IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.: 385/2000 Reserved on:3.7.2008 Decided on.7.7.2008 J.S. Nayyar. …Petitioner. Versus N.J.P.C. and others. …Respondents Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. yes For the petitioner : Mr. Ajay Mohan Goel, Advocate. For the respondents : Ms. Devyani Sharma, Advocate. Rajiv Sharma, J. The brief facts necessary for the disposal of this writ petition are that the petitioner, who was working as an Assistant Engineer in the respondent-corporation, was served with the charge-sheet on 7/10.2.1997. He filed a short reply on 22nd February, 1997. The inquiry Officer was appointed and he concluded the inquiry on 3.6.1998. The penalty of ‘censure’ was imposed upon the petitioner on 1.2.1999. The petitioner has assailed the imposition of this penalty dated 1.2.1999 and has sought consequential benefit of promotion from the due date by 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes 2 ignoring this penalty. The corporation has filed the detailed reply to the writ petition. The petitioner has filed the rejoinder to the same. Mr. Ajay Mohan Goel, Advocate had strenuously argued that the imposition of penalty of ‘censure’ vide letter dated 1.2.1999 is arbitrary, unconstitutional, thus, violative of Article 14 of the Constitution of India. He also contended that the petitioner was bound to be supplied with a copy of the inquiry report and the disagreement note dated 31.1.1999 before the imposition of penalty of censure dated 1.2.1999. He further contended that the supply of copy of the inquiry report is sine qua non as per the definite law laid down by the Hon’ble Supreme Court in Managing Director, ECIL, Hyderabad and others versus B. Karunakar and others (1993) 4 SCC 727 and his client was to be heard before recording disagreement by the disciplinary authority to the inquiry report as per the existing law. Ms. Devyani Sharma, Advocate has argued that the inquiry has been initiated and concluded in accordance with the law. She also contended that the petitioner has only been imposed minor penalty as per the Rules framed by the corporation and the detailed inquiry was not necessary in this case. She had further contended that as per the existing Rules it was not necessary to supply the copy of the inquiry report and the petitioner was not to be heard at the time of recording disagreement to the inquiry report by the disciplinary authority. I have heard the learned counsel for the parties and have also perused the pleadings carefully. What emerges from the facts gathered from the pleadings of the parties is that the petitioner was chargesheeted on 7/10.2.1997 for unauthorized leave. He filed a reply to the same on 22nd February, 1997. The Inquiry Officer was appointed on 29.8.1997. He concluded the inquiry 3 on 3.6.1998. It will be apt at this stage to take note of the disciplinary authority Sh. B.K. Mahajan dated 15.7.1998 after taking into consideration the inquiry report. The text of the note reads thus: “Inquiry Officer in his explicated note has brought out at ‘A’ above that none of allegations levelled against Shri J.S. Nayyar could be proved with necessary evidence by the Presenting Officer and accordingly are dismissed. Accordingly, the Inquiry officer has recommended for regularization of the leave as per his last para at S.No. ‘a’ to ‘c’. In light of above, I agree with the observations findings of the Inquiry Officer and as such the officer may be exonerated accordingly please.” It is thus evident that as per the note dated 15th July, 1998 that the petitioner was exonerated of all the charges but strangely enough, the petitioner was served with a letter dated 1.2.1999 (Annexure P-E). The text of letter dated 1.2. 1999 reads thus: “As a result of the departmental enquiry held in your presence and based on the official records, you are found guilty of the charge (s) levelled against you vide charge-sheet No.NJ/P&A/PF (20040)/97-19791 dated 10.2.1997. In the circumstances, the undersigned would have been fully justified to take a serious view in the matter and inflict upon you severe punishment. However, with a view to offer you a fair chance to improve your conduct you are hereby censured.” It is clarified at this stage that the petitioner after the note dated 15.7.1998 and imposition of minor penalty of ‘censure’ on 1.2.1999 has made a representation for the supply of the inquiry report on 3.11.1998. He submitted a representation on 5th March, 1999 for the supply of the copy of the inquiry report. He sent a telegram on 1.5.1999 to get the copy 4 of the inquiry report. He reiterated his demand for the supply of the copy of the inquiry report on 10.5.1999. He filed a detailed appeal against the imposition of the penalty on 24.6.1999. He reiterated again therein the demand for the supply of the copy of the inquiry report. He was supplied with a copy of the inquiry report along with letter dated 2nd July, 1999 (Annexure PF). He brought to the notice of the disciplinary authority on 25.8.1999 that the disciplinary authority Sh. B.K. Mahajan had already exonerated the petitioner and there was no occasion to reopen the matter afresh and the disciplinary proceedings were supposed to be closed on the basis of note dated 15.7.1998. The learned counsel appearing on behalf of the corporation brought to the notice of the Court ‘The NJPC Conduct, Discipline and Appeal Rules (hereinafter referred to as ‘the rules’ for convenience sake). Rule 5 deals with the terms ‘misconduct’. Rule 23 lays down penalties which can be imposed upon the employee. Rule 25 lays down the detailed procedure for imposition of major penalties. Rule 26 prescribes the procedure for taking action on the inquiry report. Rule 27 lays down the procedure for imposing minor penalty. Rule 28 provides for communication of orders. It is thus evident from the reading of the NJPC Conduct, Discipline and Appeal Rules that a regular inquiry is required to be initiated for imposing major penalties. The disciplinary proceedings in the present case were initiated against the petitioner as per rule 25. The inquiry officer was appointed. The Presenting Officer was also appointed by the disciplinary authority. The inquiry officer concluded the inquiry on 3.6.1998. The disciplinary authority has taken action on the inquiry report as is evident from the note dated 15.7.1998. Sh. B.K. Mahajan has accepted the inquiry report on 15.7.1998 and exonerated the petitioner of 5 all the charges. The text of this note has already been reproduced hereinabove. The petitioner had prayed for the supply of copy of the inquiry report on 3.11.1998. The disciplinary authority imposed penalty of censure upon the petitioner on 1.2.1999. The Court does not approve the manner in which the penalty of censure has been imposed upon the petitioner by the disciplinary authority when he had already been exonerated as per note dated 15th July, 1998. The matter is required to be considered from another angle. The petitioner has not been supplied with a copy of the inquiry report before the imposition of the penalty of censure on 1.2.1999. The petitioner had made earnest endeavour to get the copy of the inquiry report as is evident from letters dated 3.11.1998, 5.3.1999, 1.5.1999 and 10.5.1999. Even in his appeal dated 24.6.1999, he has prayed for the supply of the copy of the inquiry report. The copy of the inquiry report has been made available to the petitioner for the first time on 2nd July, 1999. He has brought to the notice of the authorities on 25.8.1999 that the penalty of censure could not be imposed upon the petitioner since Shri B.K. Mahajan, disciplinary authority, had already agreed with the inquiry report on 15th July, 1998. The Court is of the considered opinion that as per the law laid down in Managing Director, ECIL, Hyderabad and others versus B. Karunakar and others (1993) 4 SCC 727 the copy of the inquiry report was required to the supplied to the petitioner. Their Lordships in Managing Director, ECIL, Hyderabad and others versus B. Karunakar and others (1993) 4 SCC 727 have held as under: “The reason why the right to receive the report of the Inquiry Officer is considered an essential part of the reasonable opportunity it the first stage and also a principle of natural justice is that the findings recorded by the Inquiry Officer form an important material before the disciplinary authority which along with the evidence 6 is taken into consideration by it to come to its conclusions. It is difficult to say in advance, to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions. The findings further might have been recorded without considering the relevant evidence on record, or by misconstruing it or unsupported by it. If such a finding is to be one of the documents to be considered by the disciplinary authority, the principles of natural justice require that the employee should have a fair opportunity to meet, explain and controvert it before he is condemned. It is the negation of the tenets of justice and a denial of fair opportunity to the employee to consider the findings recorded by a third party like the Inquiry Officer without giving the employee an opportunity to reply to it. Although it is true that the disciplinary authority is supposed to arrive at its own findings on the basis of the evidence recorded in the inquiry, it is also equally true that the disciplinary authority takes into consideration the findings recorded by the Inquiry Officer along with the evidence on record. In the circumstances, the findings of the Inquiry Officer do constitute an important material before the disciplinary authority which is likely to influence its conclusions. If the Inquiry Officer were only to record the evidence and forward the same to the disciplinary authority, that would not constitute any additional material before the disciplinary authority of which the delinquent employee has no knowledge. However, when the Inquiry Officer goes further and records his findings, as stated above, which may or may not be based on the evidence on record or are contrary to the same or in ignorance of it, such findings are an additional material unknown to the employee but are taken into consideration by the disciplinary, authority while arriving at its conclusion. Both the dictates of the reasonable opportunity as well as the principles of 7 natural justice, therefore, require that before the disciplinary, authority comes to its own conclusions, the delinquent employee should have an opportunity to reply to the Inquiry Officer's findings. The disciplinary authority is then required to consider the evidence, the report of the Inquiry Officer and the representation of the employee against it. It will thus be seen that where the Inquiry Officer is other than the disciplinary authority, the disciplinary proceedings break into two stages. The first stage ends when the disciplinary authority arrives at its conclusions on the basis of the evidence, Inquiry Officer's report and the delinquent employee's reply to it. The second stage begins when the disciplinary authority decides to impose penalty on the basis of its conclusions. If the disciplinary authority decides to drop the disciplinary proceedings, the second stage is not even reached. The employee's right to receive the report is thus, a part of the reasonable opportunity of defending himself in the first stage of the inquiry. If this right is denied to him, he is in effect denied the right to defend himself and to prove his innocence in the disciplinary proceedings. Ms. Devyani Sharma, Advocate had strenuously argued that the petitioner has failed to show prejudice for non-supply of the inquiry report by the employer. This plea is bound to be rejected in view of the facts and circumstances of the case as enumerated hereinabove and as per rule 28 which reads thus: “Communication of order: Orders made by the disciplinary authority under Rule 26 or 27 shall be communicated to the employee concerned, who shall also be supplied with a copy of the report of inquiry, if any.” 8 It is evident that as per the existing provisions of Rule 28, the copy of the inquiry report is not required to be supplied to a delinquent and the same has to be supplied along with order whereby the disciplinary authority had imposed the penalty after taking action as per rule 26 and for imposition of penalty under rule 27. This existing rule 28 is contrary to definitive law laid down in Managing Director, ECIL, Hyderabad and others versus B. Karunakar and others (1993) 4 SCC 727. The respondent-corporation is a Government undertaking and is bound by the law declared by their Lordships of the Hon’ble Supreme Court under Article 141 of the Constitution of India. It was necessary for the corporation to carry out the necessary amendments in the Recruitment and Promotion Rules by making it obligatory on the part of the disciplinary authority to supply the copy of the inquiry report to the delinquent to enable him to make a representation against the same. In the present case, the reason for non-supply of the copy of the inquiry report to the petitioner is rule 28 in its existing form which provides for the supply of the copy of the inquiry report only with the order whereby the penalty is imposed. Now, the Court has to consider whether it was obligatory on the part of the disciplinary authority to afford the petitioner with reasonable opportunity of being heard before disagreeing with the inquiry report. In the present case the disciplinary authority had disagreed on 31.1.1999 with the inquiry report. The respondents have failed to place any material on record that the petitioner was heard before the disciplinary authority has recorded its disagreement with the inquiry report. Ms. Devyani Sharma has relied upon sub-rule (2) of rule 26 to substantiate her plea that it was not necessary to hear the petitioner before the disciplinary authority disagrees with the inquiry report. This question whether the 9 employee has to be heard if the disciplinary authority disagrees with the inquiry report or not is no more res integra in view of the law laid down by their Lordships in Punjab National Bank and others versus Kunj Behari Misra, (1998) 7 SCC 84. Their Lordships have held as under: “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, 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)” The same principle has been reiterated by their Lordships of the Hon’ble Supreme Court in Yoginath D. Bagde versus State of 10 Maharashtra and another, AIR 1999 SC 3734. Their Lordships have held as under: “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 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.” Ms. Devyani Sharma tried to distinguish these judgments by submitting that it was necessary for the petitioner to establish prejudice if he was not heard by the disciplinary authority at the time of disagreeing with the inquiry report. This question is also no more res integra in view of the definitive law laid down by 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 the 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: “In paragraph 20 thereof, this Court agreeing with the case of Institute of Chartered Accountants of India v. L. K. Ratna ((1986) 4 SCC 537) and Ram Kishan v. Union of 11 India ((1995) 6 SCC 157), specifically stated that the view taken in State Bank of India v. S. S. Koshal ((1994) Supp 2 SCC 468 and State of Rajasthan v. M. C. Saxena ((1998) 3 SCC 385), did not lay down the correct law. In our view, the controversy that is to be resolved in the present case arose for consideration in the said Punjab National Bank case directly. The said judgment in all force applies to the facts of the present case. The distinction sought to be made on behalf of the appellants taking support from the Constitution Bench judgment of this Court in Mohapatra's case (supra) does not help them for two reasons : firstly, that was not a case where the controversy that has arisen in this case dealing with specific regulation was directly dealt with. As already stated above, in the case of Punjab National Bank a three-Judge Bench of this Court has directly considered the effect of said Regulation, particularly and directly in regard to providing of an opportunity to be read into the Regulation. Secondly, on the facts of the case before the Constitution Bench, this Court found that the direction given by the High Court to reconsider as to the punishment imposed in that case was not correct. The argument that in the case arising prior to Ramzan Khan's case not giving an opportunity by the disciplinary authority, would not vitiate the order of dismissal, also does not support the case of the appellants in the light of the fact that in the case of Punjab National Bank also the proceedings related to the period prior to Ramzan Khan case. 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, 12 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. 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 impugned order. Consequently, the same is affirmed and the appeal is dismissed with no order as to costs. Consequently it is held that it was mandatory for the disciplinary authority to afford reasonable opportunity to the petitioner of being heard 13 before disagreeing with the inquiry report. Their Lordships of the Hon’ble Supreme Court in the above cited cases have also held that the opportunity of being heard should be afforded to the delinquent even if it is not prescribed/laid down in the regulations framed by the organization. In the present case the disciplinary authority had already applied its mind as is evident from note dated 15.7.1998. The petitioner has not been supplied with the copy of the inquiry report before the imposition of penalty. He has not been heard before the disciplinary authority disagreed with the inquiry report. Thus, imposition of penalty of ‘censure’ in the facts and circumstances is bad in law. The plea of Ms. Devyani Sharma that the minor penalty could be imposed upon the petitioner without inquiry cannot be accepted in the facts and circumstances of the case. Moreover, in the present case the disciplinary proceedings had in fact been initiated against the petitioner which has culminated in the submission of the inquiry report by the Inquiry Officer dated 3.6.1998. It is only if no inquiry had been initiated against the petitioner for imposition of major penalty, the corporation could take recourse to rule 27. The stand taken by the respondent in the reply that the petitioner was in possession of the inquiry report is not borne out from the records. In Annexure-PK dated 24.6.1999, the petitioner had in fact prayed for the supply of the copy of the inquiry report. In the reply the respondents have cast certain aspersions upon the inquiry officer and the petitioner. These aspersions were uncalled for since they have not been substantiated in any manner by the respondent-employer. The Inquiry Officer had only pointed out certain illegalities/irregularities in the manner in which the inquiry was initiated against the petitioner on the basis of the charge- sheet. If the inquiry officer exonerates the delinquent, it cannot be presumed that he has been influenced