Shri Surendra Singh vs Chairman/President U.P. ...
2017 Latest Caselaw 3569 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Court No. - 37
 

 
Case :- WRIT - A No. - 39732 of 2006
 

 
Petitioner :- Shri Surendra Singh
 
Respondent :- Chairman/President U.P. Co-Operative Federation Ltd. & Ors.
 
Counsel for Petitioner :- Tej Pal, Sukhendu Pal Singh
 
Counsel for Respondent :- C.S.C.,N. Misra
 

 
Hon'ble Amreshwar Pratap Sahi,J.

Hon'ble Rajiv Lochan Mehrotra,J.

This petition assails the order passed by the Managing Director of U.P. Co-operative Federation Limited dated 4/5.07.2005 and the appellate order dated 29.03.2006 as communicated on 07.04.2006 whereby a recovery of Rs.10,37,126.50 has been ordered against the petitioner on account of alleged loss caused by him in the transactions of Custom Milled Rice in the procurement year 2001-02.

The petitioner was posted as Manager of the Pradeshik Co-operative Federation, Banda. The allegations in the first show cause notice dated 29.07.2002 issued to the petitioner are that the petitioner had delivered paddy after being purchased in the district of Chitrakoot to M/s Arvind Enterprises, Karvi without obtaining any information with regard to the reputation of the said Miller. The paddy which was delivered to the said Miller did not result in the targeted delivery of the Custom Milled Rice that he was obliged to supply due to the negligence on the part of the petitioner.

The second ground taken in the show cause notice is that inspite of reminders from the Headquarter and the Regional Manager through two letters, the petitioner did not take any action ensuring delivery of the Custom Milled Rice from the mill owner nor any action was taken against the mill owner for such default. This resulted in a short-fall of supply of 1079.77 metric tonnes of hulled rice the price whereof was approximately Rs.10.17 lakhs. This was a departmental loss attributable to the petitioner.

The petitioner was still in service when the aforesaid show cause notice was served on him and he submitted a reply on 04.08.2002 copy whereof has been filed as Annexure-7 to the writ petition. On the first allegation of having not ascertained the reputation of the mill, the petitioner gave a categorical reply that the said mill owner was acknowledged and attached with the Regional Food Controller as one of the millers for supplying Custom Milled Rice. For this the petitioner had referred to the order of the Regional Food Controller dated 05.10.2001 whereby the said mill was attached keeping in view the orders of the Chief Secretary dated 31.08.2001 permitting attachments. Thus the petitioner had clearly pleaded that once the Regional Food Controller had attached the said mill for the said purpose of supplying Custom Milled Rice, there was no occasion to presume anything adverse against the said mill owner. The attachment was continuing and consequently the paddy was supplied to the mill owner for being hulled.

On the second charge the petitioner gave a categorical reply to the effect that the Regional Food Controller as well the Federation Office had written letters on 21.06.2002 and 02.07.2002 to the mill owner for supplying the short-fall in the Custom Milled Rice and the petitioner had also been pursuing the said mill owner for complying with the terms and conditions and the directions issued from time to time. Not only this when the miller failed to supply the short-fall, a first information report was lodged against him on 19.07.2002 whereafter he was put behind bars. The owner of the mill Sri Rajeev Agrahari was bailed -out on 06.08.2002 subject to the condition that he shall supply the entire short-fall of the Custom Milled Rice within sixty days of his release. A copy of the bail order has been filed as Annexure-30 to the writ petition.

The aforesaid information of the owner of the mill having been arrested and first information report having been lodged and other action taken was informed to the Headquarter by the petitioner on 20.07.2002. The licence of the mill was also suspended on 23.07.2002. All these facts were stated in the reply of the petitioner to the show cause notice aforesaid.

No action was taken against the petitioner after the aforesaid explanation was submitted and the mill owner applied for arbitration with regard to the short-fall in the supply. The then District Manager moved the application for arbitration copy whereof is Annexure-33 to the writ petition. According to the facts on record after the arbitration was disposed off execution proceedings were also set into motion.

The petitioner retired from the services in the year 2004 whereafter the petitioner was served with a fresh show cause notice on 02.06.2005. The petitioner submitted his reply on 13.06.2005. The second show cause notice issued to the petitioner mentioned the allegations that were separately worded from the first show cause notice. In this second show cause notice, the allegations against the petitioner made were that the petitioner did not perform and discharge his duties diligently for vested interests and appears to be in collusion with the miller.

The petitioner again gave a detailed reply on 13.06.2005 a copy whereof is Annexure-35 to the writ petition. In this reply the petitioner had also indicated the action taken by the petitioner in order to retrieve the shortage of supply by the miller as well as other facts to deny any charge of conspiracy or collusion with the miller.

It is thereafter that the impugned orders have been passed calling upon the petitioner to deposit the entire amount of the said shortage of Custom Milled Rice to the tune of Rs.10,17,468.65 which was a loss caused to the Federation on account of the acts and omissions of the petitioner.

Certain other dues to the tune of Rs.14,764.25, Rs.4,893.60 and 2,321.60 have also been imposed as a liability on the petitioner.

Sri Sukhendu Pal Singh, learned counsel for the petitioner while advancing his submissions submits that the impugned order of the Chairman nowhere discusses the reply given by the petitioner on 04.08.2002 to the first show cause notice nor does it consider the reply dated 13.06.2005 given in response to the second show cause notice. He further submits that there is no evidence of any collusion or any vested interest of the petitioner established on the strength of any material on record so as to demonstrate that the petitioner was in league with the miller. He also contends that the allegations of negligence and dereliction in duty are nowhere made out as the petitioner had taken action about which a full reply had been given by the petitioner in the year 2002 itself. He therefore submits that neither the order passed by the Chairman or by the Managing Director in appeal on 05.07.2005 refer to any of the aforesaid explanations hence they are vitiated. In short non consideration of the reply submitted by the petitioner and the orders being based on surmises and conjunctures have been prayed to be set aside and the writ petition be allowed.

Sri Ram Gopal Tripathi, learned counsel for the respondent nos.1 to 4 has urged that such a big loss had been caused only on account of lean actions and negligence of the petitioner who did not carry out any inspection and sat in his office merely writing letters that was not sufficient to explain his bonafide conduct. In the circumstances he appears to have a vested interest and was in league with the miller. He further submits that the petitioner waited till the end of the season in June, 2002 and when the officials asked him to take action he started compiling papers in order to save his skin without any genuine effort to recover the Custom Milled Rice from the miller. These circumstances therefore clearly establish his vested interest and collusion with the miller in causing loss to the Federation. Learned counsel has invited the attention of the Court to various paragraphs of the Counter Affidavit to substantiate his submissions.

Having considered the arguments and having perused the pleadings of the parties we find that the petitioner had given a clear reply to the allegations made in the first show cause notice dated 29.07.2002. The reply dated 04.08.2002 is on record. The petitioner in his explanation indicated the taking of action by him which according to him was a prompt action. The respondents in their Counter Affidavit in paragraph no.55 have stated that the petitioner has shown some action having been taken by him but this was only with a view to save himself from any responsibility. On the facts that have emerged what we find is that whatever action had been taken including that of launching a criminal prosecution, sending of the miller to jail and the condition put forth in his bail order do indicate penal action having taken against the defaulter. All this action had been taken prior to the issuance of the show cause notice dated 29.07.2002 and information had been tendered by the petitioner to the authorities about the same. The licence of the miller had also been suspended. These facts do not find any consideration in any of the impugned orders.

What the respondents did was not to take action, if at all the explanation of the petitioner was deficient, and they waited for his retirement. It is after the retirement of the petitioner in 2004 that a fresh second show cause notice was issued on 02.06.2005 to which again a detailed reply was given on 13.06.2005. Surprisingly enough this second show cause notice came up with the allegation of a vested interest of the petitioner and collusion of the petitioner with the miller. The petitioner in his reply vehemently denied the allegations and urged that the petitioner had no vested interest nor was there any evidence of collusion or conspiracy with the miller.

From the findings recorded in both the impugned orders as well as the facts stated in the Counter Affidavit even before us, we have been unable to gather the existence of any material or evidence indicating collusion of the petitioner. Fraud and collusion are not words of ornament. They are serious allegations of deceit and they have to be established on the basis of some evidence and not mere allegations. A mere suspicion or belief of collusion without any evidence to support the same would not be sufficient to construe an act of collusion on the part of the petitioner. No material is available so as to demonstrate the allegation of vested interest. To us it appears that when the respondents failed to find any fault with the petitioner after the reply was given to the first show cause notice in 2002, they came up with a fresh plea of collusion and vested interest after the retirement of the petitioner which was an altogether new allegation. We do not find this to be a genuine effort to ascertain the truth about the loss caused on account of any negligence or collusion on the part of the petitioner. The respondents appear to be simply beating about the bush without any serious efforts to collect any evidence to substantiate the allegation. The petitioner was not subjected to any disciplinary proceedings. To the contrary the miller had been subjected to proceedings both Criminal as well as Civil for realization of the short fall of the Custom Milled Rice. The respondents while passing the impugned orders have not recorded any reason or finding as to why the explanation afforded by the petitioner was unacceptable. As a matter of fact the impugned order does not even refer to the defence set-up by the petitioner. Consequently the orders are clearly vitiated being violative of Article 14 of the Constitution of India and the imposition of the loss on the petitioner is absolutely unjustified. The writ petition therefore deserves to be allowed to the extent of loss alleged to have been suffered by the Department in relation to the recovery of Custom Milled Rice.

Accordingly the writ petition is allowed and the impugned orders in so far as they allege a loss of Rs.10,17,468.65 is hereby quashed. The balance of the amount found to be recoverable from the petitioner shall be adjusted towards the payments to which he is entitled to receive. The petitioner shall be paid the remaining balance of the emoluments in terms of this order within three months of the date of production of a certified copy of this order with 8% simple interest per annum.

The writ petition is allowed with the aforesaid directions.

Order Date :- 24.8.2017

R./