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Misappropriation of Public Funds Justifies Removal from Service

Case Law Details

TaxGuru Citation
2025 taxguru.in 10993
Case Name
Union of India And Ors Vs Indraj (Supreme Court of India)
Date of Judgement/Order
Only available for paid members
Related Assessment Year
13/11/2025
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Union of India And Ors Vs Indraj (Supreme Court of India)

Misappropriation Is Misconduct — Repayment Doesn’t Wash It Away- Trust Breached, Dismissal Justified: Supreme Court Reverses High Court Relief

Admission + Documents = Proven Misconduct; Reinstatement Set Aside, Embezzlement, Even If Repaid, Warrants Removal

The Supreme Court set aside the Rajasthan High Court’s order and restored the penalty of removal from service imposed on a Gramin Dak Sevak/Branch Post Master (Indraj) for misappropriation of public funds.

During a 2011 inspection, it was found that though the respondent received recurring deposit instalments and insurance premiums from depositors and stamped their passbooks, he did not enter these deposits in the post office accounts, instead keeping the money for personal use. The amounts misappropriated were ₹1,900 (RD accounts) and ₹3,366 (PLI premium).

A departmental inquiry was conducted in which:

  • The respondent had full opportunity of hearing,
  • Cross-examined witnesses,
  • Did not lead any defence evidence,
  • And admitted that he had spent the amounts on household expenses, later depositing them back.

The Disciplinary Authority removed him from service, and both the Appellate Authority and the CAT upheld this. However, the High Court reversed the decision, holding the evidence insufficient and accepting the claim that his admission was obtained under the Inspector’s influence.

The Supreme Court held that:

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Author Info

CA Vijayakumar Shetty
Qualification: CA in Practice
Company: Shetty & Co, Chartered Accountants, Mangalore
Location: Mangalore, Karnataka
Articles Published: 6,289

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