S.K. Malhotra, S/O Shri S.L. ... vs Engineering Projects (India) ...
2003 Latest Caselaw 775 Del

JUDGMENT

Vijender Jain, J.

1. Rule.

2. The petitioner has filed this petition against the order of termination of his service pursuant to the show cause notice dated 29.1.1992 pursuant to which enquiry was conducted by the respondent and order of termination was passed on 1.5.1992. Aggrieved by the said order, the petitioner filed an appeal before the appellate authority which was also rejected on 29.9.1992. Mr. Venkatramani, learned counsel appearing for the petitioner, at the outset has contended that enquiry officer appointed by the respondents was an outsider and under the Rules of the respondents only an officer of the company could have been the enquiry officer. In support of his contentions, he has cited the case of Manjit Ahluwalia, V/s. UOI & ors. . It was contended that procedure of holding enquiry as per the Rules were not followed and the admission, which was extracted from the petitioner was on the basis of certain promises made to the petitioner that a lenient view of the matter would be taken if he admits his guilt. It was contended before me that from the correspondence which the petitioner had with the respondents even prior to the issuance of charge sheet, if the same is taken into consideration, it would be borne out that the extraction of admission was involuntary. It was further contended that the punishment was disproportionate. It was further contended that charges levelled against the petitioner would come under the definition of misconduct as defined in the Rules. It was contended that on the basis of General Rules in the absence of any specific Rule, the respondents could not have terminated the service of the petitioner when neither any misappropriation nor any loss of property or loss in terms of finances was caused to the respondent. It was contended that reply filed by the petitioner to the show cause notice dated 30.4.1992 was not at all considered by the disciplinary authority. It was further contended by the learned counsel for the petitioner that termination coupled with forfeiture of services/financial benefits including gratuity was bad in law as the termination order further stated that the petitioner would not be entitled to any service/financial benefits including gratuity whatsoever. Lastly, it was contended that the order of appellate authority was also bad in law. It was contended that there was no reason given in the order of appellate authority and the appeal was rejected summarily without assigning any reason.

3. Mr. Venkatramani took pains in analysing the charges. According to learned counsel for the petitioner , the first charge was with regard to petitioners taking his family from Delhi to Bolangir on 20.5.1990 and claiming T.A. for his family by air from Delhi to Raipur. The charge was that although in the T.A. bill the names of the family members were mentioned but they had not travelled by air from Delhi to Raipur and petitioner had claimed false T.A. for his family members. On the basis of aforesaid charge, it was contended before me that there was no finding as to whether the petitioner did travel from Delhi to Raipur along with his family on 20.5.190. It was also canvassed before me that there is no finding of fact as to whether family members of the petitioner travelled from Delhi to Raipur by air and in case the petitioner had presented the T.A. bill, the same could not have been passed by the authorities. Lastly, it was contended that in any case the difference between the air fare and Railway fare had already been paid by the petitioner to the respondent and no loss had been caused to the respondent on this score.

4. The second charge pertained to sending the family back from Bolangir to Delhi in the absence of any transfer order. It was contended that once the petitioner was transferred to Bolangir, he was entitled to have his family at Bolangir and if on account of various reasons, the family could not adjust at Bolangir, they had a right to go to Delhi and even in the absence of any transfer order, he was entitled to transfer his family members out of Bolangir. On the basis of aforesaid submissions it was contended that it was not a case of misappropriation or forgery and neither disciplinary authority nor appellate authority has taken these factors into consideration. It was also contended by the counsel for the petitioner that admission, which was extracted from the petitioner before the enquiry officer was to be judged keeping in view of all these circumstances. In support of his submissions he has cited The Central Bank of India Ltd. V/s. Karunamoy Banerjee . Mr. Venkatramani contended that the effect of admission so recorded by the enquiry officer and relied upon Section 31 of the Indian Evidence Act. In support of his contentions he further relied upon Edward Boykin Jr., V/s. State of Alabama in which it was held :-

"................."Presuming waiver from a silent record is impermissible. The record must show, or there must be an allegation and evidence which show, that an accused was offered counsel but intelligently and understandingly rejected the offer. Anything less is not waiver."

5. We think that the same standard must be applied to determining whether a guilty plea is voluntarily made. For, as we have said, a plea of guilty is more than an admission of conduct; it is a conviction (4). Ignorance, incomprehension, coercion, terror, inducements, subtle or blatant threats might be a perfect cover-up of unconstitutionality. The question of an effective waiver of a federal constitutional right in a proceeding is of course governed by federal standards."

6. In support of his contentions that there are specific Rules which describe misconduct, the respondents cannot take shelter of the General Rules for bringing the article of charges in terms of the definition of misconduct on the petitioner by enlaring its scope, it was contended that Conduct Rules and particularly Rule 2 define acts and omissions constituting misconduct. The respondents had implicated the petitioner under Rule 2 sub-rules (2), (4) and (9) and (25). It was contended that sub-rules (2), (4) and (9) of Rule 2 are not applicable to the case of the petitioner. Sub-rule (25) of Rule 2 deals with a general breech of service rules which cannot be construed to be applicable for grave misconduct in the case of the petitioner. In support of his submissions, learned counsel for the petitioner has cited the case of A L Kalra V/s. Project and Equipment Corporation of India Ltd. in which it was held :-

"Rule 4 bears the heading 'General'. Rule 5 bears the heading 'Misconduct'. The draftsmen of the 1975 Rules made a clear distinction about what would constitute misconduct. A general expectation of a certain decent behavior in respect of employees keeping in view Corporation culture may be a moral or ethical expectation. Failure to keep to such high standard of moral, ethical or decorous behavior befitting an officer of the company by itself cannot constitute misconduct unless the specific conduct falls in any of the enumerated misconduct in Rule 5. Any attempt to telescope Rule 4 in to Rule 5 must be looked upon with apprehension because Rule 4 is vague and of a general nature and what is unbecoming of a public servant may vary with individuals and expose employees to vagaries of subjective evaluation. What in a given context would constitute conduct unbecoming of a public servant to be treated as misconduct would expose a grey area not amenable to objective evaluation. Where misconduct when proved entails penal consequences, it is obligatory on the employer to specify and if necessary define it with precision and accuracy so that any ex post facto interpretation of some incident may not be camouflaged as misconduct. It is not necessary to dilate on this point in view of a recent decision of this Court in Glaxo Laboratories (I) Ltd. v. Presiding Officer, Labour Court, Meerut where this Court held that "everything which is required to be prescribed has to be prescribed with precision and no argument can be entertained that something not prescribed can yet be taken into account as varying what is prescribed. In short it cannot be left to the vagaries of management to say ex post facto that some acts of omission or commission nowhere found to be enumerated in the relevant standing order is nonetheless a misconduct not strictly falling within the enumerated misconduct in the relevant standing order but yet a misconduct for the purpose of imposing a penalty". Rule 4 styled as 'General' specifies a norm of behavior but does not specify that its violation will constitute misconduct. In Rule 5, it is nowhere stated that anything violative of Rule 4 would be per se a misconduct in any of the sub-clauses of Rule 5 which specifies misconduct. It would therefore appear that even if the facts alleged in two heads of charges are accepted as wholly proved, yet that would not constitute misconduct as prescribed in Rule 5 and no penalty can be imposed for such conduct. It may as well be mentioned that Rule 25 which prescribes penalties specifically provides that any of the penalties therein mentioned can be imposed on an employee for misconduct committed by him. Rule 4 does not specify a misconduct."

7. On the other hand, Ms. Ansuya Salwan, learned counsel appearing for the respondents, has contended that enquiry officer was appointed in terms of the Rules. She has contended that the language used in the Rules under Chapter 4 'DISCIPLINARY MATTERS' and Rule-1 sub-rule (ii) the expression of 'a responsible officer' is not attributed to an officer of the company. It can be an officer who is from outside the company and in this case the enquiry officer was a retired employee of the Central Vigilance Commission, who was well conversant with the enquiry and, therefore, it cannot be said that the enquiry officer acted without jurisdiction or he could not have been appointed under the rules. Ms. Salwan contended that no reply was filed by the petitioner till 30.4.1992. She contended that from the averments made in the petition as well as in the application which was submitted by the petitioner on 1.5.1992, it would be clear that the petitioner himself had admitted that he gave the reply at 5.20 P.M. on 30.4.1992. Learned counsel for the respondents contended that giving a reply on 30.4.1992 after 5.00 P.M. itself shows that the petitioner was not interested in giving reply to the respondents, otherwise he was an employee of the respondent and he knew that office functions till 5.00 P.M. However, it was contended that disciplinary authority took into consideration the synopsis of reply in a letter, which was delivered to the respondents on 1.5.1992 and after taking into consideration the synopsis of reply in the said letter, the C.M.D of the respondent-organisation recorded a note, reviewed the matter, considered the same in the light of the letter received by him and, therefore, it cannot be said that there was non-consideration on the part of the disciplinary authority of the representation of the petitioner on 1.5.1992. On the basis of aforesaid submissions, she contended that no fault could be found either with the report of the enquiry or with the penalty imposed by the disciplinary authority.

8. Controverting to the arguments of the petitioner that the family of the petitioner travelled by air , it was contended by the counsel for the petitioner that this statement was a sheer after-thought. Relying upon the representation made by the petitioner in response to the query of the Audit Department, she argued that said plea was not taken by the petitioner and in this connection attention of this court was drawn to the records where a letter, though mentioned in the writ petition of the petitioner dated 22.12.2001, although not filed on record, and from the perusal of this letter, it is evident that the petitioner has not taken the plea that tickets were obtained in different names and not in the names of his family members although his family did travel to Raipur from Delhi along with the petitioner. Counsel for the respondents further contended that in relation to the second charge in the absence of any transfer order, the petitioner could not have withdrawn the T.A. amount. She contended that the petitioner was the Deputy Finance Manager posted at Bolangir and was the overall in charge of the Finance Department at Bolangir. Learned counsel for the respondents further contended that the penalty imposed by the respondents was proper and in accordance with law. She has contended that disciplinary authority rightly passed the order whereby the service of the petitioner was terminated and he was not to be entitled for any service/financial benefits including gratuity whatsoever. She contended that the power of withholding gratuity or non-grant of gratuity is as per the Rules and in this context she relied upon Rule 4 'Conditions for the grant of Gratuity', which is as under :-

"Subject to the provision contained in Rule 3 above, Gratuity shall be granted to the employee of the Company on termination of his service, after he has rendered service for not less than 5 years both within EPI as well as with the former employer (Public Sector Undertaking only), provided the gratuity in respect of the past service is transferred to EPI (Rule 4A) :

(a) On his superannuation, or

(b) On his retirement or resignation, or

(c) On his death or disablement due to accident or disease.

Provided that :

(a) Payment of Gratuity to an employee who is dismissed for gross misconduct, such as willful insubordination or disobedience, causing damage to the Company's property or premises, theft, fraud or dishonesty in connection with Company's business or work, shall be forfeited to the extent of the damage or loss so caused.

However, in the case of employees not covered under the Payment of Gratuity Act, 1972, Gratuity will not be admissible if their services are terminated for misconduct, insolvency or inefficiency, besides any of the reason(s) mentioned above.

(b) The Gratuity payable to an employee shall be wholly or partly forfeited :

(i) If the services of such an employee have been terminated for his riotous or disorderly conduct, or any other act of violence on his part, or

(ii) If the services of such an employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

(c) If departmental proceedings are instituted against an employee while in service before his retirement, the same will be continued and concluded in the same manner as if the employee had continued in service. Gratuity in such cases will be released only after the conclusion of the proceedings and issue of final orders thereof.

Repelling the contentions of the petitioner that petitioner has not committed any grave misconduct, she relied upon sub-rule (ii) of Rule 2 and said that dishonesty in connection with company's business or property would also fall in the category of acts and omissions constituting misconduct. Lastly, it was contended before me that appellate authority examined all the relevant records and passed appropriate decision and the decision of the authority was communicated and the communication of the decision of the appellant authority need not be speaking.

I have considered the respective submissions of the learned counsel appearing for the parties. Let me first deal with the submissions of the learned counsel for the petitioner as to the effect of the admission recorded by the enquiry officer. I find some force in the arguments of the respondent that the admission was voluntary because if the admission was not voluntary or was extracted from the petitioner, then there was considerable lapse of time when the enquiry officer recorded the statement of petitioner on 20.3.1992 till 30.4.1992, when the petitioner was directed to submit his reply as final show cause notice was issued on 7.4.1992 and further time was granted at the request of the petitioner to file reply by 30.4.1992, therefore, I do not see much substance in the arguments of the counsel for the petitioner that the admission was extracted from the petitioner on the ground that a lenient view will be taken or for other considerations. Let me now deal with the arguments advanced by the counsel for the petitioner as to whether the charges would fall under misconduct. Petitioner was charged with misconduct. Rule 2 of Chapter 3 of the Conduct Rules defines misconduct. Petitioner was charged under the said Rule 2 sub-rules (2), (4), (9) and (25). The said Rules are to the following effect :-

"(2) Theft, fraud or dishonesty in connection with the Company's business or property;

(4) Giving false information;

(9) Taking or giving bribes or any illegal gratification and adopting disrupted and corrupt practices; and

(25) Any breach of these Service Rules."

9. Learned counsel for the respondents has contended that the case of the petitioner would fall in sub-rule (2) which deals with theft, fraud or dishonesty in connection with the Company's business or property. On the other hand, it was argued before me that the word 'dishonesty' is used in conjunction with company's business or property, therefore, this Rule will not be applicable to the case of the petitioner. I see force in the arguments of the learned counsel for the petitioner that theft, fraud or dishonesty is in relation to company's business or property. In the case before me neither the respondents have put to any loss nor any such allegation in the charge sheet was made by the respondents. It was then canvassed before me that the case of the petitioner would fall under sub-rule (25) i.e. 'Any breach of these Service Rules' but any attempt to expand the meaning, which specifically has not been provided in the sub-rules, would expose to a grey area which may not be amenable to objective evaluation. More so, when a misconduct entails penalty consequence, it is obligatory on the part of the employer to specify and if necessary define with precision and accuracy so that any ex post facto interpretation of some incident may not be mis-construed. However, to my mind, the petitioner's case for misconduct, though not argued, could fall in sub-rule (4) i.e. 'Giving false information''. If an employee gives a description for claiming some benefits under his service Rules and that information is false, that is covered under sub-rule (4) of Rule 2 constituting misconduct, therefore, to say that the charges are not in consonance with Rules defining misconduct are not applicable in the case of the petitioner may not be correct. May be, sub-rules (2), (9) and (25) have no applicability but petitioner cannot escape from the rigors of sub-rule (4) of Rule 2. Next, it was contended by the learned counsel for the petitioner that while analysing charges whether, as a matter of fact, the petitioner and his family had travelled from Delhi to Raipur by air, no finding of fact has been recorded. In my opinion, in view of admission made by the petitioner before the enquiry officer as well as prior to sending reply to the audit query, it was not incumbent upon the respondents to give a finding of fact in this regard, therefore, I do not see any merit in this submission of the petitioner.

10. With regard to second charge that in the absence of a transfer order the petitioner could not have submitted the T.A. bill for the air fare of his family from Raipur to Delhi. The submissions of the petitioner on this score were that the petitioner took his family as the petitioner had been transferred to Bolangir and if the petitioner was transferred to Bolangir, he was to take his family to Bolangir as petitioner was a patient of Angina and he wanted his family to be with him and he tried his best to keep his family at Bolangir but in view of the inadequate facilities in the fields of Education and Medicine, the family could not stay at Bolangir and after a stay of one and a half months, they had to be shifted to Delhi and as he could not have kept the family at Bolangir and, therefore, had to transfer them back to Delhi. It was also contended on behalf of the petitioner that in any event of the matter the difference between the air fare and Rail fare was paid to the respondents in 1991 itself and on this score also no financial loss has occurred to the respondents. The charge pertained to submission of T.A. bill of the family without an order of transfer. It is an admitted fact that no order of transfer was made which could have entitled the petitioner for claiming T.A. amount on account of family members, therefore, I do not see any force in the arguments of petitioner on this account as advanced by the counsel for the petitioner. Coming to the next submission of the counsel for the petitioner that the order of termination was bad in law as the petitioner's services have been terminated by the impugned order and by the impugned order further penalty has been imposed by the respondents that the petitioner will not be entitled for any gratuity and other service benefits, it was contended that the petitioner had rendered 20 years of service with the respondents. Reliance was placed by the respondents on Rule 4 of 'Conditions for grant of Gratuity'. From the perusal of Rule 4, which has been reproduced above, the gratuity could only be forfeited as provided under the Rules. Proviso to Rule 4 "Conditions of grant of Gratuity' is to the following effect :-

(a) Payment of Gratuity to an employee who is dismissed for gross misconduct, such as willful insubordination or disobedience, causing damage to the Company's property or premises, theft, fraud or dishonesty in connection with Company's business or work, shall be forfeited to the extent of the damage or loss so caused.

From the respondent's side, it was argued that the charges against the petitioner pertains to dishonesty. I am afraid that is not the intention of the service Rules. Dishonesty has been used with words 'in connection with Company's business or work'. The word 'dishonesty' comes after the words 'causing damage to the Company's property or premises, theft, fraud or dishonesty in connection with Company's business or work'. From the article of charges it cannot be said that article of charges pertains to either damaging the company's property or premises, theft, fraud or dishonesty in connection with Company's business or work. What is not in the ambit of Rule a wider meaning cannot be given so as to invite penalty consequence. Aforesaid plea was taken by the petitioner in the appeal filed before the appellate authority. I have perused the records of the respondents. There is nothing on record to show that the appellate authority applied its mind to the grievance of the petitioner on this score. From the perusal of the records, which were produced by the respondents in Court, it is evident that the appeal of the petitioner was placed along with para-wise comments of the respondents. However, in para (m) of the para-wise comments it was also mentioned that :-

"The Charged Officer was suspended during the course of enquiry by the Vigilance Deptt. Into various acts of omissions and commissions. The Charged Officer was suspended when a prima facie case has been established that he has committed gross misconduct and at the time of his suspension, investigation with regard to other charges was also pending. The Charged Officer wants to mislead the Appellate Authority."

11. On what basis these para-wise comments have been put before the appellate authority that at the time of suspension, investigation with regard to other charges was also pending. This statement before the appellate authority by the respondents created a bias and prejudice in the mind of the appellate authority. As no other charge or investigation was pending against the petitioner on the day when the appeal and comments were taken up for consideration by the appellate authority i.e. Board of Directors of the respondent, therefore, the order of termination of service passed by the disciplinary authority where disciplinary authority has inflicted the punishment of termination of service coupled with forfeiture of service and forfeiture of gratuity as well as other benefits and non-consideration of the same by the appellate authority, when no such forfeiture of gratuity could have been made in terms of their own Rules of the respondents, was illegal. Extraneous and irrelevant materials based on the assumption that there were certain other charges were pending against the petitioner, vitiates the order of termination of services of the petitioner and the appellate order passed by the appellate authority. The same are hereby quashed.

12. As I have quashed the order of termination, I need not go to other grounds urged before me by the parties.

13. Coming to the relief to the petitioner, I am of the considered opinion that in peculiar facts and circumstances of this case, petitioner shall be paid 50% of the back wages since his removal from services till the date of his reinstatement with all consequential benefits.

14. Rule is made absolute. The writ petition is allowed with these observations.