Ajit Kumar Saraswat vs Small Industries Development ...
2015 Latest Caselaw 3700 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI
+                         W.P.(C) No.5208/2008
                                                                 7th May, 2015
AJIT KUMAR SARASWAT                                              ..... Petitioner
                 Through:                Petitioner in person.

                          versus

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA & ANR.
                                                ..... Respondents

Through: Mr. Dinesh Agnani, Sr. Adv. with Mr.Ankit jain, Adv. for R-1.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J. MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. By this writ petition filed under Article 226 of the Constitution of

India, petitioner, who was an employee of the respondent no.1/Small

Industries Development Bank of India, impugns the orders passed by the

departmental authorities; Disciplinary Authority dated 24.5.2005 and the

Appellate Authority vide order dated 08.8.2007; imposing the punishment

upon the petitioner of reduction in one rank from General Manager to Deputy

General Manager and reduction in pay to the maximum applicable in Deputy

General Manager scale for a period of two years, and after two years, the

petitioner was to be restored to the rank of General Manager at the pay scale

he was drawing prior to the date of penalty. Against the petitioner, there

were charges of negligence and misconduct in operation of three accounts of

three customers being Mideast [India] Limited, Mesco Pharmaceuticals

Limited and Asian Consolidated Industries Limited. There were a total of 17

articles of charges against the petitioner including the aspect of allowing

withdrawals beyond the sanctioned limits, not getting fulfilled the terms

under which sanction was given and allowing discounting of bills by

unauthorised persons.

2. The petitioner disputed the article of charges, and therefore an Enquiry

Officer was appointed. In the departmental proceedings the petitioner

participated. Both the parties led their evidence. Enquiry Officer thereafter

gave his report dated 27.1.2004 holding that out of 17 articles of charges, 14

articles of charges were completely proved and 3 articles of charges, being

article of charges nos. 2, 13 & 15 were partially proved. The report of the

Enquiry Officer is a detailed report, which as per the paper book of this

Court runs from pages 157 to 263. The Enquiry Officer has examined all the

contentions, documents, evidence and arguments of the parties, and

thereafter has given the detailed findings and arrived at the conclusions for

holding the petitioner guilty.

3. Before I turn to the arguments urged on behalf of the petitioner, at this

stage, it is relevant to note that this Court while exercising the jurisdiction

under Article 226 of the Constitution of India, does not sit as an appellate

court to re-apprise the findings of facts and conclusions arrived at by the

departmental authority. Once the departmental authority takes one possible

and plausible view, this Court will not substitute its view for that of the

departmental authorities. This Court can only interfere with the findings and

conclusions of the departmental authorities if the conclusions are perverse or

are against the law/rule of the employer organization or violative of the

principles of natural justice or if the punishment imposed is highly

disproportionate. Also, at this stage, I may note that certain directions were

issued by this Court on 14.2.2013, whereby this Court requested the

competent authority in the respondent no.1/Bank to, if possible, look into the

issue of penalty afresh, and pursuant to this order, the case of the petitioner

was once again placed before the board of directors of the respondent

no.1/Bank and the board of directors have reiterated the punishment which

has been imposed upon the petitioner by observing that petitioner has indeed

been guilty of infractions, especially of allowing withdrawals in the accounts

beyond the sanctioned limit. This decision of the board of the directors is

dated 13.5.2013 and the same reads as under:-

"Extracts of Minutes of Hundred-sixty third meeting of Board of Directors held at 12:30 p.m. on May 13, 2013 at Mumbai

25. Confidential

Writ Petition No. 5208 of 2008, filed by Shri AjitKumar Saraswat, Ex-GM before the Hon'ble Delhi High Court - Compliance of the Order dated February 14, 2013, passed by the Hon'ble High Court

The Board was informed that Shri Ajit Kumar Saraswat, an ex-Officer, has filed a Writ Petition no. 5208 of 2008 before the Hon'ble Delhi High Court, against the Penalty imposed on him by the Bank, and the matters related thereto.

The Board was further informed that the Hon'ble High Court has directed in terms of the Order dated February 14, 2013, that the entire matter be placed before the Management of SIDBI, who can take a relook into the aspect of Penalty Orders, considering the lapse of time and facts of the case.

Accordingly, the Board considered the entire material on record, placed before it in terms of the Memorandum SIDBI B No. 20/2013-14 dated May 13, 2013, including the Orders dated August 19, 2004 and May 18, 2005, the advice given by the Central Vigilance Commission in terms of the letter dated Februrary 15/April 12, 2005, and the Order dated February 14, 2013 passed by the Hon'ble Delhi High Court.

The Board observed t hat 17 allegations / charges had been levelled against Shri Ajit Kumar Saraswat, out of which 14 were found to be 'proved', and 3 'partly proved' during the Departmental Inquiry. The said allegations / charges were primarily pertaining to the negligence on the part of Shri Ajit Kumar Saraswat in having allowed discounting of bills in three large accounts, i.e. Mideast (India) Limited, Mesco Pharmaceuticals Ltd. and Asian Consolidated Industries Ltd. without the approval of the Delegated Authority,

and/or without compliance of the stipulated terms, and/or without creating the stipulated security, and certain other irregularities related thereto.

The Board further observed that even after having generally concurred with the findings of the Inquiry Officer, Shri V.K. Chopra, the then Chairman & Managing Director and Competent Authority had 'proposed' the punishment of 'Reduction of three increments in the time scale of pay, for a period of two years', against Shri Ajit Kumar Saraswat, with certain directions incidental thereto.

Subsequently, at the time of passing the final order, Shri N. Balasubramanian, the then Chairman and Managing Director and the Competent Authority, who had succeeded Shri V.K. Chopra, went through the relevant papers, evidences on record, written submissions, report of the Inquiry Officer and the Representation of Shri Ajit Kumar Saraswat on the findings of the Inquiry Officer, while taking a decision to impose the punishment on Shri Ajit Kumar Saraswat and imposed the punishment of 'Reduction in one Rank (General Manager to Deputy General Manager) and reduction in pay to the maximum applicable in Deputy General Manager scale'.

After having a detailed relook into the matter, as directed b y the Hon'ble High Court, the Board noted that the Order dated August 19, 2004 was only a 'proposal', which had not attained finality, as evident from page 16 of the Order, in which the Competent Authority had merely 'proposed' a punishment in respect of Shri A.K. Saraswat, Board also considered the CVC guidelines for second stage advice in vigilance matters and noted that bank was required to sent the proposal for second stage advice to the Commission.

The Board further noted that the Order dated May 18, 2005 was the final Penalty Order, which was passed by Shri N. Balasubramanian, the then Chairman and Managing Director and Competent Authority.

The Board also noted that the final Penalty Order dated May 18, 2005 was a reasoned order, in as much as

the Competent Authority had not only stated in clear terms that he concurred with the findings of his predecessor, but he also gave a justified reason for holding one of the articles of charge as "Not proved".

Thus, the Board did not find any infirmity in the final Penalty Order dated May 18, 2005, in terms of which the penalty of 'Reduction in one rank (General Manager to Deputy General Manager) and reduction in pay to the maximum applicable in Deputy General Manager scale' was imposed on Shri A.K. Saraswat.

The Board also noted that pursuant to the Appeal dated August 05, 2005, preferred by Shri A.K. Saraswat, the then Board of Directors considered the same Order dated May 18, 2005 as the final Order, and modified it by specifying a period of two years therein.

After having re-looked into the matter, de novo, the Board also felt that the Allegations/Charges found to be proved against Shri A.K. Saraswat were serious in nature, involving a substantial amount of Bank's funds. Taking into account the gravity of the said Allegations/Charges, the Board was of the considered view that the punishment imposed on Shri A.K. Saraswat, in terms of the Order dated May 18, 2005, and modified in appeal vide resolution dated March 23, 2007 was just & proper and does not require any modification.

Accordingly, considering the facts of the case, and after detailed deliberations, the Board RESOLVED that the Order dated May 18, 2005, passed by the then Chairman & Managing Director and Competent Authority, and modified in appeal vide Board Resolution dated March 23, 2007, be and is hereby confirmed, for the reasons stated hereinabove."

4. It is also relevant to note that the punishment imposed upon the

petitioner is not the extreme punishment of removal from service, and since

the petitioner was found guilty of wrongly allowing the withdrawals in the

accounts, he was imposed the punishment of reduction of rank, and that too

only for two years. The Disciplinary Authority's stricter punishment was

reduced by the Appellate Authority. Be it noted that along with the

petitioner, his next higher officer being Mr. M.H. Jhurani was also proceeded

against departmentally, and Mr. M.H. Jhurani has been inflicted the

punishment of reduction of rank from Chief General Manager to General

Manager. Therefore, both the petitioner and Mr. M.H. Jhurani who were

jointly responsible for recommending and approval of allowing withdrawals

in the accounts beyond the sanctioned limit have been imposed similar

punishment by the departmental authorities.

5. Now, I will deal with each of the arguments which have been urged

before this Court by the petitioner.

6. The first argument urged on behalf of the petitioner is that the charge-

sheet which was first issued in this case was modified, and the petitioner was

not given an option to reply to the amended charge-sheet, and therefore the

departmental proceedings against the petitioner are liable to be quashed.

This argument urged on behalf of the petitioner on a literal reading sounded

to be very serious, however, the argument is really a case of making a

mountain of a molehill because the only amendment in the charge-sheet is

that in the original charge-sheet the relevant regulations of the respondent

no.1/Bank, as per which misconduct was found against the petitioner, were

not stated and the amended charge-sheet only gave the relevant regulation

numbers of the respondent no.1/Bank which were violated on account of

facts which were already stated in the earlier charge-sheet. In my opinion,

merely adding one line at the end of each charge stating the specific

regulation of the respondent no.1/Bank as a result of which misconduct is

alleged against the petitioner will not amount to changing of the charge-sheet

for the petitioner to have been prejudiced by petitioner alleging that he was

not allowed to give any reply to the 'amended' charge-sheet. A conclusion

given being the violation of a particular relevant regulation, even if it was not

stated in the original charge-sheet, would not have been such a defect in the

original charge-sheet to invalidate the same because what is the regulation

which is violated is a conclusion which emerges from existence of facts

stated in the charge-sheet and the facts of misconduct are in issue and not

which is the regulation number. Therefore there is only technicality in the

first argument of the petitioner with respect to the so-called illegality in

amending of the charge-sheet. In my opinion, therefore there is no merit in

the first argument that the petitioner has been prejudiced because the original

charge-sheet has been 'amended'. The first argument urged on behalf of the

petitioner is therefore rejected.

7. The second argument which is urged on behalf of the petitioner has two

parts. This argument relates to the time lag between the defaults which are

stated of the years 1993-1995 and issuing of the charge-sheet. The defaults

alleged against the petitioner are actually of the years 1993-1995 and the

charge-sheet in this case is dated 07.1.2002. It is argued that delay in issuing

of the charge-sheet vitiates the entire departmental proceedings, and in fact,

it is also argued that the issuing of the charge-sheet is time barred.

8. So far as the question of the charge-sheet being time barred is

concerned, no regulation or any provision of law was pointed out with

respect to a limitation period for a charge-sheet, and this is obviously

because there is no limitation period provided in law for issuing of the

charge-sheet. The only issue in law and facts which arise in each case of

departmental proceedings is that if the charge-sheet is delayed, a charged

employee can allege that because of the delay, prejudice is caused to him on

certain counts, and if that prejudice is substantiated and established before

the court, a court can depending upon the facts of a particular case, look into

this aspect for quashing of the departmental proceedings which would have

seriously prejudiced a charged official in his defence. In this regard, it is

relevant to note that the petitioner also argues that once the books of

accounts of the respondent no.1/Bank with respect to the three accounts were

audited, and no discrepancies were found by the audit team, there was no

ground for the respondent no.1/Bank in the year 2002 to allege that, in fact,

there were deficiencies in the accounts in the relevant years 1993-1995.

9. The argument urged on behalf of the petitioner of delay in issuing of

the charge-sheet for quashing of the same has no merits on account of

various reasons. The first reason is that no prejudice has been shown or to

have been established against the petitioner that the petitioner has in any

manner been prejudiced in his defence because certain particular documents

which established the innocence of the petitioner have been lost. No such

documents or their nature etc etc have been pointed out to this Court during

the hearing by the petitioner to show that such documents have been lost on

account of delay and such documents if filed, would have exonerated the

petitioner. Once there is no question of prejudice, delay in issuing of the

charge-sheet would not go in favour of the petitioner for quashing of the

departmental proceedings. The second reason to reject the argument of

delayed charge-sheet is that, no doubt, audit does take place of the books of

the accounts of the respondent no.1/Bank, but audit is done of thousands and

thousands of documents by taking documents on sample basis. Each and

every document of the employees is not necessarily scrutinized, and

therefore, it is very much possible that certain infractions would have

skipped the notice of the audit team, and merely because the audit team did

not find the infractions which were subsequently discovered during the years

1998-1999 with respect to the relevant period 1993-1995 cannot mean that

the petitioner on this count should be exonerated and departmental

proceedings be quashed. There is no law that if an audit team does not find

any infractions, but these infractions are discovered subsequently, it will

entitle the charged official to claim that he should be exonerated on this

count. This argument of the petitioner, therefore has no substance and is

accordingly rejected.

10. The third argument which was urged by the petitioner was that the

departmental authorities have wrongly acted against the petitioner on the

basis of such Central Vigilance Commission (CVC) advice. It is argued that

there is no provision in the CVC regulations that CVC advice has to be

sought with respect to disciplinary proceedings, and it is only the disciplinary

authority which has to apply its mind to the enquiry report for determining

the punishment to be imposed. It is argued that consultation with CVC, more

so at the back of the petitioner, is wholly illegal including for the reason that

the Disciplinary Authority in this case originally had proposed an order dated

19.8.2004 imposing only the punishment of reduction in three increments for

two years, but thereafter instead of this order dated 19.8.2004, the petitioner

was served with the order dated 18.5.2005 of the Disciplinary Authority (a

different officer than the officer who had proposed the order dated

19.8.2004), and thereby imposing the penalty upon the petitioner of

reduction of one rank from General Manager to Deputy General Manager.

Of course, I note that the Appellate Authority reduced this punishment that

the reduction in rank will not be permanent but will only be for a period of

two years.

11. No doubt, the exercise conducted by the departmental authorities of

corresponding with CVC with respect to the punishment to be imposed upon

the petitioner is unusual, inasmuch as, ordinarily it is the departmental

authority/disciplinary authority which must only and only apply its mind to

the enquiry report and decide the punishment. It is not open to the

disciplinary authority to formally consult another authority or person,

inasmuch as, decision has to be very much of the disciplinary authority and

not any other person. Even if the regulations of the respondent no.1/Bank

do provide for referring of matter to CVC, I do not think those regulations

can be legal because those regulations will hit at the very principle that it is

only the disciplinary authority which has to apply its mind and decide with

respect to acceptance and rejection of the enquiry report and also with

respect to the aspect that what should be the punishment which should be

imposed upon the charged official. Be that as it may, I note that CVC is not

a private person or a private body. CVC is a statutory body, specifically

empowered to look into corruption in government organizations and public

bodies. Therefore, no doubt, consultation legally may not take place between

the departmental authority and the CVC, however, I cannot attribute such

illegality or malafides in these actions for the disciplinary proceedings to be

quashed, and this is more so because the first order dated 19.8.2004 was only

a proposal and the same was never communicated to the petitioner. Once an

order is not communicated to the petitioner, no rights or liabilities arise

thereunder as against the petitioner/charged official. An order unless it is

communicated has no effect, and this proposition has been laid down by the

Constitution Bench of the Supreme Court way back in its judgment in the

case of Bachhittar Singh Vs. The State of Punjab AIR 1963 SC 395. The

petitioner was only served with the punishment imposed in terms of the order

dated 18.5.2005, and therefore, both the rights and liabilities arise only in

terms of the order dated 18.5.2005 of the Disciplinary Authority and not an

earlier un-communicated order of the Disciplinary Authority dated

19.8.2004. It is also further required to be noted that the petitioner may have

had a case if the order of the Disciplinary Authority dated 18.5.2005 talked

of acting on the CVC advice i.e of the Disciplinary Authority having acted

on the CVC advice, but the order of the Disciplinary Authority dated

18.5.2005 does not in any manner reflect that the Disciplinary Authority has

necessarily and only acted pursuant to the advice of the CVC or that the

order has been passed which in any manner is recorded as being influenced

by the advice of CVC. Consultation, therefore, by the disciplinary authority

with a statutory body being the CVC, in my opinion is not such grossly

arbitrary/illegal action for this Court to allow the petitioner to succeed in his

argument for quashing of the disciplinary proceedings. This argument urged

on behalf of the petitioner is therefore rejected.

12. The next argument which was urged on behalf of the petitioner was that

although the petitioner was to be restored to the same rank of General

Manager on expiry of the period of two years, the petitioner after a period of

two years has not been given back his original seniority. This argument and

aspect I need not dilate upon, inasmuch as, learned senior counsel appearing

for the respondent no.1/Bank has stated that they have no objection to the

petitioner being given the original seniority as existing on the date of the

penalty order and not reducing the seniority of the petitioner. This argument

of the petitioner is also disposed of accordingly.

13. The second last argument which was urged on behalf of the petitioner

during the course of oral hearing was that the respondent no.1/Bank has a

policy of staff accountability, and which policy is dated 17.8.2001, and in

terms of this staff accountability policy, petitioner should not have been

imposed the punishment by the departmental authority. In furtherance of this

argument urged on behalf of the petitioner, I asked the petitioner to show me

any clause in this policy dated 17.8.2001 which provided that even if

infractions are found of an officer then only because an officer such as the

petitioner is stated to have acted bonafide, then such person/petitioner cannot

be imposed any punishment by the departmental authority, and to this query,

no clause of this policy dated 17.8.2001 of the respondent no.1/Bank could

be pointed out on behalf of the petitioner that since the petitioner has acted

bonafide, petitioner cannot be visited with any penalty although infractions

have been found against the petitioner/charged official. This argument

urged on behalf of the petitioner is also therefore rejected.

14. The last argument which was urged on behalf of the petitioner is that

the petitioner has been unnecessarily discriminated and singled out for

punishment, whereas, other persons have been left out. So far as this

argument is concerned, it is noted that roles of various officers over a period

of time were duly examined by the management of the respondent

no.1/Bank, and after examination of the roles of various officers, ultimately

two officers being the petitioner and his immediate next superior officer Mr.

M.H. Jhurani were found to be violative of the rules of the respondent no.

1/Bank and hence these two officials were proceeded against departmentally.

As already stated above, Mr. M.H. Jhurani was imposed the punishment of

reduction of rank from Chief General Manager to General Manager, and

therefore, it cannot be stated by the petitioner that only he has been singled

out and no other person for the same set of allegations contained in the article

of charges has been imposed the penalty. This argument of the petitioner is

therefore also rejected.

15. No other issue or argument is urged before this Court except those as

have been dealt with above.

16. Dismissed.

VALMIKI J. MEHTA, J MAY 07, 2015/hk