IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP (T) No.:7755/2008 Reserved on:11.5.2009 Decided on:19.6. 2009 O.N. Hazri. …Petitioner. Versus State of Himachal Pradesh. …Respondent. Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. yes. For the petitioner : Mr. H.K. Paul, Advocate. For the Respondent : Mr. R.K. Sharma, Sr. Addl. Advocate General with Mr. Rajinder Dogra, Addl. Advocate General and Mr. Vikas Rathore, Dy. Advocate General. Rajiv Sharma, J. The disciplinary proceedings were initiated against the petitioner vide memorandum dated 25.2.1999. He filed reply to the same. The Commissioner, Departmental Enquiries was appointed as Inquiring Authority vide office order dated 19.3.1999 to inquire into the article of charges levelled against the petitioner. He submitted inquiry report to the disciplinary authority on 12.1.2000. The inquiry officer held charge No.1 partly established against the petitioner. According to him, charges No.2 and 3 were not proved. The petitioner was served with a memorandum 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes. 2 dated 8.1.2001 by the disciplinary authority. He has provisionally come to a conclusion that following penalty was warranted against the petitioner: (i) permanently withholding 50% pension; and (ii) to withdraw his gratuity to the extent of Rs. 50,000/-. He was permitted to make a representation within 15 days from the date of receipt of the memorandum. He filed detailed reply to the memorandum on 24.1.2001. The disciplinary authority, however, vide office order dated 19.4.2001 imposed the penalty of permanently withholding of 50% pension and also to withdraw gratuity to the extent of Rs. 50,000/-. Mr. H.K. Paul, Advocate has strenuously argued that the imposition of penalty upon the petitioner is in violation of the principles of natural justice. He then contended that the disciplinary authority was required to come to tentative conclusion while disagreeing with the report of the Inquiry Officer. He also contended that after the recording of the reasons by the disciplinary authority, the petitioner was required to be heard by the disciplinary authority before he differed from the views of the Inquiry Officer’s report. He further contended that the Inquiry Officer and the disciplinary authority have wrongly discarded the statements of DW-1 Sh. Balbir singh and DW-2 Sh. P.C. Sharma. He lastly contended that the financial sanction was accorded by the competent authority after the supply order. Mr. R.K. Sharma, learned Senior Additional Advocate General has supported the orders passed by the inquiry officer and the disciplinary authority. I have heard the learned counsel for the parties and perused the record carefully. 3 The disciplinary proceedings were initiated against the petitioner vide memorandum dated 25.2.1999. The inquiry officer has exonerated the petitioner as far as charges No.2 and 3 are concerned. He has held charge No.1 to be partly proved. The meeting was convened as per the record on 6.1.1989 in the office of the CCF (Settlement). DW-1 Sh. Balbir Singh has testified that the discussions were held in the meeting on 6.1.1989 and the list was prepared by the Superintendent and got signed from the concerned ACFS. DW-2 Sh. P.C. Sharma has deposed that the matter regarding purchase of material was discussed by him with the Incharge of three units on 6.1.1989. It is also borne out from the record that Sh. P.C. Sharma was indicted in Ex.P1/A. However, no disciplinary proceedings were initiated against him. His statement has been wrongly discarded by the inquiry officer. The fact remains that the financial sanction was accorded by the competent authority after the orders were placed with the contractors. The authorities themselves have condoned the alleged misconduct on the part of the petitioner by according financial sanction. The competent authority, in fact, has accorded the financial sanction in the month of February, 1992. In case there was any illegality or irregularity, the financial sanction could not have been accorded ex- post-facto. The inquiry officer has held charge No.1 to be partly established. He has exonerated the petitioner as far as charges No.2 and 3 were concerned. The disciplinary authority had disagreed with the views of the inquiry officer whereby he has absolved the petitioner of charges No.2 and 3. He was required to tentatively come to a conclusion before disagreeing with the views of the inquiry officer. Thereafter the reasons were required to be sent to the petitioner. In the present case, the disciplinary authority 4 had abruptly come to a conclusion that the article of charges warranted the proposed punishment. A bare perusal of memorandum dated 8.1.2001 reveals that no reasons have been assigned by the disciplinary authority while provisionally coming to the conclusion to inflict the proposed penalty upon the petitioner. The action of the disciplinary authority was in contravention of the settled position of law. Their Lordships of the Hon’ble Supreme Court in Punjab National Bank and others versus Kunj Behari Misra, (1998) 7 SCC 84 have held that it will be most unfair and iniquitous that where the charged officer succeed before the enquiry officer, he is deprived of representing to the disciplinary authority before that authority differs with the enquiry officer’s report and, while recording a finding of guilt, imposes punishment on the officer. Their Lordships have held as under: “18. Under Regulation 6 the inquiry proceedings can be conducted either by an inquiry officer or by the disciplinary authority itself. When the inquiry is conducted by the inquiry officer his report is not final or conclusive and the disciplinary proceedings do not stand concluded. The disciplinary proceedings stand concluded with decision of the disciplinary authority. It is the disciplinary authority which can impose the penalty and not the inquiry officer. Where the disciplinary authority itself holds an inquiry an opportunity of hearing has to be granted by him. When the disciplinary authority differs with the view of the inquiry officer and proposes to come to a different conclusion, there is no reason as to why an opportunity of hearing should not to be granted. It will be most unfair and iniquitous that where the charged officers succeed before the inquiry officer they are deprived of representing to the disciplinary authority before that authority differs with the inquiry officer's report and, 5 while recording a finding of guilt, imposes punishment on the officer. In our opinion, in any such situation the charged officer must have an opportunity to represent before the Disciplinary Authority before final findings on the charges are recorded and punishment imposed. This is required to be done as a part of the first stage of inquiry as explained in Karunakar's case (1994 AIR SCW 1050) (supra). 19. The result of the aforesaid discussion would be that the principles of natural justice have to be read into Regulation 7 (2). As a result thereof whenever the disciplinary authority disagrees with the inquiry authority on any article of charge then before it records its own findings on such charge, it must record its tentative reasons for such disagreement and give to the delinquent officer an opportunity to represent before it records its findings. The report of the inquiry officer containing its findings will have to be conveyed and the delinquent officer will have an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the inquiry officer. The principles of natural justice, as we have already observed, require the authority, which has to take a final decision and can impose a penalty, to give an opportunity to the officer charged of misconduct to file representation before the disciplinary authority records its findings on the charges framed against the officer.” These principles were reiterated by their Lordships of the Hon’ble Supreme Court in Yoginath D. Bagde versus State of Maharashtra and another, AIR 1999 SC 3734. Their Lordships have held as under: “54. In the instant case, we have scrutinized the reasons of the Disciplinary Committee and have found that it had taken its final decision without giving an opportunity of hearing to the appellant at the stage at which it proposed to differ with the findings of the Enquiry 6 Officer. We have also found that the complainant's story with regard to the place at which the demand was allegedly made by the appellant was inconsistent. We have also noticed that the trap laid by the A. C. B., Nagpur against the appellant had failed and was held by the Enquiry Officer to be a farce and not having been laid with the permission of the Chief Justice. We have also noticed that there was absolute non-consideration of the statements of defence witnesses, namely, Dr. Naranje and Mr. Bapat, advocate, by the Disciplinary Committee. This factor in itself was sufficient to vitiate the findings recorded by that Committee contrary to the findings of the Enquiry Officer.” Mr. R.K. Sharma, learned Senior Additional Advocate General has argued that it was necessary for the petitioner to establish the prejudice in case he was not heard by the disciplinary authority while disagreeing with the views of the Inquiry Officer. This question is also no more res integra in view of the law laid down by their Lordships of the Hon’ble Supreme Court in State Bank of India and others versus K.P. Narayanan Kutty, (2003) 2 SCC 449. Their Lordships have held that opportunity should be afforded to the delinquent employee irrespective of whether or not some prejudice is shown to have been caused by denial of such opportunity. Their Lordships have held as under: “6. It was also contended on behalf of the appellants that the High Court committed an error in setting aside the order of dismissal when it was not shown that any prejudice was caused to the respondent by not giving an opportunity to him by the disciplinary authority. In this regard the learned counsel cited a decision of this Court in Union Bank of India v. Vishwa Mohan ((1998) 4 SCC 310). As already noticed above, before the High Court both the parties concentrated only on one point, 7 namely, the effect of not providing an opportunity by the disciplinary authority when the disciplinary authority disagreed with some findings of the Enquiry Officer. It was also not shown by the appellants before the High Court that no prejudice was caused to the respondent in the absence of providing any opportunity by the disciplinary authority. The aforementioned case of Vishwa Mohan is of no help to the appellants. The learned counsel invited our attention to para 9 of the said judgment. As is evident from the said paragraph this Court having regard to the facts of that case, taking note of the various acts of serious misconduct, found that no prejudice was caused to the delinquent officer. In para 19 of the judgment in Punjab National Bank case, extracted above, when it is clearly stated that the principles of natural justice have to be read into Regulation 7(2) (Rule 50(3)(ii) of State Bank of India (Supervising Staff) Service Rules, is identical in terms applicable to the present case) and the delinquent officer will have to be given an opportunity to persuade the disciplinary authority to accept the favourable conclusion of the Enquiry Officer, we find it difficult to accept the contention advanced on behalf of the appellants that unless it is shown that some prejudice was caused to the respondent, the order of dismissal could not be set aside by the High Court. AIR 1998 SC 2311 : (1998 AIR SCW 2216 : 1998 Lab IC 2514 : 1996 All LJ 1599 7. Therefore, we are in respectful agreement with the decision of this Court in Punjab National Bank's case, being directly on the point. Moreover, in this case the High Court has given liberty to the appellants to proceed the case in accordance with law. Under these circumstances and in view of liberty given, as stated above, we do not find any good reason to upset the 8 impugned order. Consequently, the same is affirmed and the appeal is dismissed with no order as to costs.” Accordingly, in view of the discussion made hereinabove, it is held: i) the inquiry officer and the disciplinary authority have wrongly discarded the statements of DW-1 and DW-2. The authorities have condoned the alleged misconduct of the petitioner by according financial sanction in the month of February, 1992. The inquiry officer and the disciplinary authority have not properly appreciated the statements of DW-2 and DW-3. The statement of DW-2 could not be discarded merely on the ground that he was also indicted by the inquiry conducted by Mr. Chauhan. His statement was to be evaluated independently by the inquiry officer and disciplinary authority. It has been borne out from the record that in the meeting held on 6.1.1989 in the office of the CCF (Settlement) it was decided to purchase the material for the purpose of settlement. The necessary sanction, as noticed above, was accorded in the month of February, 1992. The Department has failed to prove even charge No.1 against the petitioner; ii) the disciplinary authority while disagreeing with the views of the inquiry officer’s report has not recorded any separate reasons. It was necessary for him to record separate reasons and then to afford reasonable opportunity to the petitioner to enable him to represent his case as has been held by the Hon’ble Supreme Court in the cases cited hereinabove. The action of the disciplinary authority has definitely prejudiced the petitioner; iii) the findings recorded by the disciplinary authority in para 5 of the office order dated 9.1.2001 are also based on conjectures and surmises; and iv) it was for the CCF (Settlement) to ensure that once the items were discussed on 6.1.1989 to prepare the record of the same. The meeting was attended by all the CCFs (Settlement) on 6.1.1989. The CCF (Settlement) is 9 responsible officer and he has accorded the sanction in accordance with law. It cannot be presumed that he did not know the procedure before according the financial sanction. Accordingly, in view of the observations made hereinabove, the petition is allowed. Annexures A-4 dated 19.4.2001 is quashed and set aside. The petitioner has retired in the year 2001. The memorandum was issued to the petitioner on 25.2.1999. The period of eleven years has elapsed. In these circumstances, the matter is not required to be remanded to the disciplinary authority and the same shall stand closed. There shall, however, be no order as to costs. 19.6. 2009 (Rajiv Sharma ), J. *awasthi*