Reply To: Earnest money is part of purchase price when transactions move on and is forfeited when contract is breached by failure on part of vendee

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advtanmoy
Keymaster

GETTING PUBLIC JOB BY FRAUDULENT MANNER

Public administration and services under the Union of India or State in order to be upright, efficient and above board or suspicion must be manned by persons of good moral character. Those who seek entry to public employment by perpetrating fraud, misrepresentation, false representation, or by dubious means are, but for their reprehensible conduct not entitled to enter public employment. Had such persons not committed fraud or misrepresentation by suggestio vari or suppresio faisi or by non-disclosure of true facts or disclosure of facts which are false to their own knowledge or by partial non-disclosure or partial disclosure solely with a view to seek public employment they would not have got the entry in the public employment. The contract of employment would not have been entered into. Secondly, they would not have acquired status, and therefore, rights flowing from the Statutory Rules or Regulations, would not come to their rescue. The very first step towards entry into public employment is vitiated by their conduct. It may be noted that for such a conduct which has preceded the contract of employment the employer is not seeking to impose any penalty. The employer is merely exercising right given to him by law, namely, of avoiding contract. The employer on coming to know about the fraud perpetrated or misrepresentation practised by the employee wants to avoid the contract since it is avoidable at the instance of employer. For exercising such a right, for a conduct which has preceded the contract of employment, the employer has obvious right under the Law of Contract. The employer does not want to resort to its right or power under the Statutory Rules or Regulations. The Statutory Rules which provide for imposition of penalty for misconduct committed by the employee are, in my opinion, not required to be followed because it is not the exercise of penal or punitive power on the part of the employer but it is the exercise of right flowing from the Law of Contract, namely, that of avoiding the contract for fraud, misre-presentation practised by the employee while seeking entry into public employment. For such a power the source is not to be found in the Statutory Rules or Regulations. The source is also not to be found in Article 311(2) of the Constitution of India. The source is to be found in the power of one of the contracting parties under Section 19 of the Contract Act to avoid the contract when the contract is obtained by fraud, misrepresentation, mistake etc. I am, therefore, of the opinion, that there is no need for the employer, when the employer seeks to terminate or rescind the contract of employment on the ground that the contract is obtained by the employee by fraud, misrepresentation, mistake etc. to hold a regular departmental enquiry as contemplated by Article 311(2) of the Constitution of India or as contemplated by Statutory Rules/Regulations before imposing any penalty. The employer, in my opinion, in cases like present one, is not imposing any penalty. The employer is exercising his right to avoid the contract which is obtained by fraud, misrepresentation or mistake. His right is referrable to the period prior to the employee acquiring the status. It is a right which stems from the initial contract of employment because of which employee got entry into public employment. That initial contract of employment itself being vitiated because of fraud the employer gets right of avoiding the contract, and for such avoidance of contract, in my opinion, there is no need for the employer to follow the procedure prescribed by Article 311(2) of the Constitution of India or by Statutory Rules/Regulations. I, therefore, do not accept the submission of Mr. Vakharia. In my opinion, the respondent is not required to hold regular departmental enquiry for imposition of penalty stipulated by Panchayat Service (Discipline & Appeal) Rules. Such a contract of employment can be avoided by the employer simply by notice To show cause and opportunity to the employee to tender his explanation and his documentary evidence and after considering such explanation and evidence by positive decision of the employer to avoid the contract. Once such decision is taken in good faith considering the explanation of the employee the employer has exercised his right of avoiding the contract and public interest and public administration demands that such person is not permitted to pitch his case in an higher pedestal, than this.

Hiraben Jivanbhai Chaudhari vs R.C. Raval ( Gujarat High Court-22 June, 1992)-Equivalent citations: (1993) 1 GLR 66