IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.13752 of 2004 BISHNU DEO SINGH Versus THE STATE OF BIHAR & ORS For the Petitioner : Mr. Ashwini Kumar Singh For the State : Mr. Mayank Pukhaiyal J.C. to G.A. 5 For the BPSC : Mr. Jitendra Kumar Roy-1 ------- 7. 16.05.2008 Heard learned counsel for the petitioner and learned counsel for the State. The petitioner is aggrieved by the order of punishment dated 6.9.2004 bearing memo no. 687 at Annexure-9. The impugned order visits him with the punishment of stoppage of his entire pension and gratuity permanently under Rule 43(b) of the Bihar Pension Rules and that nothing beyond subsistence allowance shall be payable for the period of suspension. The petitioner, who was an Executive Engineer, was transferred on 30.6.1999 to the Irrigation Division Kataharatand, Camp Batia (Jamui) and was handed over charge as such on 24.7.1999. Earlier M/S Gammon India Ltd., a private firm was awarded and was executing the construction of a Masonry Dam over river Barnar near Batia. The company could not complete the work in time with both sides blaming each other. The contract was rescinded. The bank guarantee given by the company for 95.93 lacs lapsed. Money Suit No. 114 of 1997 was then filed by the Department in the Civil Court at Patna for recovery of the secured advance of Rs. 121.95 lacs. A settlement meeting led to the submission of a fresh bank guarantee by M/S Gammon India Ltd. of the value of Rs. 2,30,22,436/- to the Department inclusive of secured advance and - 2 - interest. This bank guarantee also lapsed on 3.6.2000 during the petitioner‟s tenure as Executive Engineer. The present controversy arises therefrom. The petitioner was placed under suspension on 26.7.2000 on charges of irregularities and causing financial loss to the Government for having failed to ensure renewal or invocation of the bank guarantee in time. Departmental proceedings were initiated against him under Rule 55 of the Civil Services (Classification, Control and Appeal) Rules, 1986. Memo of charges were served on him on 10.8.2000. The petitioner submitted his reply in defence. The enquiry was concluded finding him guilty. A second show cause notice was given to which he replied when the final order of punishment came to be passed. Learned counsel for the petitioner submitted that the memo of charges as enclosures thereto only contained the letter of the Chief Engineer, Deoghar and what is vaguely referred to as papers related to the bank guarantee. Witnesses were shown as nil. The petitioner submitted his reply in defence. It was his specific case that from the papers of the bank guarantee submitted by the company it was apparent that it was done during the tenure of the previous Executive Engineer on 6.6.1999 when the petitioner had joined on 24.7.1999. That the Accounts Clerk never brought it to the attention of the petitioner that a bank guarantee paper was kept in the treasury chest. The security register no. 5 requireed to be maintained under the P.W.D. Accounts Code did not contain the signature of the Executive - 3 - Engineer in respect of the bank guarantee and there was no endorsement of its date of lapsing. The Executive Engineer never informed the petitioner of the same much less handed him over any document with regard to the bank guarantee. The work memorandum handed over to the petitioner by the previous Executive Engineer also contains no reference to the same. In support of which a copy thereof has been enclosed as Annexure-2 to the statement of defence. The Accounts Clerk retained the bank guarantee with himself and never informed the petitioner. On 23.6.2000 by letter no. 1922 the Chief Engineer made queries when the bank guarantee was recovered from the Accounts Clerk. That the Accountant and the Accounts Clerk never informed the petitioner that there was a bank guarantee kept in the treasury chest much less its date of expiry of validity. This is further evident from Annexures-4 & 5 to the statement of defence enclosing the statement in writing of the Accounts Clerk and the Accountant in response to the queries made by the Chief Engineer by his letter no. 1922 dated 23.6.2000 when the Accounts Clerk explicitly acknowledged in writing on 24.6.2000 that by mistake he did not put up the bank guarantee file before the petitioner. Likewise, the Accountant also put the blame on the Accounts Clerk. Serious objection was raised with regard to the manner in which the departmental proceeding was conducted to the grave prejudice of the petitioner. In response to the statements of defence the Inquiry Officer directed the Presenting Officer to obtain the comments of the Accountant, the Accounts Clerk and the then Executive - 4 - Engineer and Superintending Engineer on the defence statement that they never brought the materials to the knowledge of the petitioner. Thereafter, their written statement was received by the Inquiry Officer outside the course of enquiry, which was never made available to the petitioner. The statement of the Accounts Clerk was completely contrary to that given by him on 24.6.2000 and now stated that the petitioner had forced him to write so. The copies of such statements were never given to the petitioner. The persons concerned never appeared in the departmental proceedings as witnesses and, therefore, there was no opportunity for the petitioner to cross-examine them. In this manner, the evidence was collected behind the back of the petitioner and outside the course of the proceedings. It was on the basis of this procedure followed outside the departmental proceeding that the petitioner has been found guilty. The Inquiry Officer, who found the petitioner guilty, has noticed that the petitioner on 31.5.2000 had counted the amount of cash in the treasury chest and, therefore, he must have naturally seen the bank guarantee kept inside. It was submitted that there was no material in support of the same led in the enquiry and it is not known on what basis and wherefrom this conclusion of assumptions and presumptions was arrived at. The only material for the indictment of the petitioner is the statement of the Accounts Clerk, one Babulal Mistri, contrary to his own earlier statement and the statement of the then Executive Engineer that the petitioner had stated no comments in context of the bank guarantee when the company had come to the High Court in a writ petition in - 5 - 1999, the statement of facts for the counter affidavit of which was prepared by the petitioner. In so far as the P.W.D. Accounts Code is concerned, the submission was that since details of the bank guarantee were not recorded in the security register and in the memorandum of work, the petitioner remained ignorant of the same and he cannot be penalized for what are essentially lapses of his predecessor. Reliance in support of the submission was placed upon A.I.R. 1969 Supreme Court 983 (Central Bank of India Ltd. V Prakash Chandra Jain), (1970) 1 SCC 709 (State of Assam & anr. V. Mahendra Kr. Das & ors.), ( 2006) 4 SCC 713 (Narendra Mohan Arya v. United India Insurance Co. Ltd. & anr.) and 2008 (2) PLJR 30 (Leela Devi & anr. V. State of Bihar). Learned counsel for the State submitted that the petitioner has not been prejudiced in any manner. He has had full participation in the departmental enquiry. He did not make any demand for documents or cross-examination of witnesses. Even in his reply to the second show cause notice, after perusal of the enquiry report, he has not raised any objection to the materials placed before the Inquiry Officer of any irregularity in the departmental proceeding. The petitioner was, therefore, clearly guilty of negligence causing pecuniary loss to the Government justifying punishment. The petitioner was well aware of the bank guarantee and in any event was sufficiently cautioned of the same when the statement of facts of CWJC No. 1180 of 1999 preferred by the company was approved by him. The petitioner, therefore, cannot escape liability. The instructions - 6 - under the P.W.D. Accounts Code of the responsibility of the Executive Engineer for the validity and renewal of the bank guarantee was also relied upon. Reliance in support of the submissions was placed on ( 2005) 3 SCC 241 (Cholan Roadways Ltd. V. G. Thirugnanasambanban), (2005) 3 SCC 254 (Divisional Controller, KSRTC (NWKRTC) v. A.T. Mane and (2006) 3 SCC 74 (Transmission Corporation of A.P. Ltd. & ors. V. Sri Rama Krishna Rice Mill. This Court had called for the original records of the departmental proceeding by order dated 12.3.2008, which has been produced. The Court has also been informed that Money Suit No. 144 of 1997 filed by the Department against the company has been referred to Arbitration and is pending. The original records of the departmental proceedings reveal a sorry state of affairs. The order sheet is barely in two pages with recording on the reverse side of the pages also. It does not contain any details of regular dates fixed, examination of witnesses, exhibition of documents etc. There is nothing on record to suggest that the written explanation in reply to the defence of the petitioner submitted by the Accountant, Accounts Clerk, the Executive Engineer and the Superintending Engineer were received in course of the enquiry and copies were handed over to the petitioner with an opportunity to him to meet the same. This was extremely important. The Accounts Clerk in reply to the query of the Chief Engineer by letter no. 1922 dated 23.6.2000 had explicitly stated that by inadvertence the bank - 7 - guarantee remained with him and that he had never put it up before the Executive Engineer. To the same effect was the evidence of the Accountant. The written reply submitted by the Accounts Clerk before the Inquiry Officer was completely to the contrary. It now sought to blame the petitioner for having forced the Accounts Clerk to write so. That the petitioner for reason of the statement of facts in CWJC No. 1180 of 1999 was well aware of the bank guarantee, which was prepared in February, 2000. That the responsibility of the file of the bank guarantee was with another Accounts Clerk, Kameshwar Prasad Singh. The only other material for indictment of the petitioner is the statement of the Superintending Engineer outside the enquiry placing reliance on the statement of the Accounts Clerk and the statement in the counter affidavit. Based on these two statements, the Inquiry Officer arrived at the conclusion that the petitioner was well aware of the existence of the bank guarantee. Had the Accounts Clerk, Babulal Mistri been summoned as a prosecution witness in context of his earlier statement to the contrary the petitioner could have had the opportunity to cross-examine him. Even if he had not been summoned for deposition, if his reply to the statement of defence was made known and available to the petitioner, he could have requested for cross-examination. All these had been denied to the petitioner. To this Court, these were grave irregularities in procedure. The Inquiry Officer has collected materials outside the course of the proceedings, behind the back of the petitioner without making him aware of the same and then proceeded to indict the petitioner on basis of these - 8 - undisclosed materials. This was a grave violation of the principles of natural justice, which vitiates the proceeding completely. This Court on perusal of the original records holds that in fact there has been no departmental proceedings in accordance with law. Learned counsel for the State very fairly conceded that in so far as the first finding of the Inquiry Officer is concerned, that the petitioner had opened the treasury chest on 31.5.2000 and, therefore, must have seen the bank guarantee kept in the treasury chest, was not supported from any materials in that regard placed before the Inquiry Officer or from the records. The submission of the Respondents that the petitioner did not object to the collection of evidence in this manner behind his back in his reply to the second show cause and that therefore, he had not been prejudiced so as to interfere with the order of punishment and the departmental enquiry, does not impress the Court. What the petitioner may or may not have done shall not detract from the liability of the prosecution to prove its own case in accordance with law. If the enquiry has proceeded in a manner contrary to law, collection of evidence behind the back of the delinquent outside the enquiry without furnishing him copies of such document leading of no evidence, denial of opportunity to cross-examine, this Court is satisfied that mere failure to raise these issues in his reply to the show cause cannot lead to the conclusion that he has not been prejudiced. It is not a case where no other conclusion is possible even on basis of - 9 - materials on record to reject the objection of the petitioner on the principle of no prejudice. The petitioner has been denied valuable opportunity to prove his innocence with regard to his assertion that the security register contained no adequate information of the bank guarantee; the work memorandum did not contain any reference to the bank guarantee. In any event the Inquiry Officer has not dealt with these two issues at all much less was there any evidence before him in this regard. The indictment on the materials furnished by the Accounts Clerk, Babulal Mistri outside the enquiry without furnishing copies of the same to the petitioner and opportunity to cross-examine is gravely prejudicial in light of the own admission of the Accounts Clerk, Babulal Mistri in his reply to the queries of the Chief Engineer that by inadvertence the bank guarantee remained with him and that he did not put it up before the petitioner. This Court has also perused the letter of the Accounts Clerk dated 24.6.2000. The manner in which the words „Bank guarantee was in the chest‟ has been written it is apparent that it was a subsequent insertion as an afterthought after the letter had been written and signed. The lines are compressed and squeezed in and the spacing of lines is also different from the rest of the document. There can be serious reservations on the same whether the Bank guarantee was ever in the chest making it necessary to record his evidence in enquiry in presence of the delinquent with opportunity of cross-examination. In the case of Mahendra Kumar Das (supra) relied upon by the petitioner, the Supreme Court in the context of violation of the - 10 - principles of natural justice in the conduct of the enquiry, at paragraph 19 of the judgment relied upon the following passage from (1963) 2 SCR 943 (State of Mysore v. S.S. Makapur) : “For a correct appreciation of the position it is necessary to repeat what has often been said that tribunals exercising quasi judicial functions are not Courts and that therefore they are not bound to follow the procedure prescribed for trial of actions in Courts nor are they bound by strict rules of evidence. They can, unlike courts, obtain all information, material for the points under enquiry from all sources and through all channels without being fettered by rules and procedures which governs proceeding in Court. The only obligation which the law casts on them is that they should not act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain. What is a fair opportunity must depend on the facts and circumstances of each case but where such an opportunity had been given, the proceeding are not open to attack on the ground that the enquiry was not conducted in accordance with the procedure followed in Courts. “ Reliance at paragraph 20 was then placed to quote : “A quasi judicial authority would be acting contrary to the rules of natural justice if it acts upon information collected by it which has not been disclosed to the party concerned and in respect of which full opportunity of meeting the inference which arrives out of it has not been given.” - 11 - It was then held on the facts of the case at paragraph 24 in the relevant extract : “……….But, We have to state that it is highly improper for an Inquiry Officer during the conduct of an enquiry to attempt to collect any materials from outside sources and not make that information, so collected, available to the delinquent officer and further make use of the same in the enquiry proceedings. There may also be cases where a clever and astute Inquiry Officer may collect outside information behind the back of the delinquent officer and, without any apparent reference to the information so collected, may have been influenced in the conclusion recorded by him against the delinquent officer concerned. If it is established that the material behind the back of the delinquent officer has been collected during the enquiry and such material has been relied on by the Inquiry Officer without its having been disclosed to the delinquent officer, it can be stated that the enquiry proceedings are vitiated.” In the case of Prakash Chandra Jain (supra) relied upon by the petitioner it has been held that in absence of legal evidence the findings will be perverse. While holding that the Inquiry Officer was not bound by the strict rules of the Evidence Act, the substantive rules of natural justice cannot be ignored. To quote the relevant extract from paragraph 8 where it has been held : “8……….The principle that a fact sought to be proved must be supported by statements made in the presence of the person against whom the enquiry is held and the statements made behind the back of - 12 - the person charged are not to be treated as substantive evidence, is one of the basic principle which cannot be ignored on the mere ground that domestic tribunals are not bound by the technical rules of evidence…..” It was further held therein that it was desirable that all witnesses on whose testimony the management relies in support of its charge against the workman should be examined in his presence. The solitary effect of recording evidence in presence of the workman was explained that the witness knew that he was deposing against the person present before him and, therefore, he would be cautious in making his statements. There would be no room to persuade a witness to make convenient statements. Cross-examination would also be facilitated. The Court considers it proper to quote paragraph 11 in its entirety : “The minimum that we shall expect where witnesses are not examined from the beginning at the enquiry in the presence of the person charged, is that the person charged should be given a copy of the statements made by the witnesses which are to be used at the enquiry well in advance before the enquiry begins and when we say that the copy of the statements should be given well in advance, we mean that it should be given at least two days before the enquiry is to begin. If this is not done and yet the witnesses are not examined-in- chief fully in the enquiry, we do not mean that it can be said that principles of natural justice which provide that the person charged should have an adequate opportunity of defending himself are - 13 - complied with in the case of a domestic enquiry in an industrial matter. These views expressed by this Court bring out what was meant when this Court held that findings recorded by an Inquiry Officer must be supported by legal evidence. The evidence, as indicated in these cases, should consists of statements made in the presence of the workman charged. An exception was emphasized where the previous statement could be used after giving copies of that statement well in advance to the workman charged, but with the further qualification that the previous statement must be affirmed as truthful in a general way when the witness is actually examined in the presence of the workman.” Again in the case of Narendra Mohan Arya (supra) relied upon by the petitioner it has been held that the Inquiry Officer is not permitted to collect any material from outside sources during the conduct of the enquiry. In a domestic enquiry, fairness in procedure is part of the principles of natural justice. Reliance therein has been placed at paragfpah 27 on the following passage in the case of State of U.P. v. Md. Nooh, AIR 1958 S.C. 86 : “On the authorities referred to above, it appears to us that there may conceivably be cases – and the instance case is in point – where the error, irregularity or illegality touching jurisdiction or procedure committed by an inferior court or tribunal of first instance is so patent and loudly obtrusive that it leaves on its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. If an inferior court or tribunal of first - 14 - instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior courts sense of fair play, the superior court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to it, it confirmed what ex facie was a nullity for reasons aforementioned. This would be so also the more, if the tribunals holding the original trial and the tribunals hearing the appeal or revision were merely departmental tribunals composed of persons belonging to the departmental hierarchy without adequate legal training and background and whose glaring lapses occasionally comes to our notice.” The reliance by the Respondents on the judgment in the case of Cholan Roadways (supra) is of no relevance as the principle of res ipsa loquitur was invoked by the Supreme Court on the facts of the case when the manner of the accident caused by the driving of the bus was held to be indicative of negligence by itself in context of the disciplinary enquiry. Likewise, was the position in the case of A.T. Mane. (supra).It has been held therein that once the domestic tribunal based on evidence comes to a particular conclusion, it is not open for the appellate tribunals or courts to substitute their subject opinion. That this precisely the question in the present case, if there was a legal - 15 - evidence before the tribunal. The submission of the Respondents that cross-examination was not necessary relying upon the case of Sri Rama Krishna Rice Mills (supra) is again misconceived as that was the case not of a domestic enquiry but of a proceeding initiated with regard to the case of theft and tampering of electricity by a consumer. Undoubtedly, instructions 34 & 35 of the P.W.D. Accounts Code provide that it was the Executive Engineer of the Division who was required to keep watch over expiry of the bank guarantee through suitable registers and that lapses in that regard would be answerable by him. A suitable register to watch the expiry of bank guarantee was required to be maintained, which was to be reviewed on 10th of every month. That if the officials failed to take prompt action, the responsibility for the lapses of the bank guarantee shall be theirs. At this stage, it is worth to take note of the fact that