IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP (T) No.7361/2008 Reserved on :6.8.2009 Decided on: 21.8.2009 Deepak Vaidya and others. …Petitioners. Versus Himachal Road Transport Corporation and others. …Respondents. Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. yes. For the Petitioner : Mr. Raman Sethi, Advocate vice Mr. R.L. Kaith, Advocate, Advocate. For the Respondents : Mr. Parveen Chandel, Advocate vice Mr. Adarsh Sharma, Advocate. Rajiv Sharma, J. Brief facts necessary for the adjudication of this petition are that the predecessor-in-interest of the petitioners (hereinafter referred to as ‘the petitioner’ for convenience sake) was promoted to the post of Assistant vide office order dated 31.1.1985. This order was modified by the respondent-corporation vide Annexure PA dated 14.2.2001. Consequently, the pay was re-fixed with effect from 1.7.1984 onwards 1 Whether the reporters of Local Papers may be allowed to see the judgment? Yes. 2 vide office order dated 14.2.2001. The corporation effected recovery of Rs. 71,066/- from the gratuity amount of the petitioner (late Sh. Mohinder Pal Vaidya). The corporation had also reduced the pension of the petitioner to the extent of 5% on the basis of the charge sheet dated 2.6.1997. Mr. Raman Sethi, Advocate appearing on behalf of the petitioner has strenuously argued that the petitioner was not afforded reasonable opportunity of being heard before the issuance of Annexure-PA. He then contended that the petitioner has worked against the higher post of Assistant and at no given time, he has mis-stated or played fraud upon the corporation. He has further contended that the action of the respondents to re-fix the salary of the petitioner vide communication dated 14.2.2001 as well as recovery of Rs. 71,066/- from the payment of the gratuity is illegal, arbitrary, thus, violative of Article 14 of the Constitution of India. He lastly contended that the pension of the petitioner could not be reduced by 5% on the basis of decision dated 10.12.1998. Mr. Praveen Chandel, Advocate appearing on behalf of the respondents has supported the Annexure PA and re-fixation of salary as well as recovery of Rs. 71,066/- from the gratuity of the petitioner. He has also supported the reduction of 5% pension by way of penalty vide order dated 10.12.1998 on the basis of the disciplinary proceedings initiated vide letter dated 2.6.1997. I have heard the learned counsel for the parties and have perused the pleadings carefully. The petitioner was promoted to the post of Assistant on 31.1.1985. He started discharging the duties of Assistant with effect from 31.1.1985. He has neither mislead nor misrepresented the facts 3 at the time when the order dated 31.1.1985 was issued by the respondent-corporation promoting the petitioner to the post of Assistant. It was for the corporation to ensure and to verify the record of the petitioner. The facts on the basis of which earlier order dated 31.1.1985 has been modified were within the knowledge of the respondent-corporation. The petitioner cannot be permitted to suffer on the basis of the lapse of the Dealing Assistant who according to the respondent- corporation has not apprised the Departmental Promotion Committee about the pendency of the penalties with effect from 1.5.1980 to 31.12.1989. It is true that the employer can always rectify the mistake, if an incumbent has been promoted wrongly. However, even in those cases, the person is entitled to be heard before modifying or reversing the decision. It is admitted case of the parties that the petitioner at no given time was heard before the issuance of Annexure PA. The petitioner has suffered civil and evil consequences at the time of issuance of Annexure PA. He stood retired from service on 31.10.1997. It was incumbent upon the respondent-corporation to at least issue show cause notice to the petitioner before the issuance of Annexure PA. He has worked against the higher post. In these circumstances, his salary could not be re-fixed vide order dated 14.2.2001. No recovery could be effected from the gratuity of the petitioner on the basis of letter dated 20.6.2001. The gratuity is a property within the meaning of Article 300-A of the Constitution of India. It can be recovered only in accordance with law. In the present case the issuance of Annexure PA is in the violation of the principle of natural justice. Consequently, orders passed thereafter re-fixing the salary of 4 the petitioner with effect from 1.7.1984 on the basis of letter dated 14.2.2001 and ordering the recovery of Rs. 71,066/- from the gratuity of the petitioner on the basis letter dated 20.6.2001 are also nullity. The respondent-corporation should have associated the petitioner before the constitution of the Review Departmental Promotion Committee. The respondent-corporation has taken unilateral decision without hearing the petitioner. In a recent judgment, their Lordships of the Hon’ble Supreme Court in Prakash Ratan Sinha versus State of Bihar and others, 2009 (9) Scale 529 have held that the administrative decision taken by the respondents is within the realm of public law and, therefore, the decision ought to have been taken in fair and reasonable manner. Their Lordships have further held that if there is a power to decide and decide detrimentally to the prejudice of a person duty to act judicially is implicit in exercise of such a power and that the rule of natural justice operates in areas not covered by any law validly made. It has also been held that if any action or administrative decision result in civil consequences, the actions or decisions could be judicially reviewed or tested on the anvil of principles of natural justice. Their Lordships have held as under: “6) The respondent is an instrumentality of the State, and therefore, all its administrative decisions would be subject to the doctrine of equality and fair play, as incorporated in Articles 14 and 21 of the Constitution of India. If any of its actions or administrative decisions result in civil consequences, the actions or decisions could be judicially reviewed or tested on the anvil of principles of natural justice. This principle of law has been laid down by this Court in catena of cases. In Canara Bank and Others Vs. Debasis Das 5 and Others reported in (2003) 4 SCC 557, this Court has held in paragraph 19 that even an administrative order which involves civil consequences must be consistent with the rules of natural justice. This Court has elaborated the expression `civil consequence' by observing that it encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary damages. This Court has further stated, that, in its wide umbrella comes everything that affects a citizen in civil life. 7) The decision complained against in the instant case is an administrative decision. The decision is likely to have far reaching civil consequences for the appellant, as it has adversely affected his right to continue in the promotional post. Therefore, in our view, the decision concerning the promotion makes itself available for scrutiny by the Courts on the touchstone of well-established principles of natural justice. 8) The decision that was questioned before the Court was an administrative decision having civil consequences and is alleged to have been taken without affording an opportunity of hearing to the appellant. The argument of the learned Counsel for the appellant, basically is that, the administrative decision taken by the respondents is unfair, unreasonable and in breach of principles of natural justice. The administrative decision taken by the respondents is within the realm of public law and therefore, the decision ought to have been taken in a fair and reasonable manner. This was more necessary because the action cancelling the promotion of the appellant had civil consequences in the sense that it not only puts an end to the right of the appellant and also his further career prospectus. Therefore, the respondents are under an obligation to take all 6 decisions in a fair and lawful manner by adhering to the rules of natural justice. The law in this regard has been settled by several decisions of this Court. The principle that emerge from the decisions of this Court is that, if there is a power to decide and decide detrimentally to the prejudice of a person, duty to act judicially is implicit in exercise of such a power and that the rule of natural justice operates in areas not covered by any law validly made. Corollary principles emanating from these cases are as to what particular rule of natural justice should apply to a given case must depend to an extent on the facts and circumstances of that case and that it is only where there is nothing in the statute to actually prohibit, the giving of an opportunity of being heard and on the other hand, the nature of the statutory duty imposed on the decision maker itself implies an obligation to hear before deciding. These cases have also observed, whenever an action of public body results in civil consequences for the person against whom the action is directed, the duty to act fairly can be presumed and in such a case, the administrative authority must give a proper opportunity of hearing to the affected person. This Court in Canara Bank's case (supra) has stated that "the adherence to principles of natural justice as recognized by all civilized states is of supreme importance or when a quasi judicial body embarks on determining dispute between the parties, or any administrative action involving civil consequences is an issue. Even an administrative order, which involves civil consequence, must be consisted with the rules of natural justice. 9) In the instant, it is not in dispute between the parties that though the appellant was engaged as a daily wage worker, he was directed to discharge the work of Accounts Clerk. The Circle Promotion 7 Committee had recommended the case of the appellant for change of nomenclature from labourer to Accounts Clerk. On the basis of the recommendations made, the Electrical Superintending Engineer, Department of Energy changed his nomenclature from labourer to Accounts Clerk, subject to further approval by Chief Electrical Engineer, Department of Energy. It so happens the incharge Chief Electrical Engineer approves the proposal of the Circle Promotion Committee and issue necessary orders in this regard. Subsequently, the Regular Chief Electrical Engineer takes exception to the action of incharge Chief Electrical Engineer and cancels the earlier order passed by the impugned order dated 11.12.1998. It is the case of the respondents before the High Court that the appellant was not regularly promoted to the post of Accounts Clerk, but only the change of nomenclature from that of labourer to Accounts Clerk. Therefore, we are not expressing any opinion in this regard. In fact, the parties have proceeded before the various forums that though the appellant was promoted as Accounts Clerk from the post of labourers in view of his qualification and experience, the same could not have been disturbed without affording an opportunity of hearing to the appellant. There is no dispute between the parties that the personal or oral hearing was not granted to the appellant before passing the impugned order and therefore, the impugned order is in violation of principles of natural justice.” Accordingly, in view of the observations made hereinabove, the action of the respondents to revert the petitioner without hearing him and to re-fix the salary of the petitioner and further to recover the gratuity amount is declared arbitrary. In normal circumstances, liberty 8 ought to have been reserved to the respondent to proceed with the matter after hearing the petitioner, however, in the present case, the petitioner had retired during the pendency of this petition and thereafter died. In view of this, no useful purpose would be served by keeping the matter alive and the proceedings shall stand closed. The petitioner is also aggrieved by the reduction of salary by 5% on the basis of letter dated 10.12.1998. The charge-sheet was issued to the petitioner on 2.6.1997. He has admitted the charges vide letter dated 19.6.1998. In these circumstances, it was not necessary for the employer to continue with the disciplinary proceedings. Consequently, the imposition of penalty of reducing pension by way of penalty to the extent of 5% cannot be faulted with. Accordingly, in view of the observations made hereinabove, the petition is partly allowed. Annexure PA dated 14.2.2001 and letter dated 20.6.2001 (Annexure R-5) are quashed and set aside. The respondents are directed to refund a sum of Rs. 71,066/- to the petitioners alongwith interest @ 9% per annum within a period of six weeks from today. No costs. 21.8. 2009 (Rajiv Sharma ), J. *awasthi*