Union Of India vs Sh.G.P.Sewalia
2010 Latest Caselaw 1198 Del

*                IN THE HIGH COURT OF DELHI AT NEW DELHI

+                               W.P. (C.) No.8477/2009

%                            Date of Decision: 03.03.2010

Union of India                                               .... Petitioner
                             Through Mr.H.K.Gangwani, Advocate


                                      Versus


Sh.G.P.Sewalia                                              .... Respondent
                             Through Nemo.


CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR
HON'BLE MR. JUSTICE MOOL CHAND GARG


1.     Whether reporters of Local papers may be                 YES
       allowed to see the judgment?
2.     To be referred to the reporter or not?                   NO
3.     Whether the judgment should be reported in               NO
       the Digest?


ANIL KUMAR, J.

*

The petitioner through Union of India through Secretary, Ministry

of Home Affairs has challenged the order dated 27th August, 2008

passed in O.A No.2210/2006 titled as Sh.G.P.Sewalia v. Union of India

and Ors by the Central Administrative Tribunal, Principal Bench

allowing the original application of the respondent and setting aside the

charge memo dated 23rd August, 1999 and order dated 22nd August,

2006 passed by the disciplinary authority imposing the penalty of

reduction of pay by three stages for a period of one year without

cumulative effect.

We have heard the learned counsel for the parties. The brief facts

to comprehend the disputes are that the respondent was functioning as

Chairman and Managing Director of Delhi Scheduled Castes Financial

and Development Corporation Limited. The respondent was charged

and tried departmentally on the allegation that he was not authorized to

invest the surplus funds of DSCFDCL in schemes like PMS without

guaranteeing a pre determined return and that he made a fluctuating

investment for longer term (1 year) for a yield of 16.25% per annum,

whereas the State Bank of India had offered a rate of 15.5% per annum

and the fluctuating investment had resulted into lesser yield and

thereby the respondent committed misconduct by exhibiting lack of

devotion to duty and he acted in a manner unbecoming of a member of

the service and he acted prejudicially to the interest of DSCFDCL and

contravened Rule 3(1) of the All India Service (Conduct) Rules, 1968.

The respondent had contested the disciplinary proceedings

initiated against him contending inter-alia that he had not overstepped

his jurisdiction in making the investment in issue and even his

predecessors too had made investment of one year with the Indian Bank

in the similar circumstances. The plea was also raised on behalf of

respondent that the Board of Directors had been informed of the

decision at the earliest and the Board of Directors not only accepted the

same but ratified his decision. It was also pointed out that the

investment offer was personally brought by the Chief General Manager,

Syndicate Bank which was like any other investment earning schemes

and the bank also had accepted funds from other Government

organizations. The plea that the investment with the State Bank of India

at the rate of 16% would have become 18.5% was alleged to be illogical

and it was categorically contended that no prejudice has been caused to

DSCFDCL on account of any action on the part of the respondent rather

on account of his action and sound decision, the organization gained to

the tune of Rs.88 lakhs.

The enquiry officer only gave the finding that the charged

officer/respondent had exceeded his powers by investing in Syndicate

Bank for a period of one year. The report of the enquiry was referred to

Central Vigilance Commission which tendered its advice vide

memorandum dated 22nd June, 2001, however, the disciplinary

authority issued a disagreement memorandum dated 1st May, 2002

which was replied by the respondent contending inter-alia that the

decision to transfer the funds to high yielding PMS deposit was taken by

him considering the higher gains therein and following long established

precedents. The respondent also relied on Rule 18 (a) of the Delhi State

Mineral Development Corporation Ltd. (Delegations of Financial Powers)

Rules, which had been adopted by DSCFDCL which empowers the CMD

to make one year investments in the interest of the Corporation and it

was contended that the RBI circulars/guidelines on which the enquiry

officer had relied were never intended to apply to CEOs of the State

Government Corporation.

The disciplinary authority, however, imposed the punishment of

reduction of pay by three stages for a period of one year without

cumulative effect which was challenged before the Tribunal.

The Tribunal has noted that the decision of the respondent to

invest in Syndicate Bank had been ratified by the Board of Directors

and the Delhi Administration. It was also noticed and relied on that

according to RBI guidelines, one year investments were not long term

in nature and the note by State Bank of India was ambiguous and was

beyond the scope of chargesheet. It was also considered that it was

mathematically impossible to achieve a year end interest rate of 18.5%

against the rate of 16% at the beginning of the year or even at the

quarterly rest, interest would give a maximum yield at the rate of

17.2673% only.

The advice of CVC has also been considered which stipulated that

it would not be correct to infer that the SBIs offer of 16% was decidedly

better than the Syndicate Bank's offer of 16.25%. The respondent could

not be blamed for the market fluctuations which had resulted in

achieving of an interest yield of only 14% per annum. It was noticed

that rather the respondent's action resulted in gain to the tune of 72

lakhs and the banking scam of early 90's was irrelevant as the

investment decisions were taken in January-March and May, 1992. It

was also considered that the bank scam was with regard to fabrication

of security stamp which has no relevace to the charges leveled against

the respondent.

The case had also been referred to UPSC on 27th April, 2004,

however, the disciplinary authority had not agreed with the view of

UPSC. The Central Administrative Tribunal, Principal Bench has held

that though the charge of gross misconduct was that the respondent

failed to maintain devotion to duty and acted prejudicially to the

interest of the Corporation with an ulterior motive, however, the finding

recorded by the disciplinary authority was never that he acceded his

delegatory power of making deposits for periods less than a year and he

did not carry the offer made by SBI to its logical conclusion by

exhaustively examining the same on merits after seeking clarification

from SBI and thus ignored the higher rate of interest offered by SBI.

The learned counsel for the petitioner has emphasized that the

misconduct against the respondent had been established. However,

perusal of the enquiry report and the order of the disciplinary authority

reveals that the DA has not observed that the allegation against the

respondent has been proved and the allegation establishe misconduct

or failing to maintain absolute devotion to duty. The learned counsel

Mr.Gangwani has not been able to dispute that there is a distinction

between the misconduct and not performing the duties as efficiently as

another person similarly situated could have performed. The learned

counsel has also not been able to show as to how lack of efficiency in

discharging the duties can be sustained against the respondent since

the decision of the respondent was approved and ratified by the Board

of Directors. In the circumstances, the findings of the Tribunal that the

imputations against the respondent did not constitute misconduct

cannot be faulted. The Tribunal has also relied on the decisions of the

Supreme Court in Union of India & Ors v. J.Ahmed, (1979) 2 SCC 286

and Inspector Prem Chand v. Government of NCT of Delhi & Ors, (2007)

4 SCC 566 to contend that error of judgment or negligence simplicitor

would not be misconduct. The learned counsel for the petitioner is

unable to show anything to the contrary nor it has been established

that there was even any error in judgment or negligence on the part of

the respondent.

In any case even the disciplinary authority has held that the offer

of 16% interest offered by SBI would have amounted to 18.5% is

confusing and not having been accepted, it cannot be held that

investment by the respondent with Syndicate Bank at 16.25%

tantamount to misconduct on his part. The learned counsel for the

petitioner has not been able to deny that the surplus funds had been

invested in the similar manner as was done by the respondent in

previous years and no action was taken against the other officials

rather the prosecution witnesses SW1 and SW2 have admitted that the

respondent was empowered to deposit the surplus with the Syndicate

Bank at 16.25%. The Board of Directors also were intimated about the

decision and which ratified the same without any reservation of any

type against the respondent.

In the circumstances, the learned counsel for the petitioner is

unable to make out any ground to interfere with the decision of the

Tribunal dated 27th August, 2008 in O.A No.2210/2006 setting aside

the penalty of reduction of pay by three stages for a period of one year

without cumulative effect imposed on the respondent.

In the circumstances, this Court does not find any illegality or

irregularity in the order of the Tribunal so as to entail interference in

exercise of its power under Article 226 of the Constitution of India.

The writ petition is without any merit and it is, therefore,

dismissed. All the applications are also disposed of and interim order

dated 20th May, 2009 is vacated.

ANIL KUMAR, J.

March 03, 2010                                 MOOL CHAND GARG, J.
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