IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.02.2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.NO.2319 of 2010 and M.P.NO.1 OF 2010 M.Sakthivel .. Petitioner Vs. The General Manager, Regional Office of the F.C.I., Murugesan Complex, Greams Road, Chennai-600 031. .. Respondent This writ petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorarified mandamus to call for the records of the respondent dated 29.1.2010 in Vig.21(3)/2008 and to quash the same as illegal and unlawful without jurisdiction and ultra vires of the standing orders and consequently, to forbear the respondent in any manner interfering with the petitioner from peacefully executing the functions as Handling Mazdoor in the office of the respondent. For Petitioner : Mr.A.L.Somayaji, SC for Ms.K.Preethi For Respondent : No appearance ORDER The petitioner has come forward to challenge the order, dated 29.1.2010 passed by the respondent, thereby suspending the petitioner in respect of disciplinary proceedings pending/contemplated with regard to misappropriation of funds from FCI Co-operative Thrift Society, Chennai as well as possession of disproportionate assets which is pending with CBI FIR vide RC MA I 2007 0071 dated 31.12.2009. The petitioner was placed under suspension in terms of Standing Order No.23(3)XXXV applicable to workman employed in FSD, Egmore. The petitioner was also informed that he will be paid subsistence allowance as per Standing Order No.23(6). https://hcservices.ecourts.gov.in/hcservices/ 2.The petitioner is working as Handling Mazdoor in the Regional Office of Food Corporation of India at Chennai. For the benefit of employees of FCI, they started FCI Employees Co- operative Society (South). The said society was registered under the Multi-state Co-operative Societies Act, 2002. The petitioner claims that he was elected to the Board of Directors during the year 2004. Subsequently, he was made as the President of the Society. The said society approached the ICICI Bank for credit facilities, changing the earlier method of availing credit from the Chennai Central Co-operative Bank. The ICICI Bank provided term loan of Rs.50 Crores during April 2005 and such amounts will have to be repaid in 60 installments with interest at the rate of 8.5% diminishing. The said amount was alleged utilized by the society by granting ordinary loan subject to maximum of Rs.3 lakhs. Though it was initially fixed as Rs.2 lakhs, subsequently, it was increased to Rs.3 lakhs with the approval of the Central Registrar, New Delhi. 3.It was stated that the society committed default in paying DMI to ICICI Bank for more than six months starting from April, 2008. The Bank initiated proceedings against the society including cases under Section 138 of the Negotiable Instruments Act. On receipt of several complaints about misappropriation of funds of the society, a committee was nominated to investigate into the complaints against the petitioner and the other Board of Directors. The Area Manager of FCI by his proceedings, dated 25.11.2009 asking the petitioner to show cause as to why disciplinary action should not be taken against him for his misbehaviour and misconduct in the matter of loan obtained from ICICI Bank. 4.It was further stated that though the petitioner gave a reply, dated 3.12.2009, he filed a writ petition before this court being W.P.No.25580 of 2009 challenging the action of the Area Manager in initiating action against him. This Court in M.P.No.2 of 2009 in W.P.No.25580 of 2009 granted an interim stay against the show cause notice. An interim injunction was also granted by this court on 10.12.2009 in M.P.No.1 of 2009 restraining the officers of FCI from in any manner interfering or disturbing the petitioner from peacefully executing his functions as Handling Mazdoor. It was a strange prayer made by an employee seeking for injunction against employer not to disturb his work as Handling Mazdoor. Even at the ex-part stage, the interim orders were granted. 5.In the meanwhile, the petitioner on coming to know that CBI was planning to arrest him for the offences under Section 13(2) read with Section 13(1)(e) of Prevention of Corruption Act, 1988 in Crime No.RCMA 1 2009 A 0071 on the file of the Inspector of Police, CBI, Anti Corruption Branch Chennai-34, moved this court with Crl.O.P.No.853 of 2010. He contended that he was falsely implicated in the case. He is having records to establish that he is possessing wealth proportionate to his known source of income. https://hcservices.ecourts.gov.in/hcservices/ 6.On behalf of CBI, it was contended that the petitioner's asset as on 1.1.2005 was valued at Rs.4 lakhs. But, as on 31.10.2009, he was owning assets worth Rs.57 lakhs. A counter affidavit has also been filed. This Court granted an anticipatory bail by stating that allegations are covered by records and this court was of the considered view that custodial interrogation was not required. Therefore, this court was constrained to grant anticipatory bail. It is under these circumstances, the respondent came to suspend the petitioner by the impugned order, dated 29.1.2010. Armed with anticipatory bail and the order of injunction against the employer FCI, the petitioner has come forward to challenge the suspension order. 7.Mr.A.L.Somayaji, learned Senior Counsel appearing for Ms.K.Preethi, contended that the respondent employer has no jurisdiction to take action in respect of the petitioner on the allegations made in his capacity as the President of the FCI Thrift Co-operative Society. Further, he contended that suspension order is vague and it is not clear whether disciplinary proceedings are pending or contemplated. If it is related to Co-operative Society, then only the Central Registrar can investigate into the alleged mismanagement of the society. If it relates to the criminal case, then CBI can investigate the matter. But, under the certified Standing Order applicable to workman, Standing Order No.23(3)XXXV refers to conviction by a court for an offence involving moral turpitude. Since the suspension order refers to this clause and the petitioner is yet to be convicted, the question of suspension did not arise. The suspension order has been passed mechanically. 8.The learned Senior Counsel also stated that under Standing Order No.23(5), an order of suspension can be made only pending enquiry into misconduct. The petitioner has not committed any misconduct in terms of the relevant Standing Orders. Therefore, suspension is liable to be set aside. 9.None of the arguments advanced by the learned Senior Counsel merit acceptance. It is an admitted case of the petitioner that CBI is investigating into the alleged disproportionate assets and an FIR is pending. It is a sufficient reason for the respondent to suspend the petitioner pending further investigation. Merely because the petitioner has got anticipatory bail,that does not mean the respondent cannot take any action departmentally. On the other hand, the charge levelled against the petitioner is serious and therefore, no exception can be taken to the order of suspension. 10.Further, it must be stated that a wrong quoting of provision in the order of suspension cannot by itself give rise to a cause of action as held by the Supreme Court in its various decisions. 11.The Supreme Court in its decision reported in 1990 (3) SCC 60 (Director General and Inspector General of Police, Andhra Pradesh, Hyderabad and others Vs. K.Ratnagiri) has held in https://hcservices.ecourts.gov.in/hcservices/ paragraph 7 as follows: "7....The Rule 13(1) empowers the authority to keep the respondent under suspension pending investigation or enquiry into the criminal charges where such suspension is necessary in the public interest. When the first information report is issued, the investigation commences and indeed it has commenced when the respondent was kept under suspension. The order of suspension cannot, therefore, be said to be beyond the scope of Rule 13(1) merely because it has used the word 'prosecution' instead of investigation into the charges against the respondent. A wrong wording in the order does not take away the power if it is otherwise available. The Tribunal seems to have ignored this well accepted principle." 12.Once again, the Supreme Court vide its decision reported in 1994 (2) SCC 617 (State of Haryana Vs. Hari Ram Yadav and others) held in paragraph 10 as follows: "10....The law is well settled that in cases where the exercise of statutory power is subject to the fulfilment of a condition then the recital about the said condition having been fulfilled in the order raises a presumption about the fulfilment of the said condition, and the burden is on the person who challenges the validity of the order to show that the said condition was not fulfilled. In a case, where the order does not contain a recital about the condition being fulfilled, the burden to prove that the condition was fulfilled would be on the authority passing the order if the validity of the order is challenged on the ground that the condition is not fulfilled...." Further, in paragraph 11 of the judgment, it was observed as follows: "11....There is no averment in the said petition challenging the validity of the impugned order of suspension on the ground that the Governor of Haryana was not satisfied that it was either necessary or desirable to place Respondent 1 under suspension. In the absence of any such averment it must be held that the impugned order was passed after fulfilling the requirement of Rule 3(1) of the Rules in view of the presumption as to the regularity of official acts which would be applicable and the absence of a recital in the order about the Governor https://hcservices.ecourts.gov.in/hcservices/ being satisfied that it was either necessary or desirable to place respondent 1 under suspension is of no consequence...." 13.Standing Order 23(5) clearly provides for suspension pending enquiry. It must also be noted that the respondent has formed a committee by a letter, dated 24.11.2009 to enquire into the petitioner's role in the misappropriation of society's funds. The petitioner has also been given a show cause memo on 25.11.2009, to which the petitioner has also given a reply on 3.12.2009. The power of the employer to take disciplinary action notwithstanding the pendency of criminal offence cannot be questioned. 14.A constitution bench of the Supreme Court in R.P. Kapur v. Union of India reported in (1964) 5 SCR 431 = AIR 1964 SC 787 analysed the power of suspension by an authority pending criminal proceedings. In paragraphs 9 and 11 it was observed as follows: "9.....Take again the case where suspension is pending criminal proceedings. The usual ground for suspension pending a criminal proceeding is that the charge is connected with his position as a government servant or is likely to embarass him in the discharge of his duties or involves moral turpitude. In such a case a public servant may be suspended pending investigation, enquiry or trial relating to a criminal charge. Such suspension also in our opinion is clearly related to disciplinary matters. If the trial of the criminal charge results in conviction, disciplinary proceedings are bound to follow against the public servant so convicted, even in case of acquittal proceedings may follow where the acquittal is other than honourable. The usual practice is that where a public servant is being tried on a criminal charge, the Government postpones holding departmental enquiry and awaits the result of the criminal trial and departmental proceedings follow on the result of the criminal trial. Therefore, suspension during investigation, enquiry or trial relating to a criminal charge is also in our opinion intimately related to disciplinary matters. We cannot therefore accept the argument on behalf of the respondent that suspension pending a departmental enquiry or pending investigation, enquiry or trial relating to a criminal charge is not a disciplinary matter within the meaning of those words in Article 314. ............ 11.....These general principles in our opinion https://hcservices.ecourts.gov.in/hcservices/ apply with equal force in a case where the government is the employer and a public servant is the employee with this modification that in view of the peculiar structural hierarchy of Government, the employer in the case of government, must be held to be the authority which has the power to appoint a public servant. On general principles therefore the authority entitled to appoint a public servant would be entitled to suspend him pending a departmental enquiry into his conduct or pending a criminal proceeding, which may eventually result in a departmental enquiry against him. This general principle is illustrated by the provision in Section 16 of the General Clauses Act, 10 of 1897, which lays down that where any Central Act or Regulation gives power of appointment that includes the power to suspend or dismiss unless a different intention appears. Though this provision does not directly apply in the present case, it is in consonance with the general law of master and servant. But what amount should be paid to the public servant during such suspension will depend upon the provisions of the statute or rule in that connection. If there is such a provision the payment during suspension will be in accordance therewith. But if there is no such provision, the public servant will be entitled to his full emoluments during the period of suspension. This suspension must be distinguished from suspension as punishment which is a different matter altogether depending upon the rules in that behalf. On general principles therefore the government, like any other employer, would have a right to suspend a public servant in one of two ways. It may suspend any public servant pending departmental enquiry or pending criminal proceedings; this may be called interim suspension. Or the government may proceed to hold a departmental enquiry and after his being found guilty order suspension as a punishment if the rules so permit. This will be suspension as a penalty. These general principles will apply to all public servants but they will naturally be subject to the provisions of Article 314 and this brings us to an investigation of what was the right of a member of the former Secretary of State’s Services in the matter of suspension, whether as a penalty or otherwise." 15.Once again the Supreme Court in V.P. Gidroniya v. State of M.P. reported in (1970) 1 SCC 362 went into different types of suspension and held that even in the absence of a power an order can be made and in such circumstances, the suspended employee at https://hcservices.ecourts.gov.in/hcservices/ the maximum may get full wages. Hence paragraph 8 of the judgment may be quoted: "8.......It is now well settled that the power to suspend, in the sense of a right to forbid an employee to work, is not an implied terms in an ordinary contract. between master and servant, and that such a power can only be the creature either of a statute governing the contract or of an express term in the contract itself. Ordinarily, therefore, the absence of such a power either as an express term in the contract or in the rules framed under some statute would mean that an employer would have no power to suspend an employee of his and even if he does so in the sense that he forbids the employee to work, he will have to pay the employee’s wages during the period of suspension. Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the order of suspension has the effect of temporarily suspending the relationship of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay. It is equally well-settled that an order of interim suspension can be passed against the employee while an enquiry is pending into his conduct even though there is no such term in the contract of employment or in the rules, but in such a case the employee would be entitled to his remuneration for the period of suspension if there is no statute or rule under which, it could be withheld. The distinction between suspending the contract of a service of a servant and suspending him from performing the duties of his office on the basis that the contract is subsisting is important. The suspension in the latter case is always an implied term in every contract of service. When an emyloyee is suspended in this sense, it means that the employer merely issues a direction to him that he should not do the service required of him during a particular period. In other words the employer is regarded as issuing an order to the employee which because the contract is subsisting, the employee must obey." 16.The question of an employer suspending an employee pending criminal investigation came up before the Supreme Court in A.K.K. Nambiar v. Union of India reported in (1969) 3 SCC 864. The Supreme Court in paragraphs 10 and 11 held as follows: https://hcservices.ecourts.gov.in/hcservices/ "10. The appellant contended that the report of the Central Bureau of Investigation was made mala fide. The appellant appeared before the investigation authorities. We are not concerned with the correctness and the propriety of the report. We have only to examine whether the order of suspension was warranted by the rule and also whether it was in honest exercise of powers. The order of suspension satisfied both the tests in the present case. 11. In view of the fact that the criminal case is pending, it is desirable not to express any opinion on the merits and demerits of the charges as also the rival contentions of the parties because such an opinion may cause prejudice." 17.The same view was reiterated in Allahabad Bank v. Deepak Kumar Bhola reported in (1997) 4 SCC 1. Paragraphs 7,8 and 11 of the judgment reads as follows: "7. It is evident from the bare perusal of the aforesaid clauses that if in the opinion of the management, an employee has committed an offence, then the Bank may take steps to prosecute him and in such a case, he may also be suspended. The word “offence” occurring in clause 19.3(a) has been defined in clause 19.2 to mean any offence involving “moral turpitude” for which an employee is liable to conviction and sentence under any provision of law. 8. What is an offence involving “moral turpitude” must depend upon the facts of each case. But whatever may be the meaning which may be given to the term “moral turpitude” it appears to us that one of the most serious offences involving “moral turpitude” would be where a person employed in a banking company dealing with money of the general public, commits forgery and wrongfully withdraws money which he is not entitled to withdraw. ......... 11. We are unable to agree with the contention of the learned counsel for the respondent that there has been no application of mind or the objective consideration of the facts by the appellant before it passed the orders of https://hcservices.ecourts.gov.in/hcservices/ suspension. As already observed, the very fact that the investigation was conducted by the CBI which resulted in the filing of a charge-sheet, alleging various offences having been committed by the respondent, was sufficient for the appellant to conclude that pending prosecution the respondent should be suspended. It would be indeed inconceivable that a bank should allow an employee to continue to remain on duty when he is facing serious charges of corruption and misappropriation of money. Allowing such an employee to remain in the seat would result in giving him further opportunity to indulge in the acts for which he was being prosecuted. Under the circumstances, it was the bounden duty of the appellant to have taken recourse to the provisions of clause 19.3 of the First Bipartite Settlement, 1966. ...." 18.Once again, the Supreme Court in Secy. to Govt. v. K. Munniappan reported in (1997) 4 SCC 255 in paragraph 7 held as follows: "7.....It is seen that the Tribunal erroneously has proceeded on the premise that the Government has no power to keep an employee under suspension pending enquiry or investigation. Rule 17(e)(1) itself postulates that an officer would be kept under suspension where “enquiry into grave charges is contemplated”. Under these circumstances, actual pendency is not a precondition to suspend an officer. Pending further investigation into the offences is one of the grounds. Unless and until an in-depth investigation is done, there would be little scope to identify the persons involved in the crimes and to take follow-up action as per law. If the officer is allowed to retire, there would be no occasion to take effective steps to satisfactorily tackle the enormity of the crime. It is true that there is time gap, but in a case involving embezzlement of public funds by several persons in a concerted way, a threadbare investigation is required to be undertaken by the investigating officer and, therefore, in the nature of the situation, it would be difficult to find fault with the authorities for not completing investigation expeditiously....." 19.On the scope of judicial review by the High Court over an order of suspension was dealt with by the Supreme Court in State of Orissa v. Bimal Kumar Mohanty reported in (1994) 4 SCC 126. In paragraph 14, it was observed as follows: https://hcservices.ecourts.gov.in/hcservices/ "14.....we are of the considered view that since serious allegations of misconduct have been alleged against the respondent, the Tribunal was quite unjustified in interfering with the orders of suspension of the respondent pending inquiry. The Tribunal appears to have proceeded in haste in passing the impugned orders even before the ink is dried on the orders passed by the appointing authority. The contention of the respondent, therefore, that the discretion exercised by the Tribunal should not be interferred with and this Court would be loath to interfere with the exercise of such discretionary power cannot be given acceptance. 20.The Supreme Court also dealt with specific rules for suspending bank employee in the following decision. In Punjab National Bank v. D.M. Amarnath reported in (2000) 10 SCC 162, in paragraphs 4,6 and 7 it was observed as follows: 4. In our opinion, the law does not require that the suspension order must on its face disclose that any disciplinary proceedings were contemplated or were pending or that any criminal offence was under investigation, inquiry or trial. It would be sufficient if the competent authority recorded in its proceedings that the conditions mentioned in Regulation 12.1 were in existence. ...... 6. For the abovesaid reasons, the order of suspension was justified when it was passed. The High Court was wrong in relying upon the judgment of the Karnataka High Court in Channamallapa Kallappa Roogi v. S.M. Megur, Administrative Officer, Distt. School Board1 which is reproduced below: “In order of suspension which does not state that it was a prelude to the institution of any disciplinary proceeding amounts to perpetual suspension and a punishment, and is illegal. Only in the event of the authority proposing to commence disciplinary proceedings, there could be an order of suspension.” 7. If it was intended to lay down that the order of suspension must state that disciplinary proceedings are proposed or are pending and otherwise, the order would be bad, we are unable to agree with such a view." 21.In State Bank of India v. Harbans Lal reported in (2000) 6 SCC 504, the Supreme Court dealt with a case similar to the one https://hcservices.ecourts.gov.in/hcservices/ on hand and in paragraphs 2 to 4 it was observed as follows: "2. The short question that arises in this case is whether the appellant Bank could have suspended the respondent before issuing a charge-sheet as per the Sastry award. Para 521(10)(b) of the Sastry Award reads as under: “Pending such inquiry he may be suspended, but if on the conclusion of the inquiry it is decided to take no action against him he shall be deemed to have been on duty and shall be entitled to the full wages and allowances and to all the other privileges for the period of suspension; and if some punishment other than dismissal is inflicted the whole or part of the period of suspension, may, at the discretion of the management, be treated as on duty with