India Ltd. & Ors Vs. Saroj Kumar Mishra  Insc 411 (17 April 2007)
S.B. Sinha & Markandey Katju
[Arising out of S.L.P. (C) No. 15805 of 2006] WITH
CIVIL APPEAL NO.1998/2007 @ S.L.P.(C)No. 16569 of 2006 S.B. SINHA, J.
These two appeals involving similar questions of law and facts were taken up
for hearing together and are being disposed of by this common judgment.
Respondents herein were employees of Mahanadi Coalfields Ltd., a Government
Company within the meaning of Section 617 of the Companies Act. Coal India
Limited admittedly is the holding company of Mahanadi Coalfields Ltd. Appellant
No. 1 framed rules laying down terms and conditions of service of its Executive
Officers. The Executive Cadre of the Officers of Appellant No. 1 is divided in
various grades namely Gr. E/1 to Gr. E/8. Indisputably, promotion from A/3 to
A/4 grades is governed by the rule of Seniority-Cum-Merit. For the purpose of
considering the cases for promotion of the eligible officers from Grade E/3 to
E/4, a departmental promotion committee held its meeting in April-May, 1999.
Respondents were, however, not promoted inter alia on the premise that the
General Manager (Vigilance) of the Mahanadi Coalfields Ltd.
intimated to the concerned authority that vigilance cases were pending
against them. Orders of promotion were issued in favour of the officers who
were admittedly junior to them on 31.8.1999. When despite representation, they
were not promoted on the ground of pendency of vigilance cases, they filed writ
petitions before the Orissa High Court praying inter-alia for notional
promotion with effect from the date their juniors were promoted.
During pendency of the Writ Petitions namely in June, 2002, charge sheets
were issued and upon a disciplinary proceeding having been initiated, a penalty
of reduction of pay by one stage for a period of one year without cumulative
effect was imposed upon the respondents in July, 2003.
Before the Orissa High Court as also before this Court, reliance has been
placed by the appellants on office memorandums dated 19/27th June, 1979. Upon
taking into consideration the said office memorandum as also subsequent
memorandums and in particular the one dated 8.1.1981, the High Court held;
"15. Taking into consideration of the entire factual matrix of the case
and keeping in view the ratio decided by the Apex Court in different cases, so
far as the present petitioner is concerned, the ratio decided in the case of
Union of India Vrs. K.V.
Jankiraman and Union of India-Vrs.-Dr.(Smt.) Sudha Salhan has to be followed
and since the concerned employees in the cases of Delhi Development
Authority-Vrs. H.C. Khurana (AIR 1993 S.C. 1488), Union of India vrs.-Kewal
Kumar (AIR 1993 SC 1585) and Union of India vrs- R.S.
Sharma (AIR 1993 S.C. 2337) stand on a different footing than the present
petitioner, the ratio decided in those cases cannot be followed in the case of
the present petitioner. In the case of R.S. Sharma the order of the Tribunal
directing to open the sealed cover and giving effect to the recommendation made
by the DPC on the ground of non-service of charge memo, was set aside keeping
in view the Rules/Circulars/O.M. in force more particularly clause-iv of the
O.M. wherein it is provided that during the pendency or "investigation on
serious allegation of corruption, bribery or similar grave misconduct is in
progress either by the CBI or any agency, departmental or otherwise",
sealed cover procedure can be resorted to till the proceeding is over in all
respect. But in the instant case on the basis of O.M./Circular/Rules followed
by the MCL/Coal India, the sealed cover was opened and the petitioner was given
promotion to next higher grade (Grade-4) since the so called investigation was
not completed within two years from the date the immediate junior to the
petitioner was promoted.
This particular office memorandum has been issued may be with the intention
to check prolonged enquiry covering a period of more than two years in respect
of certain allegations against an employee, so that the concerned employee
shall not be harassed or debarred from getting benefit on the recommendation of
DPC for an indefinite/prolonged period on the ground of pendency of such
enquiry, without initiation of a departmental proceeding after service of charge
memo. However once the sealed cover is opened and the petitioner is allowed the
benefit of the recommendation of DPC by giving him promotion to the next higher
grade, he shall be entitled for all consequential benefits from the date his
immediate junior got the same. In this case the petitioner had never been
suspended during the period of the so-called preliminary enquiry nor during the
period of departmental enquiry. As such, he shall be entitled for promotion
notionally with effect from the date his immediate junior got the same along
with all service and financial benefit."
On the said findings, the writ petitions were allowed.
Mr. Ajit Kumar Sinha, learned counsel appearing on behalf of the appellant
took us through the said office memorandum dated 27.6.1979 and submitted that
as in terms thereof pendency of a vigilance or departmental action would itself
be sufficient for not promoting the officer who would, in the event of their
complete exoneration would be promoted as and from the date his immediate
junior has been promoted; the impugned judgment cannot be sustained. The High
Court, Mr. Sinha submitted, committed manifest error in invoking the sealed
cover procedure which is not applicable to the fact of the present case. If the
impugned judgment is upheld, a flood-gate of litigation would ensue. Strong
reliance in this behalf has been placed by Mr. Sinha on a reported decision of
this case in Manoj Kumar Singh v The Coal India Ltd. & Ors. in Civil Appeal
No. 17 of 2005 disposed of on 2.1.2006 as also on State of Madhya Pradesh v.
Srikant Chaphekar [1992 (4) SCC 689].
Mr. Janaranjan Das, learned counsel appearing on behalf of the respondent,
on the other hand, supported the judgment of the High Court.
The factual matrix involved in the matter being not in dispute, the only
question which falls for our consideration is interpretation of the office
memorandums dated 27.6.1979 and 8.1.1981.
Both First Appellant as also Mahanadi Coalfields Ltd. are 'State' within the
meaning of Article 12 of the Constitution of India. Their action must,
therefore, satisfy the test of reasonableness and fairness. Although an
employee of a State is not entitled to promotion to a higher post as a matter
of right, he is entitled to be considered therefor in terms of Article 16 of
the Constitution of India. A right of promotion can be withheld or kept in
abeyance only in terms of valid rules. Rules operating in the field do not
provide that only because some allegations have been made as against an officer
of the company, the same would itself justify keeping a valuable right to be
considered for promotion of an employee in abeyance. When a question of that
nature comes up for consideration before a superior court, the extant rules
operating in the field must necessarily be construed in the light of the
constitutional scheme of equality.
The office memorandum dated 19/27 June 1979 reads as under:- "The issue
relating to procedure to be followed with regard to promotion of an officer who
has been kept under suspension and/or against whom a vigilance/departmental
action is pending has been engaging the attention of the management for some
time past. Taking into consideration the extant rules and orders of the
Government of India in this regard the following decision has been taken:
a) All orders for promotion will be issued only after vigilance clearance.
b) *** *** *** c) When an officer has been completely exonerated and he is
subsequently promoted, his seniority should be fixed as if he had been promoted
in accordance with the position assigned to him in the select list. Period of
his eligibility for consideration for promotion to the next higher grade should
be reckoned with reference to the date his immediate junior has been promoted.
The pay of such an executive on promotion should be fixed notionally by
allowing the intervening period during which the officers could not be promoted
due to his suspension and/or pending departmental enquiry to be counted for
increments in the higher grade but no arrears would be admissible to him.
(Corrected as per No. C-5(A)/50972 (Vol.1) Pt./1507 dated 10.07.1979)."
The said office memorandum was, however, clarified by a subsequent
memorandum dated 8.1.1981 wherein it was laid down "It has been laid down
in CIL O.M. number quoted above that all orders for promotions will be issued
only after vigilance clearance. The stage at which a vigilance enquiry should
affect the promotion, confirmation et. Of an employee of CIL and its
subsidiaries has not been clearly defined in the above.
Quoted office memorandum. Vigilance inquiries take considerable time to
complete and in absence of a clear indication regarding the point at which such
inquiries should stand in the ay of an officer's promotion, there is scope for
confusion on this score. This matter has been engaging the attention of the
management for quite some time. Taking into consideration the existing orders
of the Government of India in this regard, the following decision has been
"All orders for promotions will be issued only after vigilance
clearance. However, vigilance clearance shall not be withheld for the mere fact
that a P.E. or R.C. has been registered by the CBI against an officer or that
complaints are being looked into a preliminary enquiry departmentally but no
conclusion has been reacted about the prima facie guilt of the officer.
Vigilance clearance shall be withheld only when :
1) In the case of a Preliminary Enquiry, either by the CBI or departmental
agencies, the competent authority, on consideration of the results of the
investigation, has formed the opinion that a charge- sheet may be issued on
specific imputations for departmental action, and 2) In case of a regular case,
the competent authority has decided to accord saction for prosecution of the
officer in Court.
Until the competent authority arrives at such a conclusion, the officer may
be treated at par as per with orders in the matter of promotion, confirmation
These instructions shall come into force with immediate effect."
It is not the case of the appellants that pursuant to or in furtherance of
the complaint received by the vigilance department, the competent authority had
arrived at a satisfaction as is required in terms of the said circulars that a
charge sheet was likely to be issued on the basis of a preliminary enquiry held
in that behalf or otherwise.
The circular letters issued by the appellants put restrictions on a valuable
right of an employee. They therefore, are, required to be construed strictly.
So construed there cannot be any doubt whatsoever that the conditions precedent
contained therein must be satisfied before any action can be taken in that
We may also notice that a revised guideline was also issued on or about
14.5.2002, wherein it was stated;
"the Vigilance clearance shall be withheld only on the ground (a) when
officer is under suspension (b) when the officer, in respect of whom a charge
sheet has been issued and disciplinary proceedings are pending; and (c) when an
officer in respect of whom prosecution for a criminal charge is pending."
The said circular although is not ipso facto applicable in this case,
clearly laws down the law otherwise prevailing.
Reliance placed by Mr. Sinha on Manoj Kumar Singh (supra) is wholly
misplaced. Therein no law was laid down. It does not contain any ratio
decidendi. The question as to whether in absence of any chargesheet or at least
in absence of any satisfaction having been arrived by the disciplinary
authority that a prima facie case has been made out for proceeding against an
employee, the Vigilance clearance can be given or not, did not fall for
consideration at all therein. No issue in that behalf was framed; no argument
was advanced; no reason has been assigned in support of the said order.
This Court merely stated;
"In the present case, the decision to take action against the appellant
had been formed on 20.1.99. Therefore, the appellant could not have been
granted vigilance clearance. In the circumstances, we see no reason to
interfere with the order under challenge. The appeal is, accordingly,
dismissed. There shall be no order as to costs."
It is surprising that although the appellant is a 'State' within the meaning
of Article 12 of the Constitution of India, it failed even to be fair to this
Court inasmuch as the subsequent office memorandum dated 8.1.1981 and/or
14.5.2002 were not brought to its notice. Had the subsequent office memorandums
and in particular the one dated 8.1.1981 been brought to the notice of the
Court, we have no doubt in our mind that the terms of the order passed in Manoj
Kumar Singh (supra) would have been different.
Similarly, reliance placed on Srikant Chaphekar (supra) by Mr. Sinha, is
equally mis-placed. Therein a Departmental Promotion Committee considered the
adverse remarks passed against the employee concerned. In this case, a
departmental promotion committee did not take into consideration the case of
the respondents at all. They were indisputably entitled to be considered for
promotion having regard to the rule of seniority-cum-merit. Although, in the
said rule, merit has some role to play, but the promotion would not be based
only on merit.
See State of Kerala and Another v N.M. Thomas and Others [AIR 1976 SC 490],
E.V. Chinnaiah v State of Andhra Pradesh & Ors [(2005) 1 SCC 394], Bhagwandas
Tiwari and Ors. v Dewas Shajapur Kshetriya Gramin Bank and Ors. [2006 (11)
SCALE 593], B.V. Sivaiah and Ors. v K.
Addanki Babu and Ors. etc. [(1998) 6 SCC 720].
A departmental proceeding is ordinarily said to be initiated only when a
chargesheet is issued.
The floodgate argument also does not appeal to us. The same appears to be an
argument of desperation. Only because, there is a possibility of floodgate
litigation, a valuable right of a citizen cannot be permitted to be taken away.
This Court is bound to determine the respective rights of the parties.
See Zee Telefilms Ltd. and Anr. v Union of India and Ors. [(2005) 4 SCC
649], Guruvayoor Devaswom Managing Committee and Anr. v C.K.
Rajan and Ors. [(2003) 7 SCC 546].
Even, in such a case, the Employer is not in a helpless situation.
Despite such promotion if the delinquent employee has suffered punishment,
subsequently appropriate steps may be taken on the basis thereof.
We, therefore, are of the opinion that there is no infirmity in the impugned
judgments. The appeals being wholly without merits, are dismissed with costs.
Counsel's fee assessed at Rs. 50,000/-.
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