S.C. Upadhyay vs The Hindustan Paper Corporation
2010 Latest Caselaw 2260 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                   Date of Judgment: 28.4.2010

+                              W.P.(C) NO.5582/1999

       S.C. UPADHYAY                                      ......Petitioner
                                    Through:    Mr.A.K.Verma, Advocate.


                        Versus

       THE HINDUSTAN PAPER CORPORATION .......Respondent
                        Through: Mr.R.K.Gupta, Advocate.



CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

     1. Whether the Reporters of local papers may be allowed to see
        the judgment?

     2. To be referred to the Reporter or not?
                                                                     Yes

     3. Whether the judgment should be reported in the Digest?
                                                          Yes

INDERMEET KAUR, J. (Oral)

1. Petitioner S.C.Upadhyay was appointed as a Sales

Supervisor with the respondent namely Hindustan Paper

Corporation (hereinafter referred to as „HPC‟) on 30.9.1980. After

seven years of service, he was confirmed to the post of Assistant

Manger (Sales) with effect from 1.8.1987. On 30.6.1992, he was

promoted as Depot Manager (Sales). During the course of his

employment, in the intervening period between the year 1993 to

1994 he had allegedly committed irregularities amounting to a

serious misconduct. This was during the period when he was

posted as Depot Manager (Sales) and functioning as Incharge of

the Delhi depot. Allegation was that the petitioner individualy

and/or in conspiracy with K.A.Khan, DGM (Sales) as also the

authorized clearing agent M/s Chawla Brothers of Delhi along with

other dealers/stockists caused wrongful loss to the corporation

with a view to cause wrongful gain for himself as well as to the

dealers and clearing agents which ran into several crores.

2. In view of this prima facie allegation a departmental enquiry

was initiated against the petitioner. The enquiry was conducted

under Rule 25 of the HPC Conduct, Discipline and Appeal Rules

(hereinafter referred to as „the Rules). Show cause notice was

issued to the petitioner on 1.9.1995 seeking his explanation. In

the course of the enquiry, four charges were framed against him

which read as follows:

I. That by acting individually and/or in conspiracy with others to cause wrongful gain to the Clearing Agent and dealers and thereby causing wilful loss to the Corporation to the tune of several crores of rupees Shri S.C. Upadhyay appears to be guilty of misconducts as defined in Clause 5(i) of HPC CDA Rules.

II. By maintaining and/or causing to be maintained improper records relating especially to the Clearing Agent‟s accounts and activities besides others, Shri Upadhyay appears to be guilty of misconducts as defined in Clauses 5(x) and 5(xxxii) read with Clauses 5(xxii) of the HPC CDA Rules.

III. By virtue of the aforesaid acts of omission/commission, Shri S.C.Upadhyay failed to maintain absolute integrity as envisaged in

Rule 4(a)(i) of the CDA Rules of the Corporation and thus appears to be guilty of misconduct as defined in Clause 5(xxxiv) of HPC CDA Rules.

IV. By virtue of the aforesaid acts of omission/commission, Shri S.C.Upadhyay failed to maintain devotion to duty as envisaged in Rule 4(a)(ii) and thus appears to be guilty of misconducts as defined in Clauses 5(c) and 5(xxxiv) of HPC CDA Rule.

3. On behalf of the department, one witness Sh.S.K.Dass was

examined who was subjected to cross-examination by the

petitioner. He was the Executive (Vigilance). As per his version

and as is evident from the report of the enquiry officer he had

deposed that he had checked the documents for the periods 1993-

1994 and 1995-1996. He had submitted his investigation report

on 17.8.1995; the petitioner i.e. S.C.Updhayay was incharge of the

Delhi depot at the relevant time; the dates of the money receipts

for freight issued by the railway authorities reflected that the date

of the clearance of the goods and the date of the invoices

ultimately raised on the stockists were much after such dates;

presumption being the goods were retired in time and immediately

sent or received by the stockists although the stockists were billed

for such supplies at much later dates. In his cross-examination,

PW-1 had stated that the Goods Receipt Register (GRR) was

maintained to record the materials received by the Delhi office; he

had denied the suggestion that his conclusions were based on

mere inferences. No witness was examined on behalf of the

petitioner. The enquiry officer had put questions to the petitioner

which was recorded in the minutes of the enquiry held on

25.7.1996.

4. In conclusion, charge no.1 which related to misconduct as

defined in Clause 5 (i) of the Rules was held not proved. Charge

no.2 was a charge relating to the misconduct of the petitioner as

defined in clause 5 (x) and 5 (xxxii) read with clause 5 (xxii) of the

Rules. Clauses 5 (x), 5 (xxxii) and 5 (xxii) are reproduced as under:

Clause 5 (x): Neglect of work or negligence in the performance of duty including malingering or showing down of work.

Clause 5 (xxii): Abetment of or attempt at abetment of any act which amounts to misconduct.

Clause 5 (xxxii): Wilful falsification, defacement or destruction of any official document/record.

This charge stood proved. The enquiry officer while discussing the

evidence adduced by the department held that the respondent had

in fact not contradicted the fact that proper record was not being

maintained at the relevant time at the depot; he was admittedly

the Depot Manager (Sales) at the relevant time and incharge of

the Delhi Depot. Enquiry officer held him guilty of misconduct as

defined under clause 5 (x) i.e. the charge of negligence and the

charge of abetment as defined in clause 5 (xxii) i.e. abetment of

allowing the records to be falsified which in turn amounted to a

misconduct. Charge 3 was held partly proved and the delinquent

petitioner was held guilty of having violated clause 4 (a) (i) of the

Rules which reads as under:

"Every employee of the Corporation shall at all times

(i) Maintain absolute integrity"

Enquiry officer had further held that the continued action of the

petitioner in allowing the clearing agent and the stockists to gain

at the cost of the corporation and having knowledge of what was

going on would show that the petitioner had failed to maintain

devotion to his duty in terms of clause 4 (a) (ii) of the Rules; as

such charge no.4 also stood partly proved.

5. The Disciplinary Authority vide its order dated 20.5.1997

agreed with the findings of the enquiry officer. The representation

of the petitioner dated 17.4.1997 was considered by the

disciplinary authority and after due consideration of the report of

the enquiry officer the oral evidence and other documentary

evidence produced before the enquiry officer, had endorsed the

findings of the enquiry officer. In terms of rule 24 of the Rules

penalty of removal from service which shall not be a

disqualification for future employment (as specified in rule 23 (f)

of the Rules) was awarded to the petitioner.

6. The order of the Disciplinary Authority was the subject

matter of an appeal; the appellate authority vide its order dated

30.8.1998 after having considered the explanation given by the

petitioner in the course of hearing before it confirmed the finding

of the Disciplinary Authority; appeal was dismissed.

7. Writ petition was filed 11 months later i.e. in July, 1999.

8. The contention of the petitioner is that the enquiry officer

has based his report on no evidence. It is speculative. Although

charge no.1 has been disproved yet the other charges i.e. charge

no.2 and part of charge no.3 and part of charge no.4 have been

held proved which is a misappreciation of the evidence by the

enquiry officer as all the charges are overlapping one another and

if the first charge i.e. charge no.1 had remained disproved the

question of the proof of charge no.2 and part proof of charge no.3

and part proof of charge no.4 could not arise. Even otherwise

charges proved against the petitioner relate to the improper

maintenance of the records of the Corporation which admittedly

were being maintained as per the past practice in the Corporation;

petitioner being a mere Depot Manager was not in the capacity to

make any large administrative changes. The charge of abetment

which necessarily postulates an active role on the part of the

petitioner has also not been established; reliance has been placed

upon a judgment of the Supreme Court reported in Kishangiri

Mangalgiri Goswami vs. State of Gujrat JT 2009 (2) SC 84 and

another judgment reported in Shri Ram vs. The State of U.P. AIR

1975 SSC 175 to substantiate this submission. The 17 years

unblemished career record of the petitioner has been overlooked.

The punishment imposed by the disciplinary authority is also

disproportionate qua the charges proved and thus violative of

Articles 14 and 21 of the Constitution; the extreme penalty of

dismissal of service could not have been awarded even assuming

although not admitting that the charges stood proved.

9. The counter arguments of the respondent have been heard.

It is stated that the petitioner has been held guilty of a serious

misconduct; his integrity has been assailed and devotion to duty

which are basic requirements and the sacrosanct duty of every

employee have been questioned and held against him. In these

circumstances, penalty of removal from service with no further

disqualification from future employment is not in any manner

disproportionate. In fact, the petitioner has already got a job.

10. The report of the enquiry officer dated 16.1.1997 is detailed;

it has gone into each and every charge leveled against the

petitioner. Misconduct has been defined in Rule 5 of the Rules; it

has various sub-heads. Charge no.1 relates to misconduct as is

defined in Rule 5 (i) of the Rules. It relates to theft, fraud or

dishonesty in connection with the business or property of the

Corporation. Although wrongful loss had been assessed, yet who

was responsible could not be pointed. As such, this charge was

held not proved. Charge no.2 was specific; it related to the

imputation against the petitioner of maintaining improper records

qua the clearing agent accounts and activities with reference to

misconduct as defined in clause 5 (x), 5 (xxii) and 5 (xxxii) of the

Rules. Clause 5 (x) is negligence in the performance of duty;

clause 5 (xxii) relates to an abetment of or attempt at abetment of

any act which amounts to misconduct. This charge is independent

and distinct from Charge no.1. Enquiry officer had held that the

petitioner‟s role so far as the clearing agents‟ activities and the

extent to which they were allowed to run the show and take

advantage at the cost of the Corporation was proved. It cannot

thus be said that if charge no.1 stood disproved, Charge no.2 could

not be proved. Similarly, charge no.3 related to the integrity of

the petitioner qua his acts/omissions and commissions. Charge

no.4 related to the acts/omissions and commissions of the

petitioner in relation to his devotion to duty. Charge no.3 and

charge no.4 were also independent of charge no.1. The submission

of the counsel for the petitioner that all charges are overlapping

and if the first charge stood disproved the others i.e. charge no.2,

3 and 4 could not be proved is a misreading of the charges; each is

independent of one and other; this is evident from the statement of

the articles of charges; and still further qualified by the distinct

definition of misconduct under each charge-head as defined in the

Rules under which the petitioner has been charge-sheeted.

Petitioner has himself admittedly committed omissions; he knew

all along the malpractices prevailing in the Corporation at the time

when he was the Depot (Sales) Incharge, yet knowingly he allowed

the same to continue.

11. The penalties as envisaged are contained in clause 23; they

are of two categories, minor and major. Petitioner having been

held guilty on account of charge no.2, part of charge no.3 and part

of charge 4 was imposed the major penalty under clause 23 (f) i.e.

removal from service which shall not be a disqualification for

future employment. It is not a dismissal which would have

foreclosed all his future chances of employment. Keeping in view

the nature of the charges proved against the petitioner which are

grave irregularities committed by him in his service tenure clearly

amounting to a negligence in his duty which in turn had permitted

the falsification of the accounts and records of the respondent;

these knowing lapses in duty had its consequent ramifications. In

these circumstances, it cannot be said that the penalty is either

excessive or disproportionate. It calls for no interference.

12. In Union of India vs. Parma Nanda 1989 SC 1185

observations of the Supreme Court in this regard are relevant

"27. We must unequivocally state that the jurisdiction of the Tribunal to interfere with the disciplinary matters or punishment cannot be equated with an appellate jurisdiction. The Tribunal cannot interfere with the findings of the Inquiry Officer or competent authority where they are not arbitrary or utterly perverse. It is appropriate to remember that the power to impose penalty on a delinquent officer is conferred on the competent authority either by an Act of legislature or rules made under the proviso to Article 309 of the Constitution. If there has been an enquiry consistent with the rules and in accordance with principles of natural justice what punishment would meet the ends of justice is a matter exclusively within the jurisdiction of the competent authority. If the penalty can lawfully be imposed and is imposed on the proved misconduct, the Tribunal has no power to substitute its own discretion for that of the authority. The adequacy of penalty unless it is malafide is certainly not a matter for the Tribunal to concern with. The Tribunal also cannot interfere with the penalty if the conclusion of the Inquiry Officer or the competent authority is based on evidence even if some of it is found to be irrelevant or extraneous to the matter. .......

In the light of the principles to which we have called attention and in view of the aforesaid discussion, the order of the Tribunal imposing a lesser penalty on the respondent cannot, therefore, be sustained. He was found guilty of the charge framed against him. He was a party to the fraudulent act for self aggrandisement. He prepared bogus documents for withdrawal of salary in the name of Ashok Kumar who was not working in his Division. He has thus proved himself unbecoming and unworthy to hold any post. Any sympathy for charitable view on such officials will not be conducive to keep the streams of administration pure which is so vital for the success of our democracy."

13. Subsequently in another judgment reported in 2002 7 SC

168 The Regional Manager & Disciplinary Authority, State Bank of

India, Hyderabad and Anr. Vs. S. Mohammed Gaffar Supreme

Court had endorsed this view and the following observations are

extracted herein as under:

"10. The High Court seems to have overlooked the settled position that in departmental proceedings, insofar as imposition of penalty or punishment is concerned, unless the punishment or penalty imposed by the Disciplinary or Appellate Authority is either impermissible or such that it shocks the conscience of the High Court, it should not normally interfere with the same or substitute its own opinion and either impose some other punishment or penalty or direct the authority to impose a particular nature or category of punishment of its choice. It is for this reason we cannot accord our approval to the view taken by the High Court in disregard of this settled principle. Consequently, the appeal is allowed, the judgment of the Division Bench is set aside and that of the learned Single Judge shall stand restored. No costs."

14. This court sitting in writ jurisdiction cannot substitute the

findings of the competent authority with its own view unless the

reasoning given by the court below is perverse or arbitrary. It is

also not the case of the petitioner that the principles of natural

justice have been flouted.

15. The Supreme Court in the words of Mathew, J. in UOI vs.

Sardar Bahadur AIR 1970 SC 679 has observed:

"A disciplinary proceeding is not a criminal trial. The standard of proof required is that of preponderance of probability and not proof beyond reasonable doubt. If the inference that Nand Kumar was a person likely to have official dealings, with the respondent was one which reasonable person would draw from the proved facts of the case, the High Court cannot sit as a court of appeal over a decision based on it. Where there are some relevant materials which the authority has accepted and which materials may reasonably support the conclusion that the officer is guilty, it is not the function of the High Court exercising its jurisdiction under Article 226 to review the materials and to arrive at an independent finding on the materials, If the enquiry has been properly held the question of adequacy or reliability of the evidence cannot be convassed before the High Court."

16. Petition is without merit; it is dismissed.

(INDERMEET KAUR) JUDGE April 28, 2010.

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