Lsp IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL CIVIL CIVIL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION WRIT PETITION NO.1215 of 2004 Vasant Motiram Shegaokar ...Petitioner V/s. SICOM Limited & ors. ...Respondents Mr.R.A.Thorat for the Petitioner Mr.S.K.Chinchalikar, AGP for Resp. no.1 Mr.A.J.Sawant with V.P.Sawant and N.R.Patankar for Resp.no.2 CORAM CORAM CORAM : D.K.Deshmukh & : D.K.Deshmukh & : D.K.Deshmukh & N.D.Deshpande, N.D.Deshpande, N.D.Deshpande, JJ JJ JJ 22nd 22nd 22nd April, 2008 April, 2008 April, 2008 & 23rd 23rd 23rd April, 2008 April, 2008 April, 2008 P.C. . By this petition the petitioner challenges the order dated 17-11-2003 passed by the Managing Director of the Respondent No.2 terminating the services of the Petitioner. At the time of termination of services he was holding the post of Regional Manager. The Petitioner was initially appointed, in the year 1976, as Assistant Development Officer. During the course of employment, he was promoted to higher posts. Ultimately, he came to be promoted to the post of Regional Manager. The order terminating the services of the Petitioner states that the services of the petitioner are terminated by giving him three months’ notice or wages in lieu of three months’ notice. The case of the Petitioner in the petition is that firstly 2 the order terminating the services of the Petitioner made in exercise of a clause in the order whereby the Petitioner was appointed initially to the post of the Assistant Development Officer is not valid. It is further the case of the Petitioner that though the order of termination is an order of simplicitor termination, infact, the termination of the service of the Petitioner is for a misconduct. The Petitioner has stated that he was called in the office of the Managing Director on 17-11-2003 and he was shown some charges and he was pressurised to submit his resignation. He declined to submit his resignation, therefore, his services have been terminated. According to the Petitioner, therefore, as the termination of the services of the Petitioner is for misconduct and that has been brought about without holding the departmental enquiry as required to be done by the Service Rules framed by the Respondent No.2 itself, the order terminating the services of the Petitioner is, therefore, liable to be set aside. The defence of the Respondent No.2 is that a preliminary enquiry was held against the Petitioner. A detailed report was submitted. The Petitioner was shown that report on 17-11-2003. He admitted his mistakes in writing and, therefore, in the interest of the Petitioner himself, the services of the Petitioner were terminated without relying on the misconduct by passing a simplicitor order of termination. According to the 3 Respondent as the Petitioner has admitted his guilt, it was not necessary to hold any departmental enquiry. 2. Initially there was some debate before us on the question whether the Respondent even after disinvestment continues to be an instrumentality of the State or not. However, we find that the Supreme Court in its Judgement in the case of Amar Alcohol Ltd. V/s. SICCOM Ltd. & Amar Alcohol Ltd. V/s. SICCOM Ltd. & Amar Alcohol Ltd. V/s. SICCOM Ltd. & anr., anr., anr., reported reported reported in (2006) 1 SCC 199 in (2006) 1 SCC 199 in (2006) 1 SCC 199 has clearly held that even after disinvestment the State of Maharashtra continues to be the largest shareholder of the Respondent No. 2 and affairs of the Respondent No. 2 are still controlled by the State Government. In our opinion, therefore, the Respondent No. 2 will continue to be an instrumentality of the State. 3. The Learned Counsel appearing for the Petitioner so far as the merits of the matter are concerned submits that the order terminating the services of the Petitioner does not refer to any misconduct. It refers to clause-4 of the appointment letter of the Petitioner. By that letter, the Petitioner was appointed to the post of Assistant Development Officer which post the Petitioner now no longer holds. According to the Learned Counsel, therefore, the moment Respondent No. 2 admits that the services of the Petitioner were terminated because he was found guilty of misconduct, 4 the order terminating the services of the Petitioner is liable to be set aside. The Learned Counsel submits that the case of the Respondent No. 2 that the Petitioner admitted his guilt cannot be accepted. The Learned Counsel took us through the report which was shown to the Petitioner in the meeting held on 17-11-2003 and also letter given by the Petitioner to the Managing Director. The Learned Counsel submits that the letter does not amount to admission of the guilt by the Petitioner, and therefore, on the basis of that letter punishment of termination of services could not have been imposed. The Learned Counsel submits that, therefore, the order imposing the punishment is liable to be set aside and according to the Learned Counsel the moment order terminating the services of the Petitioner is set aside, it will have to be held that the Petitioner is entitled to reinstatement in service with full backwages. 4. On the other hand, the Learned Counsel appearing for the Respondent No. 2 submits that though the order terminating the services of the Petitioner is a simplicitor order of termination, the reason for terminating the services of the Petitioner was misconduct of the Petitioner which has been admitted by him and, therefore, according to the Learned Counsel considering the post that the Petitioner was holding and 5 the nature of misconduct which is admitted by the Petitioner, no interference at the hands of this Court is called for in the order terminating the services of the Petitioner. The Learned Counsel further submits that the Petitioner has clearly admitted his misconduct, and, therefore, the order terminating the service is valid. 5. The Learned Counsel also took us through the record and especially report of the preliminary enquiry and the letter submitted by the Petitioner dated 17-11-2003. 6. In our opinion the case of the Respondent that the Petitioner’s services were terminated by simplicitor order of termination cannot be accepted. It is clear from the record that the services of the Petitioner were terminated because of the misconduct. In para-12 of the petition, the Petitioner has stated that some charges were levelled against him. Para-12 reads as under:- "The Petitioner states that on 17-11-2003 he was shown some charges levelled against him by the Managing Director of the Respondent No.2. The Petitioner was not given reasonable and proper opportunity to read the charges and to state the actual facts, its copy was not given to him but he was asked to sign on the copy that he had seen the 6 charges and has signed the same under pressure of Respondent No.2. The Petitioner states that the charges which were levelled against him have absolutely no substance and the Petitioner denies the same. The Petitioner states that he was neither given the copy of the charges levelled against him nor he was called upon to show cause the same. The Petitioner states that he was terminated from the services even though being a permanent employee, without assigning any reasons whatsoever by the Respondent No.2. The Petitioner states that he was in service of the Respondent No.2 for more than 27 years and had attained distinction in the services by his hard work and sincerity and served the Respondent No.2 with great energy to promote various industrial projects financed and supported by the Respondent No.2. The Petitioner states that Clause No.4 of the letter of appointment dated 24.6.1976 is totally arbitrary, unreasonable and contrary to the principles of natural justice." 7. The Respondents have filed an affidavit dated 4-11-2004. In para-18 of that affidavit, the Respondent states that; "I say that before invoking Clause (4) of the 7 Appointment Letter, the Petitioner was asked to remain present in the Respondent’s Head Office at Mumbai and was confronted with the material against him including that of disproportionate assets and misuse of the Office position for his personal gains. A detailed report in that regard was shown to the Petitioner. The Petitioner was asked as to what he had to say about the same. After the said report was shown to the Petitioner, the same was signed by the Petitioner in acknowledgment, the Petitioner immediately made a representation on the same day i.e. on 17-11-2003 "admitting his mistakes" and praying for "pity and one opportunity". A copy of the report dated 17-11-2003 bearing the signature of the Petitioner is annexed hereto and marked as EXHIBIT NO.5. A copy of the representation dated 17-11-2003 made by the Petitioner to the Respondent No.1 is annexed hereto and marked as EXHIBIT NO.6." 8. The Petitioner has filed re-joinder. It is of December 2004. In para-18 of that re-joinder Petitioner deals with para-18 of the affidavit filed by the Respondent quoted above. The Petitioner in para-18 states that; "With reference to paragraph no. 18, the fact is 8 that I received a call on my Mobile phone at 8.00 p.m. on 16-11-2003 from PA to Managing Director of Respondent No.1, conveying that the Managing Director has called me at Mumbai Head Office on the next day i.e. 17-11-2003 to take complete review of a case - SSI Co-operative Flatted Estate Limited, Nashik. I reached in the Head Office on 17-11-2003 at about 11.15 a.m. When I entered into MD’s cabin, I came to know that there was no meeting or review of the case. I was called at Head Office for different reason but the Respondent No.1 had in mind the action to be taken against me. MD has shown few papers containing certain charge against me. I was shocked to see the papers of charge and tried to explain the facts that the charges are not true, when MD in a threatening tone asked me "Do you want to contest?" He even threatened me that a Criminal/Police action can be taken against me. The copy of charges was not given to me but I was asked to make an endorsement on it and I made such endorsement. On that very day I was asked to resign, which I refused. Thereafter, I was given the idea that if I don’t resign, a Termination Order would be issued to me. I said I will think and convey my decision on the next day, so give me 24 hours time which they refused. It may be please noted that I was 9 terribly pressurized by the Team of Respondent No. 1 for submitting my resignation on the very day. It is total injustice to me. I then thought if I admit that I made some mistakes and I accordingly wrote in the representation sent to the Managing Director at that time only hoping that they will not terminate my service of 27 years. But MD did not consider and he issued me a Termination Order on the same day i.e. on 17/11/2003." 9. From the above quoted portions of affidavit of the Petitioner and Respondent it is clear that though the order of termination is a simplicitor order of termination, the foundation of that order was the misconduct of the Petitioner. Normally on the Court finding that the foundation of the order of termination is the misconduct and that the order of terminating the service has been made without holding enquiry, the Court has to set aside the order terminating the service. In the present case, however, the case of the Respondent is that it was not necessary to hold any departmental enquiry against the Petitioner because the misconduct alleged against the Petitioner was admitted by him. The Respondent in support of their case that the Petitioner admitted his misconduct relied on the letter dated 17-11-2003. It is a short letter. In our opinion it would be better to quote that letter. 10 "Sub: Sub: Sub: Charges against Mr.V.M.Shegokar Charges against Mr.V.M.Shegokar Charges against Mr.V.M.Shegokar With reference to the above subject and meeting with you, I sincerely request you to kindly give me an opportunity and I pray that you may kindly consider it. I admit that I have made some mistakes and assure you that the same will not be repeated in future. My two sons and a daughter (unmarried), are taking education and I have responsibility of their education, services and daugther’s marriage. Once again I pray to you kindly show pity to me and oblige me, for which I will remain always grateful to you." . Now from this letter and the portions quoted from the affidavits of parties above, it is clear that it is an admitted position that there was a meeting between the Managing Director and the Petitioner on 17-11-2003. In that meeting charges were shown to the Petitioner and on the charges being shown to the Petitioner, Petitioner submitted the letter which we have quoted above. In the letter the Petitioner clearly admits that he has committed mistakes. The reference to the mistakes in the letter dated 17-11-2003 is obviously to the charges levelled against him. The report submitted by the Associate Vice President and the Assistant General 11 Manager which was admittedly shown to the Petitioner had also been placed on record. That report was submitted by these two officers named above after conducting enquiry and perusal of that report shows that extremely serious allegations of misuse of the property of the Corporation, misutilisation of the funds of the Corporation and also misappropriation of the funds of the Corporation were made. After having gone through this material we find that the Respondent Corporation is justifying in saying that in the meeting held on 17-11-2003 Petitioner admitted the charges levelled against him. It goes without saying that if the delinquent admits the charges levelled against him, it will not be necessary to hold any departmental enquiry to prove the charge. In our opinion, therefore, the Corporation was justified in not holding departmental enquiry against the Petitioner. How ever, the matter does not rest here. Admittedly, the Corporation has framed the SICOM EMPLOYEES’ CONDUCT AND DISCIPLINE RULES. It is also an admitted position that the provisions of these rules are applicable to the Petitioner also. It is Rule-22 of those rules which is relevant for our purpose. It reads as under:- "No order imposing on an employee any of the penalties other than censure shall be passed by the Competent Authority without the charge or charges 12 being communicated to him in writing and without his having been given a reasonable opportunity of defending himself against such charge or charges and of showing cause against action proposed to be taken against him." 10. Perusal of above quoted Rule-22 shows that before imposing penalty on any employee the competent authority is obliged to hold enquiry into the charges levelled against the employee giving an opportunity to defend himself against the charges and he is also entitled to be given an opportunity to show-cause against the proposed action to be taken against him. It clearly means that an employee is not only entitled to an opportunity to defend himself against the charges but he is also entitled to make a representation in relation to the proposed punishment. Rule-21 of the same Service Rules give list of penalties that can be imposed on an employee. Therefore, employee would be entitled even after he admits the misconduct, to submit as to which will be the appropriate punishment to be imposed on him. In the present case it is an admitted position that to show cause in relation to proposed punishment an opportunity has not been given to the Petitioner. The Supreme Court in its Judgement in the case of State of Madhya Madhya Madhya Pradesh & Others V/s. Hazarilal reported in Pradesh & Others V/s. Hazarilal reported in Pradesh & Others V/s. Hazarilal reported in (2008) (2008) (2008) 3 Supreme Court Cases 273 3 Supreme Court Cases 273 3 Supreme Court Cases 273 in para-8 has observed 13 "An authority which is conferred with a statutory discretionary power is bound to take into consideration all the attending facts and circumstances of the case before imposing an order of punishment. While exercising such power, the disciplinary authority must act reasonable and fairly." . It is thus now can be taken as a settled law that even if the misconduct is admitted, the competent authority has a discretion to impose any of the punishment that are mentioned in Rule-21 and, therefore, an employee has a corresponding right to make a representation in relation to the appropriate punishment that is warranted by his admitted misconduct. In the present case admittedly such an opportunity has not been given to the Petitioner. In our opinion, therefore, the order terminating the services of the Petitioner is contrary to the provisions of the Service Rules and also to the principles of natural justice and,therefore, the order terminating the services of the Petitioner will have to be set aside. The consequences of setting aside the order terminating the services of the Petitioner would be that the Petitioner would stand reinstated in service and he will also be entitled to backwages. In our opinion, however, as the misconduct has been 14 admitted by the Petitioner, it will not be appropriate to direct the Respondent to immediately take the Petitioner on duty. Similarly, as there is no material before us placed by either side to indicate whether during the period the petition was pending, the Petitioner was gainfully employed or not, therefore, we cannot make any order as to the quantum of the backwages. In our opinion, therefore, following order would meet ends of justice. O R D E R R D E R R D E R (i) The order terminating the services of the Petitioner dated 17-11-2003 is set aside. It is held that the Petitioner is entitled to be reinstated in service. He is also entitled to backwages. So far as the aspect of reinstatement is concerned, though the Petitioner stand reinstated in service as on today, it will not be necessary for the Respondent Corporation to assign him duty for a period of two weeks from today. During that period the Corporation shall decide whether to place him under suspension or to permit him to join the regular duty. In case the Corporation decides to place the Petitioner under suspension, he will be entitled to subsistence allowance as per rules from the date of this order 15 till the date order imposing punishment is made. Considering that the petition has been pending for a long time, the Corporation shall take decision in relation to issuance of show-cause notice of punishment also within a period of two weeks from today. (ii) The Managing Director of Respondent Corporation shall hold an enquiry whether the Petitioner was gainfully employed during the period from the date of termination till today. In case the Managing Director finds that the Petitioner was gainfully employed then the Managing Director shall make appropriate order in that regard. The Managing Director shall hold enquiry and make appropriate order as expeditiously as possible within a period of two months from today. It goes without saying that during the course of that enquiry, Petitioner shall be granted an opportunity of being heard and placing material before the Managing Director. 16 11. At this stage a request is made on behalf of the Respondent for staying the operation of this order. Considering the nature of the order that we have passed, in our opinion, the request is not reasonable. Rejected. (D.K.DESHMUKH,J) (D.K.DESHMUKH,J) (D.K.DESHMUKH,J) (N.D.DESHPANDE,J) (N.D.DESHPANDE,J) (N.D.DESHPANDE,J)