IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1122 OF 1991 WRIT PETITION NO.1122 OF 1991 WRIT PETITION NO.1122 OF 1991 Anil Kumar Copra ) Flat No.301, Bldg. ) No.A-1/61, Gokuldham, ) Film City Road, ) Gorgeous (East), ) Bobby 400 063 )..Petitioner. Vs. 1. Ms.Engineers India Ltd. ) Express Towers, 5th Fr., ) Marksman Point, ) Bobby 400 021. ) ) 2. M.Brackish, Enquiry Officer) Co.Engineers India Ltd., ) 1-Bhikaji Cama Place, ) New Delhi 110066. ) ) 3. R.N.Seth, Disciplinary ) Authority, C/o. Engineers ) India Ltd., 1-Bhikaji Cama ) Place, New Delhi 110066 )..Respondents. Mr.J.P.Cama, with Mr.K.P.Anilkumar, Advocates for the Petitioner. Mr.P.K.Rele with Mr.S.S.Pakale, Advocates for the Respondents. CORAM: S.RADHAKRISHNAN AND CORAM: S.RADHAKRISHNAN AND CORAM: S.RADHAKRISHNAN AND S.J.VAZIFDAR, JJ. S.J.VAZIFDAR, JJ. S.J.VAZIFDAR, JJ. DATED: DATED: DATED: 15TH SEPTEMBER, 2004 15TH SEPTEMBER, 2004 15TH SEPTEMBER, 2004 ORAL JUDGMENT : ORAL JUDGMENT : ORAL JUDGMENT : (Per S.J.Vazifdar, J.) The Petitioner has challenged the enquiry held against him, sought a writ of certiorari to quash and : 2 : set aside an order of termination dated 2.4.1990 and the Appellate Order dated 3.4.1991 and for a writ of mandamus directing the Respondents to reinstate him with full back wages, consequent benefits and continuity of service with seniority. 2. The Petitioner was an employee of Respondent No.1. The Petitioner joined the services of the first Respondent on 21st September, 1981 as an Engineer (Inspection) at New Delhi. He was promoted as the Deputy Manager of the first Respondent on 1.7.1983 and at the time of his dismissal he was a Deputy Manager (Inspection). Respondent No.2 M. Prakash, was the Enquiry Officer and Respondent No.3 R.N.Seth was the Disciplinary Authority. 3. The Petitioner was entrusted with the responsibility of inspecting/expediting on behalf of the first Respondent, forty five vendors/sub-vendors for orders placed on them in respect of various projects. M/s.Chemplant Engineers, M/s.V.H.Engineers, M/s. Vijay Tanks & Vessels (P) Limited (M/s. VTV), M/s.Richardson & Cruddas Limited (M/s.R & C), M/s.ABC Equipment Industries (M/s.ABC) were five such vendors/sub-vendors. : 3 : 4. M/s.Chemplant Engineers was entrusted with the job of supplying eight vessels ordered by M/s.Indian Petrochemicals Corporation Ltd. Inspection and expediting the orders was the scope of the first Respondent’s work. M/s.Chemplant Engineers was also entrusted with the job of supplying four salt water tanks, four potable water tanks and two diesel storage tanks ordered by M/s.Mazgaon Docks Ltd. Inspection of the same was within the first Respondent’s scope of work. Mazgaon Docks Ltd. was given the contract by O.N.G.C. for the same. M/s.Chemplant Engineers were therefore sub-vendors in respect of these orders. Lastly, M/s.Chemplant Engineers was also to supply two potable water tanks and two diesel storage tanks to M/s.Hindustan Shipyard Ltd. who, in turn, had obtained the contract for the same from O.N.G.C. M/s.Chemplant Engineers were therefore sub-vendors. In respect of this order inspection was within the scope of the first Respondent’s work. 5. It is admitted by the Respondents that M/s.Chemplant Engineers were not on the approved list of vendors of M/s.Indian Petrochemicals Corporation : 4 : Ltd. and that the orders had been placed on them against the recommendation of the first Respondent. What is more important to note is that it is also admitted by the Respondents that the execution of the work by M/s.Chemplant Engineers was sub-standard and defective. According to the Petitioner, he pointed out the bad workmanship, non-deployment of qualified welders and the various short-falls in the required standards on the part of M/s.Chemplant Engineers and insisted that certain tests be conducted by them before passing the said equipment. M/s.Chemplant Engineers had requested him not to reject some of the equipment in view of the servere financial difficulties faced by them. The Petitioner’s contention is that his refusal to certify the said equipment upset M/s.Chemplant Engineers, who retaliated by lodging false complaints against him with the Respondent. Admittedly, the enquiry was initiated essentially pursuant to the complaint of M/s.Chemplant Engineers. 6. By a letter dated 15.6.1988 the Petitioner was placed under suspension. Thereafter, the Petitioner was served with a charge-sheet dated 24.6.1988. It : 5 : is necessary to reproduce the charges therein in extenso. They read as under : "1.(a) While working as Dy.Manager (Inspection) at EIL Branch Office, Bombay, you were assigned work responsibility of inspection and expediting of various equipments ordered by Company’s cients at works of vendors/sub-vendors at Bombay. (b) It has been alleged that in the course of discharge of your assigned duties, you indulged in coercive tactics with a view to extract illegal gratification from some of the vendors/sub-vendors. You have accepted such gratifications, in monetary terms particularly from M/s.CHEMPLANT Engineers; Panna Lal Silk Mills Compound, LBS Marg, Bhandup, Bombay-400 078 and M/s.V.H.Engineers, Harichand Mill Compound, LB Shastri Marg, Vikhroli, Bombay-400079, who were amongst the vendors/sub-vendors where you were inspecting and expediting equipment orders." In paragraph 2 it is stated that the aforesaid acts constituted serious acts of mis-conduct under : 6 : the Discipline, Appeal and certain other conditions of service rules for officers. There is no dispute that if the charges were established the same would constitute serious acts of mis-conduct entitling the Respondents to dismiss the Petitioner. It is therefore not necessary to set out the rules in this regard. 7. The domestic enquiry commenced on 28th September, 1988 and concluded on 20th May, 1989. It was held by the Enquiry Officer i.e. Respondent No.2, who was appointed by the third Respondent i.e. the Disciplinary Authority, Fourteen witnesses were examined. Respondent No.2 submitted his finding dated 30.11.1989 to Respondent No.2 holding the Petitioner guilty of the charges levelled against him. The enquiry officer had referred certain objections raised by the Petitioner to the Disciplinary Authority as he was of the opinion that he was not competent to deal with the same. The Disciplinary Authority dealt with these objections in the said order of termination dated 2.4.1990 and rejected all the Petitioner’s objections. Respondent No.3 on the basis of these findings issued the said order of termination dated 2.4.1990 by way of : 7 : punishment. The said findings of the Enquiry Officer and the order of termination dated 2.4.1990 are challenged in this Petition which was filed on 26.3.1991. Thereafter, the Appellate Authority of the first Respondent agreeing with the conclusions of the Enquiry Officer, by his order dated 3.4.1991 dismissed the Petitioner’s Appeal. The Petitioner therefore amended the Petition and challenged the order of the Appellate Authority dated 3.4.1991. PRELIMINARY OBJECTION 8. Mr.Rele, the learned Senior counsel appearing on behalf of the Respondents raised a preliminary objection as to the maintainability of the Writ Petition. He submitted that Respondent No.1 was an independent Company and constitutes a separate legal entity, distinct from the State and is therefore not amenable to the writ jurisdiction of this Court. We are unable to agree. 9. Respondent No.1 is controlled substantially, if not wholly, by the Government of India. The : 8 : President of India has subscribed to 51% of the share capital of Respondent No.1. Bechtel International Corporation and one of its Directors R.M.Dorman, a citizen of the United States of America have subscribed to 24% and 25% respectively of the share capital of Respondent No.1. However, the Memorandum and Articles of Association of Respondent No.1 make it clear beyond doubt that Respondent No.1 is controlled substantially in almost every significant respect by the Government of India. This is clear from Articles 53, 54, 83, 84, 98, 99, 103 and 104 of the Articles of Association of the Company. 9(a). Article 53 confers the power on the Board of Directors to borrow money. The Directors however may secure the repayment of such money only subject to the approval of the President. 9(b). Articles 83, 84, 94, 99, 102(a) establish that the power to appoint the Board of Directors including the Chairman and Managing Director, as also the power to replace the Directors vests exclusively with the President of India read as under : DIRECTIONS DIRECTIONS DIRECTIONS : 9 : "83. The number of Directors of the Company shall be not less than five and not more than eleven, all of whom will be appointed by the President of India, who will prescribe the period for which they will hold office as Directors and may remove them and appoint others in their places and fill in any vacancy that may occur." "84. The President of India may appoint one or more of the Directors as full-time Directors to render advice to the Managing Director on such matters as the Board may prescribe." MANAGING DIRECTOR MANAGING DIRECTOR MANAGING DIRECTOR "94. The President of India will appoint one of the Directors as a Managing Director." "99. The Chairman of the Board of Directors shall be nominated annually by the President of India from the Directors of the Company. The Chairman of the Board shall preside over all meetings of the Board..... "102(a) Questions arising at any meeting shall be decided by a majority of votes and in case of an equality of votes the Chairman shall have a second or casting vote." (c). Articles 102(b) and Article 102(d) further establish that the financial control also vests substantially in the Government of India and read as under : : 10 : "102(b) The Chairman shall reserve for the decision of the President any proposals or decisions of the Directors in any matter which in the opinion of the chairman is of such importance as to be reserved for the approval of the President. No action shall be taken by the Company in respect of any proposal or decision of the Directors reserved for the approval of the President as aforesaid until his approval to the same has been obtained." "102(c) Without prejudice to generality of the above provision the Directors shall reserve for decision of the President : (i) a. Creation of posts of Chairman, Managing Director, Functional Directors and/or any other members of the Board of Directors. b. Appointments in the higher categories of posts (Rs.2500-3000 and above) of persons who have attained the age of 58 years whether they are from the public or private sector. c. Appointments to the posts of General Managers of constituent units will be made by the Board of Directors. The Board shall however, follow the procedure laid-down by the Government in the matter of selection of General Managers. : 11 : (ii) Any matter relating to the sale, lease, exchange, mortgage and/or disposal otherwise of the whole or substantially the whole of undertaking of the Company or any part thereof the original or book value of which exceeds 10 lakhs rupees. (iii) Any matters relating to : (a) the promotion of company/companies; (b) entering into partnership and/or arrangement for sharing profits; (c) formation of subsidiary company/companies; (d) taking or otherwise acquiring and holding shares in any other companmy or investment in securities; (e) division of capital into different classes of shares; (Amendment in 28th AGM held on 27.9.1993) (f) undertaking works of capital nature involving capital expenditure exceeding Rs.5 crores. (g) setting aside a : 12 : portion of the profits of the Company to form a fund to provide for such pensions, gratuities or compensation or to create any provident or benefit fund in such a manner as the Directors may deem fit; (h) to approve agreements involving foreign collaboration proposed to be entered into by the Comapny; (i) to issue such directions or instructions as the President may consider necessary in regard to the exercise and performance of the Company’s functions in matters involving security or substantial public interest. The Directors shall dully comply with and give immediate effect to directions or instructions so issued; (j) to call for such returns, accounts and information with respect to the property and activity of the : 13 : Company as will be required from time to time; (k) i) to authorise the amount of capital to be raised and the terms and conditions on which it may be raised; ii) to approve the enterprises five year and annual plans of development and the enterprises capital budget; iii) to sanction expenditure in case of variations in approved estimates beyond 10% for any particular component parts thereof; and iv) to approve the enterprises revenue budget in case there is an element of deficit which is proposed to be met by obtaining funds from the Government" 102(d) Notwithstanding anything contained in any of the articles, the President may from time to time issue such directives or instructions as may be considered necessary in regard to the finances, : 14 : conduct of business and affairs of the company. The company shall give immediate effect to the directives or instructions so issued." (d). Under Article 143, the auditors of the Company are to be appointed or re-appointed by the Central Government on the advice of the Comptroller and Auditor General of India who is also vested with the powers of directing the manner in which the Companies Accounts are to be audited. 10. Respondent No.1 is therefore financially, functionally and administratively dominated by and under the control of the Government of India. The Government of India indeed has a deep and pervasive control of Respondent No.1. 11. Mr.Rele however submitted that, in fact, the Government of India does not exercise its rights conferred upon it by the Articles of Association in controlling Respondent No.1. 12. Firstly, we are unable to find anything on record which establishes the same. Secondly, whether in fact the Government exercises such rights is not : 15 : relevant. What is relevant is that the Government has the right of such control over Respondent No.1. Even assuming that the Government does not in fact exercise such rights, it is in law entitled to do so at any point of time. 13. Mr.Rele also submitted that Respondent No.1 is not financed by the Government of India. Once again, the record does not establish the same. The Supreme Court in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology & Ors., (2002) 5 Supreme Court Cases, 111, held as under : "40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be - whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State." : 16 : 14. It is important to note that the Supreme Court has held that in order to constitute an entity an Authority within the meaning of that expression in Article 12, it is necessary that the body is financially, functionally and administratively "dominated by and under the control of the Government". The Supreme Court has not held that it is also necessary that the body is financed entirely by the Government of India to constitute it an Authority. Even assuming that the first Respondent is partly financed by entities other than the Government of India, that fact alone would not exclude it from the ambit of the expression "authority" within the meaning of that expression in Article 12 of the Constitution of India. 15. In the circumstances, we reject the preliminary objection and hold that the Petition is maintainable against Respondent No.1. This brings us to the merits of the case. 16. We have with the elaborate assistance of counsel gone through the enquiry proceedings extensively and in considerable detail. This was necessary as apart : 17 : from strongly contending that the chargesheet was vague, Mr.Cama, the learned Senior counsel appearing on behalf of the Petitioner impugned the entire decision making process. The record supports the Petitioner’s case to the hilt. That the chargesheet is vague is one thing. We find that it was deliberately kept vague. We have also come to the conclusion that the entire enquiry is vitiated for several reasons. There has been a complete violation of the rules of natural justice. For instance, the Petitioner was prevented from effectively cross-examining the witnesses, he was denied access to important documents, his case has not been considered by the impugned orders fully, he was pressurised, threatened and brow beaten during the course of the enquiry. We also find that this was not a result of any formal error in procedure. It was a direct consequence in many ways of the Respondents predetermining the case. This is apparent from the face of the record produced by the Respondents themselves. 17. Mr.J.P.Cama, the learned Senior counsel appearing on behalf of the Petitioner firstly submitted that the charge-sheet was vague. The : 18 : submission is well founded. Indeed, Mr.Rele did not dispute the same. The charge-sheet does not furnish details adequate to enable the Petitioner to meet the charges. There are no details regarding the alleged coercive tactics adopted by the Petitioner. The charge-sheet does not even mention the name of the person who allegedly paid the money to the Petitioner. There are no details of when the amount was allegedly paid. This aspect is, in fact, important and not merely technical for as we shall presently see, the date on which the money was allegedly paid to the Petitioner, the Petitioner was not even in Mumbai. Even relevant documents were not supplied to the Petitioner. 18. On receiving the chargesheet, the Petitioner by his letter dated 27.9.1988 expressly pointed out that it was vague, and bereft of material particulars and that the relevant documents were not supplied to him. 19. What is even more significant is the fact that the charge-sheet is vague and devoid of any particulars despite the fact that the proceedings were initiated by Respondent No.1 solely on a complaint received from M/s.Chemplant Engineers dated : 19 : 13.6.1988. Respondent No.1 has not justified or even explained why the complaint dated 13.6.1988 or even the details therein did not find place in the charge-sheet. 20. Respondent No.1 apparently carried out "investigations" on receipt of M/s.Chemplant Engineer’s complaint and prepared a report. Neither the report nor the details thereof were furnished to the Petitioner. Even the documents referred to therein were not furnished. There is no explanation why Respondent No.1 did not furnish the same. 21. Mr.Rele’s defence in this regard however was that pursuant to the Petitioner’s request a copy of the letter dated 13.6.1988 was in fact forwarded to the Petitioner. We will assume for the purpose of this judgment that had the letter dated 13.6.1988 contained adequate particulars, the charge-sheet could not be said to be vague. However, it is important to note that even in this letter there are no details of who from or on behalf of M/s.Chemplant Engineers paid the money to the Petitioner. The only details are that an amount of Rs.10,000/- was paid in cash on 12.3.1988 and a further amount of Rs.10,000/- : 20 : was paid on 9.5.1988. Nor are there any details in that letter as to who from or on behalf of M/s.Chemplant Engineers negotiated the transaction with the Petitioner. These details were revealed during the course of the enquiry. The manner in which they were revealed and dealt with was, to say the least, peculiar and important - as aspect we shall deal with while considering the decision making process. It is pertinent to note at this stage however that what was stated by M/s.Chemplant Engineers at the enquiry does not find place even in the inquiry report (Exhibit "I" to the Petition). Surprisingly, all this has gone totally unnoticed in the impugned orders. 22. The complaint is signed by one K.S.Pai, Managing Partner of M/s.Chemplant Engineers. In the complaint, M/s.Chemplant Engineers allege having bribed the Petitioner. The complaint was made only after the Petitioner did not pass their equipment. In the letter dated 13.6.1988 they have mentioned that, "At the same time we are writing this not because the said inspector (Petitioner) has given the rejection memo but to stop this type of attitude through which name of your organisation (Respondent : 21 : No.1) & the reputation EIL, Bombay has gained through years of good work from the past and the present all other executives". We find this stand hollow. Respondent No.1 admits that the equipment supplied by M/s.Chemplant was sub-standard and that the person employed by M/s.Chemplant for execution of the order were untrained. That the complainant is thoroughly unscrupulous and dishonest is admitted by the Respondents. The complainants themselves confess their dishonesty. Such a complaint would necessarily require investigation before making allegations against an employee of Respondent No.1. Even though it may not be relevant to prove the innocence or otherwise of the Petitioner, we cannot help but note that the complainant’s word cannot be taken at face-value especially as the complainant is a self-confessed unscrupulous dealer. Indeed, we are surprised that Respondent No.1 has not even taken any effective action against M/s.Chemplant Engineers for their criminal conduct and, instead, has taken action only against its employee who did not pass the admittedly sub-standard equipment, sought to be supplied by M/s.Chemplant. 23. In the facts of this case there was neither any : 22 : reason nor justification for not furnishing the Petitioner prior to the enquiry all details and documents. The failure to do so has resulted in a miscarriage of justice. 24. Mr.Cama relied upon the judgment of a learned Single Judge of this Court (B.N. Srikrishna, J., as His Lordship then was) in Miraj Taluka Girni Kamgar Sangh v. The Manager, Shree Gajanan Weaving Mills, Sangli & Ors. reported in (1991) (2) C.L.R., 714 where it was held, "An employee faced with a vague charge that he is guilty of a described type of misconduct, would be extremely hard put to defend himself against the charge unless he is informed such particulars as would enable him to give an effective reply thereto and demonstrate that the charges are false or, otherwise not acceptable. Scanning the chargesheet given to the petitioner in the present case, I am of the view that it can be used as a model for what a chargesheet ought not to be. In my judgment, therefore, the chargesheet itself ought to have been quashed and struck down by the two Courts below on this very count. The fact that voluminous evidence is led in enquiry is no substitute for a chargesheet clearly setting forth the allegations with sufficient : 23 : precision and particulars so as to enable the employee to defend himself. That is the very purpose of a chargesheet. This is the barest requirement of a chargesheet consistent with principles of natural justice and any chargesheet which fails to comply with this requirement is no chargesheet at all. If the chargesheet fails to stand up to this test, the rest of the domestic enquiry is useless and is merely an eye-wash." (emphasis supplied). 25. We are in respectful agreement. In fact, in the present case, as we shall demonstrate, the vague chargesheet has demonstrably prejudiced the Petitioner’s defence. Further, the facts and circumstances of the case indicate that the chargesheet was deliberately kept vague to prejudice the Petitioner. It appeared to us at the end of the hearing that the result was pre-determined - the Respondents had decided in advance to find the Petitioner guilty and to punish him. 26. The above judgment was followed by another learned Single