nigam' at branch Khachrod in Ujjain District. On basis of a written report by one Subhash Sharma that a bag of sugar was removed from the Godown and was being taken to the market, the Police registered an offence under section 3/7 of the E. C. Act. The Department's case was that the thela carrying a sugar bag was intercepted by the Police. The thelawala was a Hammal called, Gafoor Khan. According to the Department he is said to have disclosed that he had come from the warehouse with the sugar bag sent by the petitioner. During initial investigations on basis of report, which according to the petitioner was false and politically motivated, on 5-4-1986 Police seized the stock-register and deposit ledger kept at the godwnn. On 9-4-1984 there, was physical verification and so far as the number of units of bags are concerned, no deficit or shortage was found. On 10-4-1986 the petitioner gave charge report of godown. 3. On 9-4-1984 there, was physical verification and so far as the number of units of bags are concerned, no deficit or shortage was found. On 10-4-1986 the petitioner gave charge report of godown. 3. Undisputedly on 3-7-1986 show cause notice was issued (Annexure-I) and on 21-7-1986 the petitioner submitted reply denying the allegations which inter alia, included that on basis of a report to the Police by Shri Subhash Sharma, President, Madhyamik Shiksha Vidhyalaya, Khachrod a bag of sugar has been seized and during interrogation the petitioner stated in writing that the bag was sent to a Co-operative Society in exchange of a damaged bag but on enquiry by Police the said Society denied the case of replacement by way of exchange. 4. (i) The petitioner faced the Departmental Enquiry on a charge as follows: "That on 5-4-1986, the petitioner as Officer-In Charge at Khachrod, unauthorisedly removed a bag of sugar from the godown which was seized by the Police and, that the petitioner gave a Statement that the seized bag of sugar was sent in exchange to the Co-operative Society when in fact it was not found so, and thereby the petitioner has committed an act which amounts to misconduct." A list of witnesses mentions only three names, namely: (i) Shri M. K. Pandit, Sr. Supdt., O. I. C. - Sanawad; (ii) Shri Dinesh Kumar Soni, Addl. Chowkidar - Khachrod; (iii) Shri Hazarilal Coiypa, Clerk, Godown - Ujjain (Annexure-III A). (ii) In the statement of allegations and particulars it was stated, that on 5-4-1986, Shri Pathan informed the Regional Manager, Indore that the Police has registered a case under section 3/7 of E. C. Act and had sealed the godowns Nos. 9a and 9b, and 1. (iii) That, Shri Pandit, Sr. Supdt. (ii) In the statement of allegations and particulars it was stated, that on 5-4-1986, Shri Pathan informed the Regional Manager, Indore that the Police has registered a case under section 3/7 of E. C. Act and had sealed the godowns Nos. 9a and 9b, and 1. (iii) That, Shri Pandit, Sr. Supdt. went to Khachrod for enquiries but found Shri Pathan/Petitioner absent on 7th and 8th of April, 1986; (iv) Shri Pandit obtained information from S.D.O. and S.H.O. Shri P. S. Thakur and the latter stated that on report by one Shri Subhash Sharma, President, Madhyamik Shiksha Vidhyalaya, Khachrod, that one gunny bag of sugar was unauthorisedly removed from the godown, it was seized, and the godowns were sealed and the stock-register and deposit ledger were also seized; (v) That the warehouse receipt of payment was not with Shri Pathan; (vi) That, the Enquiry Officer Shri Pandit during interrogations learnt that during the Police interrogation Shri Pathan had given the Police Officer a written statement to the effect that the seized gunny bag was sent to the Co-operative Society by way of exchange for a damaged bag, but the Society when inquired gave it in writing that there was no question of any exchange. Thus, Shri Pathan in order to suppress the truth had given a false statement before the Police Officer which amounts to misconduct; (vii) That, due to intervention of Police the reputation of the State Warehouse Corporation has suffered; (viii) That, Shri Pathan into circumstances has unauthorisedly removed one sugar bag from the godown for sale. 5. The petitioner/delinquent submitted a detailed reply on 24-10-1986 (Annexure IV). Shri Dandwate was appointed as E.O. Only two witnesses namely Shri Pandit and Hazarilal Coiypa were examined on 20-4-1987 (Annexures V and VI). On 28-4-1987 the petitioner submitted his written defence (Annexure VII). On 12-7-1987 Pyare Mohan Dar, Dy. Regional Manager was examined in defence on behalf of delinquent (Annexure VIII). On 9-10-1987 the Disciplinary Authority submitted his report (Annexure IX) after discussing the evidence gave his finding that in view of the circumstances of the case it is proved that Shri Pathan gave a statement before the Police but Shri Pathan had failed to prove that it was given under duress. On 9-10-1987 the Disciplinary Authority submitted his report (Annexure IX) after discussing the evidence gave his finding that in view of the circumstances of the case it is proved that Shri Pathan gave a statement before the Police but Shri Pathan had failed to prove that it was given under duress. It was also mentioned that the delinquent/petitioner had emphasised the circumstance that no shortage of bags was noticed during physical verification but the contention that no gunny bag was removed from warehouse in absence of any other circumstance creates doubt about the conduct of the petitioner and, therefore, the charge (supra) is found proved. 6. Thereafter, a notice dated 14-3-1988 (Annexure X) was issued, and on 4-4-1988, the petitioner submitted his reply in details. On 28-4-1988, Respondent No. 2 Managing Director of the 'Nigam' passed the impugned orders dismissing the petitioner from service w.e.f. 30-4-1988 a.m. The delinquent preferred an appeal and as many as 14 grounds appear to have been catalogued in the appeal memo (Annex. XIII). However, on 26-5-1986 the Dy. Manager (Works) for M. D. informed ^^fopkjksijkar fujLr** (Annexure XIV). In this petition the order of dismissal (Annexure XII) and the orders passed on appeal (Annexure XIV) have been challenged. 7. According to the petitioner the E.O. relied upon inadmissible and hearsay evidence; that the alleged statement made to Police Officer during the course. of investigation was totally inadmissible. Moreover, no such statement was brought on record in enquiry proceedings; that the conclusions are based on surmises and conjectures and the E.O. specifically mentioned in the order that the conduct of the petitioner "is "suspicious" and, therefore, the charge is found proved; that, there was no deficit or shortage in the stock of the godown when it was physically verified after seizure; that, the material witnesses were not examined; that the orders passed by the appellate authority do not show application of mind, and it is "not a speaking order" giving any reason and is thus in violation of established judicial pronouncement. 8. In the return filed on behalf of Respondents Nos. 8. In the return filed on behalf of Respondents Nos. 1 and 2, it is denied that Respondent No. 1 is 'State' under Article 12 of the Constitution of India while admitting the sealing of the stock-register and physical verification it is contended that the petitioner did not make any entry in the spillage register even though two bags of sugar from the spillage were found at the time of physical verification as borne out by the panchnama dated 9-4-1986 (Annexure R-A); that the panchnama makes it clear that the registers maintained for godown No. 9-b showed balance of 6 bags of sugar, whereas on physical verification 8 bags of damaged sugar were found. The bags contained excess sugar. Thus unaccounted bundle of empty gunny bags was found in the godown and timely entry till then, was not made in the stock-record; that the petitioner was involved in surreptitious removal of a bag of sugar from the warehouse which was seized by Police; that the bags were "numercially counted but not weighed" at the time of physical verification; that the Hammal Gafoor Khan was an "accomplice" and there was no point in examining him, that, the statement by the petitioner before the Police was "voluntary"; that even the removal of one bag "by way of exchange" was not permissible because no entry was made by the petitioner in the register; moreover, such exchange is never done, and under the terms of the warehouse receipt, the depositors deposit goods which they later on remove against delivery memos, and an endorsement is also made on the warehouse receipt about such removal; moreover, the concerned Society has also denied the transaction of exchange; that the petitioner had deliberately not made entries in the "spillage-register" so as to enable him to remove the same; that, existence of 6 bags of damaged sugar in place of 6 bags of sound sugar also establishes that he had removed "sound sugar bag" and had kept "damaged sugar" stock with the intention of wrongful gain. It is denied that the findings are not based on evidence and are merely on suspicion, surmises or hearsay evidence. It is denied that the findings are not based on evidence and are merely on suspicion, surmises or hearsay evidence. The criminal case registered by Police was 'closed' because the petitioner was not a "dealer" for the purposes of E.C. Act; that, thereafter, departmental action was taken; that, since the petitioner had admitted (before Police) that the bag of sugar was taken out of the warehouse with his consent and knowledge, it was for the petitioner to establish the circumstances in which it was taken; that there is no jurisdictional issue involved in this writ petition. That the case against the petitioner is proved by circumstantial, evidence. While admitting that the appellate Authority had passed "a non-speaking order", it is prayed that the case may be "remanded" to the appellate Authority to rectify the defect after proper hearing to the petitioner, and then to pass a fresh order. 9. The petitioner filed rejoinder in which he stated that the petitioner had taken charge from Shri Puranik on 7-2-1986 and the fault with reference to "spillage register" relates to his period. In fact respondent had sought explanation from Shri Puranik vide letters dated 25-2-1986 and 13-5-1986 (Annexures XV, XVI, XVII) and accordingly the mistake committed by the predecessor is being thrust on the petitioner. It is further stated that the Police may not have proceeded under E. C. Act, but could have, in the circumstances, if true, would have proceeded under sections 379, 380 or 381, Indian Penal Code. But as the Police found that the allegation about the bag was baseless the criminal proceedings were dropped. It was reiterated that as material documents were not brought on record and material witnesses were not examined in the departmental enquiry, the petitioner has no opportunity to cross-examine and the evidence remains hearsay. 10. The learned counsel Shri K. L. Sethi for the petitioner and the learned counsel Shri A. K. Chitaley with Shri S. M. Dagaonkar for the respondents heard at length. 11. As regards the contention that Respondent No. 1 is not a 'State' the learned counsel for the petitioner referred the decision in Ajay Hasia v. Khalid Mujib, AIR 1981 SC 487 , wherein their Lordships have observed about the 'TEST' to determine .whether a Corporation or a body created under statute is an "instrumentality" or "agency" of the Government. 11. As regards the contention that Respondent No. 1 is not a 'State' the learned counsel for the petitioner referred the decision in Ajay Hasia v. Khalid Mujib, AIR 1981 SC 487 , wherein their Lordships have observed about the 'TEST' to determine .whether a Corporation or a body created under statute is an "instrumentality" or "agency" of the Government. "The enquiry has to be not as to how the juristic person is born but why it has been brought into existence." The M. P. Agricultural Warehouse Act, 1947 was enacted to encourage the establishment of warehouses for storing agricultural produce and to make provision for their proper supervision and control. The statement of objects and reasons for this enactment have been elaborately stated which include, baility to the Reserve Bank of India to provide finance to agricultural, and the warehouses receipt will be ideal security for any bank, etc. The warehouses are to be licensed. The prescribed authority under that Act, as per rules framed thereunder, is the Registrar, Co-operative Societies, M. P. The Registrar is the licensing authority and also the appellate authority. The Registrar is clothed with various functions, such as inspection - at least once in every quarter, giving of directions, suspension or cancellation of licence of a warehouse, and the power to appoint a suitable person or a registered Co-operative Society to conduct business, maintenance of register of licences, and in view of the Act and rules and to reiterate the statement of objects and reasons, it is an instrumentality of 'State'. 12. The scope under Articles 226/227 of the Constitution of India in disciplinary proceedings is well settled. If the disciplinary enquiry has been conducted fairly without bias in accordance with the relevant disciplinary rules and the constitutional provisions to orders passed by such authority they cannot be interfered with in proceedings under Article 226 merely on the ground that it was based on the evidence which would be insufficient for conviction of the delinquent of the same charge at criminal trial. The sufficiency of evidence cannot be considered in writ proceedings, but interference is called for if the findings are not based on any evidence at all or where the evidence is hearsay, or is mere surmises or suspicion. 13. The sufficiency of evidence cannot be considered in writ proceedings, but interference is called for if the findings are not based on any evidence at all or where the evidence is hearsay, or is mere surmises or suspicion. 13. To prove the charge, only two witnesses have been examined by the Department (Annexure-V) which is the copy of the statement of Hazarilal Coiypa is to the effect that on physical verification the stock was found as per entries in the stock register. This was in presence of Police. On a vague question asked whether Shri Pathan has stated to the witness, the reply was that the petitioner stated that people here have conspired against him and want to defame him and he is not at fault. Second witness Shri Pandit is important. He states that he contacted the S.O. in this case to find out whether the case of theft was registered. He proceeds to state, that the Police Officer had shown him entire file relating to the seizure of one gunny bag of sugar from a thelawala which was seized. He also states, that there was a written statement of the petitioner to the effect that the bag was sent to the Marketing Society in exchange, but the file further shows that on enquiry made from the Manager, Marketing Society, latter had not taken any sugar from this warehouse. The incriminating statement, however, is that the written statement which he had seen in the Police file bore the signature of Shri Pathan. He also stated that when the sealed house was opened, on physical verification the stock was found as per stock register, and there was no shortage. In cross-examination by the petitioner the witness stated that after the physical verification, after about 2 hours, the petitioner had complained that he was detained for about 2 hours by the Police stating, that he will be allowed to go only on arrival of higher officials. This witness had gone to the P.S. to enquire why Shri Pathan has been detained at the P.S. and thereafter, the petitioner was allowed to go. The statement does not appear to have been properly recorded but in the cross-examination the suggestion of duress or influence of the Police appears to have been suggested. This witness had gone to the P.S. to enquire why Shri Pathan has been detained at the P.S. and thereafter, the petitioner was allowed to go. The statement does not appear to have been properly recorded but in the cross-examination the suggestion of duress or influence of the Police appears to have been suggested. Apropos the statement of Shri Dar he stated that when he contacted the Police Officer, he was informed by the Police Officer, that actually they were not able to trace whose bag it was and if they could trace it, then by 15th of May, 1986 a charge-sheet would be submitted. In cross-examination, this witness stated, that on 28-4-1986 he did not have any talk with the petitioner whether the latter had given any statement to the Police. That is the total evidence. 14. We may now focus on the charge stated in paragraph 4(i) and highlight the evidence against the petitioner. The order passed by the appellate Authority is "non-speaking". Though the decision cited before us in Ramchander v. Union of India, AIR 1986 SC 1173 relates to an order passed by the Railway Board, under Railway Servants (Discipline and Appeal) Rules (1968), it was held to be a mechanical reproduction of the phraseology of the concerned rule without any attempt on the part of the Railway Board to marshall the evidence from record with a view to decide about the sustainability of the findings. Referring to Tulsiram Patel's, case, AIR 1985 SC 1416 it was stated that the appellate Authority must pass a reasoned order dealing with the contentions raised by the appellant in the appeal. It was observed that reasoned decisions by tribunals such as the Railway Board will pomote Public Confidence in the administration procees. The duty to give reasons is an incident of the judicial process. Unfortunately appellate Authority in this case, undisputedly, passed a three-word order, whereas the appeal memo shows that about 14 grounds were raised in the appeal. That order, therefore, is of no assistance. 15. Adverting to the orders in the impugned Annexure IX there is a finding that on physical verification the stock was found quite in order as per stock register. There is conspicuous absence of any reference to "spillage register" and this circumstance which forms part of the return does not figure anywhere in the discussion in this order. 15. Adverting to the orders in the impugned Annexure IX there is a finding that on physical verification the stock was found quite in order as per stock register. There is conspicuous absence of any reference to "spillage register" and this circumstance which forms part of the return does not figure anywhere in the discussion in this order. Unfortunately, in the order the paragraphs are not numbered for convenient reference, but there is reference to the statement of Shri Dar that according to this witness there is no evidence available about removal of the sugar bag from godown. Thus, this circumstance coupled with the. finding that stock was intact (though so mentioned) are findings in favour of the petitioner which appear to have been ignored. The foundation for finding of the charge proved is the statement allegedly given by the petitioner before the Police about which the only witness is Shri Pandit. Now what Shri Pandit was told by the Police Officer, and what Shri Pandit stated on that basis before the E.O. is purely hearsay evidence. In order to prove the. false explanation or admission, whatever it may have been, the concerned Police Officer Shri Thakur should have been examined in the Departmental Enquiry. The concerned thelawala was a key witness if the petitioner had sent the. sugar gunny bag on his thela he was only a carrier. He has not been examined. The learned counsel for respondents urged, that vide Annexure R-B the Department had requested the S.P. for the copy of the statement of Hammal; the Seizure Memo of sugar bag; a copy of the statement of Manager, Marketing Society, Khachrod; the complaint by Shri Subhash Sharma on which basis criminal action was initiated and also the copy of the statement of Shri Pathan. But copies were not supplied. This attempt to obtain copies seems to have been made on 21-8-1989 whereas the impugned orders were passed on 28-4-1988 and 26-5-1988. It is replied by S. P. dated 25-9-1989. But copies were not supplied. This attempt to obtain copies seems to have been made on 21-8-1989 whereas the impugned orders were passed on 28-4-1988 and 26-5-1988. It is replied by S. P. dated 25-9-1989. We fail to understand how this exercise of obtaining those documents at the stage of hearing of writ petition, obviously, not at the stage of D.E. could help the respondents to reiterate, there is no evidence of Subhash Sharma, the author of the report who moved the Police into action, the Police Officer who seized the sugar bag, the hammal Gafoor Khan who was intercepted while carrying the sugar bag, the seizure memo and the alleged written statement of the petitioner made before the Police. Thus the evidence before the E.O. was only hearsay evidence. Admission is a good piece of evidence but then it has to be proved. When the documentary statement itself is not produced in the evidence in the departmental proceedings, it is not possible to state what the petitioner stated. In face of such hearsay evidence which influenced the disciplinary authority, it is difficult to accept the reasoning that the petitioner had failed to prove that such statement was made under duress. We want to make it clear that in admission or statement by an official who subsequently faces a D.E. is admissible evidence but its evidentiary value, would depend upon the circumstances of that case. In absence of non-production of those documents and relying on hearsay evidence the petitioner is, of course, deprived of opportunity of cross-examination of that evidence. Kashinath Dixit v. Union of India, AIR 1986 SC 2118 was referred for the posposition, that non-supply of the copies and statements of witnesses and copies of documents relied upon by the disciplinary authority would cause prejudice and a denial of resonable opportunity to the delinquent of defending himself. Nandkishore Prasad v. State of Bihar, AIR 1978 SC 1277 was also referred, wherein, it was observed, that even if a statute dealing with a quashi judicial order does not expressely provide that the party affected must be heard and that resons must be given in support of the order, the constitutional provisions under Articles 226 and 136 relating to judicial review would be defeated if the quasi judicial authority and tribunals are freed from giving the reasons. 16. 16. Thus in the final analysis we find that the total case against the petitioner in absence of evidence direct or circumstantial or documentary is based on hearsay evidence, and the conclusions are suspicions and surmises. This petition is, therefore, allowed. The impugned orders dismissing the petitioner from service and rejecting his appeal (Annexures XII and XIV) are hereby quashed. We are not inclined to accept the contention on behalf of the respondents that the matter be remanded to the appellate Authority with a direction to dispose it of after hearing the petitioner according to rules. Since the petitioner succeeds, we have no option but to order that the petitioner shall be deemed to be in service and will be entitled to such emoluments as may be admissible under the rules from the date of dismissal i.e. 30-4-1988. The petitioner shall also be entitled to the cost of this petition. Counsel's fees Rs. 200/- if certified. The amount of security, after due verification be refunded to the petitioner.