A.L.Kalara Vs. The Project &
Equipment Corporation of India Limited [1984] INSC 97 (1 May 1984)
DESAI, D.A.
DESAI, D.A.
REDDY, O. CHINNAPPA (J) VARADARAJAN, A. (J)
CITATION: 1984 AIR 1361 1984 SCR (3) 646 1984
SCC (3) 316 1984 SCALE (1)798
CITATOR INFO :
F 1985 SC1046 (6) RF 1986 SC1571 (60,66,67) F
1991 SC1010 (35,223)
ACT:
A Writ Jurisdiction of the High Court under
Article 226 of the Constitution- Public sector undertakings and other
instrumentalities of the State, whether amenable to the writ jurisdiction.
B Effect of concession in the Supreme Court
by the State as to the maintainability or amenability to the writ
jurisdiction-Though the normal procedure is to remit to the High Court, the
Supreme Court, in order not to protract the litigation involving the livelihood
of a party before it can itself hear the appeal on merits.
C. Constitution of India, 1950 Art.
14-Whether there should be any specific pleading in the Petition pointing out
whether anyone else was either similarly situated as the petitioner or
dissimilarly treated for entertaining the charge of discrimination and granting
relief on that ground D. Legislative Policy, whether judicially reviewable by
the courts-Constitution of India, 1950 Arts. 226,32 and 13.
E. Constitution of India 1950-Distinction
between Part XIV and Part III of the Constitution-Whether the employees of the
Corporation entitled to the protection under Part XIV of the Constitution.
F. Project and Equipment Corporation of India
Ltd.
Employees' (Conduct, Discipline and Appeal)
Rules, 1975-Rules 4,5 and 25, Scope of-Rule 4 does not specify any misconduct
and Rule 5 does not specify that violation of Rule 4 is per se misconduct-No
disciplinary action, there. fore will arise under Rule 4 of the 1975 Rules.
G. The Project and Equipment Corporation of
India House Building Advance (Grant and Recovery) Rules Rule 10 (1) (ii) and
the Profits and Equipments Corporation of India Ltd. conveyance Advance (Grant
and Recovery) Rules 8 and 10 (1)- Whether the non-utilisation of the advances
within the stipulated time for the purposes of and no refund thereof
immediately on the expiry of the period, constitute "misconduct"
within the meaning of the expression in Rule 4 (i) (iii) of the 1975 647 Rules
and if not whether the domestic enquiry and the punishment of the dismissal of
service is warranted.
H. Relief for a declaration in cases of
contract for public employment-whether cannot be specifically enforced.
I. Domestic Enquiry-Whether the Inquiry
Officer and the Punishing Authority must give reasons before the major
punishment is imposed- Whether non giving of the reasons makes the decision of
dismissal arbitrary and against principles of natural justice.
HEADNOTE:
The Project and Equipment Corporation of
India Ltd. was formed in 1971 as a wholly owned subsidiary company of State
Trading Corporation, a Government of India Undertaking. In 1976 it was
separated and since then it functions as a separate Government of India
Undertaking.
The appellant who joined the service under
the State Trading Corporation originally and later exercised his option to
serve the Project and Equipment Corporation with effect from November 9, 1976.
The appellant while working as Deputy Finance Manager Grade II applied for and
obtained (a) an advance in the amount of Rs. 16,050 for purchasing a plot of
land on April 4, 1979 for which he executed the requisite agreement as required
by 'the Project & Equipment Corporation of India Ltd., House Building
Advance (Grant and Recovery) Rules, and (b) an advance in the amount of Rs.
11,000 for purchase of a new motor cycle on
July 7, 1979 as admissible under "the Project and Equipment Corporation
conveyance Advance (Grant and Recovery) Rules. Under these rules
non-utilisation of the amounts within the time limit will impose a liability of
the refund of the entire amount forth with together with penal interest
thereon. The appellant failed to utilise the amounts and also to refund the
same. Therefore, coercive steps were taken to recover the entire amount of the
House Building advance from his pay by stopping the payment of his salary from
16th November, 1979. As regards the conveyance advance, the receipts etc.
for purchase made in 1980 were accepted.
On July 22, 1980 a memorandum was served upon
the appellant stating therein that the competent authority proposes to hold an
enquiry against him under Rules 27 of the Project and Equipment Corporation of
India Employees (Conduct, Discipline & Appeals Rules, 1975 in respect of
the aforesaid mis-utilization of the advances. The committee of Management in
exercise of the powers conferred by sub-rule (4) of Rule 27 of the 1975 rules
appointed one Sri A.S. Nangia, its Chief Marketing Manager as the Enquiry
Officer to enquire into the two charges against the appellant. The appellant
submitted on June 13, 1980 a detailed statement pointing out that for various
reasons therein mentioned so as to explain why there was delay in refunding the
advance and specifically pleaded that in view of the fact that the first
advance was sought to be recovered by withholding his salary and adjusting the
pay towards the advance and charging penal interest and in the second case by
accepting the document evidencing purchase of scooter no misconduct could be
said to have been committed 648 by the appellant and the disciplinary enquiry
was uncalled for. The enquiry officer in his report after recapitulating
allegations and explanation simply concluded that the appellant has contravened
Rule 10 (1) (c) (i) of the House Building Advance Rules, and also rules 8 and
10 (1) of the Conveyance Advance Rules and therefore committed misconduct
punishable under Rule 4 (1) (iii) of the 1975 Rules.
Pursuant to the report of the Enquiry
Officer, the Executive Director for and on behalf of the Committee of Management
of the corporation made an order PEC : P 5 (8) 77 dated February 4, 1981
stating that the Committee of management agrees with the findings of the
inquiry officer and imposes the punishment of removal from service with effect
from the date of the order. The appeal preferred to the Appellate Authority was
rejected as per the Memorandum dated May 21,1981 signed by one Anand Krishna
claiming to act for and on behalf of the Board of Directors.
The appellant, therefore approached the High
Court of Delhi under Art. 226 of the Constitution questioning the correctness
and validity of the findings of the inquiry officer and the decision of the
Disciplinary Authority as well as the appellate authority inter alia on the
ground that the inquiry was held in violation of the principles of natural
justice and the quasi-judicial authority failed to give reasons in support of
its order and the action taken against the appellant was per se arbitrary and
violative of Arts. 14 and 16 of the Constitution inasmuch as the allegation
contained in the heads of charges, even if unrebutted, do not constitute a
misconduct within the meaning of the expression in 1975 Rules. In order to
sustain the maintainability of the writ petition, the appellant also contended
that the respondent is an instrumentality of the State and is comprehended in
the expression 'other authority' in Art. 21 of the Constitution. The writ
petition came-up for admission before a Division Bench of the Delhi High Court.
It was dismissed in limine observing that the writ petition is not maintainable
on the facts presently set out in the petition. Hence this appeal by special
leave Allowing the appeal, the Court ^
HELD: 1: 1. Public sector undertakings and
other instrumentalities of the State are comprehended in the expression other
authority" in Article 12 of the Constitution. [660A] 1: 2. Once it is
conceded that the respondent- corporation is an instrumentality of the State
and is therefore, comprehended in the expression 'other authority' in Art. 12
of the Constitution, it is indisputable that it is amenable to the writ
jurisdiction under Arts. 32 and 226 of the Constitution. Apart from the
concession, the tests collated in the decision of the Constitution Bench of
this Court in Ajay Hasia etc v. Khalid Mujib Sheravardi and Others etc [1981] 2
S.C R. 79 for determining whether a particular body is an instrumentality of
the State are fully satisfied and therefore on precedent and concession it is
satisfactorily established that the respondent-Corporation is an instrumentality
of the State within the 649 meaning of the expression 'other authority' under
Art. 12 of the Constitution and is amenable to the writ jurisdiction.
The writ petition filed by the appellant in
the High Court was thus maintainable. [660D-E]
2. When once it is conceded that the
respondent was amenable to the writ jurisdiction, the question that will arise
is whether the matter should be remitted to the High Court as the High Court
has rejected the writ petition in limine on the ground that the respondent was
not amenable to the writ jurisdiction of the High Court. In order not to
protract the litigation involving livelihood of the party approaching the
Supreme Court for justice, the Court can set down the appeal for final hearing
on merits, which they did in the instant case. [660F-H] 3:1 It cannot be said
that executive action which results in denial of equal protection of law or
equality before law cannot be judicially reviewed nor can be struck down on the
ground of arbitrariness as being violative of Art. 14. [661E-F] 3:2 The scope
and ambit of Article 14 have been the subject matter of a catena of decisions.
It is well settled that Article 14 strikes at arbitrariness in
executive/administrative action because any action that is arbitrary must necessarily
involve the negation of equality.
One need not confine the denial of equality
to a comparative evaluation between two persons to arrive at a conclusion of
discriminatory treatment. An action per se arbitrary itself denies equal
protection of law. It is thus too late in the day to contend that an executive
action shown to be arbitrary is not either judicially reviewable or within the
reach of Article 14.
[662A, F-G, 663A-B] Ajay Hasaia etc. Khalid
Majid Shehravardi and Ors[1981] 2 S.C.R 79; E.P.Royappa v. State of Tamil Nadu
and anr.
[1974] 2 S.C.R. 348; D. S. Nakara v. Union of
India [1983] I S C. C. 305 and Maneka Gandhi v. Union of India [1978] 2 S.
C. R. 621 followed.
4. Wisdom of the legislative policy may not
be open to judicial review but when the wisdom takes the concrete form of law,
the same must stand the test of being in tune with the fundamental rights and
if it trenches upon any of the fundamental rights, it is void as ordained by
Art. 13, Conceding for the present purpose that legislative action follows a
legislative policy and the legislative policy is not judicially reviewable, but
while giving concrete shape to the legislative policy in the form of a statute,
if the law violates any of the fundamental rights including Art.
14, the same is void to the extent as
provided in Art. 13.
If the law is void being in violation of any
of the fundamental rights set out in Part II of the Constitution, it cannot be
shielded on the ground that it enacts a legislative policy. [661F-H]
5. Even if the respondent Corporation is an
instrumentality of the State as comprehended in Art. 12, yet the employees of
the Corporation are not governed by Part XIV of the Constitution. However it
could not be 650 said that the protection conferred by Part III on the public
servant is comparatively Less effective than the one conferred by Part XIV.
Therefore the distinction sought to be drawn between protection of part XIV of
the Constitution and part III has no-significance. [663B-C, 665A] Managing
Director. Uttar Pradesh Warehousing Corporation & Anr. v. Vinay Narayan
Vajpayee; [1980] 2 S.C.R.. 773 at p. 784, relied upon.
6:1. Even if the facts alleged in two heads
of charges are accepted as wholly proved, yet that would not constitute
misconduct as prescribed in Rule 5 and no penalty can be imposed for such
conduct, for the reason that while Rule 25 which prescribes penalties
specifically provides that any of the penalties therein mentioned can be
imposed on an employee for misconduct committed by him. Rule 4 does not specify
a misconduct. Rule 4 styled as 'General' specifies a norm of behaviour but does
not specify that its violation will constitute misconduct. In Rule 5, it is
nowhere stated that anything violative of Rule 4 would be per se a misconduct in
any of the sub-clauses of Rule 5 which specifies misconduct. [666B-D] 6:2. A
general expectation of a certain decent behaviour in respect of employees
keeping in view corporate culture may be a moral or ethical expectation.
Failure to keep to such high standard of moral; ethical or decorous behaviour
befitting an officer of the company by itself cannot constitute misconduct
unless the specific conduct falls in any of the enumerated misconduct in Rule
5. Any attempt to telescope Rule 4 into Rule 5 must be looked upon with
apprehension because Rule 4 is vague and of a general nature and what is
unbecoming of a public servant may vary with individuals and expose employees
to vagaries of subjective evaluation. What in a given context would constitute
conduct unbecoming of a public servant to be treated as misconduct would expose
a grey area not amenable to objective evaluation. Where misconduct when proved
entails penal consequences, it is obligatory on the employer to specify and if
necessary define it with precision and accuracy so that any ex post facto
interpretation of some incident may not be camouflages as misconduct. [665 D-G]
M/s Glaxo Laboratories (I) Ltd v. Presiding Officer, Labour Court, Meerut &
Others; [1984] 1. S.C.C. 1, followed.
7:1. Seeking advance and granting the same
under relevant rules is at best a loan transaction. The transaction may itself
provide for payments and the consequences of failure to repay or to abide by
the rules.
If the rules for granting the advance
themselves provided the consequence of the breach of conditions, it would be
idle to go in search of any other consequence by initiating any disciplinary
action in that behalf unless the 1975 Rules specifically incorporate a rule
that the breach of House Building Advance Rules and the conveyance advance
rules, would by themselves constitute a "misconduct". Therefore Rule
4 (1) is not only, not attracted but in this case no attempt was made to
establish the correction. And 651 as far as Rule 4 (1) (iii) is concerned, an
advance not refunded in time where it was recovered by withholding the salary
of a highly placed officer may not disclose a conduct unbecoming of a public
servant. Therefore, the first head of charge is an eye-wash, It does not
constitute a misconduct if it can be said to be one even if it remains
unrebutted.
The inquiry officer has not said one word how
the uncontroverted facts constitute a conduct unbecoming of a public servant,
or he failed to maintain absolute integrity.
Regarding the conveyance advance the position
is the same.
The appellant for no fault has been punished
sub-silencio.
[667F-H, 668A, D-E, 669H] 7:2. Now if what is
alleged as misconduct does not constitute misconduct not by analysis or
appraisal of evidence, but per se under 1975 Rules the respondent had neither
the authority nor the jurisdiction nor the power to impose any penalty for the
alleged misconduct. An administrative authority who purports to act by its
regulation must be held bound by the regulation. [670H, 671A]
8. In the matter of public employment if the
termination is held to be dba, a declaration can be granted that the man
continues to be in service. [671G, 672A] Sukhdev Singh & Ors. v. Bhagatram
Sardar Singh.
Raghuvanshi & Anr. [1975] 3 S.C.R. 619 @
655. Western India Automobile Association v. Industrial Tribunal, Bombay and
Ors.[1949] F.C.R. 321 at 340.
9:1. The duty to give reasons would permit
the court hearing a petition for a writ of certiorari to ex facie ascertain
whether there is any error apparent on the record.
A speaking order will at its best be
reasonable and at its worst be at least a plausible one. If reasons for an
order are given there will be less scopes for arbitrary or partial exercise of
power and the order ex facie will indicate whether extraneous matters were
taken into consideration by authority passing the order. [672D-E] M.P.
Industries Ltd. v. Union of India and Others [1966] 1 S.C.R. 466 at 472;
Vadacha Mudaliar v. State of Madras, A.I.R. 1952 Madras 276; Bhagat Raja v
Union of India and Others, [1967] 3 S.C.R. 302 @ 320; referred to.
9:2. Here, the findings of the inquiry
officer are merely his ipse dixit. No reasons are assigned for reaching the
finding and while recapitulating evidence self- contradictory positions were
adopted that either there was no misconduct or there was some misconduct or
double punishment was already imposed. Rule 27 (19) casts an obligation upon
the inquiry officer at the conclusion of the inquiry to prepare a report which
must inter alia include the findings on each article of charge and the reasons
therefore. The report is prepared in contravention of the aforementioned rule.
The situation is further compounded by the fact that the disciplinary authority
which is none other than Committee of Management of the Corporation while
accepting the report of the inquiry officer which itself was defective did not
assign any 652 reasons for accepting the report of the inquiry officer.
Further sub rule (ii) of Rule 35 provides
amongst others that the Appellate Authority shall consider whether the findings
are justified or whether the penalty is excessive or inadequate and pass
appropriate orders within three months of the date of appeal. In order to
ascertain whether the rule is complied with, the order of the appellate
authority must show that it took into consideration the findings the quantum of
penalty and other relevant considerations. There is no material for showing
that the appellate authority acted in consonance with its obligation under Rule
35. [672E-H, 673A-D-E] 9:3. Therefore, the order of removal passed by the
Disciplinary Authority is illegal and invalid for the reasons (i) that the
action is thoroughly arbitrary and is violative or Art. 14; (ii) that the
alleged misconduct does not constitute misconduct within the 1975 Rules; (iii)
that the inquiry officer himself found that punishment was already imposed for
the alleged misconduct by withholding the salary and the appellant could not be
exposed to double jeopardy; and (iv) that the findings of the inquiry officer
are unsupported by reasons and the order of the Disciplinary Authority as well
as the Appellate Authority suffer from the same vice. [673H. 674A-B] 10:1. Once
the order of removal from service is held to be illegal and invalid and the
appellant being in public employment, the necessary declaration must follow
that he continues to be in service uninterruptedly. Ordinarily, it is
well-settled that if termination of service is held to be bad, no other
punishment in the guise of denial of back wages can be imposed and therefore,
it must as a necessary corollary follow that he will be entitled to all the
back wages on the footing that he has continued to be in service
uninterruptedly. If the appellant had procured an alternative employment he
would not be entitled to wages and salary from the respondent But it is equally
true that an employee depending on salary for his survival when he is exposed
to the vagaries of the court litigation cannot hold on to a slender distant
hope of judicial process coming to his rescue and not try to survive by
accepting an alternative employment, a hope which may turn out to be a mirage.
Therefore, the appellant was perfectly justified in procuring an alternative
employment in order to keep his body and soul together as also to bear the expenses
of litigation to vindicate his honour, integrity and character.
[674B-G] 10:2. However, in the instant case,
the appellant should be paid 50% of the back wages for the rest of the period
during which he remained unemployed. This is so because the conduct of the
appellant cannot be said to be entirely in consonance with corporate culture.
As a highly placed officer he was bound to strengthen the corporate culture and
he should have acted within the spirit of the regulations both for house
building advance and conveyance advance, which are devised to help the
employees. There has been lapse in totally complying with these regulations by
the appellant though it neither constitutes misconduct to attract a penalty nor
substantially good enough for initiation of disciplinary inquiry. [675A-C] 653
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 2703 of 1981.
From the Judgment and Order dated the 23rd
July, 1981 of the Delhi High Court in C.W. No. 1648 of 1981.
M.K. Ramamurthi, L.C. Goyal and Ms. Sumitra Goyal
for the Appellant.
Lal Narain Sinha, M.C. Bhandare and P.P.
Singh for the Respondent.
The Judgment of the Court was delivered by
DESAI, J. Failure to adjust the antena to the operative channel and dipping the
head like the proverbial ostrich in the sand so as not to view the changing
kaleidoscope of the law can alone be said to be responsible for this trivial
matter to be brought to this Court.
Respondent is the Project & Equipment
Corporation of India Ltd. ('Corporation' for short) since its formation in 1971
a wholly owned subsidiary company of State Trading Corporation ('STC' for
short), a Government of India Undertaking upto 1976 when it was separated and
since then it functions as a Government of India undertaking. The appellant
A.L. Kalra joined as Upper Division Clerk in the STC on August 6, 1963. On
November 1, 1969, he came to be promoted as Assistant and earned a further
promotion on May 22, 1974 as Accountant. On the setting up of the Corporation,
the appellant exercising his option came to be transferred as Accountant to the
Corporation on November 9, 1976. Under the relevant conditions of transfer, he
continued to be governed in the matter of recruitment and promotion by the
relevant rules of the STC. He was promoted in an officiating capacity as Deputy
Finance Manager Grade II on June 29, 1978 and he was put on probation after
being promoted as Deputy Finance Manager Grade II on regular basis effective
from February 5, 1979. The appellant applied for and obtained an advance in the
amount of Rs. 16,050 for purchasing a plot of land on April 4, 1979 for which
he executed the requisite agreement on April 4, 1979. The rules under which
advance was obtained are styled as 'The Project and Equipment Corporation was
India Ltd. House Building Advance (Grant & Recovery) Rules for House
Building Advance' for short) framed in exercise of the powers conferred upon
the Board of Directors by the Articles of Association of the Corporation. The
appellant also applied for and obtained an advance in the amount of Rs.
11,000/- for purchase of a 654 new motor cycle on July 7, 1979. This advance is
governed by what are styled as the Projects & Equipment Corporation of
India Ltd. Conveyance Advance (Grant & Recovery) Rules ('Conveyance Advance
Rules' for short).
In respect of the house building advance
according to the respondent-Corporation, in view of Rule 10 (1) (c) (i) the
appellant was required to utilise the amount drawn by him for the purpose for
which advance was granted within two months of drawal and submit the documents
evidencing the purchase of plot within the prescribed time failing which he was
liable to refund at once the entire amount together with interest to the
Corporation. The agreement dated April 4, 1979 executed by the appellant also
obligated him to utilise the advance for the purpose for which the same was
sanctioned and to produce the sale-deed for verification by the Corporation
failing which the whole of the advance had to be refunded with interest. It was
alleged that the appellant neither utilised the advance for the purchase of
plot nor refunded the amount despite several reminders and ultimately on
November 13, 1979 a memorandum was served upon him cautioning him that if he
failed to refund the entire amount forthwith, disciplinary proceedings will be
initiated against him. As the appellant failed to comply with the request made
in the memorandum, his salary from November 7, 1979 as a whole was withheld for
adjusting the amount of advance and the interest payable thereon. He was also charged
penal interest for the default committed by him.
In respect of the conveyance advance, which
was sanctioned on July 7, 1979, the appellant is alleged to have committed a
default by not purchasing the motor cycle within a period of one month as required
by Rule 10 of the Conveyance Advance Rules, and on November 13, 1979 he was
advised to refund the amount by November 14, 1979 failing which he was
threatened with disciplinary action. It is, however, admitted that the
appellant purchased a scooter in April, 1980 and submitted the documents which
appear to have been accepted by the Corporation. The balance of advance was
also refunded.
A memorandum dated July 22, 1980 was served
upon the appellant stating therein that the competent authority proposes to
hold an enquiry against him under Rule 27 of the Project and Equipment
Corporation of India Ltd. Employees' (Conduct, Discipline & Appeal) Rules,
1975 ('1975 Rules' for short). There were 655 two heads of charges in the
charge-sheet drawn-up against the appellant on which disciplinary enquiry was
proposed to be held. These two heads of charges read as under :
"Article I Shri A.L. Kalra while
functioning as Deputy Finance Manager-Grade II in the Finance Division of the
PEC during April, 1979 applied and drew an advance of Rs. 16,050 for purchase
of a plot of land at Faridabad.
The did not furnish the relevant documents in
the office nor did he refund the amount of advance to the Corporation within
two months of the date of drawal of the advance as required under Rule 10 (1)
(c) (i) of PEC House Building Advance (Grant and Recovery) Rules.
Shri Kalra by his above act exhibited lack of
integrity and conduct unbecoming of a public servant and violated Rule 4 (1)
& (iii) and Rule 5 (5) of the PEC Employees' (Conduct, Discipline &
Appeal) Rules and Rule 10 (1) (c) (i) of PEC House Building Advance (Grant
& Recovery Rules and thereby committed misconduct punishable under the PEC
employees (Conduct, Discipline and Appeal) Rules. 1975.
Article-II Shri, A.L. Kalra drew a conveyance
advance of Rs. 11,000 in July, 1979 for purchasing a motor-cycle, but did not
utilise the amount for the above purpose and did not furnish cash receipt etc.
evidencing purchase of the vehicle within one month as required under Rule- 8
of the PEC Conveyance Advance (Grant & Recovery) Rules. Nor did he refund
the amount of advance to the Corporation as required under Rule 10 (1) ibid.
Shri A.L. Kalra by his above act exhibited
lack of integrity and conduct unbecoming of a Public servant and violated
Rule-4 (1) (i) & (iii) and Rule 5 (5) of PEC Employees (Conduct, Discipline
& Appeal) Rules and also violated Rule-8 and Rule-10 (is of the PEC
Conveyance Advance (Grant & Recovery) Rules and thereby committed
misconduct punishable under the PEC Employees' (Conduct, 656 Discipline &
Appeal) Rules, 1975." The appellant was also asked to submit his defence
statement within 10 days from the date of the receipt of the memorandum. The
appellant by his letter dated February 13, 1980 requested for extension of time
to file the defence statement. It appears that he sought further extension of
time by three weeks which request was declined by the memorandum dated Feb. 23,
1980.
The Committee of Management in exercise of
the powers conferred by sub-rule (4) of Rule 27 of the 1975 Rules appointed
Shri A.S. Nangia, Chief Marketing Manager as the Enquiry Officer to enquire
into the charges against the appellant submitted on June 13, 1980 a detailed
statement pointing out that the inquiry was the outcome of malice for various
reasons therein mentioned and also explaining why there was delay in refunding
the advances and specifically pleaded that in view of the fact that the first
advance was sought to be recovered by withholding his salary and adjusting the
pay towards advance and charging penal interest and in the second case by
accepting the document evidencing purchase of scooter, no misconduct could be
said to have been committed by the appellant and the disciplinary enquiry was
uncalled for. Various other contentions were also raised in the defence
statement. The inquiry officer conducted the enquiry in respect of the
aforementioned two charges. One U.S. Aggarwal, Finance Manager of the
Corporation appeared as Presenting Officer. The appellant conducted his own
defence.
In Para 4 of his report, the Inquiry officer
states that the 'preliminary hearings of the inquiry was held on 3rd and 9th
April, 1980 and then inquiry was held regularly on various dates from 23rd
April 1980 to 22nd May, 1980 The appellant was called upon to submit his
statement of defence which he had submitted on June 30, 1980.
The findings purported to have been recorded
by the inquiry officer were the subject matter of a heated debate between the
parties and therefore, the report of the Inquiry Officer may be broadly scanned
here. After recapitulating in paras 1 to 4 the various stages through which the
enquiry progressed, in para 5, it is stated that at the 'preliminary hearing on
3rd April, 1980, Shri A.L. Kalra, (appellant) pleaded guilty to all the charges
mentioned in Annexure I and also agreed to the statement of imputation of his
misconduct in support of the articles of charges framed against him.' In part 5
(3), the inquiry officer discussed the first head of charge in respect of the
657 house building advance. It was found as a fact that the advance was taken
for the purchase of a plot and that the appellant had negotiated for a purchase
of a plot from Shri J.C. Chugh who was examined as a management witness and who
admitted that he waited for six months to complete the transaction but after
that he disposed of the plot. Evidence of Shri J.C. Chugh revealed that the
deal was delayed because Haryana Estate Officer demanded some additional amount
and there was dispute between the appellant, the vendee and J.C. Chugh, the
vendor as to who should bear the extra burden. In paragraph 5.1.4 after
recapitulating the reminders sent to the appellant to refund the advance, it is
observed that it is not clear from the relevant rule as to which is the
competent authority to grant extension of time for utilisation of the amount.
And then in paragraph 5.1.5 he recommended that the sanction of the competent
authority should be taken before granting any extension. There ends the
discussion on the charge in respect of house building advance.
The inquiry officer then proceeded to examine
the second head of the charge. After recapitulating the fact about sanction of
advance and drawal of the same, it was observed that the appellant drew the
advance on July 9, 1979 and on April 7, 1980 he submitted the documents such as
cash receipt in respect of purchase of a scooter, insurance certificate,
receipt of balance amount deposited with the cashier, original insurance policy
and registration book evidencing the purchase of scooter. It is then observed
that under the relevant rules motor cycle had to be purchased within one month
from the date of the drawal of the advance or else he should have obtained
fresh sanction for the purchase of a scooter instead of a motor cycle. Then
comes the particular observation which may be extracted :
"He (appellant) did not obtain any fresh
sanction for purchase of a scooter but simply submitted the papers for
regularisation of the advance and although no specific letter for sanction of
the purchase of a scooter was issued by the Personnel Division yet the fact
that he was asked to refund the balance amount tantamounts to agreeing defacto
sanction for the purchase of the same." The inquiry officer then proceeds
to dispose of the contention of the appellant that in other cases of similar
advance and default, no action was taken but he was singled out for a harsh
treatment 658 for the reasons alleged by him but with which we are not
concerned at this stage. The inquiry officer then noticed that the full salary
payable every month to the appellant was stopped by the Corporation from
November 16, 1979 in addition to the inquiry under which disciplinary action
was proposed to be taken. The inquiry officer concluded his report as under :
"While deciding the case, the fact that
the salary was stopped from 16th November, 1979 may be kept in view as this
may, I feel, tantamount to double punishment. Normally even where an employee
is suspended certain amount of subsistence allowance is granted whereas in this
case the salary was completely stopped and nothing has been paid since
then." What is referred to as the report of the enquiry which is minutely
scanned in the preceding paragraphs merely seems to be the record of inquiry
and recapitulation of allegations and explanation. What is styled as findings
of the inquiry officer are separately filed being Annexure M to the petition.
This is a bald document of two paragraphs in which the inquiry officer records
that the appellant has contravened Rule 10 (1) (c) (i) of House Building
Advance Rules and has thereby committed misconduct punishable under Rule 4 (1)
(iii) of 1975 Rules. In paragraph 2, it is stated that the appellant has
committed breach of Rule 8 and Rule 10 (i) of the Conveyance Advance Rules and
has thereby committed misconduct punishable under Rule 4 (1) (iii) of 1975
Rules. By what process this conclusion is reached or what evidence appealed to
him is left to speculation. The reasons in support of the conclusion are
conspicuous by their absence. The findings are the ipse dixit of the inquiry
officer.
Pursuant to this report of the inquiry
officer the Executive Director for and on behalf of the Committee of Management
of the Corporation made an Order No. PEC.P ; 5 (8)/77 dated February 4, 1981.
The heads of charges are reproduced in paragraph 1. Paragraphs 2 and 3 are
devoted to the stages through which the enquiry progressed. In paragraph 4, the
findings unsupported by reasons are reproduced. In paragraph 5, it is stated
that the Committee of Management agrees with the findings of the inquiry
officer and imposes the punishment removal from service with effect from the
date of the order.
The appellant preferred an appeal to the
Appellate Authority being the Board of Directors of the Corporation on February
21, 659 1981. One Anand Krishna claiming to act for and on behalf of the Board
of Directors, Appellate Authority issued memorandum dated May 21, 1981,
Annexure P to the petition in which it is stated that the appeal of the
appellant was considered by the Appellate Authority and after going through the
records of the case, the Appellate Authority has decided to uphold the decision
of the authority and to confirm the penalty of removal imposed upon him.
The salient feature which flies into the face
about the findings recorded by the inquiry officer and the order by the
Disciplinary Authority as well as the Appellate Authority is that none of them
made a reasoned order or speaking order and their conclusions are mere ipse
dixit unsupported by any analysis of the evidence or reason in support of the
conclusions.
The appellant approached the High Court of
Delhi under Art. 226 of the Constitution questioning the correctness and
validity of the findings of the inquiry officer and the decision of the
Disciplinary Authority as well as the Appellate Authority inter alia on the
ground that the enquiry was held in violation of the principles of natural
justice and the quasi-judicial authority failed to give reasons in support of
its order and the action taken against the appellant was per se arbitrary and
in violation of Art.
14 and Art. 16 of the Constitution inasmuch
as the allegations contained in the heads of charges, even if unrebutted, do
not constitute a misconduct within the meaning of the expression in 1975 Rules.
In order to sustain the maintainability of the writ petition, the appellant
also contended that the respondent is an instrumentality of the State and is
comprehended in the expression 'other authority' in Art. 12 of the Constitution.
The writ petition came-up for admission
before a Division Bench of the Delhi High Court. It was dismissed in limine
observing that the writ petition is not maintainable on the facts presently set
out in the petition. Hence this appeal by special leave.
In order to obtain any decision on merits,
the appellant will have to clear the roadblock about the maintainability of the
writ petition in the High Court.
Happily this untenable contention was not
pursued in this Court. In para 2 (vi) of the counter-affidavit filed by one
Mahanand Khokher on behalf of the respondents it was unambiguously stated that
the 'respondent-Corporation is advised not to dispute the maintainability of
the petitioner's petition as 660 regards applicability of Art. 12 of the Constitution.'
Further in para 5.1 of the same affidavit, it was stated that as regards the
assertion of the appellant that the respondent-Corporation is an
instrumentality of the Central Government and hence within Art. 12 of the
Constitution, the respondent Corporation does not dispute the same. This
admission was reiterated in para 5.2. Further in the written submissions dated
September 30, 1983 filed on behalf of the respondent, it is conceded that the
respondent is a State within the meaning of Art. 12 for the purposes of Part
III of the Constitution, with this reservation that the employees of the
respondent are not members of a civil service of the Union or all India civil
service or a civil service of a state or holds the civil posts under the Union
or the State and therefore, would not be entitled to the protection of Part XIV
of the Constitution. This concession absolves us from the obligation to examine
the status and character of the respondent-Corporation to determine whether it
is an instrumentality of the State and therefore, comprehended in the
expression 'other authority' in Art. 12 of the Constitution. Once it is
conceded that the respondent-Corporation is an instrumentality of the State and
is therefore, comprehended in the expression 'other authority' in Art. 12 of
the Constitution, it is indisputable that it is amenable to the writ
jurisdiction under Arts. 32 and 226 of the Constitution. Apart from the
concession, the tests collated in the decision of the Constitution Bench of
this Court in Ajay Hasia etc. v. Khalid Mujib Sehravardi & Ors. etc., for
determining whether a particular body is an instrumentality of the State are
fully satisfied and therefore on precedent and concession it is satisfactorily
established that the respondent- Corporation is an instrumentality of the State
within the meaning of the expression 'other authority' under Art. 12 of the
Constitution and amenable to the writ jurisdiction. The writ petition filed by
the appellant in the High Court was thus maintainable.
Once when in this Court it was concluded that
the respondent was amenable to the writ jurisdiction of the High Court, the
question arose whether the matter should be remitted to the High Court as the
High Court has rejected the writ petition in limine on the ground that the
respondent was not amenable to the writ jurisdiction of the High Court.
Ultimately, in order not to protract the litigation involving livelihood of the
appellant, the appeal was set down for final hearing on merits. The respondent-
Corporation was accordingly directed to file its affidavit as also the
documents on which it seeks to rely. The appeal was thereafter heard on merits.
661 Before we deal with the contentions
raised on behalf of the appellant, it is necessary to dispose of a contention having
a flavour of a preliminary objection raised by Mr. Lal Narain Sinha on behalf
of the respondent-Corporation. It was urged that in the absence of any specific
pleading pointing out whether anyone else was either similarly situated as the
appellant or dissimilarly treated the charge of discrimination cannot be
entertained and no relief can be claimed on the allegation of contravention of
Art. 14 or Art. 16 of the Constitution. It was submitted that the expression
discrimination imports the concept of comparison between equals and if the
resultant inequality is pointed out in the treatment so meted out the charge of
discrimination can be entertained and one can say that equal protection of law
has been denied. Expanding the submission, it was urged that the use of the
expression 'equality' in Art. 14 imports duality and comparison which is
predicated upon more than one person of situation and in the absence of
available material for comparison, the plea of discrimination must fail. As a
corollary, it was urged that in the absence of material for comparative
evaluation not only the charge of discrimination cannot be sustained but the
executive action cannot be struck down on the ground that the action is per se
arbitrary. Proceeding along, it was urged that making law is a matter of
legislative policy and the degree of reasonableness in every such law is
equally a matter of policy and policy of the legislature is not judicially
reviewable on the specious plea that it is either arbitrary or unreasonable.
It is difficult to accept the submission that
executive action which results in denial of equal protection of law or equality
before law cannot be judicially reviewed nor can it be struck down on the
ground of arbitrariness as being violative of Art. 14. Conceding for the
present purpose that legislative action follows a legislative policy and the
legislative policy is not judicially reviewable, but while giving concrete
shape to the legislative policy in the form of a statute, if the law violates
any of the fundamental rights including Art. 14, the same is void to the extent
as provided in Art. 13. If the law is void being in violation of any of the
fundamental. Rights set out in Part III of the Constitution, it cannot be
shielded on the ground that it enacts a legislative policy. Wisdom of the
legislative policy may not be open to judicial review but when the wisdom takes
the concrete form of law, the same must stand the test of being in tune with
the fundamental rights and if it trenches upon any of the fundamental rights,
it is void as ordained by Art. 13.
662 The scope and ambit of Art. 14 have been
the subject matter of a catena of decisions. One fact of Art. 14 which has been
noticed in E.P. Rayappa v. State of Tamil Nadu & Anr. deserves special
mention because that effectively answers the contention of Mr. Sinha. The
Constitution Bench speaking through Bhagwati, J. in concurring judgment in
Royappa's case observed as under:
"The basic principle which, therefore,
informs both Arts. 14 and 16 is equality and inhibition against discrimination.
Now what is the content and reach of this great equalising principle ? It is a
founding faith, to use the words of pedantic or lexicographic approach. We
cannot 'countenance any attempt to truncate its all-embracing scope and
meaning, for to do so would be to violate its activist magnitude. Equality is a
dynamic concept with many aspects and dimensions and it cannot be
"cribbed, cabined and confined" within traditional and doctrinaire
limits. From a positivistic point of view equality is antithetic to
arbitrariness.
In fact equality and arbitrariness are sworn
enemies;
one belongs to the rule of law in a republic
while the other, to the whim and caprice of an absolute monarch.
Where an act is arbitrary it is implicit in
it that it is unequal both according to political logic and constitutional law
and is therefore violative of Art.
14, and if is affects any matter relating to
public employment, it is also violative of Art. 16. Arts. 14 and 16 strike at
arbitrariness in State action and ensure fairness and equality of
treatment." This view was approved by the Constitution Bench in Ajay Hasia
case It thus appears well-settled that Art. 14 strikes at arbitrariness in
executive/administrative action because any action that is arbitrary must
necessarily involve the negation of equality. One need not confine the denial
of equality to a comparative evaluation between two persons to arrive at a
conclusion of discriminatory treatment. An action per se arbitrary itself
denies equal of protection by law. The Constitution Bench pertinently observed
in Ajay Hasia's case and put the matter beyond controversy when it said
'wherever therefore, there is arbitrariness in State action whether it be of
the legislature or of the executive or of an "authority" under
Article 12, Article 14 immediately springs into action and strikes down such
State action.' 663 This view was further elaborated and affirmed in D.S. Nakara
v. Union of India. In Maneka Gandhi v. Union of India it was observed that Art.
14 strikes at arbitrariness in State action and ensure fairness and equality of
treatment. It is thus too late in the day to contend that an executive action
shown to be arbitrary is not either judicially reviewable or within the reach
of Art. 14. The contention as formulated by Mr. Sinha must accordingly be
negatived.
It must be conceded in fairness to Mr. Sinha
that he is right in submitting that even if the respondent-Corporation is an
instrumentality of the State as comprehended in Art.
12, yet the employees of the Corporation are
not governed by Part XIV of the Constitution Could it however be said that a
protection conferred by Part III on public servant is comparatively less
effective than the one conferred by Part XIV ? This aspect was examined by this
Court in Managing Director, Uttar Pradesh Warehousing Corporation & Anr. v.
Vinay Narayan Vajpayee where O. Chinnappa Reddy, J. in a concurring judgment
has spoken so eloquently about it that it deserves quotation:
"I find it very hard indeed to discover
any distinction, on principle, between a person directly under the employment
of the Government and a person under the employment of an agency or
instrumentality of the Government or a Corporation, set up under a statute or
incorporated but wholly owned by the Government. It is self evident and trite
to say that the function of the State has long since ceased to be confined to
the preservation of the public peace, the exaction of taxes and the defence of
its frontiers. It now the function of the State to secure 'social, economic and
political justice', to preserve 'liberty of thought, expression, belief, faith
and worship', and to ensure 'equality of status and of opportunity'. That is
the proclamation of the people in the preamble to the Constitution. The desire
to attain these objectives has necessarily resulted in intense Governmental
activity in manifold ways. Legislative and executivity have reached very far
and have touched very many aspects of a citizen's life.
The Government, directly or through the
Corporations, set up by it or owned by it, now owns or manages, a large number
of industries and institutions. It is the biggest builder in the country. Mammoth
and minor irrigation projects, heavy and light engineering projects, projects
of various kinds are undertaken by the Government. The Government is also the
biggest trader in the country. The State and the multitudinous agencies and
Corporations set up by it are the principal purchasers of the produce and the
products of our country and they control a vast and complex machinery of
distribution. The Government, its agencies and instrumentalities, Corporations,
set up by the Government under statutes and Corporations incorporated under the
Companies Act but owned by the Government have thus become the biggest
employers in the country. There is no good reason why, if Government is bound
to observe the equality clauses of the constitution in the matter of employment
and in its dealings with the employees, the Corporations set up or owned by the
Government should not be equally bound and why, instead, such Corporations
could become citadels of patronage and arbitrary action. In a country like ours
which teems with population, where the State, its agencies, its
instrumentalities and its Corporations are the biggest employers and where
millions seek employment and security, to confirm the applicability of the
equality clauses of the constitution, in relation to matters of employment,
strictly to direct employment under the Government is perhaps to mock at the
Constitution and the people. Some element of public employment is all that is
necessary to take the employee beyond the reach of the rule which denies him
access to a Court to enforce a contract of employment and denies him the
protection of Arts. 14 and 16 of the Constitution. After all employment in the
public sector has grown to vast dimensions and employees in the public sector
often discharge as onerous duties as civil servants and participate in
activities vital to our country's economy. In growing realization of the
importance of employment in the public sector, Parliament and the Legislatures
of the States have declared persons in the service of local authorities,
Government companies and statutory corporations as public servants and extended
to them by express enactment the protection usually extended to civil servants
from suits and prosecution. It is, therefore, but right that the independence
and integrity of those employed in the public sector should be secured as much
as the independence and integrity of civil servants." 665 There fore the
distinction sought to be drawn between protection of part XIV of the
Constitution and Part III has no significance.
And now to the facts. The gravamen of the two
heads of charges is that the appellant is guilty of misconduct as prescribed in
Rule 4 (1) (i) and (iii).
It reads as under:
"4 (1) Every employee shall at all
times:
(i) maintain absolute integrity;
(ii) _______ __________ _______ (iii) do
nothing which is unbecoming of a public servant." Rule 5 prescribes
various misconducts for which action can be taken against an employee governed
by the rules.
Rule 4 bears the heading 'General'. Rule 5
bears in the heading 'misconduct'. The draftsmen of the 1975 Rules made a clear
distinction about what would constitute misconduct. A general expectation of a
certain decent behaviour in respect of employees keeping in view Corporation
culture may be a moral or ethical expectation. Failure to keep to such high
standard of moral, ethical or decrous behaviour befitting an officer of the
company by itself cannot constitute misconduct unless the specific conduct
falls in any of the enumerated misconduct in Rule 5. Any attempt ' to telescope
Rule 4 into Rule 5 must be looked upon with apprehension because Rule 4 is
vague and of a general nature and what is unbecoming of a public servant may
vary with individuals and expose employees to vagaries of subjective
evaluation. What in a given context would constitute conduct unbecoming of a
public servant to be treated as misconduct would expose a grey area hot
amenable to objective evaluation. Where misconduct when proved entails penal
consequences, it is obligatory on the employer to specify and if necessary
define it with precision and accuracy so that any ex post facto interpretation
of some incident may not be camouflages as misconduct. It is not necessary to
dilate on this point in view of a recent decision of this Court in M/s Glaxo
Laboratories (I) Ltd. v. Presiding officer, Labour Court, Meerut & Others
where this Court held that 'everything which is required to be prescribed has
to be prescribed with precision and no argument can be entertained that
something not prescribed can yet be taken 666 into account as varying what is
prescribed. In short it cannot be left to the vagaries of management to say ex
post facto that some acts of omission or commission nowhere found to be
enumerated in the relevant standing or is nonetheless a misconduct not strictly
falling within the enumerated misconduct in the relevant standing order but yet
a misconduct for the purpose of imposing a penalty.' Rule 4 styled as 'General'
specifies a norm of behaviour but does not specify that its violation will
constitute misconduct.
In Rule 5, it is nowhere stated that anything
violative of Rule 4 would be per as a misconduct in the sub-clauses of Rule 5
which specifies misconduct. It would therefore appear that even if the facts
alleged in two heads of charges are accepted as wholly proved, yet that would
not constitute misconduct as prescribed in Rule 5 and no penalty can be imposed
for such conduct. It may as well be mentioned that Rule 25 which prescribes
penalties specifically provides that any of the penalties therein mentioned can
be imposed on an employee for misconduct committed by him. Rule 4 does not
specify a misconduct.
Mr. Ramamurthi, learned counsel for the
appellant further contended that the very initiation of the disciplinary
enquiry and imposition of punishment of removal from service is thoroughly
arbitrary and discloses a vindictive attitude on the part of the respondent
Corporation. It was urged that the two heads of charges per se do not
constitute any misconduct and they can be styled as trumped-up which even if
held approved would not render the appellant liable for any punishment. The two
heads of charges have been extracted hereinbefore. Charge No. 1 refers to the
drawal of a House Building Advance and failure to comply with the requisite
rules prescribed for House Building Advance. According to the finding recorded
by the inquiry officer, the failure of the appellant to refund the amount of
advance to the respondent-Corporation within two months of the date of the
drawal would be violative of Rule 10 (I) (c) (i) of the House Building Advance
Rules and it would constitute misconduct within the meaning of the expression
in Rule 4(1) (iii) of 1975 Rules. Rule 10 (I) provides that the advance shall
be drawn in instalments as prescribed in various sub-clauses. The relevant
sub-clause in this case is sub-cl. (C) which provides that "when advance
is required partly for purchase of land and partly for constructing a single
storeyed new house thereon; (i) not more than 20% of the sanctioned advance on
execution by the applicant employees an agreement in the required form for
repayment of the advance. The amount will be payable to the applicant only for
purchasing a 667 developed plot of land on which construction can commence
immediately and sale deed in respect thereof be produced for the inspection of
CPM/RM within two months of the date on which 20% of the advance is drawn or
within such further time as the CPM/RM may allow in this behalf failing which
the employee shall be liable to refund at once the entire amount to the
Corporation together with interest thereon." A bare reading of the
relevant rule will show that in provides for obtaining advance which in this
case was taken for purchasing a plot. The inquiry officer accepts the evidence
of Mr. Chugh that the appellant had negotiated with him for purchase of a plot
but some dispute arose about some additional expenditure and the negotiations
protracted over a period of six months. Now para 1 sub-cl.(C) confers on CPM/RM
power to extend the time for finalising the deal or call upon the employee to
refund the entire amount and he is liable to pay interest thereon. This is the
only consequence of taking advance and failure to keep to the time-schedule.
The relevant rule is a self contained
provision providing for the condition for grant of advance, time table for repayment
and consequence of failure to keep to the time schedule. The House Building
Advance was drawn on April 4, 1979. On November 13, 1979 the appellant was
asked to refund the entire amount. Immediately on November 16, 1979, an order
was made withholding the entire salary of the appellant. Even the inquiry
officer was constrained to observe that the appellant was exposed to double
jeopardy inasmuch as his salary as a whole was withheld and he was being
removed from service. It is also pertinent to note that the inquiry officer is
not clear when he said 'that once the power to extend the time to repay the
advance is conferred and penal interest is charged, is any rule violated.' This
is not an attempt to re-appreciate evidence in the case but the entire thing is
being analysed to point out that the action apart from being arbitrary is
motivated and unjust.
If the rules for granting the advance
themselves provided the consequence of the breach of conditions, it would be
idle to go in search of any other consequence by initiating any disciplinary
action in that behalf unless the 1975 Rules specifically incorporate a rule
that the breach of House Building Advance Rules would by itself constitute a
mis-conduct. That is not the case here as will be presently pointed out.
Seeking advance and granting the same under
relevant rules, is at best a loan transaction. The transaction may itself
provide for re-payment and the consequence of failure to repay or to abide by
the rules. That has been done in this case. Any attempt to go in search of a
possible other consequence of breach of contract itself appears to be arbitrary
and even motivated. However, the more serious infirmity in framing this head of
charge is that according to the inquiry officer this failure to refund the
advance within the time frame in which it was sanctioned constitutes violation
of Rule 4 (1) (iii). Let us turn to the charge-sheet drawn-up against the
appellant. Under the first head of charge it was stated that the appellant was
guilty of misconduct as prescribed in Rule 4 (1) (i) and (iii). Rule 4 (1) (i)
provides that every employee shall at all times maintain absolute integrity.
How did the question of integrity arise passes comprehension.
The appellant applied for House Building
Advance. Inquiry officer says that the appellant had negotiated with Mr. Chugh
for purchase of a plot. There is not even negative evidence or evidence which
may permit an inference that the house building advance was utilised for a
purpose other than for which it was granted. Therefore Rule 4 (1) (i) is not
only attracted but no attempt was made before us to sustain it. And as far as
Rule 4 (1) (iii) is concerned, we fail to see how an advance not refunded in
time where it was recovered by withholding the salary of a highly placed
officer discloses a conduct unbecoming of a public servant.
Therefore, the first head of charge is an
eye-wash. It does not constitute a misconduct if it can be said to be one even
if it remains unrebutted. The inquiry officer has not said one word how the
uncontroverted facts constitute a conduct unbecoming of a public servant, or he
failed to maintain absolute integrity.
Turning to the second head of charge, it is
alleged that the appellant applied for and obtained a conveyance allowance of
Rs. 11,000 on July 7,1979 but did not utilise the amount for the purpose for
which it was granted and did not furnish cash receipt evidencing purchase of a
vehicle within one month as required by Rule 8 of the Conveyance Advance Rules,
nor did he refund the amount to the Corporation as required by Rule 10 (I). It
is not in dispute that the respondent applied for a motor-cycle advance which
was sanctioned and on being sanctioned he drew the same on July 9, 1979. As
required by the respondent, the appellant executed an agreement on July 6,
1979, a day preceding the sanction of the advance guaranteeing that if the
motor-cycle was not purchased and hypothecated within one month from the date
of the drawal of the 669 advance, the whole of the advance together with the
interest accrued thereon would become refundable. As the appellant did not keep
to the time-schedule, memos dated August 20, September 24, November 12 and
November 13, 1979 were served upon him calling upon him to either furnish the
requisite documents or to refund the advance latest by November 14, 1979. The
inquiry officer in this connection, recapitulated the facts in paragraphs 5.2.
5.2.1, and 5.2.2. Then he proceeded to record a finding that the appellant on
April, 7, 1980 submitted the documents namely cash receipt in respect of
purchase of a scooter, insurance certificate, receipt showing deposit of the
balance of advance with cashier, original insurance policy and registration
book for purchase of the scooter. The report does not show the date of purchase
which could have been ascertained with certainty from the insurance certificate
as well as the cash receipt.
After recapitulating these undisputed facts,
he stated that the fact that 'he (appellant) was asked to refund the balance
amount tantamount to agreeing de facto sanction for the purchase of the same
(scooter)'. In the last paragraph, he has stated that a stoppage of the salary
effective from November 16, 1979 in the opinion of the inquiry officer
tantamounts to imposition of double punishments and this is compounded by not
paying even a subsistence allowance. We scanned the report minutely with the
able assistance of the learned counsel for the respondent subjecting it to
microscopic analysis to ascertain whether the inquiry officer recorded any
finding in respect of this charge adverse to the appellant. We found none. On
the contrary, a comprehensive reading of the report clearly indicates that the
inquiry officer was satisfied that the delay in submitting the documents and
purchasing a scooter instead of a motor cycle should not have been visited with
such drastic punishment of stoppage of salary altogether and yet compelling the
appellant to render service without quid pro quo. Curiously, however, in a
separate document recorded as finding, the inquiry officer has held that the
appellant contravened Rule 10 (I) of the Conveyance Advance Rules which would
constitute misconduct within the meaning of the expression in Rule 4 (I) (iii)
of the 1975 Rules. The report and the findings are wholly irreconcilable and
left us guessing about the approach of the inquiry officer, his conclusion and
his finding. This aspect considerably troubled us because we would presently
point out that the disciplinary Authority as well as the appellate authority have
declined a peep into the working of their minds by making a reasoned or a
speaking order. The appellant appears to us to have been convicted sub
silencio.
670 The first question we must pose to
ourselves is whether taking the findings of facts as recorded by the inquiry
officer and accepting for the present purpose that they are not open to a
judicial review, do they constitute misconduct so as to invite penalty ?
According to the inquiry officer, failure either to produce the documents or to
refund the amount within a period of one month from the drawal of the
conveyance advance constitutes contravention of Rule 10 (I) of the Conveyance
Advance Rules. Rule 10 reads as under:
"10. (1). Where an employee after taking
advance is unable to purchase the vehicle for any reason, he shall refund
within one month of drawal of advance the full amount with interest thereon to
the Corporation. If he fails to do so, he shall be liable to disciplinary
action for misconduct in addition to liability for payment of additional
interest in accordance with Sub Rule (2).
(2) Where an amount of advance is retained by
an employee beyond one month or where the employee fails to produce evidence of
purchase, insurance policy of registration book, the normal rate of interest
under Rule 5 will be charged for the first month and for the period in excess
of one month in addition to the normal rate of interest, additional interest at
a rate equivalent to difference between the borrowing rate of the Corporation
and the normal rate chargeable under Rule 5 will be charged. The additional
rate of interest will be compound interest and it will be merged with the
principal at monthly intervals for the purpose of calculating interest for
subsequent periods." In this connection, our attention was drawn to
Circular dated December 11, 1979 issued by the respondent-Corporation which
provides that henceforth a penal interest will be levied/charged 'on the total
drawn amount under the Conveyance Advance Rules in cash vouchers or receipts
are not produced to the Personnel Division within the prescribed period, or in
case the amount drawn is refunded without utilisation.' It thus transpires that
drawal of the advance, if not utilised within the prescribed period or if not
refunded within the same time, will expose the drawer to a liability to penal
interest. And in this case, it has been so charged.
Now if what is alleged as misconduct does not
constitute misconduct not by analysis or appraisal of evidence, but per se
under 1975 671 Rules the respondent had neither the authority nor the
jurisdiction nor the power to impose any penalty for the alleged misconduct. An
administrative authority who purports to act by its regulation must be held
bound by the regulation. 'Even if these regulations have no force of law the
employment under these corporations is public employment, and therefore an
employee would get a status which would enable him to obtain a declaration for
continuance in service, if he was dismissed or discharged contrary to the
regulations.' [Sukhdev Singh & Ors. v.
Bhagatram Sardar Singh Raghuvanshi and Anr.]
If thus it is satisfactorily established that the employment under such
Corporation like the respondent which is an instrumentality of the State, is
public employment it is difficult to entertain the submission of Mr. Sinha
which did prevail for some time in the days gone by that contract of public
service cannot be specifically enforced. Mr. Sinha in this connection relied
upon Sec. 14 of the Specific Relief Act, 1963 and urged that where the origin
of employment is in a contract the breach of it cannot be remedied by directing
specific performance of a contract of personal service. He also drew our
attention to Western India Automobile Association v. Industrial Tribunal,
Bombay and Ors. Where a Constitution Bench of this Court has observed as under:
"It is true that this Tribunal can do
what no Court can, namely, add to or alter the terms or conditions of the
contract of service. Express power to do so is given by the regulation, while
there are no words conferring a power to reinstate or revive a contract
lawfully determined." Reference was also made to Dr. S.B. Dutt v.
University of Delhi wherein it was held that an arbitrator appointed by the
parties and functioning under the Arbitration Act, 1940 cannot by his award
enforce a contract of personal service in contravention of the provisions of
the Specific Relief Act and this discloses an error apparent on the face of the
award. But neither Sec. 14 nor the aforementioned two decisions can render any
assistance to the respondent because it is well-settled that in the matter of
public employment if the termina- 672 tion is held to be bad, in view of the
latest decisions in Sukhdev Singh and Uttar Pradesh Warehousing Corporation's
cases a declaration can be granted that the man continues to be in service.
Mr. Ramamurthi on behalf of the appellant
further contended that the order of removal from service is void as it is
passed in violation of the principles of natural justice and at any rate an
order imposing penalty by a quasi-judicial tribunal must be supported by
reasons in support of its conclusions. It was urged that duty to give reasons
would permit the court hearing a petition for a writ of certiorari to ex facie
ascertain whether there is any error apparent on the record.) It was conceded
that for the present submission adequacy or sufficiency of reasons is not
questioned. What is contended is that the inquiry officer has merely recorded
his ipse dixit and no reasons are assigned in support of the findings. The
mental process is conspicuously silent. A speaking order will at its best be
reasonable and at its worst be at least a plausible one (M.P. Industries Ltd.
v. Union of India & Others). What prevents the authority authorised to
impose penalty from giving reasons ? If reasons for an order are given, there
will be less scope for arbitrary or partial exercise of power and the orders ex
facie will indicate whether extraneous circumstances were taken into
consideration by authority passing the order. This view in Vedachala Mudaliar
v. State of Madras was approved by this Court in Bhagat Raja v. Union of India
and Others. As pointed out earlier, the findings of the inquiry officer are
merely his ipse dixit.
No reasons are assigned for reaching the
finding and while recapitulating evidence self-contradictory position were
adopted that either there was no misconduct or there was some misconduct or double
punishment was already imposed.
Rule 27 (19) casts an obligation upon the
inquiry officer at the conclusion of the inquiry to prepare a report which must
inter alia include the findings on each article of charge and the reasons
therefor. The report is prepared in contravention of the aforementioned rule.
The situation is further compounded by the
fact that the disciplinary authority which is none other than Committee of
Management of the Corporation while accepting the report of the inquiry officer
which itself was defective did not assign any reasons for accepting the report
of the inquiry officer. After reproducing the findings of the 673 inquiry
officer, it is stated that the Committee of Management agrees with the same. It
is even difficult to make out how the Committee of Management agreed with the
observations of the inquiry officer because at one stage while recapitulating
the evidence the inquiry officer unmistakably observed that appellant was
subjected to double punishment and at other. place, it was observed that
granting extension of time and acceptance of documents and balance advance
would tantamount to extending the time which would make the affair look wholly
innocuous. This shows utter non-application of mind of the Disciplinary Authority
and the order is vitiated.
A detailed appeal was submitted by the
appellant to the Board of Directors running into about 8 pages. The only order
while dismissing the appeal brought to our notice is a communication by a
gentleman Anand Krishna whose authority and designation are not stated, but who
purported to act on behalf of the Board of Directors, that the appellate
authority, after going through the records of the case, has decided to uphold
the decision of the disciplinary authority and to confirm the penalty of
removal from service imposed upon the appellant. Rule 35 of 1975 Rules deals
with appeals. Sub-rule (ii) of Rule 35 provides amongst others that the
Appellate Authority shall consider whether the findings are justified or
whether the penalty is excessive or inadequate and pass appropriate orders
within three months of the date of appeal. In order to ascertain whether the
rule is complied with, the order of the appellate authority must show that it
took into consideration the findings the quantum of penalty and other relevant
considerations. There is no material for showing that the appellate authority
acted in consonance with its obligation under Rule 35. However, in para 5.14 to
17 of the counter affidavit, it was stated that 'full inquiry report with
annexure can be shown to the court at the time of hearing, if desired.' If the
respondent was anxious to sustain its action, it was obligatory upon it to
disclose the full inquiry report. Nothing was shown to us nor any attempt to
show the proceedings of the appellate authority to disabuse our mind that the
appellate authority was guilty of utter non-application of mind and discharged
its duty under Rule
35. No attempt was made to urge that the
three authorities had ever assigned reasons in support of their conclusions.
For this additional reason also, the initial
order of the Disciplinary Authority as well as the Appellate Authority are
liable to quashed and set aside.
To sum up the order of removal passed by
Disciplinary Authority is illegal and invalid for the reasons:(i) that the
action is thoroughly arbitrary and is violative of Art.
14, (ii) that the alleged 674 misconduct does
not constitute misconduct within the 1975 Rules; (iii) that the inquiry officer
himself found that punishment was already imposed for the alleged misconduct by
withholding the salary and the appellant could not be exposed to double
jeopardy; and (iv) that the findings of the inquiry officer are unsupported by
reasons and the order of the Disciplinary Authority as well as the Appellate
Authority suffer from the same vice. Therefore, the order of removal from
service as well as the appellate order are quashed and set aside.
The last question then is to what relief the
appellant is entitled ? Once the order of removal from service is held to be
illegal and invalid and the appellant being in public employment, the necessary
declaration must follow that he continues to be in service uninterruptedly.
This aspect does, not present any difficult and the declaration is hereby granted.
When removal from service is held to be
illegal and invalid, the next question is whether: the victim of such action is
entitled to backwages. Ordinarily, it is well- settled that if termination of
service is held to be bad, no other punishment in the guise of denial of back
wages can be imposed and therefore, it must as a necessary corollary follow
that he will be entitled to all the back wages on the footing that he has
continued to be in service uninterruptedly. But it was pointed out in this case
that the appellant was employed as Factory Manager by M/s KDR Woollen Mills,
A-90, Wazirpur Industrial Area, Delhi from where he resigned with effect from
August 8, 1983. It was also submitted that he was drawing a salary of Rs. 2500
per month. Now if the appellant had procured an alternative employment, he
would not be entitled to wages and salary from the respondent. But it is
equally true that an employee depending on salary for his survival when he is
exposed. to the vagaries of the court litigation cannot hold on to a slender
distant hope of judicial process coming to his rescue and not try to survive by
accepting an alternative employment, a hope which may turn out to be a mirage.
Therefore, the appellant was perfectly
justified in procuring an alternative employment in order to keep his body and
soul together as also to bear the expenses of litigation to vindicate his
honour, integrity and character.
The submission of the respondent that the
appellant had accepted employment with M/s KDR Woollen Mills may be accepted in
view of the evidence tendered in the case.
Therefore, the appellant would not be
entitled to salary for the period he was employed with M/s KDR Woollen Mills.
675 Even for the rest of the period, the
conduct of the appellant cannot be said to be entirely in consonance with
corporate culture. As a highly placed officer he was bound to strengthen the
corporate culture and he should have acted within the spirit of the regulations
both for house building advance and conveyance advance, which are devised to
help the employees. There has been lapse in totally complying with these
regulations by the appellant though it neither constitutes misconduct to
attract a penalty nor substantially good enough for initiation of disciplinary
inquiry. Accordingly, having regard to all the aspects of the case, the
appellant should be paid 50% of the back wages for the period since his removal
from service upto his reinstatement excluding the period for which he had
procured an alternative employment. The respondent shall also pay the costs of
the appellant quantified at Rs. 3000.
S.R. Appeal allowed.
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