IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated 2.3.2009 CORAM The Hon'ble Mr.S.J.MUKHOPADHYA, the Acting Chief Justice and The Hon'ble Mr.Justice R.SUDHAKAR Writ Appeal No.3056 of 2004 and W.A.M.P.No.5658 of 2004 1.Oil and Natural Gas Corporation Ltd., represented by its Chairman-cum- Managing Director, Jeevan Bharathi, Tower-II, 124, Indira Chowk, New Delhi-110 001. 2.The Director (Technical), Oil and Natural Gas Corporation Ltd., Tel Bhavan, Dehradun 248 003, Uttranchal. 3.The Manager (P & A), Office of the Technical Services Establishment, ONGC Shed No.5, Tel Bhavan, Dehradun 248 003, Uttranchal. 4.The Group General Manager - Basin Manager, Oil and Natural Gas Corporation Ltd., Southern Region, CMDA Towers, No.1, Gandhi Irwin Road, Egmore, Chennai-8. (The Group General Manager – Basin Manager, ONGC, Chennai-8 is accepted as 4th appellant vide order of this Court dated 3.8.2004 made in W.A.M.P.No.5102 of 2004) ... Appellants/respondents https://hcservices.ecourts.gov.in/hcservices/ -Vs.- P.Surya Rao. ... Respondent/Petitioner Writ Appeal is filed under Clause 15 of Letters Patent against the order of the learned single Judge in W.P.No.36399 of 2002 dated 29.4.2004. The Writ Petition presented under Article 226 of the constitution of India for the issuance of a writ of certiorarified mandamus to quash the order No.47/335/80/91-TBG dated 4.9.2002 issued by the 3rd respondent after calling for the records from him and consequently direct the respondents to reinstate the petitioner with continuity of service with full arrears of Salary allowances and other attendant benefits including promotion as Superintending Engineer, Chief Engineer and Deputy General Manager in the year 1994, 1997 and 2000 with due seniority over his juniors. For appellants : Mr.N.R.Chandran, Senior Counsel for M/s.King and Patridge. For respondent : A.V.K.Ezhilmani ----- JUDGMENT R.SUDHAKAR,J. The Oil and Natural Gas Corporation Ltd., (hereinafter called as ONGC) and three others have filed the writ appeal, challenging the order dated 29.4.2004 passed by a learned single Judge in W.P.No.36399 of 2002. 2. The respondent herein, a dismissed and reinstated employee has filed the above writ petition aggrieved by the order of the third appellant's proceedings dated 4.9.2002 wherein the third appellant while ordering reinstatement of the respondent/writ petitioner into service with effect from the date of rejoining of the service in ONGC, imposed certain conditions and denied certain benefits. The respondent/writ petitioner, therefore, sought for setting aside the said order and to direct the appellants to reinstate the respondent/writ petitioner with continuity of service with full arrears of salary, allowances and all other attendant benefits including promotion as Superintending Engineer, Chief Engineer and Deputy General Manager in the years 1994, 1997 and 2000 respectively with due seniority over his juniors. https://hcservices.ecourts.gov.in/hcservices/ 3. The brief case of the respondent/writ petitioner for the disposal of this appeal is as follows:- The Respondent/writ petitioner was working as Deputy Superintending Engineer with the appellants' organization. In the year 1990, (i.e.) on 27.8.1990 a case was registered against the respondent/writ petitioner by the Deputy Superintendent of Police, CBI, Visakapatnam under Section 13(2) read with Section 13(i)(e) of Prevention of Corruption Act, 1988, alleging that the respondent/writ petitioner amassed assets disproportionate to his known sources of income. Consequently, respondent/writ petitioner was placed under suspension by ONGC with effect from 1.12.1990 and the suspension was revoked on 9.10.1991 and the respondent joined service once again on 30.10.1991. The CBI filed a charge sheet in C.C.No.4 of 1994 on the file of the Special Judge, for CBI Cases, Visakapatnam. The Special Judge by his judgment dated 1.7.1996 convicted the respondent/writ petitioner and imposed a sentence of rigorous imprisonment for a period of one year and further imposed a fine of Rs.15,000/- and in default to undergo three months simple imprisonment. Respondent/writ petitioner preferred appeal in C.A.No.552 of 1996 on 10.7.1996 before the Andhra Pradesh High Court. In the meanwhile, on 27.8.1996, the Director (Technical ONGC, whose designation has been changed as Director (Technical & Field Service) issued a show cause notice to the respondent/writ petitioner stating that it had been provisionally concluded that the respondent/writ petitioner is not a fit person to be retained in service in view of the conviction by the criminal court and accordingly proposed to impose the penalty of dismissal from service. The show cause notice was served on the respondent/writ petitioner, when he was working at Southern Regional Office at Chennai. Hence, the respondent/writ petitioner filed W.P.No.14059 of 1996 before this Court challenging the show-cause notice. This Court granted interim injunction on 27.9.1996. Hence, the respondent/writ petitioner continued in employment at the Regional office, Chennai as Deputy Superintending Engineer(Civil). However, W.P.No.14059 of 1996 was dismissed on 15.4.1999. Paragraph 18 of the order reads thus:- "18. The impugned memorandum dated 27.8.1996 calls upon the writ petitioner to make a representation on the penalty proposed to be imposed under Rule-34 of the Rules taking into account the gravity of the criminal charge and the conviction. It does not say that the punishment is to be imposed on the strength of facts or conclusions arrived at by a judicial trial. The conclusion appears to be foregone. However, as pointed out by the learned counsel for the first respondent, there is a provision for appeal and it is open to the writ petitioner to convince the disciplinary authority to await the decision in https://hcservices.ecourts.gov.in/hcservices/ the criminal appeal and in case the authority does not heed to the request of the writ petitioner he can go to the higher authority. At the same time, it should also be pointed out that the second respondent can await the decision in the criminal appeal filed by the writ petitioner before invoking Rule-41 of the Rules. But it is entirely left to the respondents to consider the same. In any event the relief prayed for by the writ petitioner cannot be granted. The writ petition is dismissed. No costs. Consequently, W.M.P.No.19123 of 1996 is closed." 4. The Director (Technical), (now the second appellant), however, dismissed the employee/respondent herein from service by order dated 30.7.1999. Respondent/writ petitioner preferred departmental appeal to the first appellant on 14.8.1999 and the same was rejected on 2.2.2000. The Andhra Pradesh High Court by judgment in Appeal passed on 7.11.2001, acquitted the respondent/ writ petitioner in the criminal case holding that the respondent/writ petitioner was not guilty of the charge of possession of disproportionate assets. Respondent/writ petitioner, thereafter, sent a representation dated 19.12.2001 to the first appellant seeking reinstatement with all consequential benefits. He sent several reminders on 9.1.2002, 21.1.2002, 5.2.2002, 13.2.2002 and 20.3.2002. After lapse of several months, the respondent/writ petitioner received the impugned proceedings dated 4.9.2002 from the third appellant imposing certain conditions for reinstatement and called upon the respondent/writ petitioner to give his consent within 21 days and the said proceedings which is under challenge reads as follows:- "(i) Reinstatement will be effective from the date of rejoining the service of ONGC. (ii) You will not be entitled to any benefit for the intervening period with effect from the date of dismissal to the date of rejoining. (iii) You will not be entitled to any career growth for the period of severance and the period will be treated as non-existent/dies non. (iv) Your seniority will be fixed afresh as per the revised position. (v) Your pay will be fixed in the revised pay scale (Pay Scale with effect from 1.1.1997) without any increment benefit. https://hcservices.ecourts.gov.in/hcservices/ (vi) On reinstatement, you will be posted in ER-Assam Asset." Respondent/writ petitioner received the above letter on 7.9.2002. He sent a reply on 11.9.2002 for benefits as claimed and with a further request to the department to furnish the relevant rules under which the above conditions were imposed. The respondent employee requested for more time to take a decision. It appears that there is no reply to this specific request. 5. It was further contended by the writ petitioner that as per the earlier ONGC Vigilance Manual, which was in force earlier to the present set of Rules and Regulations, in terms of Chapter VII, paragraph 2.2., after an acquittal on merits, on reinstatement, the officer is entitled to full pay and allowance and the period of absence will have to be treated as period spent on duty. To this effect a letter dated 18.9.2002 was sent to the appellants M/s.ONGC quoting the provision of the Vigilance Manual and asking reinstatement with all benefits. It is now clarified and not disputed that while considering the period under issue, 1994 Rules alone will apply to the facts of this case. The writ appeal W.A.No.910 of 1999 filed against the dismissal of W.P.No.14059 of 1996 challenging the show-cause notice dated 27.8.1996, was dismissed on 24.4.2002 stating that the respondent/writ petitioner should pursue his appellate remedy and take further action if any adverse order was passed. The appeal as stated earlier, was rejected on merits. The impugned order dated 4.9.2002 was passed thereafter. 6. The first contention raised on behalf of the respondent/writ petitioner before the learned single Judge was that once his conviction has been set aside by the High Court on merits and the charge has been held not proved, the whole basis of the dismissal goes, he will be entitled to all benefits on reinstatement. The competent authority in terms of Rule 34, dismissed the respondent/writ petitioner from service by way of penalty invoking the power conferred under rule 41(a) of the ONGC (Conduct, Discipline and Appeal) Rules, 1994, in view of conviction by a criminal court on the above stated criminal charge. When once the criminal charge is effaced, there is no ground to dismiss the respondent/writ petitioner from service. The second contention was that when he was not charged with any misconduct mentioned in Regulation 2(k) read with the Schedule thereunder, except the one in item 12 namely 'convictions in any Court of law for any criminal offence', the appellants cannot deprive the employee of the full benefits on reinstatement. The next contention was that if the employee was fully exonerated, he will be entitled to full pay and allowances, as if he had not been dismissed or removed or suspended and the period of absence will be treated as one spent on https://hcservices.ecourts.gov.in/hcservices/ duty. It was further contended that the action of the appellants, violates respondent/writ petitioner's fundamental right under Articles 14 and 16 of the Constitution of India. 7. Before the learned single Judge on behalf of appellants/ respondents, no counter has been filed by the appellants ONGC in the writ petition. However, a counter is filed in W.P.M.P.No.54753 of 2002 in W.P.No.36399 of 2002. It is stated that the ONGC was not responsible for the criminal case proceedings since the criminal case itself was initiated by the CBI and not by M/s.ONGC. The Court of Special Judge for CBI Cases, Visakhapatnam found the respondent/ writ petitioner guilty under the Prevention of Corruption Act and by judgment dated 1.7.1996 convicted the respondent/writ petitioner to undergo one year rigorous imprisonment and pay a fine of Rs.15,000/-. Following the above conviction, appellants issued a memorandum of show cause dated 27.8.1996 to the respondent/writ petitioner calling upon him to make his representations with regard to proposed punishment of dismissal from service in terms of Rule 34 of the ONGC Conduct, Discipline and Appeal Rules 1994. The respondent filed W.P.No.14059 of 1999 to quash the above memorandum of show-cause dated 27.8.1996. The said writ petition was dismissed by this Court as per order dated 15.4.1999 with the observation that the writ petition was premature. The respondent/ writ petitioner filed appeal in W.A.No.910 of 1999 and the same was also dismissed on 24.4.2002 with observation that the respondent/ writ petitioner should pursue the appellate remedy. The second appellant, the competent authority passed an order dated 30.7.1999 dismissing the respondent/writ petitioner from service. The period of suspension from 1.12.1990 to 29.10.1991 was treated as "non-duty period". But in the meanwhile, as stated earlier, the High Court of Andhra Pradesh, Hyderabad by order dated 7.11.2001 allowed C.A.No.52 of 1996 setting aside the judgment of conviction imposed on the respondent/writ petitioner and also ordered refund of the fine amount. And therefore, there is no issue with regard to reinstatement. But, the issue that still remained is whether the reinstatement benefits will operate retrospectively (i.e.) with effect from the date of dismissal or prospectively (i.e.) as and when the respondent/writ petitioner reports for duty. Reliance was placed on Rule 25(2)(B) of the ONGC Service Rules, 1995, "(2)(B) Where an employee is reinstated in service under item (c) of clause 2(A), the order of reinstatement shall specify:- (i) the amount of proportion of pay and allowance, if any, to be paid to the Employee for the period of his absence between the date of https://hcservices.ecourts.gov.in/hcservices/ termination of his services and the date of his reinstatement; and (ii) whether the said period shall be treated as a period spent on duty for any specified purpose or purposes" read with Sub Rule (2)(A) and (1), it is contended that reinstatement is not pursuant to a departmental enquiry, but because of the decision of the High Court, Andhra Pradesh setting aside the conviction. 8. In the instant case, the dismissal was not on account of the departmental enquiry, but only a sequel to the action initiated by the State. The prosecution of the respondent/writ petitioner was not at the behest of the ONGC, but one initiated by the CBI. While that being so, the question that needs to be addressed is whether the employer/ONGC can be saddled with the responsibility of payment of salary and benefits for the period during which the employee was out of office. The competent authority is the sole Judge as to how that period is to be treated. Taking into consideration the well settled principle of law, viz., "No Work No Pay" during the period of severance, the ONGC offered to reinstate the respondent/writ petitioner vide its order dated 4.9.2002 on the terms and conditions stipulated therein. The ONGC further contended before the learned single Judge that as the respondent employee was dismissed from service on account of conviction and is reinstated on his acquittal. He, however, would not be entitled to back wages or other benefits since he had disabled himself from rendering service during the period of severance. Based on decision of the Apex Court it was contended that the discretion to pay back wages, allowance and other benefits for the period of severance rests exclusively with the employer. Therefore, it is well within the powers of the competent authority to treat the period of dismissal as not spent on duty and refuse the employee back wages, benefits and allowances. Respondent/writ petitioner was convicted by a Court of law. Hence, there is no question of infringement of Articles 14 and 16 of the Constitution of India. It is not open to the respondent/writ petitioner to insist upon payment of salary and allowances for the period he did not work and object to the conditions stipulated in the impugned order. 9. In the reply affidavit filed by the respondent/writ petitioner, it is stated that the prosecution against the respondent/writ petitioner was started only after a sanction order dated 24.12.1994, by the Director (Technical) ONGC. Had the ONGC applied its mind to employee's representation, the prosecution itself may not have commenced and the respondent/writ petitioner would not have been put to the agony of prolonged criminal prosecution, loss of employment and other benefits. Hence, it is not correct to say that dismissal of the respondent/writ petitioner came without any action https://hcservices.ecourts.gov.in/hcservices/ by the ONGC. Respondent/writ petitioner has suffered loss of employment and all the adverse consequences due to a callous order of the sanction passed by the ONGC and hence, he is entitled to be treated in service with all consequential benefits. The counter- affidavit is wholly silent about the specific provision in the Vigilance Manual which says that when reinstatement following an acquittal in criminal prosecution, the employee is entitled to be reinstated with all consequential benefits of continuous service. On the contrary, the provision in the Service Rules which empowers the Disciplinary Authority to take action, when a dismissal pursuant to the disciplinary action is set aside, has been relied upon. The order of the third appellant is absolutely whimsical and not based on any reason or justification and has not followed the rules and regulations. 10. At the outset, it has to be clarified that though the conviction by the Special Court, for CBI Cases came to be passed on 1.7.1996, the order of dismissal passed by the appropriate authority was passed on 30.7.1999, by that time, the new ONGC Conduct, Discipline and Appeal Rules, 1994 has come into effect. Therefore, the case of the respondent employee will have to be considered on the basis of the Rules and Regulations as amended and contained in the Human Resources (HR) Manual 1st April 2003. 11. Learned single Judge referred to following Rules and Regulations relating to ONGC for the purpose of deciding the controversy between the parties:- (i) Regulation 14 of the Oil And Natural Gas Corporation Limited Pay and Allowances, Regulations, 1972(Chapter 4 of HR Manual, page 221, as amended from time to time); (ii) Rules 3(j), 33, 34 and 41(a) of the Oil and Natural Gas Corporation Limited Conduct, Discipline and Appeal Rules, 1994 (Chapter 9 of HR Manual, Page 385, came into force from 23.12.1994) It will be relevant to extract these provisions for better understanding of the lis and for considering this appeal filed by the Department, viz., ONGC aggrieved by the final order passed by the learned single Judge allowing the writ petition. 12. Regulation 14(b)(iii)(a), (b), (c) and (d) of the Oil And Natural Gas Corporation Limited Pay and Allowances, Regulations, 1972 (Chapter 4 of HR Manual, page 221-234, as amended from time to time) reads thus:- https://hcservices.ecourts.gov.in/hcservices/ "14. Period under suspension: An employee under suspension shall be entitled to the following payments namely, (a) xxx (b) Any compensatory allowance admissible from time to time on the basis of pay, of which the employee was in receipt on the date of suspension: (i) xxx (ii) xxx (iii) (a) When an employee, who had been dismissed, removed, compulsorily retired or suspended, is reinstated or would have been reinstated but for his retirement on superannuation while under suspension, the authority competent to order the reinstatement shall consider and make a specific order:- (i) regarding the pay and allowance to be paid to the employee for the period of his absence from duty or for the period of suspension ending with the date of his retirement on superannuation, as the case may be, and (ii) whether or nor the said period shall be treated as a period spent on duty. (b) Where the authority mentioned in clause (a) above is of the opinion that the employee has been fully exonerated or, in the case of suspension, that it was wholly unjustified, the employee shall be given the full pay and allowances to which he would have been entitled had he not been dismissed, removed, compulsorily retired or suspended, as the case may be. (c) In other cases, the employee shall be given such proportion of such pay and allowances as such competent authority may specify in this behalf; Provided that the payment of allowance under Clause (b) or clause (c) shall be subject to all other conditions under which such allowances are admissible. Provided further that such proportion of such pay and allowances shall not be less than the subsistence grant admissible under these regulations. https://hcservices.ecourts.gov.in/hcservices/ (d) In a case falling under clause (b), the period of absence from duty shall be treated as a period spent on duty for all purposes." (emphasis supplied) 13. Rule 3(j) of the Oil and Natural Gas Corporation Limited Conduct, Discipline and Appeal Rules, 1994(Chapter 9 of HR Manual, Page 385, came into force from 23.12.1994) reads thus:- "3. Definitions – In these Rules, unless the context otherwise requires:- (a) to (i) x x x (j) "Misconduct", without prejudice to the generality of the term "Misconduct" and the specific provisions made in these Rules, includes acts and omissions specified in the Schedule II annexed to these Rules." (emphasis supplied) 14. Rule 33(1)(c), (2)(b), (3) and (4) of the Oil and Natural Gas Corporation Limited Conduct, Discipline and Appeal Rules, 1994 (Chapter 9 of HR Manual, Page 385, came into force from 23.12.1994) reads thus:- "33. SUSPENSION – (1) The Appointing Authority, or any other Authority to which it is subordinate, or the Disciplinary Authority or any other Authority empowered by the Company by general or special order to impose a penalty as specified in Rule 34 may place an Employee under suspension: (a) x x x (b) x x x (c) Where a case against him in respect of any criminal offence is under investigation, inquiry or trial. (2) (a) x x x (b) An employee shall also be deemed to have been placed under suspension from date of his conviction; if in the event of a conviction for an offence, he is sentenced to a term of imprisonment https://hcservices.ecourts.gov.in/hcservices/ exceeding 48 hours and is not forthwith dismissed or removed or compulsorily retired consequent to such conviction. (3) Where a penalty or dismissal, removal or compulsory retirement from service imposed upon an Employee under suspension is set aside in appeal or on review under these Rules and the case is remitted for further inquiry or action or with any other directions, the order of his suspension shall be deemed to have continued in force on and from the date of original order of dismissal, removal or compulsory retirement and shall remain in force until further orders. (4) Where a penalty or dismissal, removal or compulsory retirement from service imposed upon an Employee is set aside or declared or rendered void in consequence or by a decision of a court of law and the Disciplinary Authority, on a consideration of the circumstances of the case decides to hold a further inquiry against him on the allegations on which the penalty of dismissal, removal or compulsory retirement was originally imposed, the Employees shall be deemed to have been placed under suspension by the Appointing Authority from the date of the original order of dismissal, removal or compulsory retirement and shall continue to remain under suspension until further holders. (emphasis supplied) 15. Rule 34 - Major Penalties (v), (vi), (vii), (viii) and (ix) of the Oil and Natural Gas Corporation Limited Conduct, Discipline and Appeal Rules, 1994(Chapter 9 of HR Manual, Page 385, came into force from 23.12.1994) reads thus:- "34. NATURE OF PENALTIES – The following penalties, for good and sufficient reasons and as hereinafter provided, be imposed on an Employee, who is found guilty of misconduct or a breach of any Rules or orders made by the Company or by any other Authority empowered in that behalf by the Company, namely; Minor Penalties: (i) to (vi) x x x https://hcservices.ecourts.gov.in/hcservices/ Major Penalties: (v) Reduction to a lower stage in the time scale of pay for a specified period, with further directions as to whether or not the Employee will earn increments of pay during the period of such reduction and whether on the expiry of such reduction, the reduction will or will not have the effect or postponing further increments of his pay. (vi) Reduction to a lower time scale of pay, grade, post or service which shall ordinarily be a bar to the promotion of the Employee to the time scale of pay, grade, post or service from which he was reduced, with or without further directions regarding conditions of restoration to the grade, post or service from which the Employees was reduced and his seniority and pay on such restoration to that grade, post or service. (vii) Compulsory retirement. (viii) Removal from service which shall not be a disqualification for future employment. (ix) Dismissal from service which shall ordinarily be a disqualification for future employment under the Company." 16. Rule 41(a) of the Oil and Natural Gas Corporation Limited Conduct, Discipline and Appeal Rules, 1994(Chapter 9 of HR Manual, Page 385, came into force from