C^r^.. ^ ^" S^a ...<( '^ // J S!. .6 ^r. Nri< 1»S^ ^ IN THE HIGH COURT OF MADHYA PRADESi : ^JABALFUR (M.P«) miT PETITION N0 t_^3o / 1997. PETITIONSR s t R.S.Krishnamoorthy, aged 57 years, S/o Shri R. SuryaEia rayan9- Resi dent ©fHpuse No<q-8, Adarsh - Nagar, Surg, Bist<Dtirg(M«P.) V___B_R S ® S RESPGNDSNTS ; s1: Ferro Serap Nigam Limited, ^ Through- Chairman, <^ ./-G»-2^€&^ Itt.fltK FSNL Bhaw8.n,Central - Avenue, Equipment Zone , Bhilai -;490001 (M.P») !2; Maiaaging Director, ^ Ferro Scrap Nigam Limited, F S NL Bhawan, Central - Avenye, Bluipment Zone , Bhilai,490 001, DLstri©tIlirg (MoP.) ^RIT PETITION UNDm__ARTICT^_2?6_/_^?7 , GF THE GGNSTITUTION OF INHEA. (i) Smt. R, Satya Lakshmi Kameshvvari aged about 5S^W/o Late Shri R.S.Krishiiamurty (ii) Uday Eihask.ar Ravi S/b Late Shri R.S.Krishnamyil^ aged about 35 years. Both resident of 3-5-1090/A/'4 Lalcshmi Colony Opp. YMCA Narayanagiida Hyderabad-500 02C).. ^ /•' fc:' & ^^^ ^.H,° HIGH COURT OF CHHATTISGARH, BILASPUR SINGLE BENCH : HON*BLE SHRI MANINDRA MOHAN SHRIVASTAVA,J. Writ Petition No. 430/1997 PETITIONERS RESPONDENTS Smt. R. Satya Laskhmi Kameshari & another Versus Ferro Scrap Nigam Limited & another ORDER f}CT6^^^— Sd/- Manindra Mohan Shrivastava Judge fct223£sia3a£:i %3^, "^ '"11 ir'-^ HIGH COURT OF CHHATTISGARH : BILASNJR SINGLE BENCH : HON'BLESHM MANINDRA MOHAN SHRIVASTAVA.J. Writ Petition No. 430/1997 PETITIONERS Smt. R. Satya Laskhmi Kameshari 85 anofher Versus RESPONDENTS Ferro Scrap Nigam Limited & another Writ Petition under Article 226/227 of the Constitution of India Appearance: Shri N.K. Vyas, counsel for the petitioners. Shri P. S. Koshy, counsel for the respondents. ORDER (Passed on 1 ^09.2010} 1. By this petition, the petitioners have assailed legality and validity of order dated 7th Januaiy, 1997 (Annexure P-1) passed by the Board of Directors of respondent No.l, by which penally of dismissal from service has been imposed on the deceased-petitioner R.S. Krishnamoorthy. 2. During the pendency of the petition, the original petitioner -R.S. Krishnamoorthy died and his legal heirs were allowed to be substituted in his place. 3. Facts necessary for decision of controversy involved in the petition as narrated in the petition are that from December, 1987 to August1989, the deceased-petitioner worked in Bhilai Steel Plant in various capacities, the last being Manager (Finance). He was appointed in Ferro Scrap Nigam Limited (for short "the Nigam") as Assistant General ~<:! ^ Manager (Finance & Accounts) on 4.8.1989 by order dated 7.7.1989 (Annexure P-II) issued by the Assistant General Manager (P 8& A). On 30th September, 1989, the petitioner became head of the Finance and Accounts Department and was designated as Assistant General Manager (Finance 85 Accounts), in-charge. He was promoted as Dy. General Manager (Finance 85 Accounts) vide order dated 27th July, 1992 (Annexure P-XXII) passed by the Managing Director, in the pay- scale of Rs.6250-175-7475/- w.e.f. 21st July, 1992 on probation for a period of6 months. Vide order dated 27.8.1992 (Annexure P-XXIII), pay of the petitioner was fixed at a basic pay of Rs.7300/- w.e.f 30th July, 1992 in the scale in which he was appointed stating that his increment would be due on 1.7.1993 to be granted upon confirmation. It is the case of the petitioner that his pay-scale was revised retrospectively w.e.f. 1.1.1992 in the pay-scale ofRs.8250-300-10050/- and pay was fixed at Rs.9750/-, but the increment which was due for payment in July, 1993 was not added. Further case of the petitioner is that even before his promotion as Dy. General Manager in the year 1992, he was appointed as Chairman of Ferro Scrap Nigam Staff Provident Fund Tmst (for short "the Tmst"). Petitioner, vide letter dated 11.1.1993 tendered his resignation and requested for his release w.e.f. 30th April, 1993, but instead ofaccepting his resignation, the petitioner was placed under suspension vide order dated 3.7.1993 (Annexure P- V), which was later on withdrawn vide order dated 7.10.1994 (Annexure P-VA). 4. A charge sheet was issued to the petitioner on 3.7.1993(Annexure VI) alleging misconduct on the part of the petitioner, thereby initiating a departmental enquiiy. The petitioner filed a Writ Petition No. 1832/95 ^f^I?®^ 's^~\ 1Tlj %>-^/ ^^^^ u -r'Z- challenging the correctness and validity of the enquiry, in which, initially, an interim order staying departmental enquiry was passed on 12.6.1995. That writ petition was flnally disposed off vide order dated 21.3.1996 (Annexure P-IX) with a direction to change Enquiry Offlcer and to hold enquiry at Bhilai and also to conclude theenquiry within a period of 3 months from the date of production/communication of the order. Later on, the enquiry was completed and closed on 17.5.1996 and the enquiiy report was submitted by the Enquiry Officer on 7.6.1996 (Annexure P-18). The Board passed resolution for dismissal of the petitioner from service and finally an order was passed on 7.1.1996 (Annexure P-I) by which penalty of dismissal from ser^ice was imposed on the petitioner. 5. Learned counsel for the petitioners submitted that in view of the provisions contained in Conduct, Discipline 85 Appeal Rules, 1982 (Annexure P-XIX) (hereinafter referred to as athe Rules of 1982"), though, the Disciplinary Authority of the petitioner was Chairman/Managing Director, upon completion of enquiiy, the matter relating to departmental enquiry was taken up by the Board, which is the Appellate Authority and the order of penalty was imposed by the Appellate Authority which is in violation of the Rules of 1982. It is also contended that the petitioner was deprived of taking assistance of defence assistant which has violated the provisions contained in Rule 25 (6) ofthe Rules of 1982. Next contention of learned counsel for the petitioners is that he was not given due and proper opportunity to defend the charges. Though, the petitioner had submitted a list of eight defence witnesses, which he proposed to examine in his defence, respondents allowed the petitioner \ &-' to examine only four of them and his application for examining four other important witnesses was illegally, arbitrarily and malafide rejected which seriously and adversely affected the petitioner and prejudiced him in his defence. The petitioner's prayer to summon P.C. Jain, Tax Consultant, was arbitrarily rejected, which seriously prejudiced his defence. It is next contended by learned counsel for the petitioners that though the petitioner had demanded certain important and relevant documents/ reports to be summoned but the same was perfunctory rejected. Next contention of learned counsel for the petitioners is that the enquiry report is completely biased as the defence of the petitioner has not been considered. It is submitted that the alleged misconduct related to failure and gross negligence in not collecting Govt. securities, non-remittance of employer's and employees' contribution, non-collection of funds from the Company, non-recovery of income tax receivables, non-payment of gratuity to ex-employees and allegations relating to malfunctioning/improper functioning ofthe Trust, petitioner has been held singularly responsible for every affair of the Trust without any action being taken against other Members of the trust and the Manager of the Trust, which is an act of hostile discrimination. It is submitted that the Manager was responsible for various commission and oinissions, which fell within the job specification and duties of the Manager of the Trust. All these aspects were not taken into consideration by the Enquiry Officer. It is argued that the defence of the petitioner was not at all considered while holding him guilty of charges and the Board took the decision to dismiss the services of the petitioner from service thereby depriving him of his valuable right to prefer an appeal under Rule 33 of the Rules of 1982. Learned counsel ^A. for the petitioners relies upon the decisions of Supreme Court in the matter of Surjit Ghosh Vs. Chairman & Managing Director, United Coininercial Bank 8& Ors.1, J. K. Aeeanwal Vs. Haryana Seeds Development Corporation Ltd. & Ors.2, Hardwari Lal Vs. State of U.P & Ors.3, Union of India Vs. Prakash Kumar Tandon4 Boneaieaon Refinery & Petrocheinicals Ltd. & Ors. Vs. Girish Chandra Sarma5, Anil Kumar Vs. Presidine OfRcer & Ors.6. Mathew Oommen Vs. Suseela Mathew7, State of U.P. and Ors. Vs. Saroj Kumar Sinha8 and Chairman-cum-Manaeine Director, Coal India Ltd. and Anr. Vs^ Mukul Kumar Choudhari & Ors,9. 6. On the other hand, submission of learned counsel for the respondents is that the petitioner while working as Chairman of the Trust was found to have committed serious and gross mistake which is clear from the charges levelled against the petitioner. Learned counsel for the respondents argues that the petitioner was appointed as Deputy General Manger by the Board, who is the Appointing Authority of the petitioner and therefore the Board was fully competent to act as the Disciplinary Authority. It is argued that the relevant documents were given to the petitioner and in the absence of any prejudice caused to the petitioner; the petitioner is not entitled to any relief only on the ground that some of the documents were not supplied to him. Learned counsel for the respondents further argued that some of the documents were privileged documents and therefore the petitioner was not entitled ' (1995) 2 SCC 474 2AIR 1991 SC 1221: (1991)2 SCC 283 3 AIR 2000 SC 277 : (1999) 8 SCC 582 4 2009 AIRSCW 809 52007AIRSCW5185 6 AIR 1985 SC 1121 : (1985) 3 SCC 378 72006AIRSCW209 82010AIRSCW1077 9 2009 AIR SCW 5596 ^^Est^ .^.•y^^^ / /'( ^ •:X;i^^ %. ^^^y lv^ss^lr ^ to disclosure of those documents as provided in Rule 25 (10) of the Rules of 1982. He further submits that the petitioner has failed to demonstrate that the document demanded by him and not supplied were of such relevance that non-supply prejudiced him in his defence while defending any of the charges levelled against him. It is next contended by learned counsel for the respondents that the application of the petitioner for examining the defence witnesses was thoroughly scrutinized and upon reaching to the satisfaction with regard to relevancy of the witnesses, the Authority allowed the petitioner to examine four witnesses and, therefore, it cannot be said that rejection of petitioner's application for examining the remaining 4 witnesses in any manner prejudiced the case of the petitioner or violated the principles of natural justice. Learned counsel for the respondents stated that vide order dated 21.3.1996, enquiry was directed to be completed within 3 months and therefore respondents were duty bound to comply with the order of the Hon'ble Court. Therefore, the enquiry was completed within the time stipulated affording due and proper opportunity of hearing to the petitioner. He argues that the petitioner, in order to protract and delay the enquiry so that the employer could not complete the same within the time frame allowed by Hon'ble Court, deliberately made baseless demand with regard to documents, examination of witnesses, which were considered and relevant documents and witnesses were allowed to be placed on record and irrelevant rejected. Hence, there is no violation of principles of natural justice much less violation of the Rules of 1982 and the enquiry is therefore in accordance with the rules. He lastly submitted that the Enquiry Officer, after considering the entire oral and documentary evidence on record, particularly by the prosecution as well as by the defence, considered in meticulous details after scrutiny of evidence on record with respect to each of the charges levelled against the petitioner and reached to the conclusion with regard to the guilt of the petitioner. Learned counsel for the respondents has also argued that in the absence of there being any defect in the decision making process, the Court would not embark upon re-assessment or re-scrutiny of the evidence on record so as to disturb the flndings of fact based on preponderance of probabilities on the basis of available evidence on record. Learned counsel for the respondents placed reliance upon the decisions in the cases of Canara Bank Vs. V.K. AwasthvloState Bank of India & Ors. Vs. Ramesh Dinker Punde1 1, Jaeadeesam D Vs. Bank of Barodal2, UCO Bank & another Vs. Rajinder Lal Capoor13 Moni Shankar Vs. Union of India & another14, Chairman and Manaeine Director, V.S.P. 85 Ors. Vs. Gooaraiu Sri Prabhakara Hari Babu15. State of Uttar Pradesh & another Vs. Man Mohan Nath Sinha & another16, Administrator, Union Territory of Dadra & Naear Haveli Vs. Gulabhia M. Lad17 , U.P State Textile Corooration Ltd. Vs. P.C. Chaturvedi & Ors.18, Pt. D. Aher Vs. State ofMaharashtra19, Ashok Kumar Sonkar Vs. Union oflndia 85 Ors.2o, Bank oflndia& Ors. Vs. T. Joeram21 7. The first and foremost submission of learned counsel for the petitioner, to assail the validity of the order of penalty that the power of 102005AIRSCW 2005 " 2006 AIRSCW 5457 12 2007 (2) LLJ 5^9 Madras 13 (2007) 6 SCC 694 14 (2008) 3 SCC 484 15 (2008) 5 SCC 569 16 (2009)88cc 310 17 (2010)58cc 775 18 (2005)88cc 211 19 (2007) 1 SCC 445 20 (2007) 4 SCC 54 21 (2007) 7 SCC 236 2^ Disciplinaiy Authority has been exercised by the constituted Appellate Authority itself, contrary to the provision contained in the Rules of 1982, needs to be examined first. The factual foundation laid in the petition by the petitioner is that the petitioner was initially appointed as Assistant General Manager (Finance & Accounts), vide order dated 7th July, 1989 (Annexure P-II). The order was issued by Assistant General Manager (P & A) and the order reads that the Managing Director has been pleased to offer to the petitioner the appointment. TKe petitioner therefore pleads that he was appointed by the Managing Director. In paragraph 5.6 of the petition, it has been categorically pleaded that he was awarded promotion to the post of Deputy General Manager by the Directors in July, 1992 in the pay scale of Rs.6250- 175-7475. The averments made in the petition by the petitioner contained a pleading that the petitioner was appointed as Chairman of Trust w.e.f. 23.10.1989. According to the petitioner, such appointment as Chairman was contraiy to the Trust rules and regulations, placed on record as Annexure P-III. In paragraph 5.25 of the petition, the petitioner has made categoric averment that there exist provision of appeal under Rule 33 of the Rules of 1982 and therefore in view of the provisions contained in the Rules and the schedule appended thereto, the Board happens to be the Appellate Authority of the petitioner. The first ground raised in the petition is a below- "1. That, the order of dismissal dated 7.1.1997 is illegal and passed by a Superior Authority to the appointing authority thereby deprived the petitioner of his valuable right to prefer an appeal under Rule 33 of the Conduct, Discipline and Appeal Rules of the Company .?? •stsj^a.s^&SSzs^S^^^&SsS^Sc ^y^ r Q'\ 1 \ '<t'<i 1 •u-.,.jy? '^K^S^ 9 \^^ 9,<^ 9. 8. In reply to paragraph 5.19 of the petition, respondents have averred that the petitioner was promoted as Dy. General Manager and the Appointing Authority for the similar post is Board of Directors. In reply to paragraph 5.25 of the petition, it has been stated in the return that the Appointing Authority for the post of Dy. General Manager is the Board of Directors, who was the appointing authority on the date and time of dismissal of the petitioner. It has also been averred that it is only the Appointing Authority who could dismiss the employee. Respondents have clearly stated in their return at various places that the matter relating to disciplinary action against the petitioner after submission of enquiry report was considered by the Board of Directors itself as the charges related to gross misconduct and, therefore, it was the Board of Directors which was the appropriate authority to act as Disciplinary Authority. Though in paragraph 5.25 it has been stated that where the Appointing Authority is the Disciplinary Authority, the provision of appeal to higher authority does not find place. It has also been stated that the petitioner could even then appeal to he same Board of Directors in case he had any material defence. However, while replying to ground one of the petition, it has been stated that in case the Appointing Authority is Disciplinary Authority, the opportunity of appeal to higher authority is naturally lost. The petitioner by way of rejoinder has rebutted the averment of the return with regard to Appointing Authority in respect of the Dy. General Manager and has also placed on record the order of promotion (Annexure P-XII). Petitioner has placed on record the entire rules of 1982 as Annexure P XIX to demonstrate that the petitioner was appointed on a post which is category -II post for which the Appointing Authority is the Chairman/Managing Director and the Board is the appellate authority. 10 'i^ A perusal of appointment order of the petitioner shows that the petitioner was promoted by the Managing Director on the post of Dy. General Manager with the approval of the Board of Directors. 9. The scheme of the Rules of 1982 is required to be examined in the above stated factual scenario. Rule 24 ofthe Rules of 1982 read thus: "24. Disciplinary Authority The Board or the Disciplinary Authority, as specified in the schedule, may impose any of the penalties specified in Rule 23 on nay employee." 10. Provision contained in schedule provides that in respect of Executives in grades below those covered by Sr. No.l but above Rs. 1900-2500/-, Disciplinary Authority / Competent Authority would be the Chairman/Managing Director, the Board would be Appellate Authority as well as Reviewing Authority. The Scheme of the Rule discloses that the Disciplinary Authority and the Appellate Authority would be as specified in the Schedule and it is nowhere provided either in the body of the Rule or in the Schedule that the Appointing Authority would be the Disciplinary Authority. It is therefore necessary to examine as to who appointed the petitioner. In order to find out as to who would be the Disciplinary Authority and Reviewing Authority in respect of the petitioner, it has to be examined with reference to provisions contained in Schedule. The promotion order of the petitioner placed on record as Annexure P-XXII clearly shows that this was not an order of appointment by the President of India. Moreover, the pay scale of the petitioner is above Rs. 1900-2500/-,therefore in the cae of petitioner, as per Schedule, the Disciplinary Authority would be Chairman/Managing Director and the Board happens to be the 11 't&^ Appellate Authority/Reviewing Authority. There exist clear provision with regard to remedy of departmental appeal in Rule 33 of the Rules of 1982 which make detailed provision in that regard by providing specific remedy of appeal. The order of appointment clearly shows that the petitioner was appointed by the Managing Director. The averment of the respondents that the Board of Directors was the Appointing Authority is neither supported from the order of the promotion nor from any rules relating to recruitment/appointment placed on record by the respondent. The contents of the order of appointment that the promotion order is issued with the approval of the Board would not by itself mean that the Board is the Appointing Authority. Respondents have not demonstrated with reference to any rules relating to appointment that the power of appointment in respect of the Executives of the rank of Dy. General Manager was with the Board of Directors and that the Managing Director was only to communicate the order. Therefore, it is established beyond all pale of doubt that under the scheme of Rules of 1982, the Chairman/Managing Director was the Disciplinary Authority, whereas the Board was Appellate Authority and Reviewing Authority. Thus, the disciplinary power at the first instance, could have been exercised either by the Chairman or the Managing Director. The petitioner had an opportunily to appeal to the Board and also a further right to review. However, since the Board itself acted as Disciplinary Authority and passed the order of dismissal, the petitioner was clearly denied his right of appeal as also right of review. The impugned order of dismissal by the respondent FSNL fherefore, suffers from an inherent defect. f€^\ i ^S^ I ';^ ^&^' %^. assssS^ 12 Q .. 11. The issue as has been raised in this petition in the aforesaid factual scenario arose for consideration before the Supreme Court in the case of Surjit Ghosh (supra). In identical situation, the Supreme Court found that the order of dismissal was passed by the Appellate Authority and not by the Disciplinary Authority and as the rule provide for remedy of appeal and review, the order passed by the Appellate Authority was held illegal and unsustainable in law. 12. The submission of learned counsel for the respondents that unless the prejudice is shown to have been caused on account of Appellate Authority exercising the powers of Disciplinary Authority, petitioner is not entitled to any relief and secondly that as the order of punishment has been passed by the higher authority, no appeal under the Rules could be availed and it is not necessary to provide for such remedy of appeal were repelled by the Supreme Court in following words. c(6. The respondent-Bank in its submission contended that although it is true that the Deputy General Manager had acted as the disciplinary authority when he was in fact named under the Regulations as an appellate authority, no prejudice is caused to the appellant because the Deputy General Manager is higher in rank than the disciplinary authorily, viz., the Divisional Manager/AGM (Personnel). According to the Bank, it should be held that when the order of punishment is passed by a higher authority, no appeal is available under the Regulations as it is not necessary to provide for the same. It was also contended that there is no right to appeal unless it is provided under the Rules or Regulations. Although the argument looks attractive at first sight, its weakness lies in the fact that it tries to place the Rules/Regulations which provide no appeal on par with the Rules/Regulations where appeal is provided. It is true 13 that when an authority higher than the disciplinary authority itself imposes the punishment, the order of punishment suffers from no illegality when no appeal is provided to such authority. However, when an appeal is provided to the higher authority concerned against the order of the disciplinary authority or of a lower authority and the higher authority passes an order of punishment, the employee concerned is deprived of the remedy of appeal which is a substantive right given to him by the Rules/Regulations. An employee cannot be deprived of his substantive right. What is further, when there is a provision of appeal against the order of the disciplinary authority and when the appellate or the higher authority against whose order there is no appeal, exercises the powers of the disciplinary authority in a given case, it results in discrimination against the employee concerned. This is particularly so when there are no guidelines in the Rules/Regulations as to when the higher authority or the appellate authorily should exercise the powers of the disciplinary authority. The higher or appellate authority may choose to exercise the power of the disciplinaiy authority in some cases while not doing so in other cases. In such cases, the right of the employee depends upon the choice of the higher/appellate authority which patently results in discrimination between an employee and employee. Surely, such a situation cannot savour of legality. Hence we are of the view that the contention advanced on behalfofthe respondent-Bank that when an appellate authorily chooses to exercise the power of disciplinary authority, it should be held that there is no right of appeal provided under the Regulations cannot be accepted." UL 13. I have, therefore, no hesitation to hold that the impugned order of dismissal suffers from inherent defect and is liable to be set aside only 14 on the ground that it was passed by the Appellate Authority and not by the Disciplinary Authority. 14. Some other grievances have been raised by the petitioner in the petition touching upon other illegality and irregularity and also violation of principle of natural justice in the conduct of departmental proceedings. However, it