1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. CIVIL WRIT PETITION NO.3818/01 K.L. Sain vs. State & Ors. Date of order : 22nd July, 2008 HON'BLE MR.JUSTICE MOHAMMAD RAFIQ Shri N.K. Maloo for the petitioner. Smt. Parinitoo Jain, Deputy Government Counsel for the respondents no.1 & 2. Shri R.D. Rastogi for the respondent no.3. ****** REPORTABLE Petitioner K.L. Sain filed this writ petition way back in the year 2001 with the prayer that the charge sheet dated 24.2.2000 and the order dated 12.7.2001 refusing to appoint one R.C. Jain, Accountant, to act as his defence representative and further the order dated 21.7.2001 rejecting his representation for appointment of Shri R.C. Jain as defence representative be quashed and set aside. Petitioner was appointed on the post of Junior Assistant on 24.4.1974 in the Rajasthan State Tanneries Ltd., Jaipur and was later promoted as Senior Assistant. He was thereafter promoted as Senior Assistant on 8.4.1980 and he worked as such till 30.8.1991 when he was declared surplus and 2 was relieved to join the services with respondent no.3 namely Rajasthan Financial Corporation (for short-RFC). Upon absorption in the services of the respondent no.3, the petitioner was appointed as Typist. Rajasthan State Tennaries Ltd. (for short- `RSTL') was a company registered under the provisions of the Indian Companies Act, 1956. According to the petitioner, service conditions of its employees were governed by the rules applicable to the employees of the State Government. While earlier the Revised Pay Scale Rules of 1978 and 1981 were made applicable to the employees of RSTL, but the petitioner and other employees were not granted the benefit of Rajasthan Civil Services Revised Pay Scale Rules of 1987 and 1989. The petitioner and other employees jointly filed an application before the Payment of Wages Authority, Tonk claiming such benefits. The application was contested by Rajasthan State Tanneries Ltd. But ultimately it was allowed by order of the Authority dated 26.6.1992. Similar order was passed by the Authority for the subsequent period which was allowed 3 vide order dated 28.11.1992. This order was challenged by the RSTL in Civil Writ Petition No.3233/94, which writ petition was however dismissed on 9.7.1998. According to the petitioner, at the time when he was declared surplus, he was being paid salary in the pay scale of Rs.1200-2050 and last pay certificate (for short-LPC) to this effect duly signed by the Managing Director of the said company was issued. However, the respondents absorbed the petitioner in their services in a much lower scale of Rs.975- 1720, but his basic pay of Rs.1800/- was protected by giving him personal pay. Appointment of the petitioner by way of absorption as surplus employees was treated to be a direct recruitment. However the respondent no.2, viz. State Enterprises Department, passed order on 17.5.99 holding that the benefit of pay revision of 1986 and 1988 was wrongly given to the petitioner and other employees of RSTL. In furtherance of the said order, respondent no.2 passed an order on 1.11.1999 directing that pay of the petitioner should be refixed and differential amount be recovered. In last 4 para of the order, it was further directed that disciplinary action against the petitioner for committing fraud and forgery of documents be also separately initiated. It is pursuant to this direction that the RFC issued charge sheet to the petitioner. The petitioner filed writ petition no.5904/99 challenging both the orders in which initially operation of the orders was stayed. Thereafter, an application was filed by the respondents for modification of the stay order raising an objection that charge sheet dated 24.2.2000 was not under challenge, therefore, the stay order cannot apply to disciplinary proceedings. On this application, this Court vide order dated 31.5.2001 while modifying the stay order permitted the respondents to proceed with the disciplinary proceedings against the petitioner. Thereafter, the application was filed by the petitioner for recall of the order dated 31.5.2001. Since the counsel for the petitioner could not appear on the date fixed, the application was dismissed on 19.7.2001. The petitioner in view of the charge sheet issued to him, which has given 5 rise to fresh cause of action, filed the fresh writ petition which is the present writ petition. Shri N.K. Maloo, learned counsel for the petitioner argued that the respondent RFC has no authority to hold disciplinary proceedings against the petitioner because he was not their employee when the alleged misconduct was committed. It was argued that RSTL was a company registered under the provisions of Companies Act. It was therefore a separate legal entity. The petitioner ceased to be an employee of RSTL since 30.8.91 and his appointment with the respondent RFC was an altogether new appointment which was treated as a direct recruitment as per the order issued by the Government dated 2.7.1991 and further order dated 10.3.1992 issued by the RFC. His services were now governed by RFC (Staff) Regulations, 1958. The charge sheet issued to the petitioner is therefore without jurisdiction. Alternatively, Shri N.K. Maloo submitted that this charge sheet was result of order of the Government dated 17.5.99 and 1.11.99. The order dated 1.11.1999 being 6 essentially an order in consequence of the order dated 17.11.99, both these orders have since been withdrawn by the Government. Shri N.K. Maloo in this connection invited attention of the Court towards the order of the Government in its State Enterprises Department dated 12.1.2004 by which both these orders were withdrawn. These orders were withdrawn because when the pay fixation and pay scale of the petitioner and other surplus employees of the RSTL were sought to be revised by various absorbing authorities including the respondents, the affected employees as also the petitioner filed writ petitions before this Court. The learned Single Judge of this Court in S.B. Civil Writ Petition No.5904/04, K.L. Sain vs. State & Anr. vide his judgement dated 22.10.2002 set aside the order dated 17.5.1999 and all consequential orders. Judgement of the single bench was upheld by the division bench and also the Supreme Court. The Government therefore withdrew the order dated 17.11.99 and the consequential order dated 1.11.1999. The respondents, even otherwise, have no authority to now insist 7 to proceed against the petitioner in the departmental action. Shri N.K. Maloo, learned counsel for the petitioner in support of his arguments relied on the judgement of division bench of this Court in State of Rajasthan vs. P.D. Paliwal & Anr.- RLR 2001 (1) 467. Shri N.K. Maloo, learned counsel for the petitioner then argued that the alleged and assumed incident of preparing a forged last pay certificate pertains to the year 1988-89 whereas the petitioner was absorbed in the services of the respondent RFC vide order dated 2.7.1991 but the charge sheet was issued to the petitioner enormously delayed on 24.2.2000, twelve years after the date of the alleged incident. The charge sheet is therefore liable to be quashed for the reason of delay and latches alone. Learned counsel also argued that in fact the basic order was passed by the Managing Director on 15.4.1989 allowing pay fixation order to the petitioner and others. The petitioner then approached the Payment of Wages Authority, which on that basis decided the matter in favour of the petitioner and other 8 employees. The order of Payment of Wages Authority was never challenged and was allowed to become final. Thereafter, when the learned Single Judge of this Court, on consideration of all these arguments allowed the writ petition, the respondents filed special appeals. Their special appeals were also dismissed, main judgement being rendered in D.B. Civil Special Appeal (Writ) No.95/2003 dated 20.2.2003. Special leave to petition filed by the respondents before the Hon'ble Supreme Court was also dismissed on 12.9.2003. When the order, as a consequence of which, the charge sheet was issued to the petitioner, itself has been quashed and set aside, which has remained undisturbed upto the Supreme Court, the respondents cannot in law be permitted to proceed against the petitioner in departmental action. Lastly, Shri N.K. Maloo, the learned counsel for the petitioner, argued that even on merits, the kind of charges that the disciplinary authority has levelled against the petitioner cannot be allowed to proceed as the charges are absolutely unfounded and without any basis. Charge no.1 is to the 9 effect that when petitioner was dealing clerk in the establishment section of RSTL in 1989, he prepared a forged LPC in favour of five employees and obtained the signature of FAS thereupon. Charge no.2 states that in spite of being required, the petitioner did not produce before FAS the file relating to Shri Sachdeva so that he could take undue advantage of the order dated passed by the M.D. dated 15.4.1989. Third charge is to the effect that in spite of decision having not been taken by M.D., RSTL, the petitioner got a wrong pay fixation order sanctioned in favour of five employee and fraudulently obtained the signature of FAS. Fourth charge is in fact extension of the second charge that by causing the file to disappear in RFC, the petitioner unauthorisedly obtained signature on the LPC and thereby caused pecuniary loss to various public sector undertakings. He was thus responsible for committing a fraud. Fifth charge is that he by deceiving the FAS obtained his signature on the LPC whereas there was no written consent of M.D. or FAS for issuance of the fixation order. Shri N.K. Maloo in substance 10 argued that all these charges are such which primarily point out the responsibility of the Senior Officers such as Managing Director and F.A.S. They are shown to have acted in the manner as if they were wholly innocent and the petitioner was totally responsible for all what they did. While there are eleven beneficiaries in all, but not a single person except the petitioner has been charge sheeted so much so that even the M.D. and the FAS, who were directly responsible for issuing the LPC and pay fixation order, have not at all been proceeded against. Shri N.K. Maloo therefore submitted that the charge sheet issued to the petitioner is liable to be quashed and the writ petition deserves to be allowed. Per contra, Shri R.D. Rastogi, the learned counsel for the RFC opposed the writ petition and argued that in fact the correct pay scale of the petitioner and others who were declared surplus from the services of the RSTL was much lower than the one as indicated in the LPC. The LPC was manipulated in such a way that the pay of the petitioner was indicated to be Rs.1800 11 which eventually enabled him to secure pay protection even though he was absorbed on the post of Typist in the pay of 1575-1720. It was argued that the conditions of service of the petitioner would be governed by the terms on which he has been absorbed in the service of the respondents. The petitioner was sent to the RFC by the Government in its Department of State Public Enterprises. Even though for certain purposes, appointment of the petitioner is treated as direct recruitment but nevertheless he has come to be appointed in the services of the respondent RFC by way of absorption. The Government in its order dated 2.7.1991 has indicated the conditions on which the petitioner was absorbed. Clause 15 of the condition clearly provided that any point which is not covered by the guidelines arises in the process of absorption, the same would be referred to the Bureau of Public Enterprises for taking a view. The decision conveyed by the Bureau of Public Enterprises shall be final and binding on all concerned. Learned counsel therefore submitted that it is under the authority 12 given to the respondent by the Government that the charge sheet has been issued to the petitioner. What has been examined by this Court in another set of writ petitions was merely the order dated 17.5.99 which pertained to withdrawal of the benefit of revised pay scale of 1996 and 1998 but the order dated 1.11.1999 is still intact. Shri R.D. Rastogi, the learned counsel, reading from that order argued that the order also issued by the Government also contained an independent decision to initiate disciplinary proceedings against the petitioner Shri K.L. Sain for committing fraud and forgery conveyed as he was found responsible for irregularities and cheating while working in RSTL. Learned counsel argued that according to Rule 15 of the Rajasthan Civil Services (Classification, Control & Appeal) Rules, 1958, the Government has specified disciplinary authorities for various categories of Government servants but when a doubt was raised as to who shall be disciplinary authority for a government servant, who has been transferred from one department to 13 another, the government in its Department of Appointments by Circular No.F.3(2)Apptts.(A- III)/69 dated 28.10.1969 clarified that in such a case, an authority under whom the incumbent has been transferred, irrespective of the fact whether the delinquency was committed in another department prior to his transfer, would be competent to take disciplinary action against such employees. Learned counsel further argued that the scope of jurisdiction for interference by this Court in a disciplinary matter at the stage of charge sheet is very limited. He in this connection, relied on the judgement of Supreme Court in Union of India & Anr. vs. Kunisetty Satyanarayana-AIR 2007 SC 906 and Union of India & Anr. vs. Ashok Kacker-1995 Supp (1) SCC 180. I have given my thoughtful consideration to the rival submissions and also perused the material forming part of the record and the cited precedents. Initiation of disciplinary proceedings against the petitioner is the result of the issuance of charge-sheet which is primarily founded on the order of the Government dated 14 1.11.1999. This order in turn proceeds on the premise that the petitioner was illegally allowed pay fixation under the Revised Pay Scale Rules of 1989 and 1998 vide order dated 15.12.1993 as he issued a LPC illegally showing his basic pay at Rs.1800/- in the pay scale of Rs.1200-2050. In compliance of the Government order dated 17.5.1999, the pay fixation order dated 15.5.1997 and the revised LPC were both withdrawn because the order dated 14.5.1989 issued by M.D., RSTL under which its employees were authorised notional pay and fixation benefits, has been treated as void ab initio and thus withdrawn by the said order of the Government dated 17.5.1999. Necessary recoveries were therefore to be effected from Shri K.L. Sain. It was lastly directed that the disciplinary proceeding against Shri K.L. Sain for committing fraud and forgery be taken separately by the State Enterprises Department. This Court in the writ petition filed by the petitioner and other affected employees, some of whom were absorbed in different public sector undertakings, quashed the order of the 15 Government dated 17.5.1999 holding that whether or not the pay of the absorbed employees were fixed in the revised pay scale with the erstwhile employer, their pay would be notionally arrived with reference to the revised pay scale of 1986 and 1988 and that their pay would be fixed in the organisation where they were absorbed. The Court held that the last pay certificate was issued to the petitioner and others, consequent upon acceptance of their claim by the Payment of Wages Authority which vide order dated 26.6.92. This order of Payment of Wages Authority was never challenged any further and thus attained finality. The State Government vide its order dated 30.12.1999 maintained that since RSTL was transferred to public sector undertaking on November 12, 1999 and its employees were no longer the employees of the State Government, therefore their pay fixation was shown by the department in accordance with guidelines dated July 2, 1999. The State Enterprises Department has no reason to interfere with the order. This Court further held that since the order dated 17.5.1999 16 was passed without providing any hearing to the petitioner and others such order even otherwise was not liable to be sustained. The order was therefore quashed. The Government even though has initially contested the writ petition when it filed reply therein on 18.3.2002, but subsequently it has passed the order on 20.1.2004 in the terms that since the earlier order dated 17.5.1999 has been quashed by judgement of this Court which has been upheld upto Supreme Court, it has become inffective. It was therefore directed that all orders issued pursuant to the aforesaid order dated 17.5.1999, whereunder the restriction was imposed for extending notional benefit under Revised Pay Scale Rules of 1986 and 1988, are hereby withdrawn. The order of the Government dated 1.11.1999, as its reading would show, was essentially an order issued in consequence of the order dated 17.5.1999. And it has thus for all purpose lost its efficacy and authority. But then, Shri R.D. Rastogi would argue that the order dated 17.5.1999 can be deemed to be withdrawn only to the extent it 17 pertains to withdrawal of the notional benefits of Revised Pay Scale Rules of 1988 and 1989 and not for the other part of the order which directed for initiation of the departmental action against the petitioner. This argument cannot be upheld because if only one goes by logic of the argument, it would imply that the order dated 1.11.1999, which was essentially an order issued pursuant to the earlier order dated 17.5.99, would not survive but its other part would still survive. How possibly if part of it is taken as withdrawn for one reason, the other part can be taken as surviving for other purpose. But that is besides the point. The crux of the matter is that acceptance of this argument would lead to a very absurd consequence. If the petitioners and others are allowed to avail of the notional benefit under the revised pay scale Rules 1996 and 1998 and for the same reason that such benefit was unduly secured by the petitioner on the strength of manipulated LPCs for himself and for other employees, such a dichotomy would be very difficult to reconcile. Moreover, the tenure of the 18 charges, read one after the other, as has been noticed above, clearly indicates that the petitioner, though may have been Dealing Assistant in the establishment section of the RSTL, but what is alleged against him is that he by exercising fraud obtained the signatures of FAS and the Managing Director. This clearly indicates that LPCs were in fact issued under the signature of the Managing Director upon the same being forwarded to him by F.A.S. No action however has been taken against the then Managing Director or even against the FAS and no material whatsoever has been brought on record to the effect that if at all they have been proceeded against in departmental action. Moreover, the argument that the LPC issued by the Managing Director on 15.4.1989 was manipulated by the petitioner does not stand to scrutiny as would be evident from the observation made by the learned Single Judge of this Court in judgement dated 22.10.2002 which clearly shows that the LPC was issued in purported compliance of the judgements of the Payment of Wages Authority dated 26.6.92 and prior to that already 19 order to this effect had been passed by the M.D. of RSTL on 15.4.1989, granting notional benefits of pay revision of 1996 and 1998 to the petitioner and the others. Even otherwise, when the delinquency does not pertain to the period of petitioner's working with the respondent RFC, it cannot possibly have any authority to proceed against him in disciplinary proceedings. Clause-15 of the guidelines of the Government dated 2.7.1991 merely provided that “if any other point not covered by the above guidelines, arises in the process of absorption, the same would be referred to the Bureau of Public Enterprises for taking a view”. That was necessarily a clause which was meant to fill up the lacunaes in the guidelines provided therein only in so far as the process of absorption was concerned. But once the petitioner was appointed in the services of the respondent-RFC, his appointment was required to have been taken as a direct recruitment which was envisaged by clause (i) of the very same guidelines which provided that “appointment by way of absorption of surplus employees shall be 20 deemed to be a direct recruitment, though process prescribed for direct recruitment is not required to be followed in such cases.” Moreover, when the respondent RFC claims to derive its authority to proceed against the petitioner in departmental action on the strength of the order of the Government, that order having since been withdrawn, the authority, if at all there was any, has now ceased to exist. Charge sheet in the present matter is liable to be quashed for the additional reason of delay of more than a decade from the date of alleged incident. In regard to incident of 1988-89, charge sheet has been issued to the petitioner twelve years thereafter on 24.2.2000, whereas the petitioner in the meantime was already absorbed in the services of RFC on 2.7.1991. The judgement of P.D. Paliwal, supra, on which reliance has been placed by Shri N.K. Maloo, learned counsel for the petitioner cannot however be applied to the facts of the present case as that decision was rendered in an altogether different fact situation where the member of Rajasthan 21 Administrative Service when promoted to Indian Administrative Service was held to be governed by different set of rules. At the same time, ratio of the judgements of the Supreme Court relied on by Shri R.D. Rastogi, learned counsel for the respondent also cannot be applied to the facts of the present case. It is of course true that the scope of interference by this Court in disciplinary matters at the stage of issuance of charge sheet in exercise of its power of judicial review under Article 226 of the Constitution is very limited and such matters should not be ordinarily interfered with at the threshold stage. But when on facts it is shown that the charge sheet has been issued without the authority of law and the very foundation of issuance of charge sheet has ceased to exist and when such charge sheet has been issued after enormous delay of more than twelve years from the date of the alleged incident, all these considerations being taken together, refusal to exercise the power of judicial review by this Court in such a case would, in my considered view, only amount to negation of 22 justice. In view of what has been discussed above, this writ petition is allowed and the charge sheet dated 24.2.2000 is quashed and set aside. There shall be no order as to costs. (MOHAMMAD RAFIQ), J. RS/