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Enquiry Necessary Before Dismissal for Suppression of Criminal Antecedents

12-Aug-2026

Bharatiya Nyaya Sanhita, 2023 (BNS)

Shatrughn Yadav v. The Fertilizers and Chemicals Travancore Ltd. (F.A.C.T.) and Others

"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."

Justice Sanjay Karol and Justice Augustine George Masih

Source: Supreme Court

Why in News?

A Bench of the Supreme Court, comprising Justice Sanjay Karol and Justice Augustine George Masih, in Shatrughn Yadav v. The Fertilizers and Chemicals Travancore Ltd. (F.A.C.T.) and Others (2026), held that disclosure of criminal antecedents by an employee after joining service would not automatically result in dismissal.

The Court held that before passing a termination order, the employer must conduct an enquiry to determine whether the suppression was deliberate and must record a finding that continuation of the employee is not feasible, laying down a two-pronged test for such enquiries.

What was the Background of Shatrughn Yadav v. F.A.C.T. (2026) Case?

The Appellant was appointed as a Technician (Process) by the Fertilizers and Chemicals Travancore Ltd. on 05.05.2021, on consolidated pay for an initial tenure of two years.
Six months later, the employer sought verification of the Appellant's criminal antecedents from the District Magistrate, who reported that a Non-Cognizable Report dated 03.04.2019 had been registered against the Appellant under Sections 323 and 504 of the IPC.
A show cause notice was issued to the Appellant on 30.04.2022, directing him to explain why his services should not be terminated for furnishing false information.
The Appellant denied any knowledge of a criminal case against him at the time of joining, relying on a subsequent representation of 06.06.2023 recording that the police had found no evidence against him and had deleted his name from the array of accused.
Without enquiring into the truth of the alleged suppression or recording reasons why his continuation was not feasible, the employer passed an order terminating the Appellant's services.
The Appellant approached the Kerala High Court. The Single Judge held that his claim of being unaware of the NCR involved a disputed question of fact requiring proof, and the Division Bench upheld this view, dismissing the appeal.
Aggrieved, the Appellant approached the Supreme Court.

What were the Court's Observations?

On the Requirement of an Enquiry: The Court held that termination is not an automatic consequence of disclosure of criminal antecedents. The employer must consider the specific facts of the employee's case and apply its mind before deciding on termination.
On the Two-Pronged Test: The Court laid down that before terminating an employee for suppression of criminal antecedents, the employer must undertake a two-pronged enquiry. The first prong is factual — whether there was, in truth, any suppression or furnishing of false information, having regard to the employee's knowledge at the relevant time and the circumstances of the declaration. The second prong requires the authorities to apply their mind to the specific facts, including the type of suppression, the nature of allegations, the role and gravity of the offence, the nature of the post, and the eventual outcome of the criminal proceedings, to determine whether continuation in service is not feasible.
On Knowledge as a Pre-requisite for Suppression: The Court observed that knowledge of a fact is a necessary pre-requisite for its non-disclosure, since suppression presupposes awareness of that which is concealed. It held that a candidate cannot be held liable for suppressing information that was never within his knowledge, and where the existence of a criminal antecedent is not shown to have been known to the candidate, no suppression can be said to have occurred.
On Application to the Facts: The Court found that the Appellant had consistently maintained he was unaware of the registration of any criminal case against him, a stand supported by a police character certificate and further certificates confirming non-pendency of any case, and that he was neither called to the police station nor arrested during the relevant period.
On Failure to Conduct the Second Enquiry: The Court noted that although the Appellant was given sufficient opportunity to present his case, the authorities proceeded on the presumption that existence of a criminal antecedent automatically rendered him ineligible, without recording specific findings on the nature of the offence, its impact on the post held, or the subsequent discharge of the Appellant.
On the Legality of Termination: The Court held that the termination failed on both prongs of the test and was illegal as well as without application of mind, and accordingly set aside the decisions of the High Court.

What is the Legal Position on Suppression of Criminal Antecedents in Service Law?

Mere possession of a criminal antecedent, even if not disclosed, does not by itself disqualify a person from public employment or automatically justify termination.
The employer is required to independently assess whether the non-disclosure was deliberate, having regard to the employee's actual knowledge at the relevant time.
Where the employee had no knowledge of the existence of a case against him, there can be no suppression, since concealment presupposes awareness of the fact concealed.
Even where suppression is established, the employer must further examine the nature and gravity of the offence, its relevance to the post held, and the outcome of the criminal proceedings, before concluding that continuation in service is not feasible.
An order of termination passed without undertaking both stages of this enquiry is not sustainable in law.

Civil Law

Section 9 Application by Unsuccessful Party Maintainable in Exceptional Cases

12-Aug-2026

THE ARBITRATION AND CONCILIATION ACT, 1996

National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd.

"A court may, in rare and compelling cases, permit the unsuccessful party to invoke Section 9 to prevent irreparable prejudice and to preserve the efficacy of the challenge under Section 34."

Justice K.V. Viswanathan and Justice Alok Aradhe

Source: Supreme Court

Why in News?

A Bench of Justice K.V. Viswanathan and Justice Alok Aradhe, in National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. (2026), held that to prevent an award holder's unjust enrichment through a bank guarantee while the award is under challenge, interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 can be granted on an award debtor's application to preserve the efficacy of the challenge under Section 34.

The Court refused to interfere with the Delhi High Court's judgment, which had allowed the respondent-award debtor's Section 9 application seeking interim relief against alleged unjust enrichment of a bank guarantee of about Rs. 3.5 crores by the appellant-award holder during the pendency of a Section 34 application.

What was the Background of National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd. (2026) Case?

A Memorandum of Understanding was executed in 2002 between National Projects Construction Corporation Ltd. and Ishvakoo (India) Pvt. Ltd., pursuant to which the respondent was provided Rs. 3.5 crores as Mobilisation Advance against bank guarantees.
In 2005, the High Court disposed of a Section 9 application on the understanding that the appellant would not invoke the bank guarantees provided they were kept alive, and that the guarantees could be invoked only if the arbitrator found the appellant entitled to recover the amount.
The respondent failed to keep the guarantees alive, leading to their invocation by the appellant in September 2017.
The arbitrator, while passing the Award on December 5, 2017, dismissed the respondent's claims and remained unaware that the bank guarantees had already been encashed.
The respondent challenged the Award under Section 34 and, during its pendency, filed a fresh Section 9 application seeking return of the amount.
The Single Judge allowed the application and directed the appellant to deposit Rs. 3.5 crores with the Registry, an order that was upheld by the Division Bench, prompting the award holder to approach the Supreme Court.

What were the Court's Observations?

On Maintainability of Post-Award Section 9 Applications: The Court noted that precedent recognises the maintainability of a post-award Section 9 application, while cautioning that the threshold for grant of interim relief is higher where the application is moved by an award debtor.
On the Exceptional Nature of the Remedy: The Court held that a court may, in rare and compelling cases, permit the unsuccessful party to invoke Section 9 to prevent irreparable prejudice and to preserve the efficacy of the challenge under Section 34.
On Unjust Enrichment: The Court held that permitting the appellant to retain the money pending disposal of the Section 34 application would unjustly enrich the appellant, and that the High Court was justified in so observing.
On Fulfilment of the Parameters for Section 9 Relief: The Court held that the respondent had made out a rare and compelling case for relief, having fulfilled the necessary parameters for obtaining relief under Section 9 — namely, the existence of a prima facie case and balance of convenience — since retention of the money by the appellant during the pendency of the Section 34 application would unjustly enrich the appellant.
On Relief Granted: The Court dismissed the appeal and directed the appellant to hand over the bank guarantee amount to the High Court's registry, granting four weeks for the appellant to deposit Rs. 3.5 crores with the Registry of the Delhi High Court, to be kept in a Fixed Deposit on auto-renewal basis until disposal of the Section 34 application.

What is Section 9 of the Arbitration and Conciliation Act, 1996?

Section 9 empowers courts to grant interim measures of protection before, during, or after arbitral proceedings but before enforcement of the arbitral award.
Any party to an arbitration agreement can approach the court seeking interim relief for various protective measures during the arbitration process.
The court can appoint guardians for minors or persons of unsound mind specifically for the purposes of arbitral proceedings under this provision.
Courts are authorized to preserve, provide interim custody, or order sale of goods that form the subject-matter of the arbitration agreement.
The provision allows courts to secure the amount in dispute in arbitration to ensure effective enforcement of the final award.
Courts can order detention, preservation, or inspection of any property related to the arbitration dispute and authorize entry into premises for necessary observations or experiments.
Interim injunctions and appointment of receivers can be granted by courts under this section to maintain the status quo during arbitration.
Once an arbitral tribunal is constituted, courts cannot entertain Section 9 applications unless circumstances exist that render Section 17 remedies (tribunal's interim measures) inefficacious.
If interim measures are granted before arbitration commences, the arbitral proceedings must begin within 90 days of the court order, or within such extended time as the court may determine.