IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.609 of 2007 ====================================================== Prosanta Kumar Ray, son of Shri Mohan Lal Ray, Flat No. 54-B, Pocket-B, DDA, SFS Flats, Mayur Vihar, Phase-3, Delhi-110096, Executive Director (Finance), Pyrites, Phosphates & Chemicals (Ltd.), Amjhore, District Rohatas, Bihar .... .... Petitioner Versus 1. Union of India through the Secretary (Fertilizers), Ministry of Chemicals and Fertilizers Department of Fertilizers, Shastri Bhawan, New Delhi 2. The Secretary (Fertilizers), Ministry of Chemicals and Fertilizers, Department of Fertilizers, Shastri Bhawan, New Delhi 3. The Board of Directors, the Pyrites Phosphates & Chemicals Ltd. (A Govt. of India Undertaking), Corporate Office, 12-A, Sector-24, NOIDA, UP 4. The Pyrites, Phosphates & Chemicals Ltd. (A Govt of India Undertaking), Corporate Office, 12-A, Sector-24, NOIDA, UP through its Chairman-cum-Managing Director 5. The Chairman-cum-Managing Director, Pyrites, Phosphates & Chemicals Ltd. (A Govt. of India Undertaking), Corporate office, 12-A, Sector-24, NOIDA, U.P. cum-the Director (Fertilizers), Ministry of Chemical & Fertilizers, Department of Fertilizers, Shastri Bhawan, New Delhi. .... .... Respondents ====================================================== Appearance : For the Petitioner/s : M/S Ranjit Kumar Dubey, Ram Prawesh Kumar, Advocates For the Union of India : Mr.S.M.Iqbal Hasan Rahmani, CGC For O.L. S.K.Banerjee : Mr.Subhash Chandra Mishra, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER 35 24-08-2012 Heard learned counsel for the petitioner, learned Central Government Counsel and learned counsel for the Official Liquidator. The petitioner has filed the present writ application for quashing the order dated 3.3.2005 issued by the Chairman-cum- Managing Director, Pyrites, Phosphates & Chemicals Ltd. by Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 2 which after holding that the petitioner had voluntarily abandoned his service and accordingly in exercise of powers conferred by clause (ii) of Rule 30 of PPCL Conduct, Discipline and Appeal Rules, 1987 it has been decided to impose the penalty upon the petitioner of being struck off from the rolls of the Company with immediate effect. The petitioner also seeks quashing of the letter dated 2.6.2006 communicating the decision of the Board of Directors at its meeting held on 22.5.2006 rejecting the memorandum of appeal dated 7.4.2005 filed by the petitioner against the order dated 3.3.2005. The petitioner also seeks a direction on the respondents for acceptance of his option of relieving under Voluntary Separation Scheme (VSS) filed on 3.1.2003 in terms of the circular dated 30.9.2002 with effect from 4.3.2005. Further reliefs have been sought by the petitioner with respect to sanction of leave for certain period and payment of arrears of salary from February, 2004 to 3.3.2005 and arrears of due bills and claims as stated in paragraph-38 of the writ petition. The petitioner joined Pyrites, Phosphates & Chemicals Ltd. on 6.1.1998 as Sr.General Manager (Finance) in the Corporate Office at NOIDA (UP). The said company was a Government of India Undertaking, having its Corporate Office at 12-A, Sector-24, NOIDA (UP) controlled by the Government of Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 3 India, Ministry of Chemical & Fertilizers, Department of Fertilizers. Subsequently on 6.7.1998 the petitioner was promoted as Executive Director (Finance) and continued to function as Head of Finance Accounts of the Company as a whole in the Corporate Office at NOIDA. On 20.4.2000 the Board for Industrial and Financial Reconstruction (BIFR) while considering the case of the company directed not to dispose of any fixed or current assets of the company without its prior permission. Subsequently by order dated 20.11.2002 the BIFR recommended that the company PPCL should be wound up under Section 20(1) of the Act and forwarded the copies of the proceedings to this Court for necessary action in accordance with law. This Court in its Company Jurisdiction ultimately on 12.7.2007 passed the order for winding up of the company. It is pointed out that the winding up petition was filed on the basis of recommendation of BIFR on 21.12.2002 while the winding up proceedings itself commenced on 3.1.2003 which would be the effective date after the final winding up order was passed on 12.7.2007. In the meantime, the Government of India conveyed its approval regarding closure of Dehradun and Saladipura Units with extension of Voluntary Separation Scheme benefit to all the employees of the said Units/Establishments. Again by letter dated Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 4 27.9.2002 the Board of Directors of the company conveyed the decision of the Government of India regarding the extension of Voluntary Separation Scheme between 4.10.2002 to 3.1.2003 to all regular employees of Dehradun Unit and Saladipur Unit and South Marketing Zone of Company failing which all the workmen would be eligible for retrenchment compensation as per ID Act, 1947 and the officers will be relieved as per the terms of their appointment in the company. By another letter dated 30.9.2002 the Board of Directors of the company conveyed the decision of the Government of India regarding extension of VSS with effect from 4.10.2002 to 3.1.2003 to all employees of the Corporate Office, Registered Office and Marketing Division (excluding South Marketing Zone) of the company failing which all the workmen would be eligible for retrenchment compensation as per ID Act, 1947 and the officers will be relieved as per the terms of their appointment in the company. Pursuant to the circular dated 30.9.2002 the petitioner applied on 3.1.2003 for being given the benefit under the Voluntary Separation Scheme. On 16.6.2003 the Government of India conveyed its approval in respect of closure of Amjhore Unit and all the remaining Units/Establishments of the entire PPCL with extension of VSS benefits to all the employees. On 20.6.2003 the Board of Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 5 Directors conveyed the said decision regarding the closure of Amjhore Unit and directed to avail the benefit of VSS failing which the consequences mentioned earlier would operate. It is the case of the petitioner that the Chairman-cum-Managing Director of the company relieved almost all the employees under the VSS retaining just a few and the request of the petitioner in that regard was kept pending by the respondent No.5. It is the stand of the petitioner that on some official issues differences occurred between the petitioner and the Chairman-cum-Managing Director of the company, specially with regard to the implementation of VSS which the petitioner wanted to be implemented as was clear from the approval granted by the Board of Directors which was not liked by the CMD. Thereafter several orders harassing the petitioner were issued one after another by the then CMD including restricting the reimbursement of telephone charges to Rs.500/- per month, as against the actual expenses earlier in respect of telephone installed at the residence of the petitioner at par with other junior level officer such as Staff Assistant; instruction in writing on 30.9.2003 to the petitioner for security and disposal/destroying of old records, old books, etc. as lying in the basement of the corporate office premises with personal responsibility to be attended on priority No.1 with daily reporting Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 6 of progress to the CMD; another office order dated 29.10.2003 withdrawing all the powers of the petitioner although the same continued to be exercised by the Unit Head much junior to the petitioner, calling for explanation for payment of Rs.1000/- as a terminal benefit under VSS although the same was in accordance with the decision of the Board, not clearing the extension after the expiry on 31.12.2003 of the rented flat of the petitioner in a mala fide and arbitrary manner despite several requests owing to which the petitioner was forced to vacate the house and not sanctioning leave for five days on two occasions in the month of December, 2003 including two days casual leave (30th & 31st) for shifting to LIG flat with prior verbal intimation and permission of the CMD. Not contented with the same the CMD ultimately issued the transfer order relieving the petitioner on 30.12.2003 in the same capacity to Amjhore which is a remote place where there was no sanctioned post of Executive Director (Finance) and was completely lacking in any civic amenities. It is the stand of the petitioner that he being a very senior officer as Executive Director (Finance), the order was passed in a mala fide manner and was wholly illegal and beyond the powers of the respondent No.5. Further directions issued regarding responsibility of the petitioner for closure activities of the unit including disposal of moveable Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 7 items were also contrary to the above-mentioned order passed by BIFR on 20.4.2000 which was continued to operate even after the recommendation for winding up of the company was made. The petitioner however under the circumstances joined at Amjhore and found that there was no proper security arrangement. He also found that the unit In-charge of the level of Executive Director was already functioning at Amjhore. Despite the situation being clearly explained by the petitioner repeatedly to the headquarters about the bad condition and there being no security arrangement no action was taken by the headquarters. The petitioner was thus compelled to write to CMD on 14.2.2005 requesting for being granted VSS latest by 21.2.2005. On no action being taken by the respondents the petitioner filed CWJC No. 2936 of 2005 but on 3.3.2005 it is alleged that in an illegal and arbitrary manner without following the provisions and procedure provided under PPCL Rules, 1987, he was imposed penalty by striking off his name from the rolls of the company with immediate effect. The petitioner filed a representation on 25.5.2005 for review of the order stating that his replies dated 21.5.2004 and 3.9.2004 have not been considered. On no response from the respondent No.5 CMD the petitioner filed Memo of Appeal before the Board of Directors against the impugned order Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 8 dated 3.3.2005. When the appeal of the petitioner was not disposed of within the statutory period of three months under the Rules then the petitioner filed another writ petition being CWJC No. 9338 of 2005 for a direction to the respondents to dispose of the appeal. Both the writ petitions were disposed of by a common order dated 23.3.2006 considering the undertakings given in the counter affidavit that the appeal preferred by the petitioner against his transfer shall be disposed of on merit within a period of two months. This Court had directed that while disposing of the appeal the points raised in CWJC No.2936 of 2005 should be considered. Thereafter by the impugned letter dated 2.6.2006 the petitioner was communicated the decision of the Board of Directors in its meeting held on 22.5.2006, without enclosing the copy of the order of the Board passed in the appeal of the petitioner dated 7.4.2005, stating that the appeal has been rejected by the Board of Directors. Aggrieved by the same the petitioner has filed the present writ petition. In the present matter since the petitioner’s stand was that the benefit of Voluntary Separation Scheme is to be received by him from the Government of India, several opportunities were granted to learned Central Government Counsel to file the counter affidavit in the matter but no counter affidavit has been filed on Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 9 behalf of the Central Government. Learned counsel for the petitioner submits that the action of the respondents is not only in violation of statutory Service Rules, namely, PPCL Conduct, Discipline and Appeal Rules, 1987 but also of the principles of natural justice. It is submitted that the impugned order dated 3.3.2005 of the Chairman-cum-Managing Director was passed without holding any departmental enquiry assigning non est reasons as to why departmental enquiry could not be conducted and striking off the name of the petitioner from the rolls of the company holding that the petitioner has abandoned his service. It is urged by learned counsel for the petitioner that there is neither any justification for such conclusion regarding abandonment of service nor any justification for not holding full- fledged departmental enquiry. It is submitted that an order under Rule 30 of CDA Rules could have been passed if an employee has been convicted on a criminal charge or on the strength of facts or conclusion arrived at by a judicial trial or the disciplinary authority was satisfied for reasons to be recorded by it in writing that it was not reasonably practicable to hold an enquiry in the manner provided in the Rules or the Board was satisfied that in the interest of the security of the company it was not expedient to hold any inquiry in the manner provided in the rules. It is submitted that Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 10 none of the three conditions are satisfied in the present matter. It is pointed out that even if the worst view is taken in the matter then a proper departmental proceeding could have been held. However, if it was the stand of the respondents as appears from the impugned order that the petitioner was not co-operating, even then after framing of charge memo they could have sent letters to the known address of the petitioner and in case the petitioner did not co-operate in the matter then after issuing a public notice in the newspapers the respondents could have proceeded ex parte by bringing evidence on record and on the basis of the same considering each and every charge an order could have been passed. It is pointed out that there was no such situation that the settled procedure could not have been followed in the given circumstances, it not being a case where any interest of the company was involved or it was not reasonably practicable for conducting the departmental enquiry against the petitioner who was a very senior officer, being the Executive Director (Finance) of the Company at its Corporate Headquarters. It is thus submitted that the order has been passed in a mala fide manner by the then Chairman-cum-Managing Director for humiliating and harassing the petitioner. It is also submitted by learned counsel for the petitioner Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 11 that the appellate order is contrary to the direction of this Court as in terms of the order of this Court dated 23.3.2006 passed in CWJC No. 2936 and 9338 of 2005 neither the points raised in the memo of appeal nor the contention raised in CWJC No. 2936 of 2005 have been dealt with. Thus being contrary to the direction of this Court the order is fit to be quashed for the said reason. It is further pointed out that the appellate order does not give any reason as to why passing the order under Rule 30 of CDA Rules was justified and thus it is fit to be set aside on that ground also. Learned counsel for the petitioner thus submits that both the impugned orders passed by CMD and the Board of Directors are fit to be quashed and a direction may be issued to grant benefit to the petitioner of the VSS with effect from 4.3.2005 as there is no justifiable reason in not giving the said benefit. In this context it is further pointed out that the said benefits have been conferred by the Government of India, Ministry of Chemicals and Fertilizers, Department of Fertilizers upon all the employees of the company and they are not dues which are recoverable from the assets of the company. In support of the same learned counsel has brought on the record the Annual Report published by the Government of India for the year 2003-04 and 2007-08 as Annexures- 28 & 29 to the writ petition. Paragraph 7.7.2 of the Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 12 former report is in the following terms : “The Government had approved for closure/hive off of Dehradun and Saladipura units in July, 2002 and Amjhore unit including all other establishments in June, 2003, offering voluntary separation scheme (VSS) to its employees and disposal of the assets as per the due procedure. Accordingly, the Company has relieved 1200 employees under VSS, retaining only 19 employees for all the three units, Registered Office and Corporate Office. The Government provided Rs. 66.17 crore for implementation of VSS.” He also refers to paragraph 7.5.2 of the 2007-08 Annual Report which is in the following terms : “The Government approved closure and hiving off of the Dehradun and Saladipura units in July, 2002 and the Amjhore unit including all other establishments in June 2003, implementation of the Voluntary Separation Scheme (VSS) for its employees, and disposal of the assets as per due procedure. Accordingly, the company has relieved 1211 employees till December, 2006 retaining 7 employees for all the three units, the Registered Office and the Corporate Office. The company has so far spent Rs. 63.65 crore on implementation of VSS from the funds provided by the Government for the purpose.” It is thus the contention of learned counsel for the petitioner that since the amount for payment of VSS has been provided by the Government of India, therefore direction may be issued to the Government of India in the present matter to grant the benefit of the VSS to the petitioner. With respect to other dues of the petitioner against the Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 13 company which is now in liquidation, learned counsel for the petitioner prays that appropriate direction be issued in this regard. Learned Central Government Counsel appearing for the Union of India has confined his submissions mainly to state that the Government of India is not liable to pay the VSS amount as it is the liability of the company and the petitioner is an employee of the company which is now under liquidation. He also submits that VSS was not extended to Amjhore Unit of the company. Learned counsel was unable to meet the contention of the petitioner on the basis of the Annual Report being filed continuously by the Ministry of Chemicals and Fertilizers, Government of India that VSS amount was paid out of the funds granted by the Government of India. Learned counsel for the O.L. appearing for the company which is now under liquidation does not oppose the stand of the petitioner. He fairly submits on the basis of the materials on the record that the impugned order passed by the Chairman-cum- Managing Director is in violation of the principles of natural justice. It is submitted that the entire action of the disciplinary authority, i.e., respondent No.5 CMD is mala fide exercise of powers starting with the transfer order itself which was made without there being any sanctioned post of Executive Director Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 14 (Finance) at Amjhore. It is also stated by him that the petitioner having been appointed as Executive Director (Finance) at the Corporate Headquarters as the head of finance and accounts could not have been transferred at Amjhore where already a senior officer of the same rank was carrying out the very function for which the petitioner had been issued the transfer order. It is also pointed out by learned counsel for the OL that there is nothing on the record to show that the petitioner had voluntarily abandoned his service. He also submits that there was complete violation of principles of natural justice in not holding full-fledged departmental enquiry before passing such an order having such serious consequences for the petitioner. According to him, no such situation was prevailing at the headquarters of the company so as to obviate the full-fledged departmental enquiry against the petitioner before terminating his service. Thus, according to him, there was no situation for the application of Rule 30 of the CDA Rules. Learned counsel for the OL also submits that the impugned order dated 22.5.2006 passed by the Board of Directors which has not been supplied to the petitioner but merely communicated through a letter dated 2.6.2006 does not conform to the direction of this Court given to the Appellate Authority to Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 15 consider all the points raised in the memo of appeal as also in the writ petition and thus it suffers from non-application of mind and is fit to be set aside. I have considered the submissions of learned counsels for the parties. In the present matter the impugned order dated 3.3.2005 of the Chairman-cum-Managing Director is passed invoking Rule 30 of the PPCL Conduct, Discipline and Appeal Rules, 1987. The said Rules lay down special procedure for imposing major or minor punishment without following the detailed procedure laid down for imposition of major penalty or even the procedure for imposing a minor penalty. As is usual in all cases of termination, the procedure for imposing major penalty provided in Rule 25 is on similar footing as Rules in that regard which includes issue of charge memo, appointment of an enquiry officer, holding of a detailed enquiry by allowing oral and documentary evidence after providing earlier copies of or an opportunity to inspect the documents listed to the charge memo and to submit a list of additional documents and witnesses and supply of copies of statement of witnesses, if any, listed in the charge memo. Thereafter an enquiry report is required to be presented which has to be considered by the disciplinary authority and final order Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 16 imposing the penalty is to be passed. The said procedure is to be followed in all the cases of termination. Rule 30 on the other hand confers power on the disciplinary authority to pass an order of punishment without holding a full fledged enquiry if an employee has been convicted on a criminal charge or on the strength of facts or conclusion arrived at by a judicial trial or where the disciplinary authority is satisfied for reasons to be recorded by it in writing that it is not reasonably practicable to hold an enquiry in the manner provided in the Rules or where the Board is satisfied that in the interest of the security of the company it is not expedient to hold any enquiry in the manner provided in the rules. In the present matter no prior satisfaction of the Board is to be found regarding if not being expedient to hold any inquiry in the manner as provided in the interest of security of the company. Further, it is not a case where the petitioner has been convicted on a criminal charge or on the strength of facts or conclusion arrived at by a judicial trial. Thus the only ground on which the order could have been passed under Rule 30 by the disciplinary authority was if it was satisfied for reasons recorded by it in writing that it was not reasonably practicable to hold an enquiry in the manner provided in the rules. From a perusal of the impugned order dated 3.3.2005 the reason mentioned for passing an order under Rule 30 was that Patna High Court CWJC No.609 of 2007 (35) dt.24-08-2012 17 the petitioner had left the headquarters on 9.2.2004 all on a sudden without taking prior permission from the competent authority, his explanation dated 17.2.2004 was found of no merit, he was not reporting to the headquarters despite several opportunities granted to him and the disciplinary authority, namely, CMD was not convinced about the grounds mentioned by the petitioner and therefore came to the conclusion that in the said circumstances it was not possible to conduct disciplinary enquiry. The said reasons mentioned for invoking powers under Rule 30(ii) of PPCL CDA Rules, 1987 are completely non est for the exercise of such powers by the disciplinary authority. The reasons mentioned in fact could have been the very charges in the disciplinary enquiry and only