Pancham Ram Yadav vs The U.P. Co-Operative Federatin ...
2017 Latest Caselaw 5851 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Court No. 37
 

 
Case :- SPECIAL APPEAL No. - 435 of 2008
 

 
Appellant :- Pancham Ram Yadav
 
Respondent :- The U.P. Co-Operative Federatin Ltd. Thru' M.D. & Another
 
Counsel for Appellant :- Prakash Padia,Chandan Kumar
 
Counsel for Respondent :- Ram Gopal Tripathi,V.C. Tripathi
 

 

 
Hon'ble Amreshwar Pratap Sahi,J.

Hon'ble Saral Srivastava,J.

Heard Sri Chandan Kumar, learned counsel for the appellant and Sri Ram Gopal Tripathi, learned counsel for all the respondents.

This appeal prays for setting aside the judgment dated 12.11.2007 of the learned Single Judge in Writ Petition No.18891 of 2000 in so far as it relates to the present appellant only.

The appellant while working as a Storekeeper in the godown of U.P. Cooperative Federation Limited, the respondent herein, is alleged to have been involved in the illegal removal of 361 bags of Sugar as a result whereof, along with others, he was also charge-sheeted in disciplinary proceedings and was called upon to answer the charges including the charge of financial loss having been caused on account of such removal of bags. The said charges were enquired into and the appellant was held to be liable for the said loss and the charges of misappropriation were stated to have been proved. As a measure of punishment to the appellant, on the conclusion of the enquiry, the appellant was dismissed from service vide order dated 03.03.2000 and was also simultaneously saddled with the recovery of the amount stated to have been misappropriated as per the charges that have been found to be proved. An F.I.R. was also lodged and a criminal case is being pursued. During investigation more than 100 bags of the misappropriated Sugar are stated to have been recovered.

Aggrieved the appellant filed Writ Petition No.18891 of 2000 that has been dismissed by the learned Single Judge by the judgment dated 12.11.2007 holding that the complicity of the appellant is established and in the circumstances the dispensation of the services of the appellant as well as the recovery of the pecuniary loss from the appellant has been upheld. While proceeding to dismiss the writ petition the learned Single Judge noticed and followed the judgment of another learned Single Judge in the case of Satya Narain Mishra Vs. Prabandh Nideshak and another 2002(1) AWC, 582.

The appellant herein filed a Recall Application for the said judgment before the learned Single Judge urging that his counsel had not been heard. The said application was rejected vide order dated 21.01.2008, hence this appeal.

Sri Chandan Kumar while advancing his submissions has urged that since the correct position of law has not been noticed by the learned Single Judge, namely the power to award punishment as per Regulations 84 and 85 of the U.P. Co-operative Societies Employees Service Regulation, 1975 therefore the impugned judgment is vitiated. He submits that the same Regulations, in a case of almost an identical set of two punishments having been awarded simultaneously, a Division Bench in the case of Virendra Kumar Gupta Vs. State of U.P. and others in Service Bench No.614 of 2009 decided on 28.07.2015 has held that since Regulation 84 of the Regulations 1975 prevail over and above the U.P. Co-operative Federation Limited Karmchari Seva Niyamawali, 1980, therefore only one punishment could have been awarded, hence, the reliance placed by the learned Single Judge in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) is contrary to law as considered by the said Division Bench.

It may be noticed that the judgment impugned in the present writ petition was delivered on 12.11.2007 when the judgment in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) was reportedly prevailing. The Division Bench judgment in the case of Virendra Kumar Gupta Vs. State of U.P. and others (Supra) has been rendered on 28.07.2015 without noticing the ratio of the judgment of the learned Single Judge in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra).

Sri Chandan Kumar submits that the Division Bench judgment being later in point of time, delivered and interpreting the same Regulation, would prevail, inasmuch as, this was a direct case with regard to an employee of U.P. Co-operative Federation Limited whereas the judgment rendered by the learned Single Judge in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) was in relation to a Co-operative Bank. He therefore, contends that the Division Bench judgment having interpreted the same regulations and being a later judgment would prevail and would be binding.

Replying to the said submissions Sri Ram Gopal Tripathi, learned counsel for the respondents has urged that since the Division Bench judgment had been rendered without noticing the ratio of the judgment in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) interpreting the same regulations, this Court should attempt to harmonize the provisions of Regulations 84 and 85 of the 1975 Regulations and Rule 83 of the 1980 Rules referred to therein. His contention therefore is that the Division Bench judgment in the case of Virendra Kumar Gupta Vs. State of U.P. and others (Supra) which does not notice the ratio of the judgment in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) should not be applied on the facts of the present case or alternatively the matter may require a revisit on the question of law.

We have considered the submissions raised. In order to appreciate the aforesaid rival submissions raised it would be appropriate to extract paragraph no.13 of the judgment in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) :

"In case bank employee who is found to have embezzled the amount the public policy demands that apart from the punishment given by departmental authority, he be held responsible for the recovery of the pecuniary loss caused by the employee to the Bank. If an emmployee is held to be liable to only one of the punishments, it may become an incentive to misappropriate or embezzle a large amount and escape liability of such misappropriation or embezzlement. The punishment of reversion or removal or dismissal on the ground of misconduct should be with direction of recovery to make good the loss caused due to such misconduct. Regulation 84, providing for penalties and stating that the employee is liable to be punished by any one of the penalty has thus to be interpreted to mean that in case of misappropriation or embezzlement which is the misconduct on account of which the employee has been penalised, the recovery of the amount of pecuniary loss caused to the bank is necessary to be coupled with the penalty effected upon delinquent employee. In V.K.Bahadur Vs. State Bank of India, 2001 L&IC 935, this Court following the judgment in State Bank of India Vs. T.J.Paul, AIR 1999 SC 1994; Kailash Nath Gupta V. Inquiry Officer : 1997 (1) AWC 263 (NOC): 1997 ACJ 896, held that where financial irregularities of serious nature are found proved against the bank employee no lenient view should be taken. A bank runs on public confidence. A greater integrity and devotion is required from bank employee in comparison to employees of other organizations. If the allegation of embezzlement, misappropriation or gross negligence is found to be established causing pecuniary loss to the bank on account of delinquent employee, the amount of loss must be made good by him. In the present case, only half of the doubtful recoveries have been sought to be made good, and in the circumstances it is held that imposition of penalty of reversion along with recovery of the amount, does not violate Regulation 84 of the U.P. Co-operative Societies Service Regulation, 1975."

A perusal of the aforesaid view expressed by the learned Single Judge would indicate that Regulation 84 came to be interpreted in a manner which in our opinion is based on a sound reasoning to advance the purpose of punishment. It holds that in a case of misappropriation and financial embezzlement if, the said charge is found to be proved then Regulation 84 should be read in a manner so as to allow the Disciplinary Authority to impose an appropriate punishment coupled with a direction to recover the entire financial loss show caused.

This in our opinion also would not amount to a double punishment but would be supplemental to the punishment awarded to the employee on having found to be indulging in financial misappropriation or causing financial loss which would be a sound public policy while interpreting Regulation 84. The money which is sought to be recovered is in a sense not an award of punishment but is to recover something that belonged to the employer and was an entrustment.

Regulation 84 is extracted hereinunder :

"Penalties.--(i) Without prejudice to the provisions contained in any other regulation, an employee who commits a breach of duty enjoined upon him or has been convicted for criminal offence or an offence under Section 103 of the Act or does anything prohibited by these regulations shall be liable to be punished by any one of the following penalties :

(a) censure.

(b) withholding of increment.

(c) fine on an employee of Category IV (peon, chaukidar etc.),

(d) recovery from pay or security deposit to compensate in whole or in part for any pecuniary loss caused to the Co-operative Society by the employee's conduct,

(e) reduction in rank or grade held substantively by the employee,

(f) removal from service, or

(g) dismissal from service."

What we find is that the Division Bench in the case of Virendra Kumar Gupta Vs. State of U.P. and others (Supra) while proceeding to interpret the provision has held that the Rules of 1980 have been framed under the Regulations of 1975 and therefore, they being subordinate to Regulation 84, Rule 83 of the Rules can not be read so as to expand the meaning of the award of any one punishment as provided for in Regulation 84. Rule 83 of the 1980 Rules are extracted hereinunder :-

^^1 fdlh vU; lsok fu;e esa fn;s x;s micU/kksa ij izfrdwy izHkko Mkys fcuk fdlh deZpkjh dks tks vius drZO;ksa dk dksbZ mYya?ku djrk gS ;k n.M vijk/k vf/kfu;e dh /kkjk 103 ds v/khu fdlh vijk/k ds fy;s fl) nks"k gqvk gS ;k lsok fu;ekoyh }kjk izfrf"k) dksbZ dk;Z djrk gS] rks mls fuEu 'kkfLr;ksa esa ls ,d ;k vf/kd 'kkfLr;ksa }kjk nf.Mr fd;k tk ldsxkA

¼d½ fuUnk]

¼[k½ osru o`f) ij jksd]

¼x½ Js.kh 4 ds fdlh deZpkjh ¼pijklh] pkSdhnkj vkfn½ ij tqekZuk]

¼?k½ deZpkjh ds vkpj.k }kjk QsMjs'ku dks gksus okyh fdlh /ku laca/kh {kfr dks iw.kZr;k vFkok vkaf'kd :i ls {kfriwfrZ djus ds fy;s osru ;k izfrHkwfr ls olwyh]

¼M-½ deZpkjh }kjk ekSfyd :i esa /k`r ij ;k Js.kh esa voufr]

¼p½ lsok ls gVk;k tkuk] rFkk

¼N½ lsok ls inP;qr

¼2½ n.M ds vkns'k dh izfrfyfi vfuok;Zr% lEc) deZpkjh dks nh tk;sxh vkSj deZpkjh ds lsok vfHkys[k esa bl vk'k; dh izfo"V dh tk;sxhA

¼3½ fuUnk djus ds vykok dksbZ Hkh 'kkfLr rc rd vkjksfir ugha dh tk;sxh tc rd fd deZpkjh ds dkj.k crkus dh uksfVl u ns nh xbZ gks vkSj ;k rks og fofufnZ"V le; ds Hkhrj mRrj nsus esa vlQy jgk gks vFkok mRrj n.M nsus okys vf/kdkjh }kjk vlarks"ktud ik;k x;k gksA

¼4½ ¼d½ vkjksfir deZpkjh dks leqi;qDr izkf/kdkjh }kjk vijk/k dh xEHkhjrk ds vuqlkj n.M fd;k tk;sxk%

izfrcU/k ;g gS fd [k.M ¼1½ ds mi[k.M ¼M-½] ¼p½ ;k ¼N½ ds v/khu dksbZ 'kfDr vuq'kklfud dk;Zokgh fd;s fcuk vkjksfir ugha dh tk;sxhA

¼[k½ dksbZ deZpkjh ml izkf/kdkjh ls ftlds }kjk og fu;qDr fd;k x;k Fkk fHkUu fdlh izkf/kdkjh }kjk rc rd gVk;k ;k inP;qr ugha fd;k tk;sxk tc rd fd fu;qDr izkf/kdkjh us ,sls vizkf/kdkj dk izfrfu/kk;u ,sls vU; O;fDr ;k izkf/kdkjh dks fyf[kr :i esa igys gh u dj fn;k gksA

¼5½ fu;qDr izkf/kdkjh ;k mlds }kjk izkf/kd`r O;fDr osru o`f) jksdus dk vkns'k nsrs le; ml vof/k dk tc rd ds fy;s og jksdh xbZ gS vkSj bldk fd D;k mlls Hkfo"; dh osru o`f);ka vFkok inksUufr LFkfxr gksxh] mYys[k djsxkA**

The sum and substance of the conclusion drawn by the Division Bench therefore is that even though the 1980 Rules does provide for one or more than one punishment, yet the same can-not travel beyond the language used in Regulation 84 of the 1975 Regulations.

We are unable to respectfully agree with the aforesaid interpretation inasmuch the words "any one" of the penalties should be harmonized with the words used in Rule 83 of the 1980 Rules particularly in cases relating to financial impropriety or embezzlement as is involved in the present case and was also involved in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra). We would therefore approve of the reasoning given by the learned Single Judge in paragraph no.13 of the judgment in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra), as against the interpretation given by the Division Bench in the case of Virendra Kumar Gupta Vs. State of U.P. and others (Supra) in view of the above discussion. We find that such an interpretation would advance the cause of justice and would alienate all possibilities of perpetuation of any mischief, inasmuch as, an employee who may be on the verge of his retirement can take recourse or attempt to such financial misappropriation or embezzlement and then walk away with the punishment of dismissal without any liability to return back the amount. This would be a paradox and would be against public policy and therefore such an interpretation deserves to be avoided. We may add that an interpretation, the effect whereof is likely to be utilized by an unscrupulous employee as an incentive or license to embezzle, should be cast aside. Any loophole or possibility of free play should be prevented from acting as a catalyst for an indulgent individual. The purpose of punishment is also to act as a deterrent. An action, as a consequence of a proved charge of misappropriation, to recover, is like a natural corollary that should be implemented and executed to complete the process or else it would invite a legal criticism of letting the guilty escape. Regulation 84 and Rule 83 combined together should not allow the process to remain unfinished.

Consequently having not found ourselves in agreement with the ratio of the judgment of the Division Bench in the case of Virendra Kumar Gupta Vs. State of U.P. and others (Supra) in respect of the subject matter in issue, we find it necessary to refer this question to a Larger Bench with a request to Hon'ble The Chief Justice to constitute a larger Bench for resolving the question of law formulated hereinafter :

1. Whether Regulation 84 of the U.P. Co-operative Societies Employees' Service Regulation 1975 read with Rule 83 of the U.P. Co-operative Federation Limited Karmchari Seva Niyamawali, 1980 services can be harmonized so as to uphold the punishment by way of dismissal of an employee coupled with an order directing recovery of an amount on the charge of a financial embezzlement or misappropriation to be included within the fold of Regulation 84 ?

2. Whether the law laid down in the case of Virendra Kumar Gupta Vs. State of U.P. and others (Supra) in respect of the true import of Regulation 84 read with Rule 83 aforesaid does not state the correct position of law as against the reasoning given by the learned Single Judge in paragraph no.13 in the case of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) and alternatively as to whether the statement of law in that regard as explained in the judgment of Satya Narain Mishra Vs. Praband Nideshak and another (Supra) should be accepted as the correct position of law ?"

Let the papers be placed before Hon'ble The Chief Justice for constituting a Larger Bench in terms of Chapter V Rule 6 of Allahabad High Court Rules, 1952 at the earliest for being resolved.

Order Date :- 27.10.2017

R./