1 Letters Patent Appeal No.209 OF 2006 --------- Against the judgment dated 23.1.2006 passed by the learned Single Judge of this Court in C.W.J.C. No. 15002 of 2004. --------- Subhash Chandra Singh son of Sri Bishwambhar Pd. Singh, resident of Village- Dhelwa, P.O. Mour, P.S.- Barbigha in the district of Sheikhpura --- -- Petitioner------Appellant Versus 1. The Bihar State Food & Civil Supply Corporation Ltd. through its Chairman-Cum-Managing Director, Sone Bhawan, 5th Floor, Birchand Patel Path, Patna- 1. 2. The Chairman-cum-Managing Director, Bihar State Food & Civil Supplies Corporation Ltd. (in short D.S.F.C. Ltd.) Sone Bhawan, 5th Floor Birchand Patel Path, Patna-1. 3. The Chief of Administration, B.S.F.C. Ltd. Sone Bhawan, 5th Floor, Birchand Patel Path, Patna.1 4. The Chief of Claim B.S.F.C. Ltd. Sone Bhawan, 5th Floor, Birchand Patel Path, Patna-1. 5. The Chief of Finance, B.S.F.C.Ltd. Sone Bhawan 5th Floor, Birchand Patel Path, Patna-1. 6. The Chief of Store B.S.F.C. Ltd. Sone Bhawan, 5th Floor, Birchand Patel Patna, Patna-1. 7. The Chief of Civil Suppliers B.S.F.C. Ltd. Sone Bhawan, 5th Floor, Birchand Patel Patna, Patna-1. 8. The District Manager, B.S.F.C. Ltd. Gaya. ---- Respondents ----- Respondents. -------- For the Appellant : Mr. Tej Bahadur Singh, Sr. Advocate & Mr. Sanjeev Kumar. For the Respondents:Mr. Ram Shankar Pradhan, Sr.Advocate. Mr. Amrendra Narayan Rai. -------- P R E S E N T THE HON'BLE MR. JUSTICE S.K.KATRIAR THE HON'BLE MR. JUSTICE KISHORE KUMAR MANDAL S.K. Katriar, J. The petitioner of C.W.J.C. No. 15002 of 2004 (Subhash Chandra Singh Vrs. The Bihar State Food & Civil Supply Corporation Ltd. & Ors.), has preferred this appeal under Clause 10 of the Letters Patent of High Court of 2 Judicature at Patna, and is aggrieved by the order dated 23.1.2006, by a learned Single Judge of this Court, whereby the writ petition has been dismissed, and the order dismissing the petitioner from service has been upheld. 2. A brief statement of facts essential for the disposal of the appeal may be indicated. The petitioner (appellant herein) had joined the services of the respondent Corporation in 1975 as a Godown Manager. By order dated 7.12.1993, he was placed under suspension for misappropriation of the Corporation’s properties. Charge-sheet dated 8.7.1994 was served on him wherein it was stated that he had misappropriated the Corporation’s properties valued at Rs. 8, 18, 195/-. The petitioner appeared participated in the enquiry proceedings. The learned Enquiry Officer submitted his report dated 16.12.2003. Second show-cause notice dated 8.1.2004 was served on him. He had shown his cause by his communication dated 27.1.2004. On a consideration of the materials before him including the cause shown by the appellant, the order of punishment dated 3.2.2004 was passed, whereby he has been dismissed from service. The same further states that he shall not be entitled to any amount beyond subsistence allowances for the period of 3 suspension, and a sum of Rs.6,89,570/- shall be realized from him along with simple interest at the rate of 18%. 3. It is relevant that the petitioner was also subjected to a criminal case on the same allegations. He was granted anticipatory bail by this Court on the condition that he should deposit a sum of Rs. 1, 28,625/-. 4. While assailing the validity of the order of the punishment, learned counsel for the appellant submits that the Corporation had started with a pre-determined mind to punish him. The charge-sheet states that as to why appellant had not been dismissed from service. He relies on the following reported judgments: (i) A.I.R. 1958 S.C. 300, Khem Chand V. Union of India and others.(Paragraph nos. 20 and 21). (ii)A.I.R. 1988 S.C. 686, K.I. Shephard and others V. Union of India and others.(Paragraph 16) (iii) A.I.R. 1989 S.C.568, H.L. Trehan and others V. Union of India and others, (Paragraph nos.12 and 13). He next submits that the punishment is disproportionate to the gravity of the proven charges. He also submits that the rate of interest is very high. He lastly submits that the order of non-payment of salary beyond 4 subsistence allowances should have been preceded by a show-cause notice. 5. Learned counsel for the respondent has opposed the appeal and submits that the punishment was imposed on the appellant after a detailed enquiry. The appellant has not been able to show any prejudice. He relies on the judgment of the Supreme Court reported in 2001(6) S.C.C. 392, State of U.P. Versus Harendra Arora and another. (Paragraph nos. 12 and 13).The appellant never raised question of prejudice earlier which is a mixed question of law and facts. He lastly submits that it is also a case of loss of confidence in a situation where the misappropriation is not disputed. He relies on the judgment of the Supreme Court reported in (2005) 3 S.C.C. 254, Divisional Controllers, KSRTC (NWKRTC) Versus A.T. Mane. 6. We have perused the materials on record and considered the submissions of learned counsel for the parties. We would first of all discuss the submission advanced on behalf of the appellant that the charge-sheet itself indicated the proposed punishment indicative of pre- determined mind. The portion of the charge-sheet about which grievance is being raised is reproduced hereinbelow: 5 ^^ mi;qZDr lkjs rF;ksa ls ;g Li’V gksrk gS fd vkius fuxe dh lEifRr dk xyr mn~ns”; ls tkucw>dj xcu djus ds vkjksi esa vkidks D;ksa ugha fuxe dh lsok ls o[kkZLr dj fn;k tk;] vki viuk Li’Vhdj.k i= izkfIr ds 15 fnuksa ds vUnj lefiZr djuk lqfuf”pr djsa A fufgr vof/k rd Li’Vhdj.k vizkIr jgus ij ;g le>k tk;sxk fd vkidks bl laca/k esa dqN ugha dguk gS vksj fuxe ,drjQk dkjZokbZ ds fy, Lora= gksxk A ** It is evident that in view of seriousness of the allegations the learned disciplinary authority did indicate the proposed punishment, but has surely added that “ vki viuk Li’Vhdj.k i= izkfIr ds 15 fnuksa ds vUnj lefiZr djuk lqfuf”pr djsa A ** Apart from the direction, to submit the show-cause, a detailed enquiry did take place in which witnesses were examined and documents were brought on record. The appellant was given adequate opportunity to cross-examine the witnesses of the Corporation, produce his own document and examine his own witnesses in support of his defence. The learned Enquiry Officer discussed the materials on record in detail and came to the conclusion that the appellant was guilty of the misappropriation of Rs. 8, 18,195/- for loss of about 700 quintals of grains. It is also relevant to state that second show-cause notice was also issued to the appellant and he had shown his cause to the same. The report was accepted by the learned disciplinary authority leading to the order of dismissal, and has also been upheld by the learned Single Judge. It appears to us that the 6 proposed punishment indicated in the charge- sheet meant nothing for either side and the charges have been fully established during the course of enquiry. On the contrary, it appears to have given the requisite warning to the delinquent employee to take the proceedings seriously. We have perused the enquiry report and we are convinced that the charges have been framed by documentary evidence. 7. In the case of Khem Chand (supra) the following observations in paragraph 21 of the judgment are illuminating and support the respondent’s case. “21. The learned Solicitor General appearing for the Union of India, then, contends that assuming that the government servant is entitled to have an opportunity not only to show cause against his guilt but also an opportunity to show cause against the punishment proposed to be inflicted on him, the appellant in the present case has had both such opportunities, for by the notice served on him on July 9, 1949, the appellant was called upon to show cause against the charges as well as against the punishment of dismissal in case the charges were established. He points out that in 75 Ind App 225: (AIR 1948 PC 121) (B), the notice given to I.M. Lall did not specify dismissal as the only and particular punishment proposed to be imposed on him, but called upon him to show cause why he should not be dismissed, removed or reduced or subjected to such other disciplinary action as the competent authority might think fit to enforce, whereas in the present case the notice referred to above clearly indicated that the punishment of dismissal alone was proposed to be inflicted. The learned Solicitor General in support of his contention relies on the 7 observations of the majority of the Federal Court quoted above and in particular on the passage where their Lordships stated “that in some cases it would be quite sufficient to indicate the charges, the evidence on which those charges are put forward and to make it clear that unless the person can on that information show good cause against being dismissed or reduced in rank if all or any of the charges are proved, dismissal or reduction in rank would follow and that this would be sufficient in some cases.” He also strongly relies on the circumstance that their Lordships of the Judicial Committee, after quoting the above passage, stated that they agreed with the view taken by the majority of the Federal Court. But as we have already explained, the other observations of their Lordships of the Judicial Committee, which follow immediately, quite clearly indicate that what they agreed with was that a second opportunity was to be given to the government servant concerned after the charges had been brought home to him as a result of the enquiry. Their Lordships made it clear that no action could, in their view, be said to be proposed within the meaning of the section until a definite conclusion had been come to on the charges and the actual punishment to follow was provisionally determined on, for before that stage the charges remained unproved and the suggested punishments were merely hypothetical and that it was on that stage being reached that the statute gave the civil servant the opportunity for which sub-s (3) made provision. A close perusal of the judgment of the Judicial Committee in I.M. Lall’s case (B), will, however, show that the decision in that case did not proceed on the ground that an opportunity had not been given to I.M. Lall against the proposed punishment merely because in the notice several punishments were included, but the decision proceeded really on the ground that this opportunity should have been given after a stage had been reached where the charges had been established and the competent authority had applied its mind to the gravity or otherwise of the proved charge tentatively and proposed a particular punishment. There is as the Solicitor general fairly concedes, no 8 practical difficulty in following this procedure of giving two notices at the two stages. This procedure also has the merit of giving some assurance to the officer concerned that the competent authority maintains an open mind with regard to him. If the competent authority were to determine, before the charges were proved, that a particular punishment would be meted out to the government servant concerned, the latter may well feel that the competent authority had formed an opinion against him, generally on the subject-matter of the charge or, at any rate, as regards the punishment itself. Considered from this aspect also the construction adopted by us appears to be consonant with the fundamental principle of jurisprudence that justice must not only be done but must also be seen to have been done.” While considering the judgment of the Supreme Court in the case of Secretary of State V. I.M. Lall, A.I.R.1945 FC 47, the learned Judges of the Supreme Court observed as follows: “ …Their Lordships made it clear that no action could, in either view, be said to be proposed within the meaning of the section until a definite conclusion had been come to on the charges and the actual punishment to follow was provisionally determined on, for before that stage the charges remained unproved and the suggested punishments were merely hypothetical …” We are, therefore, of the view that the proposed punishment indicated in the charge- sheet is hypothetical, and the charges have indeed been convincingly proved during the course of enquiry proceedings. The judgment in Khem Chand (supra) is, therefore, of no help to the appellant. 9 8. Learned counsel for the appellant has also relied on the judgment of the Supreme Court in K.I. Shephard (supra).The same was not a case with respect to disciplinary proceedings. That was a case where the Hindustan Commercial Bank, the Bank of Cochin Ltd. and Lakshmi Commercial Bank, which were private Banks, were amalgamated with Punjab National Bank, Canara Bank, and State Bank of India respectively in terms of separate schemes drawn under S. 45 of the Banking Regulation Act, 1949. Pursuant to the schemes, certain employees of the first mentioned three Banks were excluded from employment and their services were not taken over by the respective transferee Banks. Such exclusion was made without giving the employees, whose services were terminated, an opportunity of being heard. The Supreme Court in that context observed post -decisional hearing, after the concerned authorities had decided not to absorb their services, was inefficacious. The same has been discussed by the Supreme Court in the case of H.L. Trehan (supra). Both are cases of post-decisional hearing after action was complete. It was in that context that the Hon’ble Judges observed that such post- decisional hearing is inadequate. 10 8.1. On the contrary, in the present case, as stated hereinabove, the charges have been proved after exhaustive enquiry proceedings. The two judgments are inapplicable to the facts and circumstances of the present case. 9. We are of the view that the judgment of the Supreme Court in State of U.P. (supra) is relevant in the present context wherein it has been observed that, except decisions which are of fundamental nature and go to the root of the matter, theory of substantial compliance, or prejudice test, are the appropriate tests. Paragraph nos. 12 and 13 are reproduced hereinbelow for the facility of quick reference: “12. Thus, from the case of ECIL it would be plain that in cases covered by the constitutional mandate i.e. Article 311(2), non-furnishing of enquiry report would not be fatal to the order of punishment unless prejudice is shown. If for infraction of constitutional provision an order would not be invalid unless prejudice is shown, we fail to understand how requirement in the statutory rules of furnishing copy of the enquiry report would stand on a higher footing by laying down that question of prejudice is not material therein. 13. The matter may be examined from another viewpoint. There may be cases where there are infractions of statutory provisions, rules and regulations. Can it be said that every such infraction would make the consequent action void and/or invalid? The statute may contain certain substantive provisions, e.g., who is the competent authority to impose a particular punishment on a particular employee. Such provisions must be strictly complied with as in these cases the theory of substantial compliance may not be available. For example, where a rule specifically provides 11 that the delinquent officer shall be given an opportunity to produce evidence in support of his case after the close of the evidence of the other side and if no such opportunity is given, it would not be possible to say that the enquiry was not vitiated. But in respect to many procedural provisions, it would be possible to apply the theory of substantial compliance or the test of prejudice, as the came may be. Even amongst procedural provisions, there may be some provisions of a fundamental nature which have to be complied with and in whose case the theory of substantial compliance may not be available, but the question of prejudice may be material. In respect of procedural provisions other than of a fundamental nature, the theory of substantial compliance would be available and in such cases objections on this score have to be judged on the touchstone of prejudice. The test would be, whether the delinquent officer had or did not have a fair hearing. In the case of Russell V. Duke of Norfolk it was laid down by the Court of Appeal that the principle of natural justice cannot be reduced to any hard-and-fast formulae and the same cannot be put in straitjacket as to its applicability depends upon the context and the facts and circumstances of each case.” 10. In the instant case, learned counsel for the appellant has not addressed us at all as to what prejudice he has suffered in view of the indication of the proposed punishment in the charge-sheet. We are thus convinced that the indication of the proposed punishment was really hypothetical in the facts and circumstances of the present case. The Corporation acted with fairness in conducting the departmental proceedings where adequate opportunity was afforded to the appellant to establish his defence. To this has to be added the 12 circumstance that the charge-sheet and the order of punishment were separated by almost 10 years, and have been passed by the different Managing Directors. The contention is rejected. 11. Learned counsel for the appellant has next contended that the punishment of dismissal from service is disproportionate. Law is well settled that the quantum of punishment is essentially a managerial and executive function and is normally left to the employer to determine the same in view of the proven charges. This Court in exercise of powers of review can alter the quantum of punishment if it comes to the conclusion that the punishment is grossly disproportionate to the gravity of the proven charges, or it shocks the conscience of the Court. In the facts and circumstances of the present case, we are of the view that the punishment of dismissal from service is the only appropriate punishment in view of the proven charges. 12. Learned counsel for the respondent has rightly relied on the judgment of the Supreme Court in the case of Divisional Controller (supra) wherein the Supreme Court has observed that when an employee is found guilty of misappropriating the Corporation’s fund, there is nothing wrong in the Corporation losing 13 confidence or faith in such an employee and awarding punishment of dismissal. In such cases there is no place for generosity or misplaced sympathy on the part of the judicial forums and interfering therefor with the quantum of punishment. Paragraph nos. 12 and 13 are reproduced hereinbelow for the facility of quick reference: “12. Coming to the question for quantum of punishment, one should bear in mind the fact that it is not the amount of money misappropriated that becomes a primary factor for awarding punishment; on the contrary, it is the loss of confidence which is the primary factor to be taken into consideration. In our opinion, when a person is found guilty of misappropriating the corporation’s funds, there is nothing wrong in the corporation losing confidence or faith in such a person and awarding a punishment of dismissal. 12. This Court in the case of B.S. Hullikatti held in similar circumstances that the act was either dishonest or was so grossly negligent that the respondent therein was not fit to be retained as a conductor. It also held that in such cases there is no place for generosity or misplaced sympathy on the part of the judicial forums and thereby interfere with the quantum of punishment.” 13. We must detain ourselves to consider whether or not the value of the property is being realized with excessive rate of interest. It has been proved during course of enquiry that a sum of Rs.8,18,195/- was the value of grains misappropriated by the appellant. He had deposited a sum of Rs.1,28,625/- in view of the order of the High Court while granting him 14 anticipatory bail. He is, therefore, obliged to deposit Rs.6,89,570/- with simple interest at the rate of 18%. We are of the view that the rate of interest may be reduced. We, therefore, direct that the appellant shall be liable to pay simple interest at the rate of 11% (eleven) from the date(s) of misappropriation till the date of refund of the sum of Rs.6,89,570. 14. In the result, we dismiss the appeal with the aforesaid modification with respect to the rate of interest. In the facts and circumstances of the case, there shall be no order as to costs. ( S.K. Katriar, J.) (Kishore K. Mandal, J.) High Court Patna, Dated 22nd December, 2009 Vinay/ AFR.