* THE HON'BLE MR JUSTICE RAMESH RANGANATHAN + WRIT PETITION NO. 13557 OF 2000 %22.12. 2006 # T. Venkata Naayana. ….. Petitioner Vs. $ Girijan Cooperative Corporation Limited, Visakhapatnam, rep., by its Vice Chairman and Managing Director and others. …..Respondents ! Counsel for the petitioner: Sri Dr. K. Lakshmi Narasimha. ^ Standing Counsel for respondent corporation: Sri N. Sridhar Reddy, < Gist: >Head Note ? [1] 1999(3) SCC 679 2 (2006(8) Supreme 690 3 (2006) 4 SCC 713) 4 2002(5) ALD 406 (DB) 5 1995(1) ALD 500 6 AIR 1968 SC 266 7 AIR 1968 SC 236 8 1999(7) SCC 332 9 1996(10) SCC 659 10 2002(1) ALD 280(FB) 11 2004 (8) SCC 88 12 AIR 1961 SC 1070 13 1995(3) ALD 786 14 2000(1) ALT (Crl.) 84 15 AIR 1980 SC 840 16 1996(9) SCC 322 THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO.13557 OF 2000 ORDER: Seeking to have the proceedings, in Rc.No.5429/97. Admn. dated 10.9.1998, issued by the 1st respondent and the consequential notice, in Rc.No.B/176/97 dated 9.1.1999, issued by the 4th respondent quashed, the present writ petition is filed. In his proceedings dated 10.9.1998, the Vice-Chairman and Managing Director of the Respondent–Corporation, dismissed the petitioner from service treating the period of his suspension as “dies non” and further directed that he shall make good the loss caused to the respondent-corporation of Rs.54,034-10 with interest. Thereafter, the Senior Manager, Yellandu, (4th respondent), issued notice dated 9.1.1999 directing the petitioner to remit Rs.54,034-10 with 18% interest per annum within 15 days from the date of receipt of the notice. The petitioner was informed that, in case he failed to do so, necessary legal action for recovery would be initiated against him. Facts, in brief, are that the petitioner, a Junior Stores Assistant, while working in the Mahadevpur unit of the respondent–corporation, was placed under suspension, vide proceedings dated 2.12.1997, pending enquiry into certain allegations. The order of suspension continued to remain in force till the order of punishment of dismissal from service was imposed on him vide proceedings dated 10.9.1998. The Dy.General Manager (Admn.) issued proceedings dated 29.1.1998 framing 10 charges against the petitioner and called for his explanation. In reply thereto, the petitioner submitted his detailed explanation, vide letter dated 3.4.1998, denying all the charges. The 1st respondent, vide proceedings dated 2.7.1998, issued a provisional conclusion order proposing the punishment of dismissal from service. Along with the said order a copy of the enquiry report was enclosed calling upon the petitioner to submit his explanation thereto. The petitioner, in his letter dated 15.7.1998, submitted his explanation requesting that the proceedings be dropped. The 1st respondent, thereafter, passed the impugned order of punishment dated 10.9.1998. The petitioner preferred an appeal thereagainst on 28.10.1998. In this writ petition, the petitioner would question the competence of the 1st respondent to inflict on him the punishment of dismissal from service and contend that the competent authority to inflict punishment is the Regional Manager and that the appellate authority is the Managing Director. According to the petitioner since charge sheet was issued and the order of punishment was passed by the Managing Director, who is the appellate authority, the petitioner was deprived of his right of appeal. Petitioner would submit that Rule 4, which empowered a superior authority also to inflict punishment, was unconstitutional. Petitioner would contend that the enquiry officer did not conduct any enquiry, that merely on the basis of the statements recorded behind his back, during the preliminary enquiry, the enquiry officer had concluded that the charges were proved, that the persons, whose earlier statements were relied upon, were not produced for cross-examination. Petitioner would submit that, under the rules, it is the duty of the enquiry officer to establish the charge and afford an opportunity to the delinquent employee to cross-examine the witnesses. However, in the present case, as no witness was examined by the enquiry officer, the order of dismissal was contrary to law and was required to be set aside. Petitioner would also contend that the findings of the enquiry officer are perverse and are based on no evidence, that no documents were supplied to him along with the charge sheet and that the enquiry officer had recorded a finding of guilt against the petitioner based on his personal knowledge. Petitioner would contend that the 1st respondent, in his provisional conclusion order, had made up his mind to impose the punishment of dismissal from service on the petitioner and, since the entire exercise was pre-determined, the order of punishment stood vitiated and was required to be set aside. Petitioner would contend that, while passing the order of dismissal from service, the 1st respondent did not take into consideration any of the objections raised by him. According to the petitioner since the Disciplinary and Appeal Rules, governing employees of the respondent – corporation, provide for imposition of only one penalty, the order of punishment imposed on the petitioner was liable to be set aside as two punishments were imposed on him, one of dismissal from service and the other for recovery of Rs.54,034-10 ps along with interest at 18% per annum. Petitioner would submit that as dismissal from service is a major penalty, and recovery of the pecuniary loss caused to the corporation is a minor penalty, and since a major penalty can only be imposed after due enquiry, the respondents could not have imposed on him the major penalty of dismissal from service. In their counter affidavit, respondents would submit that the petitioner, while working as a Junior Stores Assistant at Yellandu in the year 1997, had misappropriated huge amounts and had caused them monetary loss and that, on the irregularities coming to his notice, the Assistant Project Officer, ITDA, Bhadrachalam had reported the same to the 1st respondent in his letter dated 26.11.1997. Respondents would contend that the irregularities committed by the petitioner were grave in nature, that he was the custodian of the stocks in the godown of GPCMS and was responsible for supply of provisions to the tribal hostels in the area and that he had resorted to forgery, cheating and misappropriation of amounts for his personal gain. According to the respondents the petitioner, without supplying stocks to the hostels, had raised bills, forging the signatures of the wardens, for a sum of Rs.54,034- 10 and it was in such circumstances that he was placed under suspension, vide proceedings dated 2.12.1997, pending enquiry and that, vide proceedings dated 2.12.1997, the Dy. General Manager (Admn.) was appointed as the enquiry officer to enquiry into the charges framed against him. Respondents would submit that, as many as 10 charges were framed against the petitioner, a charge memo was served on him and his explanation called for, that the material available for conducting the enquiry was enclosed to the charge memo, that the petitioner had submitted his explanation thereto on 3.4.1998 and had requested for examination of two witnesses on his behalf i.e., Golla Kanakaiah, Maistry/Hamali and B. Rajaiah, Maistry/Hamali, that the enquiry officer had conducted a detailed enquiry and had recorded the evidence of the then Manager on behalf of the department on 20.4.1998 and thereafter the petitioner and his witnesses were also examined. According to the respondents, the petitioner did not choose to cross-examine the departmental witnesses. They would contend that the records sought for by the petitioner were also provided, that the enquiry officer had furnished his report dated 6.6.1998 to the 1st respondent who, after considering the enquiry report, had issued the provisional conclusion order dated 2.7.1998, enclosing thereto a copy of the enquiry report, which was served on the petitioner on 4.7.1998. Respondents would submit that the petitioner had filed his explanation to the provisional conclusion order on 15.4.1998 and had referred to the enquiry report therein which established that he was in receipt of the enquiry report and all the other documents relied upon by the department. It is stated that, after considering his explanation and the findings in the enquiry report, a final order was passed, vide proceedings dated 10.9.1998, imposing on the petitioner the punishment of dismissal from service, treating the period of suspension undergone by him as “dies non” and directing him to make good the loss caused to the Corporation of Rs.54,034-10 with interest at 18% per annum. It is stated that the final order of dismissal from service was served on the petitioner on 6.10.1998 against which he preferred an appeal. As the term of the Board of Directors had expired, and as the new Board was not constituted, the petitioner had filed the present writ petition and this Court had granted interim stay of recovery. It is stated that, during the pendency of the writ petition, the Board of Directors was re-constituted and that the Board, vide proceedings dated 10.9.1999, had confirmed the order of the disciplinary authority. Respondents would submit that the petitioner had filed an application seeking amendment of the prayer to include a challenge to the validity of the order of the appellate authority. Respondents would state that the Vice-Chairman and Managing Director had the power to pass the impugned order dismissing the petitioner from service, that as per the service regulations the competent authority, or any superior authority, could initiate disciplinary action against a delinquent employee and, while the Regional Manager was the competent disciplinary authority to impose the punishment, the Vice-Chairman and Managing Director, a superior authority, was also empowered to pass the impugned order of dismissal from service. It is stated that the Board of Directors, vide resolution dated 11.8.1998, had conferred powers on the Vice- Chairman and Managing Director to impose the punishment of dismissal and removal from service on employees of all cadres. It is stated that since an appeal lies to the Board of Directors against the orders of the Vice-Chairman and Managing Director, and as the petitioner had invoked this remedy of appeal, the contention that he had lost his right of appeal was not tenable. Respondents would submit that the enquiry officer had conducted a detailed enquiry and had examined witnesses both on behalf of the department and the petitioner. They would deny that no enquiry was conducted and submit that these allegations were made only to prejudice this Court. It is stated that sufficient opportunity was given to the petitioner to peruse the records and that he had availed such an opportunity. Respondents would state that the petitioner never complained that the enquiry was conducted arbitrarily or that he was not permitted to peruse the records of the Corporation. It is stated that the order dismissing the petitioner from service was passed by the Vice- Chairman as the charges held established included that of forging the bills and misappropriation of huge amounts. Respondents would state that the Corporation is empowered to recover the loss caused to it. In his rejoinder, the petitioner would reiterate that the department had not produced any witnesses during the enquiry for cross-examination, that this was clear even from the provisional conclusion order as well as the final order passed by the respondents wherein there was no mention about the evidence of the official witnesses and, if there was any truth in their contention that the witnesses had been examined and that he did not choose to cross-examine them, nothing prevented the department from recording their evidence during trial, that on the contrary there was no whisper about their witnesses or of what they had stated during the enquiry and that the department had relied upon some letters supposed to have been written by them without examining those persons and without giving the petitioner the opportunity of cross-examining them. Petitioner would reiterate that no official or departmental witnesses were examined nor allowed to be cross-examined by him during the enquiry and that the entire action was vitiated for violation of principles of natural justice. Petitioner would contend that the impugned order of punishment does not refer to any of the witnesses having been examined on behalf of the department or the date on which they were examined by the enquiry officer or what was the cross-examination done by him and, in the absence of such averments, it was not open to the respondents to state, for the first time in their counter affidavit, that witnesses were examined in the enquiry. Petitioner would contend that the witnesses referred to in the counter affidavit were his witnesses and not that of the department. Petitioner would emphasize that the counter affidavit was silent as to the name of the departmental witnesses examined in the enquiry and the date on which they were examined. Petitioner would reiterate that two punishments were imposed on him and that, on this score also, the impugned order of punishment was liable to be set aside. Dr.K.Lakshmi Narasimha, learned counsel for the petitioner, would seek to have the impugned order of punishment quashed on the following grounds: 1. The charges levelled against the petitioner in the departmental enquiry were identical to the charges levelled against him in C.C.246 of 1999 in the Court of the Judicial Magistrate of First Class, Yellandu. As the criminal case was dismissed, and the petitioner was held not guilty of the charges under Sections 468, 471 and 409 I.P.C., the order of punishment, based on the departmental enquiry held on the very same charges, and on the very same set of facts, stood vitiated and was required to be set aside. Learned counsel would rely Capt. M. Paul Anthony Vs. Bharat Gold Mines Limited[1] and Jasbir Singh v. Punjab & Sind Bank[2]; 2. No witnesses were examined in the departmental enquiry in the presence of the petitioner nor was the petitioner afforded an opportunity of cross-examining them. Reliance was placed on statements recorded behind the petitioner’s back to hold him guilty of the charges. 3. The evidence of witnesses examined behind the back of the petitioner, and without giving him the opportunity to cross-examine them, must be eschewed. As there was no other evidence, to establish the charges levelled against the petitioner, the order of punishment, based on the findings of the enquiry officer relying on such evidence, was liable to be quashed. 4. The Discipline and Appeal Regulations of the respondent – corporation provides that only one punishment can be imposed. As two punishments had been imposed on the petitioner i.e., (1) dismissal from service and (2) recovery of the pecuniary loss caused to the Corporation, the impugned order of punishment was liable to be set aside. Learned counsel would contend that, on the impugned order of punishment being set aside, the petitioner is entitled to be reinstated into service with all consequential benefits. Learned counsel would rely on Narinder Mohan Arya Vs. United India Insurance Co.Ltd [3] in this regard. Sri N.Sridhar Reddy, Learned Standing Counsel for the respondent-corporation, on the other hand, while fairly conceding that the statement in the counter affidavit, that the departmental witnesses were examined first and thereafter the petitioner and his witnesses were examined, was erroneous, would submit that on 20.4.1998, while the witnesses on behalf of the petitioner were examined, on the next day i.e., 21.4.1998 the evidence of Sri T.Mahender Reddy, Senior Manager, Yellandu was recorded. Learned Standing Counsel would submit that, since the then senior manager had deposed in the enquiry, and the petitioner had failed to avail the opportunity of cross-examining him, the mere fact that the petitioner had chosen not to cross-examine the said witness would not vitiate the enquiry. Learned Standing Counsel would submit that, even if the petitioner is held to have been denied the opportunity of cross-examining the witnesses, since a perusal of his explanation to the charge memo would establish that he had admitted his guilt, at least in respect of some of the charges, violation of principles of natural justice during the course of enquiry was of no consequence, since the petitioner could have been imposed the punishment of dismissal from service merely on the basis of his admission and the departmental enquiry was a needless formality and a superfluous exercise. Learned Standing Counsel would submit that, even if some of the charges are held to be established on the basis of the admissions of the petitioner, the respondents were entitled to impose on him the punishment of dismissal from service. According to the Learned Standing Counsel, this Court, in proceedings under Article 226 of the Constitution of India, would not sit in appeal over the decision of the disciplinary authority on the nature and extent of punishment to be imposed. Learned Standing Counsel would submit that, even if this Court were to hold that the disciplinary proceedings were vitiated for violation of principles of natural justice, as the allegations levelled against the petitioner were grave and serious, the respondents must be given the liberty to now hold an enquiry in compliance with principles of natural justice and, thereafter, take action against the petitioner in accordance with law. Learned Standing Counsel would submit that, in certiorari proceedings, an enquiry by this Court was limited only to the validity of the order and it was not open to the petitioner to contend that, once the order of punishment was quashed, he should be reinstated into service. Learned Standing Counsel would contend that, while the charges in the disciplinary proceedings and in the criminal case may be similar, the judgment in Capt. M. Paul Anthony1 and Jasbir Singh2 could not be applied to this case as the evidence adduced in the departmental enquiry was not identical to the evidence let in the criminal case. Learned Standing Counsel would submit that, even if the impugned order of punishment is quashed and liberty is given by this Court to complete the enquiry in accordance with principles of natural justice, it was always open to the respondents to produce witnesses, other than those examined in the criminal case, to establish the charge. According to the learned standing counsel the only punishment imposed on the petitioner was that of dismissal from service and the very fact that action had been initiated against him, under the provisions of the A.P. Cooperative Societies Act, for recovery of the pecuniary loss caused to the corporation, would establish that the second punishment, of recovery of the pecuniary loss caused to the corporation, had not been imposed. Learned Standing Counsel would submit that the respondents were entitled to recover the amount of pecuniary loss caused to the Corporation and, since the recovery proceedings initiated under the A.P. Cooperative Societies Act was not as a direct consequence of the disciplinary enquiry, it would not amount to a punishment merely because recovery of pecuniary loss is enumerated as one of the minor penalties. Before examining the rival contentions it is necessary to refer to the relevant rules and applicable provisions:- DISCIPLINARY, PUNISHMENTS AND APPEAL RULES:- 1. An employee who commits a breach of the Rules of the Corporation or who displays negligence, inefficiency, disobedience or indolence or who knowingly does anything detrimental to the interests or prestige of the Corporation who commits a breach of discipline or is guilty of any other act of misconduct or misbehaviour shall be liable for any one of the penalties specified in Rule (2) below: 2. NATURE OF PENALTIES: The following penalties may for good and sufficient reasons and as hereinafter provided, be imposed on an employee referred to in Rule (1) above. a) Minor Penalities I) Censures II) Fine (to be imposed only on categories VIII and below) III) With-holding of increments or promotion. IV) Recovery from pay of the whole or any part of pecuniary loss caused to the Corporation. b) Major Penalties V) Suspension (where an employee has been kept under suspension pending enquiry) VI) Reduction to a lower rank in seniority list or to a lower post not being lower than that to which he was directly recruited or to lower time scale not being lower than that to which he is directly recruited or to a lower stage in a time scale. VII) Compulsory retirement. VIII) Removal from service which does not disqualify him for future employment in the Corporation to a post lower than the one from which he is removed. IX) Dismissal from service which disqualified him for future employment. Appendix-E prescribes the procedure to be followed in inflicting punishments and the relevant clauses therein are referred to hereunder:- 2. REQUEST FOR AN ORAL ENQUIRY AND/OR TO BE HEARD IN PRESENCE: a) if within the prescribed time or such further time as the enquiry officer may give, no written statement in defence is filed and no request, in writing, is made for oral enquiry or for being heard in person or if the delinquent officer absents himself without sufficient reason to attend the enquiry on the date fixed, it is always better that the enquiring officer proceeds with the enquiry ex-parte to satisfy himself about the truth of the charges. An enquiry must necessarily be held where the employee asks for it or has expressed a desire to be heard in person, or having regard to the written statement in defence, or the statement made by the employee himself when he is heard in person, a further enquiry is necessary to decide the truth of the charges. B) The Enquiring Officer shall examine the delinquent orally, if he desires to be heard in person. The delinquent should not be compelled to be a witness against himself. 3. RECORDING OF EVIDENCE. a) At the oral enquiry evidence should be heard on charges which are not admitted. The enquiry, however, should not extend to matters not mentioned in the charge sheet. b) The evidence in support of the charges should be recorded first and the accused employee given an opportunity to cross-examine the witness. c) The evidence of each witness should be recorded in the form of a narrative and within the evidence is completed it should be read to the witness, and if necessary, explained to him in the language in which it was given. If the witness denies the correctness of any part of the evidence, when it is read over to him, the Enquiry Officer may either carry out the correction, or instead of correcting the evidence, make a memorandum of the objection taken and add such remarks as he thinks necessary. Then the statement shall be signed by the Enquiry Officer. Copies of such evidence as are required by the accused employee should be supplied to him free of costs. NOTE: No document or statement produce or recorded at the preliminary enquiry can be relied on at the regular enquiry, unless such document is duly proved on the person who made the statement in regular enquiry or unless such document or statement is admitted by the accused employee. 7. ENFORCING THE ATTENDANCE OF WITNESS: The officer holding the enquiry has no power to enforce the attendance of any non official witnesses. As regards official witnesses he should be able to procure their presence either by writing to them direct or through the administrative heads of appropriate levels. Normally, the request to call on official witness should not be rejected. When, however, it appear, that the request is frivolous or vexatious, that it is made with a view to unnecessarily prolong the enquiry and that the facts which he is expected to speak to (according to the statement of the accused are not relevant for the purpose of enquiry) the request should be refused and the reasons thereof recorded in writing and communicated to the delinquent Officer. 8. Inspection of documents by the employee concerned: The enquiry officer should give every reasonable facility to the accused employee to inspect any documents or records necessary for the purpose of preparing his defence. Such inspections should be arranged in the presence of a responsible officer to ensure that the records are not tempered with in any manner. 9. Enquiry Officer’s responsibility: It is the Enquiring Officer’s responsibility to arrive at the truth or falsity of