LPA/1902/2004 1/10 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL No. 1902 of 2004 In SPECIAL CIVIL APPLICATION No. 8811 of 2002 For Approval and Signature: HONOURABLE MS. JUSTICE R.M.DOSHIT HONOURABLE MR.JUSTICE K.M.THAKER ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= UNITED INDIA INSURANCE CO. LTD - Appellant(s) Versus R.M. SHAH - Respondent(s) ========================================================= Appearance : MR MAULIK J SHELAT for Appellant(s) : 1, MR VM PANCHOLI for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MS. JUSTICE R.M.DOSHIT and HONOURABLE MR.JUSTICE K.M.THAKER Date : 05/03/2008 LPA/1902/2004 2/10 JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MS. JUSTICE R.M.DOSHIT) This Appeal preferred by the United India Insurance Company Ltd. [hereinafter referred to as “the insurance company”], under Clause 15 of the Letters Patent, arises from the judgment and order dated 2nd/5th July, 2004 passed by the learned Single Judge in above Special Civil Application No. 8811 of 2002. 2. The respondent [hereinafter referred to as “the delinquent”] was employed by the insurance company. At the relevant time, the delinquent was serving as a Development Officer at Ahmedabad. For an incidence occured in the month of October/November, 1990 of demanding and accepting illegal gratification from an insured one Shri Sharffuddin Kamruddin Shaikh for clearing his claim, a disciplinary proceeding was initiated against the delinquent by memorandum of charge issued on 10th February, 1992. During the preliminary enquiry about the LPA/1902/2004 3/10 JUDGMENT incidence in question, statement of one Shri D.M. Chhajed, then a Deputy Manager at Ahmedabad was recorded. The said Shri D.M. Chhajed was named as one of the management witnesses. It appears that the enquiry proceeding was not commenced until July, 1998. The enquiry officer opined that the imputation of charge made against the delinquent was proved. The report of the enquiry officer was furnished to the delinquent. The delinquent was called upon to make representation against the finding of guilt recorded by the enquiry officer. After receiving the reply of the delinquent, the disciplinary authority, the above referred Shri D.M. Chhajed, then a Regional Manager at Ahmedabad, by order dated 30th June, 2000, accepted the finding of guilt recorded against the delinquent and imposed the punishment of “reduction in basic pay by 18 steps in the time scale applicable to Shri R.M. Shah and fix him at the bottom of the scale in Grade I and that the period of suspension shall be treated as “period not spent on duty”. LPA/1902/2004 4/10 JUDGMENT 3. The said order of punishment was confirmed on 23rd February, 2001 in departmental appeal and on 8th November, 2001 by order made on Memorial to the Chairman and Managing Director of the insurance company. Feeling aggrieved, the delinquent preferred the above Special Civil Application No. 8811 of 2002 before this Court. 4. The learned Single Judge has by impugned judgment allowed the said petition. It so happened that the above referred Shri D.M. Chhajed was at the time of incidence a Deputy Manager. In course of the preliminary enquiry his statement was recorded on 14th July, 1991. By the time the disciplinary proceeding had commenced in the month of July, 1998 the said Shri Chhajed rose to be a Regional Manager at Ahmedabad, the disciplinary authority of the delinquent. It was the said Shri Chhajed who had acted as a witness in the disciplinary proceeding and had also made the impugned order of punishment against the delinquent. In the LPA/1902/2004 5/10 JUDGMENT circumstances, the learned Single Judge was pleased to hold that “Mr. D.M. Chhajed who had passed the order of penalty, was the disciplinary authority as well as the management witness. Therefore, the said Authority was in a position to impress upon the inquiry report. Under the circumstances, the conclusion of the inquiry report can be said to be biased, in view of the fact that the Competent Authority has deposed against the delinquent. Therefore, the proceedings here are vitiated.” The learned Single Judge also made observation in connection with “non-assistance by lawyer”, however the decision is solely based on the above referred observation made in connection with Mr. Chhajed having acted both as the management witness and the disciplinary authority. The learned Single Judge has also observed that “this Court could have allowed the respondent to hold an inquiry afresh or could have directed the Disciplinary Authority to take a fresh decision in the case. But, in view of the fact that the petitioner has LPA/1902/2004 6/10 JUDGMENT already retired and the incident is of the year 1990, no fruitful purpose could be achieved by remanding the matter back for inquiry afresh. This Court could have substituted the penalty by imposing a minor penalty, but such exercise is not permissible under Article 226 of the Constitution in view of law laid down by the Apex Court.” 5. As can be seen, the act of commission of misconduct by the delinquent is grave. The allegations made against the delinquent have been held to be proved. The prejudice or bias alleged against the above referred Shri Chhajed was the legal bias. No specific allegation of personal bias or prejudice had been made against the said Shri Chhajed. We are, therefore, of the opinion that the learned Single Judge ought not to have absolved the delinquent by setting aside the impugned order made by the disciplinary authority. In cases like this, the delay in initiating the disciplinary proceeding or the LPA/1902/2004 7/10 JUDGMENT factum of the delinquent having reached the age of superannuation should not tilt the balance in favour of the delinquent. We do not agree with the observation made by the learned Single Judge that the disciplinary authority, Shri Chhajed must have influenced the report of the enquiry officer. True, the enquiry officer, an Assistant Administrative Officer in the insurance company was lower in rank than Mr. Chhajed. But, evidently he was not immediate subordinate to Shri Chhajed. Besides, there was no allegation made against the said Shri Chhajed that he had in any manner tried to influence the enquiry officer. We, however, do agree that the aforesaid Shri Chhajed having acted as a management witness ought not to have acted as a disciplinary authority also. The said Shri Chhajed, having participated in the disciplinary proceeding at the stage of preliminary enquiry as well as the enquiry proper, as a matter of prudence, refrained from acting as a disciplinary authority. In our opinion, the interest of LPA/1902/2004 8/10 JUDGMENT justice could be served by allowing the insurance company to take the decision afresh in respect of the disciplinary enquiry conducted against the delinquent. 6. In view of the above discussion, we allow this Appeal partially. The order of the learned Single Judge to quash the order of punishment made on 30th June, 2000 by the disciplinary authority, is confirmed. It is, however, observed that the appellant insurance company shall be at liberty to decide the matter afresh. In other words, the matter may be entrusted to the disciplinary authority to consider the report of the enquiry officer and the relevant record to decide afresh whether or not the imputation of charge made against the delinquent stood proved and whether or not the punishment of reduction in pay imposed upon the delinquent was justified. It is made clear that in the event the disciplinary authority holds the delinquent guilty, the disciplinary authority will not LPA/1902/2004 9/10 JUDGMENT impose punishment afresh which is higher than the one which was imposed earlier on 30th June, 2000. In view of long passage of time, we also direct that the aforesaid exercise shall be completed within 3 months from today. In the event the decision is in favour of the delinquent, the delinquent shall be paid the amount of difference in salary and the retiral benefits within 3 months from the date of the order. 7. The learned advocates agree that the sum of Rs. 3 lakhs has been deposited in the registry of this Court pursuant to the order made on Civil Application No. 195 of 2005. Parties to this Appeal will be at liberty to apply for remittance of the said amount after the disciplinary authority considers and makes orders afresh or after the expiry of period of 3 months from today whichever be earlier. The parties will bear their own cost. [ Ms. R.M. Doshit, J.] LPA/1902/2004 10/10 JUDGMENT rmr. [ K.M. Thaker, J. ]