IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.03.2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.Nos.25915 to 25919 & 25580 of 2009 and M.P.Nos.2,2,2,2 & 2 and 3,3,3,3 & 3 of 2009 and M.P.Nos.1,1,1,1 & 1 and 2,2,2,2 & 2 of 2010 and M.P.Nos 1& 2 of 2009 W.P.No.25915/2009 V.Annamalai ..Petitioner Vs 1. The Executive Director (South) Food Corporation of India Zonal Office,(South), Food Corporation of India, Haddows Road, Chennai – 600 006. 2. The General Manager, Regional Office of the Food Corporation of India, Murugesan Complex, Greames Road, Chennai – 600 006. 3. Area Manager, Food Corporation of India Thanjavur District Office, No.379 & 380, North Main Street, Thanjavur – 613 009. 4. The Central Registrar, Under the Multi State Co-operative Societies Act, O/o The Regional Joint Registrar of Co-Operative Societies, St.Marys Road, Chennai – 18. ..Respondents W.P.No.25916/2009 R.K.Munirathinam ..Petitioner Vs 1. The Executive Director (South) Food Corporation of India Zonal Office,(South), Food Corporation of India, Haddows Road, Chennai – 600 006. https://hcservices.ecourts.gov.in/hcservices/ 2. The General Manager, Regional Office of the Food Corporation of India, Murugesan Complex, Greames Road, Chennai – 600 006. 3. Area Manager, Food Corporation of India Chennai District Office, Sathyamurthy Road, Chennai – 600 031. 4. The Central Registrar, Under the Multi State Co-operative Societies Act, O/o The Regional Joint Registrar of Co-Operative Societies, St.Marys Road, Chennai – 18. ..Respondents W.P.No.25917/2009 G.Krishnan ..Petitioner Vs 1. The Executive Director (South) Food Corporation of India Zonal Office,(South), Food Corporation of India, Haddows Road, Chennai – 600 006. 2. The General Manager, Regional Office of the Food Corporation of India, Murugesan Complex, Greames Road, Chennai – 600 006. 3. Area Manager, Food Corporation of India Vellore District Office, Vellore. 4. The Central Registrar, Under the Multi State Co-operative Societies, Office of the Regional Joint Registrar of Co-operative Societies, St.Marys Road, Chennai – 18. ..Respondents W.P.No.25918/2009 T.Nagalingam ..Petitioner Vs https://hcservices.ecourts.gov.in/hcservices/ 1. The Executive Director (South) Food Corporation of India Zonal Office,(South), Food Corporation of India, Haddows Road, Chennai – 600 006. 2. The General Manager, Regional Office of the Food Corporation of India, Murugesan Complex, Greames Road, Chennai – 600 006. 3. Area Manager, Food Corporation of India Chennai District Office, Sathyamurthy Road, Chennai – 600 031. 4. The Central Registrar, Under the Multi State Co-operative Societies Act, Office of the Regional Joint Registrar of Co-operative Societies, St.Marys Road, Chennai – 18. ..Respondents W.P.No.25919/2009 M.George ..Petitioner Vs 1. The Executive Director (South) Food Corporation of India Zonal Office,(South), Food Corporation of India, Haddows Road, Chennai – 600 006. 2. The General Manager, Regional Office of the Food Corporation of India, Murugesan Complex, Greames Road, Chennai – 600 006. 3. Area Manager, Food Corporation of India Tuticorin District Office, No.23/B, Beach Road, Tuticorin. 4. The Central Registrar, Under the Multi State Co-operative Societies, Office of the Regional Joint Registrar of Co-operative Societies Act, St.Marys Road, Chennai – 18. ..Respondents https://hcservices.ecourts.gov.in/hcservices/ W.P.No.25580/2009 M.Sakthivel ..Petitioner Vs 1. The Executive Director (South) Food Corporation of India Zonal Office,(South), Food Corporation of India, Haddows Road, Chennai – 600 006. 2. The General Manager, Regional Office of the Food Corporation of India, Murugesan Complex, Greames Road, Chennai – 600 006. 3. Area Manager, Food Corporation of India Chennai District Office, Sathyamurthy Road, Chennai-600 031. 4. The Central Registrar, Under the Multi State Co-operative Societies Act, Office of the Regional Joint Registrar of Co-oeprative Societies, St.Marys Road, Chennai – 18. ..Respondents Writ petitions filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus to call for the respondents particularly that of the second respondent in IR/society/2008/Vol.I dated 24.11.2009 and the consequential proceedings of the 3rd respondent in Lr.No.VIG.32/(sv)2009/Doc dated 25.11.2009 and quash the same as without jurisdiction, ultra vires, illegal and unlawful and consequently forbear the respondents from in any manner interfere nor disturb the petitioner from peacefully executing his functions as in the office of the respondents. For Petitioners : Mr.T.S.Rajmohan For Respondents : Mr.A.S.Thambusamy for R2 & R3 COMMON ORDER Heard both sides. 2. W.P.Nos.25915 to 25919 of 2009 are filed by the petitioners who are the employees of the Food Corporation of India. Incidentally, they are also members of the Food Corporation https://hcservices.ecourts.gov.in/hcservices/ of India (South Zone) Employees Co-operative Society which is registered under the Multi State Co-operative Societies Act. The petitioners in these five writ petitions challenge a communication dated 24.11.2009 issued by the second respondent, General Manager, Regional Office of the Food Corporation of India, Chennai and another proceedings of the Area Manager, Food Corporation of India dated 25.11.2009. The first order is an internal communication of the Food Corporation of India and the second order is not addressed to the petitioners and did not pertain to them. 3. These writ petitions were admitted on 15.12.2009. Pending the writ petitions, in M.P.No.3 of 2009, an interim stay was granted staying all further proceedings pursuant to the impugned orders. In M.P.No.2 of 2009 in respect of all the writ petitions, an order of injunction was also granted restraining the respondents 1 to 3 in any manner disturbing the petitioners from peacefully executing their functions under the office of the third respondent in each writ petition. That was also granted on 15.12.2009. 4. At the time of seeking such interim relief, the petitioners never disclosed that they were under suspension by the Food Corporation of India vide orders dated 9.12.2009. All of them were suspended, pending further enquiry into the matter. The most startling fact was that, when they were aware of the suspension order, without receiving and attacking the suspension order, they filed applications in M.P.No.2 of 2009 seeking a restraint order against 1st to 3rd respondents so as not to disturb them from peacefully executing the functions of the post which were held by them. Such a prayer is unknown to service jurisprudence. There can never be an order of anticipatory against an employer on mere apprehension. 5. In the present case, none of the petitioners disclosed their suspension before the Court. But however, got a restraint order against the Food Corporation of India from initiating any action. The respondent Food Corporation of India has filed vacate stay Applications supported by counter affidavits. It is startling to note that in these five cases, the petitioners have been never issued with any order proposing to take disciplinary action as alleged in the original writ petitions. In paragraph 2 of the counter affidavit, it is stated that the impugned letter dated 25.11.2009 was issued only to M.Sakthivel who was handling Mazdoor. He was also the President of the Employees Co-operative Society. It is also stated that the office order dated 4.11.2009 and the letter dated 25.11.2009 were never issued to the petitioners herein. 6. The original office file relating to those proceedings were also been perused. In the office order dated 24.11.2009 issued on behalf of the General Manager, it is stated as follows: OFFICE ORDER https://hcservices.ecourts.gov.in/hcservices/ In partial modification of the Office Order under reference cited, the following officers working in Regional Office, Chennai – 6 are nominated as Committee Members to investigate the complaint Against Secretary / President and some Board Members against misuse of power/fund of FCI (SZ) employees Co-op. Society Ltd. (Registered No.M.S.CS/CR-23/92. It is requested to submit the compliance report within one week from the date of issue of this Ofice order since the same has to be transmitted to Executive Director (South), Zonal Office, Chennai for further action in this regard. Sl.No. Name Designation 1. Shri.B.ANBALAGAN,ASST. GENERAL MANAGER (QC) 2. Shri.V.C.KRISHNAN, MANAGER(D) 3. Shri.G.ANWARUDDIN, MANAGER(D) 4. Shri.P.SAKTHIVEL,MANAGER(ACCOUNTS) 7. It is pursuant to this order dated 24.11.2009, the Area Manager F.C.I. Depot Office, Chennii-31 had issued the order dated 25.11.2009 which reads as follows: MEMO Sub: V&S. Disciplinary proceedings against Shri.M.Sakthivel, Department Labour/ President of FCI(SZ) Employees Co-op. Society Chennai memo issued of :- Ref: Lr.No.IR/Society/2008 d. 29-1-2009 18-9-2009 of AGM (I.R) **** Shri.M.Sakthivel (President of FCI (SZ) Employees Co.op. Society Chennai) presently working at FCI, District Office, Chennai – 31, has been reported for his misdeeds in the Society wherein a loan of Rs.50 crores was obtained during June-2005. It has been reported that from July, 2007 the Loan amount has not been deposited by the Society to ICICI-Bank. Thus Shri. M.Sakthivel D.L. (President of the FCI.Co-op. Society Chennai) has violated the agreement entered with ICICI-Bank, which has spoiled the image of FCI. Shri.M.Sakthivel, DL (President of FCI (SZ) Employees Co-op. Society) is therefore directed toe explain as to why disciplinary action should not be taken against him for his misbehavior and misconduct. His explanation should reach the undersigned within 10 days from the date of receipt of this memo, failing which it will be construed that he has no explanation to offer and action deemed fit will be initiated against him. Sd/- Area Manager. A.K.Radhakrishnan Area Manager, https://hcservices.ecourts.gov.in/hcservices/ F.C.I D.O.,Chennai-31. To Shri.M.Sakthivel,D.L. (President FCT(SZ) Emp.Co-op.Society Chennai) FCI, District office, CHENNAI – 600 031 (Through controlling officer) It can be seen from the said order, the order has been marked only to M.Sakthivel, Mazdoor and President of the Co-operative Society. The fact that it was only addressed to such M.Sakthivel can be seen from the subject column where it is referred to a disciplinary proceedings against Sri.M.Sakthivel, Department Labour/President of FCI(SZ) Employees Co-operative Societies, Chennai. 8. However, in these batch of writ petitions, the petitioners produced a copy of the order dated 25.11.2009 as if it was also issued to the entire Board of Directors of the Society along with the said Sakthivel. In the order produced by them (a typed copy found in the typed set) after the name of M.Sakthivel, the words, "Board of Directors" is added in ink. The petitioners along with their writ petitions have filed applications to dispense with the production of the copy of the order. In the affidavit filed in support of the writ petitions in paragraph 31, it was averred as follows: "31. It is further prayed that this Hon'ble Court may be pleased to dispense with the filing of the Original impugned proceedings of the second respondent in IR/society/2008/Vol.I dt.2411.2009 and the consequential proceedings of the 3rd respondent in Lr.No.VIG.32/(sv)/2009/Doc dt.:25.11.2009 and thus render justice." 9. There is no averment that the original of the order was either served to them and it not having been served on them but however, they were able to produce a true copy of the same. Curiously, the affidavit is silent as to whether the petitioners were in receipt of such an order or that they have misplaced the original. It only shows their ulterior motives. At the time of filing of the writ petitions, the petitioners cleverly were not willing to take a definite stand on the receipt of a non-existent order, lest if it is found out it may work against them. 10. In any event, in refuting the contention about the service of the impugned order on them, in the affidavit in paragraph No.6, it was averred as follows: "6. The allegations in para 17 are denied. The second respondent did not issue the office order dated 24.11.2009 and the 3rd respondent did not issue the letter dated 25.11.2009 to the petitioner. The letter dated 25.11.2009 was https://hcservices.ecourts.gov.in/hcservices/ issued only to M.Sakthivel then President of the Society by Area Manager, Chennai." 11. Therefore, the petitioners approached with nefarious design to secure some order. They have not only fabricated to make the order dated 25.11.2009 was issued to them. It was for this reason they neither produced the order of suspension which was sought to be served on them nor disclosed in the affidavit that there were suspension orders. On the contrary, they prayed for a blanket injunction against the respondents from taking any action which is also unheard of in service law. It is only to secure such an order, they have also enclosed the alleged impugned order which was never meant to be served on them. 12. Further, the petitioners are working in the following places. The petitioner in W.P.No.25915/2009, V.Annamalai is the Manager,(Accounts) at Thanjavur. The petitioner in W.P.No.25916/2009 R.K.Munirathinam, is an Assistant Grade II Depot at the Area Manager's Office, Chennai, The petitioner in W.P.No.25917/2009, G.Krishnan is working as an Assistant Grade- I, (General) in Area Manager's Office at Vellore. The petitioner in W.P.No.25918/2009,T.Nagalingam is working as a Subedhar in the Area Manager's Office at Chennai. The petitioner in W.P.No.25919/2009 M.George is working as an Assistant Grade-II (General) in the Area Manager's Office at Tuticorin. Therefore, atleast in respect of three petitioners, they were not under the control of Area Manager, Depot Office at Chennai-31. Therefore, such an order could not have been served by him as he was not the competent authority to give such show cause notice. Even otherwise in the order dated 25.11.2009 (in both the paragraphs), only the name of M.Sakthivel is referred to. If the intention of the Food Corporation of India were to give show cause memos to the petitioners, they would have certainly mentioned the name, place of office and the designation of the petitioners before calling for an explanation from them and it would have been served by competent authorities who have jurisdiction over them. 13. The Supreme Court in Gujarat Steel Tubes Limited vs. Gujarat Steel Tubes Mazdoors Sabha reported in 1980 (1) L.L.J 137, has held that disciplinary action can only be taken individually and not collectively. If the conduct of any employee is questioned by an employer, necessarily, it has to be dealt with in individual capacity. In industrial law, there is nothing known as a collective misconduct. Therefore, the petitioners had deliberately created records as if they were injured by the show cause notice. They have filed the present writ petitions and obtained the illegal orders without disclosing truth before this Court. Such orders never existed can also be seen from another angle. If an order was issued by an incompetent authority they would have raised want of competence as a ground. But on the contrary, there is no such averment made in the affidavit. The fact that they were working in various Area offices is reflected in the cause title and each of the petitioner had impleaded the respective Area Managers as party third respondent in all the https://hcservices.ecourts.gov.in/hcservices/ writ petitions. 14. It must be noted that this Court had an occasion to deal with the writ petition challenging the suspension order dated 29.1.2010 issued against M.Sakthivel. The writ petition challenging the suspension order in W.P.No.2319/2010, was repelled by the judgment dated 9.2.2010. In that order, it was found that the Co-operative Society namely Food Corporation of India Employees (South Zone) Co-operative Society was registered under the Multi State Co-operative Societies Act, 2002 and the said Sakthivel along with others were elected to the Board of Directors during the year, 2004. In normal circumstances, the Society had availed loan facilities only from Chennai Central Co- operative Bank. But the newly elected Board members approached ICICI Bank for credit facilities. The ICICI Bank provided a loan of Rs.50 crores during April, 2005 with the condition that the amounts should be repaid in 60 instalments. It was claimed that the loan received from the ICICI Bank was distributed at the rate of Rs.3 lakhs per applicant, though it was initially decided to lend only Rs.2 lakhs. Since the Society committed defaults in repayment for more than six months, the ICICI Bank initiated proceedings against the Society including complaints under Section 138 of the Negotiable Instruments Act. 15. It was thereafter, many employees realised that the loans were raised in their names and they were declared defaulters. When number of complaints were received by the Food Corporation of India, a Committee was constituted by the Food Corporation of India. Since the members of the Society including the petitioners herein were all employees of the Food Corporation of India, a Committee was formed and it nominated senior officers of Food Corporation of India whose names are found in the order dated 24.11.2009. The Assistant General Manager (Quality Control), two Managers(Distribution) and one Manager (Accounts) formed the committee and they were directed to investigate the complaint against the Secretary/President/ Board Members for the misuse of power and funds of Food Corporation of India(South Zone) Employees Cooperative Society. 16.The arguments advanced before this Court was that when the acts were done by them in the capacity of office bearers of Co-operative Society, no disciplinary control vests with the Food Corporation of India. Therefore, any action including of disciplinary action or suspension made against them will be without jurisdiction. In repelling the said contention, this Court referred to the Judgment of the Supreme Court in Lalla Ram v. D.C.M. Chemical Works Ltd. reported in (1978) 3 SCC 1. The Supreme Court in paragraph 9 has observed as follows: " Though it is true that private quarrel between an employee and a stranger with which the employer s not concerned as in Agnani case falls outside the categories of misconduct, it cannot be reasonably disputed that acts which are subversive misbehaviour by an employee which is https://hcservices.ecourts.gov.in/hcservices/ directed against another employee of the concern may in certain circumstances constitute misconduct so as to form the basis of an order of dismissal or discharge...." 17. In paragraph 25 of the order in W.P.No.2319/2010, this Court had observed in paragraph 25 as follows: "The other contention that in respect of misconduct or irregularity committed in the Co- operative Society run by the employees, no action can be taken also cannot be accepted. First of all, it is the society run by the employees of the same Corporation. Only by virtue of their being employees of FCI, they are eligible for membership in the said society. Many times, it is noticed that employees, who are holding office and are Board of Directors of such societies are given duty relief by the employer to attend to the Society's work. Even otherwise, since CBI has registered a criminal case under the Prevention of Corruption act, which charge came to bed only because the petitioner is a "public servant" and was allegedly in possession of assets disproportionate to known sources of income. Hence, that contention also must fail." 18. To counter that point, Mr.T.Rajmohan, the learned counsel for the petitioners contended that the Supreme Court in Indian Express & Chronicle Press v. M.C.Kapur reported in 1974 L.L.J 30 has held that the Management has no official or other interest in Society and has no control over the management function or finance but provides only amenities to the society and it cannot take any disciplinary action on the employees over their conduct in respect of the Co-operative Society. The said judgment has no application to the fact of this case. The Supreme Court in that case had dealt with specific Standing Orders applicable to the workmen. In paragraph 4 of the judgment, the following misconducts listed in that Standing orders were referred to. " (b) Theft, fraud or dishonesty in connection with the company's business or property. (i) Riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline." Therefore, only in the context of these specific misconducts, the Supreme Court had held that the Society's business is not Company's business or property and the disorderly behaviour was not during the working hours. Therefore, the employer will have no jurisdiction under the Standing order to take action against employees for having committed misconducts while running a Co- operative Society established by them. 19. Mr.A.S.Thambusamy, the learned counsel for Food Corporation of India, brought to the notice of this Court, the Criminal Original Petition filed by one Soundararajan in https://hcservices.ecourts.gov.in/hcservices/ Crl.O.P.No.24283/2009 seeking for a direction to register a criminal case against all the Board of Directors including the petitioners herein. The complaint referred to the petitioners being the Board of Directors have committed various criminal acts including offences under Sections 204, 406, 420, 456 I.P.C. read with Section 8, 9 and 10 of Prevention of Corruption Act 1988. Based upon the complaint dated 21.8.2009, this Court initially directed the State Police to take action on the complaint. But subsequently, on being informed that the Society is a Multi State Co-operative Society and the Employees are employed by the Food Corporation of India which is a Central Public Sector, the said order was modified. A direction was given to the State Police to forward the complaint to the Central Bureau of Investigation (C.B.I.) which was in turn was directed to register a case and investigate the offence. Pursuant to the same, it is also stated that a First Information Report has been registered. 20. It is too late in the day for the Central Government owned Public Sector Officials to contend that their conduct whether as a public servant or in any other capacity, can never be enquired into by their employer. On the contrary, in the present case, not only the petitioners were employees of the Food Corporation of India, but all other members of the Co-operative Societies are also employees of the Food Corporation of India. When they were aggrieved about loans were raised in their names, they are entitled to give complaint not only to the authorities administering the Co-operative Society but also to the employer about their own fellow employees. If such a complaint regarding the conduct of the other employees were found proved it will amount to acts subversive of discipline. 21. In the present case, not only there is a criminal investigation against the petitioners but also complaints by co- employees. For that purpose, the Food Corporation of India has constituted a Committee of Managers to investigate into the matter. As and when any specific misconduct by any of the petitioners are found out, it will be open to Food corporation of India to proceed against them in accordance with law. There is no impediment for them in dealing with such conduct by their own officers. 22. In the present case, all the petitioners are covered by the Food Corporation of India (Staff) Regulations framed under Section 45 of the Food Corporation Act 1964 (Central Act, 37 of 1964) with the previous sanction of the Central Government. Regulation No.31 reads as follows: "31. General Every employee shall at all times: (a) maintain absolute integrity (b) maintain devotion to duty; (c) conform to and abide by the provisions of the Act and the rules and regulations made thereunder; (d) comply with and obey all lawful orders and directions which may from time to time be issued to https://hcservices.ecourts.gov.in/hcservices/ him in the course of his official duties by any person or persons to whom he may be subordinate in the service of the Corporation. 32. Every Employee shall serve the corporation honestly and faithfully and shall endeavour his utmost to promote the interest of the Corporation. He shall show courtesy and attention in all transactions and not do anything which is un-becoming of a Corporation employee." 23. Apart from the preamble made under Section 31, Regulations 32A list out various acts and omissions which are also made as misconducts. Regulation No.32A (24) reads as follows: "(24) Failure to maintain a responsible and decent standard of conduct in private life, thereby bringing discredit to the Corporation." A note is also appended under the description of misconducts to the effect that these misconducts are only illustrative and not exhaustive. 24. Even for participating in the affairs of any Co- operative Society, Regulation No.45(2)(e) grants permission only to the following extent: 45 "(2) An employee may without the previous sanction of the Managing Director :- (a) to (d) omitted (e) take part in the registration, promotion or management (nor involving the holding of an elective office) of a co-operative society sub- stantially for the benefit of employees of the Corporation, registered under the Co-operative Societies Act, 1912 (2 of 1912) or any other law for the time being in force:" It is not made clear whether the petitioners covered by these statutory regulations ever took permission from the