IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 7004 of 1989 For Approval and Signature: Hon'ble MR.JUSTICE J.M.PANCHAL ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? No 2. To be referred to the Reporter or not? No : 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? No 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? No 5. Whether it is to be circulated to the concerned No : Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- DILIP H SHAH Versus NEW INDIA ASSURANCE -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 7004 of 1989 MR AMAR MITHANI for MR PM RAVAL for Petitioner MR RAJNI H MEHTA, SENIOR ADVOCATE, for Respondent -------------------------------------------------------------- CORAM : MR.JUSTICE J.M.PANCHAL Date of decision: 20/03/2003 ORAL JUDGEMENT By filing instant petition under Article 226 of the Constitution, the petitioner has prayed to issue an appropriate writ, order or direction to quash order dated March 31, 1987, passed by the General Manager of the respondent-Company dismissing him from service, and also order dated August 21, 1987, passed in appeal by the Chairman-cum-Managing Director of New India Assurance Company Limited affirming the order passed by the competent authority. 2. The petitioner was working as an Inspector at Sayala under Surendranagar Branch of the New India Assurance Company Limited ("the Company" for short) during the period from 1981 to 1984. It was reported to the competent authority that he had committed certain acts of omissions and commissions. The competent authority was of the opinion that there were grounds for inquiring into the truth of imputations of misconduct against the petitioner. Therefore, the competent authority had appointed Shri K.H.Dalal, who is an employee of the Company, as an inquiry officer by letter dated September 3, 1985 to inquire into the truth of misconducts committed by the petitioner. The charges levelled against the petitioner were as under : (i) Issuing policies without number and date in collusion with the Assistant Branch Manager Mr.R.C.Mehta with a view to avoiding accounting of documents as well as premium and thus, committing a fraud on the Company. (ii) Collecting cash premium against cover-notes, but not depositing the same with the Company. (iii) Non-submission of tag utilization statement in respect of tags issued to him. (iv) Providing insurance-cover in bogus names with a view to defrauding the Company, and (v) Depositing premium after the claims were lodged. 3. One Mr.M.N.Shah was appointed as presenting officer for the purpose of inquiry against the petitioner. The petitioner was given a copy of letter dated September 3, 1985, issued by the Company, wherein charges levelled against him were mentioned, and his plea was recorded. The petitioner did not plead guilty and had presented his case through Mr.P.S.Mehta, an employee of Oriental Assurance Company. The inquiry was conducted as per the provisions of the General Insurance (Conduct, Discipline and Appeal) Rules, 1975 ("the Rules" for short) and the proceedings were recorded in the form of Minutes. At the inquiry, the presenting officer had examined following witnesses : (i) Mr.D.H.Raval, P.W.7, (ii) Mr.J.K.Joshi, P.W.5 (iii) Mr.H.R.Raval, P.w.2, and (iv) Mr.N.S.Baviskar, P.W.1, to establish the charges levelled against the petitioner. The presenting officer had also produced documentary evidence in support of the case of the Company against the petitioner, which were duly exhibited by the inquiry officer. As recorded in report dated September 16, 1986 made by the inquiry officer, initially exparte proceedings were conducted against the petitioner because the petitioner had failed to avail of the opportunity given to him to participate in the inquiry. However, the record shows that later on those witnesses, who were examined by the presenting officer to prove the charges levelled against the petitioner, were also permitted to be cross-examined by the petitioner and the petitioner was afforded opportunity to produce documents on which he was seeking reliance, but the petitioner had neither examined himself nor examined any witness to establish that the case of the Company against him was not well-founded. Rule 25(15) of the Rules provides that the Inquiring Authority may, after the employee closes his case, and shall, if the employee has not examined himself, generally question him on the circumstances appearing against him in the evidence for the purpose of enabling the employee to explain any circumstances appearing in the evidence against him. Accordingly, the inquiring authority had generally questioned the petitioner on the circumstances appearing against him in the evidence for the purpose of enabling him to explain the circumstances appearing in the evidence against him. After completion of production of the evidence, the petitioner and the presenting officer had filed written briefs of their respective cases. On the conclusion of the inquiry, the inquiring authority prepared inquiry report dated September 16, 1986 roughly running into 23 pages mentioning (a) a gist of the articles of charge and the statement of the imputations of misconduct, (b) the manner in which the inquiry was held, (c) the manner in which the proceedings conducted were recorded, (d) as to how the documents produced were exhibited, (e) a gist of the defence of the petitioner in respect of each article of charge, (f) an assessment of the evidence in respect of each article of charge, and (g) the findings on each article of charge and the reasons therefor. The inquiring authority, on assessment of evidence, concluded that the charges levelled against the petitioner were established and forwarded his report to the competent authority for appropriate action. The said report is produced as Annexure-N to the petition. It may be stated that the petitioner had demanded statements of two witnesses examined at preliminary inquiry which was conducted by the Vigilance Officer of the Company, but those statements were not supplied by the inquiring authority. The disciplinary authority was of the view that those statements should have been supplied to the petitioner and that it was necessary to give direction to the inquiring authority to make further inquiry. Accordingly, the disciplinary authority by letter dated November 10, 1986 directed the inquiring authority to supply the statements given by the two witnesses examined at the preliminary inquiry conducted by the Vigilance Officer and remitted the case to the inquiring authority for further inquiry and report. The inquiring authority thereupon supplied copies of statements of the two witnesses recorded at preliminary inquiry conducted by the Vigilance Officer to the petitioner and further permitted the petitioner to have inspection of the documents which were demanded by him. After further inquiry was complete, the petitioner filed written brief of his case. Thereafter second inquiry report dated March 10, 1987 was prepared by the inquiring authority wherein particulars such as (i) how the proceedings were conducted, (ii) examination of the petitioner by the inquiry officer, (iii) submission of briefs by both the parties, (iv) technical objections raised by the defence, (v) examination of the defence version, and (vi) assessment of the evidence etc. were recorded. On evaluation of evidence, the inquiring authority concluded that no modification in the conclusion arrived at in the first report was necessary and that the charges levelled were proved. The said report was forwarded to the competent authority for appropriate action. After going through the proceedings, documents and the two inquiry reports including further findings submitted by the inquiring authority, the disciplinary authority was satisfied that sufficient opportunity was given to the petitioner to defend himself against the charges and that no procedural lacuna was noticed. The disciplinary authority agreed with the findings recorded by the inquiring authority and held that the charges levelled against the petitioner were proved. 4. It was noticed by the competent authority that the cattle insurance had been introduced by the Government as a part of the rural development programme to help the weaker sections of the society/predominantly illiterate and semi-literate, and that instead of rendering helping hand to the villagers in implementing successfully the objectives of the Company, the petitioner had taken undue advantage of ignorance of the parties, exploited the situation and thereby defeated the very purpose of the scheme. The disciplinary authority was, therefore, of the opinion that the penalty of dismissal from service under Rule 23(g) of the Rules deserved to be imposed on the petitioner. Accordingly, by an order dated March 31, 1987, which is produced as Annexure-N to the petition, the petitioner was dismissed from service. 5. Feeling aggrieved by the order dismissing him from service, the petitioner preferred an appeal before the Appellate Authority of the Company as provided in the Rules. The Chairman-cum-Managing Director of the Company, who heard the appeal, dismissed the same by order dated August 21, 1987, giving rise to instant petition. 6. I have heard Mr.Amar Mithani, learned advocate of the petitioner, and Mr.R.H.Mehta, learned Senior Advocate of the respondent-Company at great length and in detail, and has considered the documents forming part of the petition. 7. The first contention that the petitioner was not supplied with the copies of the two inquiry reports submitted by the inquiring authority to the disciplinary authority and, therefore, the order dismissing the petitioner from service should be set aside, is devoid of merits. In Commandant, Central Industrial Security Force and others v. Bhopal Singh, (1993)4 SCC 785, it has been authoritatively ruled by the Supreme Court that the law laid down on November 20, 1990 in Union of India vs. Mohmed Ramzan Khan, (1991)1 SCC 588, to the effect that a delinquent employee is entitled to get copy of inquiry report submitted by the inquiry officer to the disciplinary authority, is prospective in operation i.e. applicable to the orders of punishment passed after November 20, 1990 and not to the orders of punishment passed before November 20, 1990. In this case, the order of punishment was passed on March 31, 1987 and was confirmed in appeal on August 21, 1987 i.e. before November 20, 1990 on which date the decision in Union of India v. Mohmed Ramzan Khan (supra) was delivered. The view expressed in Commandant, Central Industrial Security Force & Ors. (supra) has been reiterated by the Supreme Court in several other reported decisions and the latest decisions reiterating the said view are; (i) State of Punjab and others v. K.K.Sharma, (2002)9 SCC 474, and (ii) Debotosh Pal Choudhury v. Punjab National Bank and others, (2002)8 SCC 68. Therefore, the order dismissing the petitioner from service is not liable to be set aside on the ground that the petitioner was not furnished copies of the two inquiry reports submitted by the inquiring authority to the disciplinary authority. 8. The plea that so far as this Court is concerned, the law was well settled, since the decisions in (1) S.T.Dasadia v. Commissioner, Surat Municipal Corporation, 1983(1) GLR 770, (2) M.J.Ninama v. Post Master General, Ahmedabad, 1984 GLH 800, (3) N.M.Mandalia v. Bhavnagar Municipality, 1984(2) GLR 837, (4) Union of India and others v. N.N.Prajapati, 1985(2) GLR 1404, and (5) Homi B.Munshi v. P.G.Shroff and others, 1989(2) GLR 1367, to the effect that a delinquent is entitled to a copy of the report of the inquiry officer and, therefore, non-supply of the copies of the two inquiry reports to the petitioner has vitiating effect, cannot be accepted. It is true that in the above quoted decisions, a view was taken that failure by the disciplinary authority to supply to the delinquent officer a copy of report of the inquiring authority amounts to denial of the principles of natural justice and consequently the order imposing penalty is liable to be quashed and that such a plea was accepted by the Division Bench of this Court in T.S.Rabari v. Government of Gujarat & Anr., 1991(2) GLR 1035 in following terms :- "Again, in our opinion, the learned Counsel for the petitioners are right in submitting that so far as this Court is concerned, the law is well settled, since the decision in M.J.Ninama, decided in 1984 by the Single Judge and confirmed by the Division Bench, wherein this Court has specifically held that a delinquent is entitled to a copy of the report of the Enquiry Officer and that the Forty-second Amendment of the Constitution has not altered the said position. Thus, even prior to and in absence of Mohmed Ramzan Khan, the respondents were bound to supply a copy of the Enquiry Officer's report to a delinquent. Therefore, it is not open to the respondents to advance such an argument ignoring and keeping aside the law laid down by this Court." However, it is to be noticed that the effect of law declared by the different High Courts and the Central Administrative Tribunal that failure by the disciplinary authority to supply to the officer concerned a copy of report of the inquiring authority amounts to denial of the principles of natural justice and consequently the order imposing penalty is liable to be quashed, has been considered by the Five Judge Constitution Bench of the Supreme Court in Managing Director, ECIL, Hyderabad and others v. B.Karunakar and others, (1993)4 SCC 727. In Para-43 of the reported decision, following pertinent observations have been made by the Supreme Court : "However, it has to be noticed that although it is in Mohd. Ramzan Khan case that this Court for the first time accepted and laid down the law that the delinquent employee is entitled to the copy of the report before the disciplinary authority takes its decision on the charges levelled against him, Gujarat High Court in a decision rendered on July 18, 1985 in Union of India vs. N.N.Prajapati and a Full Bench of the Central Administrative Tribunal in its decision rendered on November 6, 1987 in Premnath K.Sharma v. Union of India had taken a similar view on the subject. It also appears that some High Courts and some Benches of the Central Administrative Tribuna have given retrospective effect to the law laid down in Mohd. Ramzan Khan case notwithstanding the fact that the said decision itself had expressly made the law prospective in operation. The fact, however, remains that although the judgments in N.N.Prajapati case and Premnath K.Sharma case as well as some of the decisions of the High Courts and of the Benches of the Central Administrative Tribunal were either taking a similar view prior to the decision in Mohd. Ramzan Khan case or giving retrospective effect to the said view and those decisions were not specifically challenged, the other decisions taking the same view were under challenge before this Court both before Mohd. Ramzan Khan case was decided and thereafter. In fact, as stated in the beginning, the reference to this Bench was made in one such case as late as on the August 5, 1991 and the matters before us have raised the same question of law. It has, therefore, to be accepted that at least till this Court took the view in question in Mohd. Ramzan Khan case the law on the subject was in a flux. Indeed, it is contended on behalf of the appellants/petitioners before us that the law on the subject is not settled even till this day in view of the apparent conflict in decisions of this Court. The learned Judges who referred the matter to this Bench had also taken the same view. We have pointed out that there was no contradiction between the view taken in Mohd. Ramzan Khan case and the view taken by this Court in the earlier cases and the reliance placed on K.C.Asthana case to contend that a contrary view was taken there was not well-merited. It will, therefore, have to be held that notwithstanding the decision of the Gujarat High Court in N.N.Prajapati case and of the Central Administrative Tribunal in Premnath K.Sharma case and of the other courts and tribunals, the law was in an unsettled condition till at least November 20, 1990 on which day the Mohd. Ramzan Khan case was decided. Since the said decision made the law expressly prospective in operation the law laid down there will apply only to those orders of punishment which are passed by the disciplinary authority after November 20, 1990. This is so, notwithstanding the ultimate relief which was granted there which, as pointed out earlier, was per incuriam. No order of punishment passed before that date would be challengeable on the ground that there was a failure to furnish the enquiry report to the delinquent employee. The proceedings pending in courts/tribunals in respect of orders of punishment passed prior to November 20, 1990 will have to be decided according to the law laid down in Mohd. Ramzan Khan case. This is so notwithstanding the view taken by the different benches of the Central Administrative Tribunal or by the High Courts or by this Court in R.K.Vashisht case." A bare reading of the above quoted paragraph makes it clear that it has to be accepted that at least till the Supreme Court took the view on question in Mohd. Razak Khan's case that a delinquent is entitled to a copy of the report submitted by the inquiry officer to the disciplinary authority, the law on the subject was in a flux. Further, notwithstanding the decisions of the High Court of Gujarat in N.N.Prajapati (Supra), and of the Central Administrative Tribunal in Premnath K.Sharma v. Union of India (1988) 6 ATC 904 and of other Courts and Tribunals, the law was in an unsettled condition till at least November 20, 1990, on which day Mohd. Razak Khan's case was decided. It is also apparent from the above quoted observations that the proceedings pending in Courts/Tribunals in respect of orders of punishment passed prior to November 20, 1990 will have to be decided according to law that prevailed prior to the said date and not according to the law in Mohd.Razak Khan's case and this is so notwithstanding the view taken by different Benches of Central Administrative Tribunal or by the High Courts or by the Supreme court in R.K.Vashisht v. Union of India, 1993, Suppl.(1) SCC 431. Having regard to the clear proposition of law laid down by the Supreme Court, the order imposing penalty on the petitioner is not liable to be quashed on the ground that even prior to and in absence of decision in Mohd. Razak Khan's case the disciplinary authority was bound to supply copies of the two reports made by the inquiring authority to the delinquent. The said plea, therefore, fails and is hereby rejected. 9. The second contention based on requirements of Rule 25(8)(iii) of the Rules to the effect that non-supply of statements of Mr.Velabhai Melabhai Bharvad and Dr.D.P.Mori has resulted into denial of the principles of natural justice and, therefore, the order imposing punishment of dismissal from service should be set aside, cannot be accepted. Sub-rule (8) of Rule 25 of the Rules, inter alia, provides that if the employee does not plead guilty, inquiring authority shall adjourn the case to a later date not exceeding thirty days, after recording an order that the employee may, for the purpose of preparing his defence, be supplied with the copies of the statements of witnesses, if any, listed in the chargesheet. It may be mentioned that though Mr.Velabhai Melabhai Bharvad and Dr.D.P.Mori were cited as witnesses in the chargesheet, they have not been examined by the presenting officer at the inquiry to prove any of the charges levelled against the petitioner and this is quite evident from page No.105 of the compilation. What is important is that the inquiry officer has neither referred to nor relied upon the statements of either Mr.Bharvad or Dr.Mori for coming to the conclusion that the charges levelled against the petitioner are established. The minutes of the proceedings maintained on page 105 of the compilation would show that Mr.Bharwad and Mr.Mori were dropped as witnesses in order to avoid duplication of the same facts and not for any other purpose. Further, the petitioner himself could have examined either Mr.Velabhai Melabhai Bharvad or Dr.D.P.Mori to substantiate his defence, but admittedly, the petitioner has neither examined himself nor examined any witness in support of his defence. Under the circumstances, a question arises as to what is the effect of non-supply of the copies of the statements of witnesses referred to in the chargesheet. A bare reading of sub-rule(8) of Rule 25 makes it abundantly clear that the inquiring authority is obliged to supply copies of statements of those witnesses to be examined at the inquiry and not of the witnesses merely named in the chargesheet and who are not examined at the inquiry. Further, the grievance regarding non-supply of the statements of two witnesses examined was raised by the petitioner in his written brief before the first report dated September 16, 1986 was forwarded by the inquiring authority to the disciplinary authority. The second inquiry report dated March 10, 1987 would indicate that the inquiring authority had supplied copies of the statements of witnesses examined and also permitted the petitioner to have inspection of all the documents subsequently demanded. This assertion made by the inquiring authority in its second report could not be assailed by the petitioner before the first appellate authority, nor the petitioner has been successful in pointing out to this Court that the assertion made by the inquiring authority in the second report to the effect that the petitioner was permitted to have inspection of other documents demanded by him, which also included the two statements, was factually incorrect. Under the circumstances, the order dismissing the petitioner from service is not liable to be set aside on the ground that the copies of statements of Mr.Velabhai Melabhai Bharvad and Dr.D.P.Mori were not supplied to him. 10. The third contention that the petitioner having not pleaded guilty, the case should have been adjourned to a later date by the inquiring authority and the procedure adopted by the inquiry officer in exhibiting the documents produced by the presenting officer in absence of Assistant to delinquent employee having resulted into miscarriage of justice the petition should be allowed, has no substance. The minutes of the case maintained by the inquiring authority indicates that the case was adjourned to a later date after the plea of the petitioner was recorded. In the Rules, there is no provision for exhibiting the documents which may be presented either by the presenting officer or by the delinquent employee. The petitioner had informed the authority concerned that he was willing to avail of the assistance of any other person and accordingly, the petitioner was permitted to be defended by an employee who was serving in another Insurance Company. After recording the plea, the inquiry officer had ascertained from the presenting officer whether he was giving copies of the relevant documents to the delinquent employee and the presenting officer had handed over photostat copies of the documents to the petitioner; whereas the originals were submitted for consideration of the inquiry officer, which were subsequently exhibited in the presence of the petitioner, but of course not in the presence of his assistant because at that time, the petitioner had not appointed/selected his assistant. The delinquent officer had verified and checked the copies provided to him and confirmed before the inquiring officer that the same were copies of the originals which were submitted by the presenting officer before the inquiring officer. As the petitioner had not pleaded guilty and the copies of the documents duly verified by him and compared with the originals, were handed over to him, the case was adjourned to a later date. The procedure adopted by the inquiring authority cannot be regarded as contrary to the provisions of Rule 25(8) of the Rules or the principles of natural justice. Under the circumstances, the plea that the procedure adopted by the inquiry officer has resulted into miscarriage of justice and, therefore, the inquiry should be held to have been vitiated, cannot be accepted and is