Shitla Prasad ... vs State Of U.P.Through ...
2012 Latest Caselaw 3596 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

Reserved
 
Writ Petition No. 453 (SB) of 2006
 
S.P. Srivastava					.....   Petitioner
 
Versus
 
State of U.P. and another			.....	Respondents
 
Connected with
 
Writ Petition No. 575 (SB) of 2006
 
Ram Parvesh Tiwari				.....	Petitioner                                                                  
 
Versus
 
State of U.P. and others      		......	Respondents
 
******
 
Hon'ble Rajiv Sharma, J.

Hon'ble Surendra Vikram Singh Rathore, J.

Since common question of facts and law are involved in both the aforementioned writ petitions, as such, the same are being disposed of by a common judgment.

The petitioners in both the aforementioned writ petitions, feeling aggrieved by the order of the disciplinary authority punishing them with the punishment of dismissal from service and also with recovery of the amount of damage which was caused to the department by their alleged misconduct, have preferred the aforementioned writ petitions.

In brief, the facts of Writ Petition No. 453 (SB) of 2006 are as under:-

Petitioner Sheetala Prasad Srivastava was appointed as Sales Tax Officer on 20.08.1976. Subsequently, he was promoted on 26.7.1996 on the post of Assistant Commissioner, Trade Tax (now known as Deputy Commissioner, Trade Tax) on 25.7.2002. He was transferred to Bahraich as Assistant Commissioner (Assessment Trade Tax). On re-designation of post, he was designated as Deputy Commissioner Assessment Trade Tax with effect from 15.11.2002. On 22.7.2003, he was placed under suspension on the ground that he had passed assessment orders in some cases prejudicial to the interest of revenue and also prepared refund vouchers hurriedly.

Feeling aggrieved by the order dated 22.7.2003, the petitioner had approached this Court by filing writ petition No. 1020 (S/B) of 2003. During the pendency of the said writ petition, the Additional Commissioner, Grade-I, Trade Tax, Lucknow, who was appointed as Enquiry Officer, served a charge sheet dated 20.9.2003. Subsequently, a Division Bench of this Court, vide order dated 9.10.2002, disposed of the writ petition finally with a direction that the petitioner shall file reply to the charge sheet within 15 days and thereafter the inquiry be completed within a period of six weeks and enquiry report thereafter shall be submitted within 15 days.

In compliance of the order dated 9.10.2002, petitioner submitted his reply, but on account of change of Inquiry Officers, the enquiry could not be concluded as directed by this Court and as such, the petitioner moved a representation before the Inquiry Officer for revocation of his suspension, which was forwarded, vide letter dated 31.12.2003 to the Secretary, Tax recommending the revocation of suspension of the petitioner. However, the Government turned down the said recommendation vide order dated 17.3.2004.

Against the above inaction of the opposite parties, the petitioner had again approached this Court by filing writ petition No. 475 (SB) of 2004, raising grievance that the order passed in his earlier writ petition has not been complied with.

According to the petitioner, on considering the assertions made in the above writ petition, a Division Bench of this Court, vide order dated 7.4.2004, directed the State to seek instructions from the authorities concerned as to why the enquiry is not being completed, despite the orders passed by this Court as well as the stage of enquiry. It was also directed to the State to indicate the reasons for not concluding the enquiry and also the proposed action, which might be taken against the erring officers (if any). Counsel for the petitioner submitted that after order dated 7.4.2004 being passed by this Court, the Inquiry Officer felt annoyed and concluded the inquiry proceedings within five days vindictively and arbitrarily by holding that the charges levelled against the petitioner stands proved and also submitted its report dated 26.4.2004. On the basis of the said vindictive enquiry report dated 26.4.2004, a show cause notice was issued to the petitioner, to which the petitioner submitted his reply on 27.5.2004, denying therein all the charges levelled against him.

Submission of the petitioner is that since no action on the said inquiry report was taken and as such, this Court, vide order dated 11.4.2005, as an interim measure, in writ petition No. 475 (S/B) of 2004, stayed the further operation of the order of suspension dated 22.7.2003 and further directed the opposite parties to reinstate the petitioner in service within a week from the date of receipt of a certified copy of the order. However, liberty was granted to the opposite parties to conclude the disciplinary proceedings against the petitioner, in accordance with law. In compliance of the order dated 11.4.2005, the petitioner was reinstated in service on 26.5.2005 and was transferred as Deputy Commissioner Enforcement Trade Tax, Gorakhpur. Thereafter, vide impugned order dated 22.3.2006, the petitioner was dismissed from service and an amount of Rs. 51,52,906/- (Rs. Fifty One Lac Fifty Two Thousand Nine Hundred Six only) was directed to be recovered from him. Hence writ petition No. 453 of 2006 (S/B) was filed.

Factual matrix of Writ Petition No. 575 SB of 2006 are that the petitioner was also working in the Trade Tax Department on the post of Trade Tax Officer, which was re-designated as Assistant Commissioner, Trade Tax. From 3.8.2001 to 9.7.2003, he was discharging his duties in district Bahraich. During this period, some assessment orders prejudicial to the interest of revenue were passed by him in exercise of his official duties which were alleged to be against provisions of some circulars of the department and allegedly caused damage to the department. He was transferred to Lucknow and while serving at Lucknow, he was placed under suspension vide order dated 22.7.2003. The petitioner moved a representation requesting cancellation of his suspension order. Petitioner filed Writ Petition No. 1134 SB of 2005 challenging his suspension order. The said writ petition was disposed of finally vide judgment and order dated 8.7.2005 directing the State Government to take final decision in the matter within six weeks. Since the said judgment and order dated 8.7.2005 was not complied with by the respondents, therefore, a Writ Petition No. 1540 (SB) of 2005 was filed by the petitioner. A Division Bench of this Court, vide order dated 14.9.2005, stayed the order of suspension. Subsequently, after completion of the inquiry, the petitioner was dismissed from service and an amount of Rs. 1,40,265 (Rs. One Lac Forty Thousand Two Hundred Sixty Five only) was ordered to be recovered from him. Hence writ petition No. 575 (S/B) of 2006 was filed.

Grievance of petitioners in both the writ petitions is that the Inquiry Officer had not correctly appreciated the reply submitted by them and have concluded the inquiry hurriedly. It is further submitted that the principles of natural justice were violated in conducting the said inquiry. It is further submitted that the amount directed to be recovered from the petitioners cannot be termed as loss of revenue to the State on account of wrong assessment orders passed by the Assessing Officers as the same can be reopened in exercise of the powers by the Revisional Authority and in case, the turnover has escaped assessment, then the same can also be reopened by the Assessing Authority itself. Since no assessment order was passed in the said cases, therefore, it cannot be presumed that there was any loss of revenue to the State. On the basis of this argument, it is submitted that no recovery could have been directed against them.

So far as the point of loss to the department is concerned, learned counsel for petitioner has placed reliance on a letter dated 19.10.2004 sent by Special Commissioner, Trade Tax, U.P., Lucknow, addressed to Deputy Commissioner, Kar Evam Nibandhan Anubhag, U.P., in which, it is mentioned that there is no evidence on record regarding the loss of revenue to the department.

The arguments of learned counsels for the petitioners are that the petitioners being quasi-judicial authority, in exercise of their lawful jurisdiction, they have passed assessment orders wherein the turnover was assessed and the tax was imposed. Such quasi-judicial exercise of power cannot be termed to be misconduct unless and until the same is perverse or not based on record. It is further submitted that mere error of judgment cannot be termed as misconduct. In the present case there is no charge against the petitioner that they passed such orders for extraneous consideration. The Enquiry Officer, without any evidence on record, held that the charges stands proved on the basis of the assessment orders passed by them and the explanation submitted by them. This act of the inquiry officer was done in utmost haste manner without any oral enquiry.

Learned Counsel for the State has submitted that in this case, due opportunity was afforded to the petitioners to defend themselves and keeping in view all the materials available before the inquiry officer, enquiry report was submitted, which was accepted by the disciplinary authority and accordingly, the petitioner was punished, therefore, the impugned order does not suffer from any illegality, hence, no interference is called for in exercise of jurisdiction under Article 226 of the Constitution of India.

We have gone through the pleadings and materials available on record.

It is an admitted fact that the petitioners were exercising a quasi-judicial jurisdiction and have passed assessment orders with regard to several traders, which were the subject matter of the enquiry. There was no complaint made against the petitioner and further with regard to charge against the petitioners that they got the refund vouchers prepared very hurriedly, the same is in the interest of the Department insofar as on the excess amount the Department has to pay the interest upto the date of issuance of refund voucher.

Learned Counsel for the petitioners have placed reliance upon the pronouncement of Hon'ble the Apex Court in the case of Zunjarrao Bhikaji Nagarkar Vs. Union of India and others (1999) 7 SCC 409, wherein Hon'ble Apex Court, in paragraphs-41, 42 and 43, has held as under:-

"41. When penalty is not levied, the assessee certainly benefits. But it cannot be said that by not levying the penalty the officer has favoured the assessee or shown undue favour to him. There has to be some basis for the disciplinary authority to reach such a conclusion even prima facie. The record in the present case does not show if the disciplinary authority had any information within its possession from there it could form an opinion that the appellant showed "favour" to the assessee by not imposing the penalty. He may have wrongly exercised his jurisdiction. But that wrong can be corrected in appeal. That cannot always form a basis for initiating disciplinary proceedings against an officer while he is acting as a quasi-judicial authority. It must be kept in mind that being a quasi-judicial authority, he is always subject to judicial supervision in appeal.

42. Initiation of disciplinary proceedings against an officer cannot take place on information which is vague or indefinite. Suspicion has no role to play in such matter. There must exist reasonable basis for the disciplinary authority to proceed against the delinquent officer. Merely because penalty was not imposed and the Board in the exercise of its power directed filing of appeal against that order in the Appellate Tribunal could not be enough to proceed against the appellant. There is no other instance to show that in similar case the appellant invariably imposed penalty.

43. If every error of law were to constitute a charge of misconduct, it would impinge upon the independent functioning of quasi-judicial officers like the appellant. Since in sum and substance misconduct is sought to be inferred by the appellant having committed an error of law, the charge-sheet on the face of it does not proceed on any legal premise rendering it liable to be quashed. In other words, to maintain any charge-sheet against a quasi-judicial authority something more has to be alleged than a mere mistake of law, e.g., in the nature of some extraneous consideration influencing the quasi-judicial order. Since nothing of the sort is alleged herein the impugned charge-sheet is rendered illegal. The charge- sheet, if sustained, will thus impinge upon the confidence and independent functioning of a quasi-judicial authority. The entire system of administrative adjudication whereunder quasi-judicial powers are conferred on administrative authorities, would fall into disrepute if officers performing such functions are inhibited in performing their functions without fear or favour because of the constant threat of disciplinary proceedings."

In the case of Union of India Vs. A.N. Saxena reported in [1992 (3) SCC 124], Hon'ble Apex Court has held as under:-

"It was argued before us by learned counsel for the respondent that as the respondent was performing judicial or quasi-judicial functions in making the assessment orders in question even if his actions were wrong they could be corrected in an appeal or in revision and no disciplinary proceedings could be taken regarding such actions."

In the aforementioned case of A.N. Saxena (Supra) Hon'ble Apex Court has also observed as under:

"On a reading of the charges and the allegations in detail learned Additional Solicitor General has fairly stated that they do not disclose any culpability nor is there any allegation of taking any bribe or of trying to favour any party in making the orders granting relief in respect of which misconduct is alleged against the respondent."

Reliance has also been placed on the pronouncement of a judgment of Hon'ble Apex Court in the case of Ramesh Chander Singh Vs. High Court of Allahabad and another reported in [2007 (4) SCC 247] wherein it has been held in paragraph-12 as under:-

"12. This Court on several occasions has disapproved the practice of initiation of disciplinary proceedings against officers of the subordinate judiciary merely because the judgments/orders passed by them are wrong. The appellate and revisional courts have been established and given powers to set aside such orders. The higher courts after hearing the appeal may modify or set aside erroneous judgment of the lower courts. While taking disciplinary action based on judicial orders, the High Court must take extra care and caution."

IN the aforesaid legal position, it is abundantly clear that in the absence of any complaint against the petitioner it can only be inferred that it was the opinion of the inquiry officer that the assessment orders were not in accordance with the circulars of the department. The perusal of the inquiry report clearly establishes that on the basis of the same facts, which were mentioned in the assessment orders, inquiry officer took a different view in the matter. Mere wrong orders passed by a competent authority cannot be termed to be misconduct, unless and until such orders, prima facie, proved to be mala fide, biased or passed for extraneous considerations. Hon'ble the Apex Court has also held that such wrong orders can be corrected in appeal/ revision. The very purpose of providing remedy of revision/appeal is, that the law expects that the wrong orders, if passed by the authorities, can be corrected by way of revision/appeal. So far as question of loss of revenue is concerned, there is a report on record to the effect that no loss of revenue has been assessed. Merely on the basis of presumption that if the orders would have been passed otherwise then the higher revenue would have been recovered, it can not be termed to be loss of revenue. Unless and until assessment orders for imposition of tax is passed till then it cannot be said that there was any loss of revenue. Therefore, the order for the recovery of the loss caused to the department also does not appear to be sustainable under the law.

Therefore, in view of the aforementioned discussion, it is clear that the petitioner in exercise of lawful jurisdiction while working on the post of Deputy Commissioner Assessment Trade Tax passed the assessment orders and without any oral enquiry these orders were held by the inquiry officer to be wrong. Mere wrong exercise of lawful jurisdiction cannot be said to be misconduct. There was no charge against the petitioner that they passed such orders for extraneous consideration. Perusal of the inquiry report shows that no witness was examined to prove the case of the department and only on the basis of the charges and the assessment orders and the written reply submitted by the petitioner, the inquiry was concluded.

A Division Bench of this Court in the case of Parasu Ram Singh Vs. Secretary of Agriculture, U.P. Lucknow and others reported in [2008 (26) LCD 1522] has held as under:

"This Court has already held that after the charge sheet is given to a delinquent employee an oral enquiry is must, whether the employee requests for it or not. The record which has been produced before us reveals that after submission of reply to the charge sheet, no date or time was fixed by the Enquiry Officer for recording of evidence of the witnesses on behalf of the Department to prove the charges as also for the defence witnesses for holding the enquiry. We are of the view that the petitioner was not given proper opportunity of hearing and no oral enquiry as required by law was held."

A Division Bench of this Court in the case of Radhey Kant Khare Vs. U.P. Cooperative Sugar Factories Federation Ltd. reported in [2003 (21) LCD 610] has also held as under:-

"8. After a charge sheet is given to the employee an oral enquiry is a must, whether the employee requests for it or not. Hence a notice should be issued to him indicating him the date, time and place of the enquiry. On that date the oral and documentary evidence against the employee should first be led in his presence vide A.C.C. Ltd. v. Their Workmen (1963) II LLJ 396 (SC). Ordinarily, if the employee is examined first it is illegal vide Anand Joshi v. MSFC 1991 LIC 1666 Bom., S.D. Sharma v. Trade Fair Authority of India 1985 (II) LLJ 193, Central Railway v. Raghubir Saran 1983 (II) LLJ 26. No doubt in certain exceptional cases the employee may be asked to lead evidence first, vide Firestone Tyre and Rubber Co. Ltd. v. Their Workmen AIR 1968 SC 236, but ordinarily the rule is that first the employer must adduce his evidence. The reason for this principle is that the charge sheeted employee should not only know the charges against him but should also know the evidence against him so that he can properly reply to the same. Where no witnesses were examined and no exhibit or record is made but straightaway the employee was asked to produce his evidence and documents in support of his case it is illegal vide P.C. Thomas v. Mutholi Co-operative Society Ltd. 1978 LIC 1428 Ker, and Meenglas Tea Estate v. Their Workmen AIR 1963 SC 1719."

In the facts of present case, there is no oral inquiry. The perusal of the inquiry report establishes that no witness was examined, therefore, the inquiry report and the orders of dismissal passed thereon cannot be sustained in view of the aforementioned factual and legal position.

Natural justice has a prime role to play in the matter where the justice has to be secured. Natural justice is another name for common-sense justice.

Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common sense/ liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. It is the substance of justice which has to determine its form.

The expressions "natural justice" and "legal justice" do not present a watertight classification. It is the substance of justice, which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law. As Lord Buckmaster said, no form or procedure should ever be permitted to exclude the presentation of a litigant's defence.

The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. After all, it is an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle found its way into the "Magna Carta". The classic exposition of Sir Edward Coke of natural justice requires to "vocate, interrogate and adjudicate". In the celebrated case of Cooper V. Wandsworth Board of Works (1863) 143 ER 414 the principle was thus stated: (ER p.420)

"[E]ven God himself did not pass sentence upon Adam before he was called upon to make his defence. ''Adam' (says God), ''where art thou? Hast thou not eaten of the tree whereof I commanded thee that thou shouldest not eat?"

Principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice. Inquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than decision in a quasi-judicial enquiry. [emphasis supplied]

Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statue or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the framework of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. The expression "civil rights but of civil liberties, material deprivations and non-pecuniary damages in its wide umbrella comes everything that affects a citizen in his civil life.

In D.K. Yadav Vs. J.M.A. Industries; (1993) 3 SCC 259 the Apex Court while laying emphasis on affording opportunity by the authority which has the power to take punitive or damaging action held that orders affecting the civil rights or resulting civil consequences would have to answer the requirement of Article 14. The Hon'ble Apex Court concluded as under: -

"The procedure prescribed for depriving a person of livelihood would be liable to be tested on the anvil of Article 14. The procedure prescribed by a statute or statutory rule or rules or orders affecting the civil rights or result in civil consequences would have to answer the requirement of Article 14. Article 14 has a pervasive procedural potency and versatile quality, equalitarian in its soul and principles of natural justice are part of Article 14 and the procedure prescribed by law must be just, fair and reasonable, and not arbitrary, fanciful or oppressive."

In National Building Construction Corporation v. S. Raghunathan; (1998) 7 SCC 66, the Apex Court in unequivocal words that a person is entitled to judicial review, if he is able to show that the decision of the public authority affected him of some benefit or advantage which in the past he had been permitted to enjoy and which he legitimately expected to be permitted to continue to enjoy either until he is informed the reasons for withdrawal and the opportunity to comment on such reasons.

At this juncture, it would be relevant to produce relevant portion of paragraph 34 of the judgment rendered in State Bank of Patiala and others v. S.K.Sharma, JT 1996(3) SC 722. Though this decision was given in a service matter but the Hon'ble Apex Court has dealt with the principles of natural justice and the result, if it is not followed:-

Where the enquiry is not governed by any rules/regulations/ statutory provisions and the only obligation is to observe the principles of natural justice - or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action - the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between "no opportunity" and no adequate opportunity, i.e. between "no notice"/"no hearing" and "no fair hearing". (a) In the case of former, the order passed would undoubtedly be invalid (one may call it "void" or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e. in accordance with the said rule (audi alteram partem). (b) But in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice, in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query. (It is made clear that this principle (No.5) does not apply in the case of rule against bias, the test in which behalf are laid down elsewhere.)

While applying the rule of audi alteram partem (the primary principle of natural justice) the Court/Tribunal/Authority must always bear in mind the ultimate and over-riding objective underlying the said rule, viz., to ensure a fair hearing and to ensure that there is no failure of justice. It is this objective which should guide them in applying the rule to varying situations that arise before them.

In M/s Mahatma Gandhi Upbhokta Sahkari Samiti vs. State of U.P. and others 2001(19)LCD 513 the controversy involved was that the order of cancellation was passed on the basis of inquiry conducted by Sub Divisional Magistrate but the copy of the inquiry report on which reliance was placed was not furnished to the petitioner. A Division Bench of this Court held that when report of inquiry has been relied upon, that report has to be furnished to the person, who is affected by the same.

The said legal position has been reiterated and followed in a number of decisions rendered by this Court in the case of Dori Lal vs. State of U.P. and others 2006(24)LCD 1521, it has been held that the order cancelling the licence passed without the petitioner being provided the copy of the resolution of the village Panchayat as well as the enquiry report, if any and without being afforded opportunity of submitting explanation and hearing amounts to gross violation of principle of natural justice and hence the order is liable to be quashed.

In Rajpal Singh vs. State of U.P. and others 2008(16) LCD 891, it has been held by this Court that non-furnishing of the inspection report of the Supply Inspector, which was relied upon for cancellation of the licence, amounts to violation of principle of natural justice, hence, the order of cancellation as well as the appellate order was not sustainable in the eyes of law.

Recently, a co-ordinate bench of this Court in Sita Devi vs. Commissioner, Lucknow & others reported in [2011(29) LCD 626] held that the action of the authority in passing the order of cancellation without supplying the copy of the preliminary enquiry report while proving the charges against the petitioner on the basis of said enquiry report is hit by the grave legal infirmity and whole action of the authority is in great disregard of the principles of natural justice.

For the reasons aforesaid, both the writ petitions deserve to be allowed and are hereby allowed. A writ of certiorari is hereby issued to quash the impugned orders dated 22.3.2006 passed by respondent no. 1 in captioned Writ Petition No. 452 (SB) of 2006 and Writ Petition No.575 (SB) of 2006.

Since the petitioners have attained the age of superannuation and have retired from service, therefore, it is not desirable to direct enquiry afresh from the stage of charge-sheet. Therefore they shall be entitled only for the consequential financial benefits. The pension of the petitioners shall be recalculated treating them to be in service till the date of their superannuation, they shall not be entitled to the salary for the period during which they remained out of job because of the dismissal order. The orders of the recovery of amount are also hereby quashed. The exercise for consequential benefits shall be carried out within three months from today.

Order Date: 21st August, 2012

Virendra/-