R.P. Tak vs Secretary, Ministry Of Heavy ...
2017 Latest Caselaw 5475 Del

               IN THE HIGH COURT OF DELHI AT NEW DELHI

                                       Judgment reserved on: September 21, 2017
                                      Judgment delivered on: September 27, 2017

+     W.P.(C) 1798/2016, CM Nos. 7698/2016 & 10460/2016

      R.P. TAK                                                         ..... Petitioner

                                  Through:   Ms. Anju Bhattacharya, Adv. with
                                             Ms. Nandita Chandra & Mr.
                                             Abhimanyu Singh Khatri, Advs.

                         versus



      SECRETARY, MINISTRY OF HEAVY INDUSTRIES & PUBLIC
      ENTERPRISES AND ANR
                                                    ..... Respondents

                                  Through:   Mr. Umesh Sharma, CGSC & Mr.
                                             Pradeep Jha, Adv. for R1
                                             Mr. Sanjiv Sen, Sr. Adv. with
                                             Mr. Dev J. Roy, Mr. Alok Sinha,
                                             Mr. Rajiv Shankar Dwivedi & Mr. S.K.
                                             Sankar, Advs. for R2.

CORAM:
HON'BLE MR JUSTICE V. KAMESWAR RAO

                                    JUDGMENT

V. KAMESWAR RAO, J

1. The present petition has been filed by the petitioner with the following prayers:

"In view of the aforementioned facts and circumstances, it is most respectfully prayed that this Hon'ble Court may be graciously pleased to:-

a) Issue a writ in the nature of certiorari quashing the decision of respondent No.1 contained in Office Memorandum dated 10.09.2015 and 09.02.2016;

b) Issue a writ in the nature of certiorari quashing the decision of the respondent No.2 as contained in order dated 10.12.2015 withholding the petitioner's retiral benefits on the ground that vigilance clearance is awaited from respondent No.1 which is contrary to their Rules and also provisions of law;

d) issue a writ in the nature of mandamus directing the respondent to release the petitioner's retiral benefits with upto date interest @ 18% per annum;

e) Pass such other of further order(s) as may be deemed fit and proper in facts and circumstances of the present case."

2. The facts as averred by the petitioner in the writ petition are, he joined the

respondent no. 2 as Director (Finance) on January 4, 2006. On November 26, 2010, he

was appointed as Chairman and Managing Director in terms of the procedure followed

by the Government of India through PESB. On September 30, 2014, the petitioner

superannuated from service but his retiral dues were not released on the ground of

pendency of vigilance clearance from respondent no.1 which according to him is in

clear violation of applicable Rule 30A of Cement Corporation of India Conduct,

Disciplinary and Appeal Rules. It is averred that respondent no.2 vide its

communication dated September 10, 2015 to the Department of Public Enterprise

requesting therein to list out / earmark the name of the petitioner for not considering

him to the post of non-official Director on the Board of any CPSE. The petitioner filed

a Writ Petition (Civil) No. 10041/2015 on October 16, 2015. On October 28, 2015, this

Court had passed the order in the said Writ Petition directing the respondent no.2 to

treat the Writ Petition as a representation and decide it within a period of six weeks by

passing a speaking order and if need be, the petitioner be call for clarification. It is

averred that on December 10, 2015 respondent no.2 passed an order reiterating the

petitioner's retiral dues have been withheld on the ground of pendency of vigilance

clearance. On February 9, 2016, respondent no.1 also passed an order reiterating that

the impugned order was passed on the advice and opinion of CVC.

3. It is contended by Ms. Anju Bhattacharya, learned counsel appearing for the

petitioner that the impugned orders with regard to stoppage of retiral dues and the

exclusion of the petitioner from the panel for consideration as Independent Director on

the Board of CPSE is legally untenable. She qualifies her submission by stating that, in

so far as the retiral dues are concerned, the petitioner having retired and as no

disciplinary proceedings have been initiated before retirement, respondent no. 2 could

not have withheld the same. On the aspect of the exclusion of the petitioner from the

panel for consideration as Independent Director is concerned, the same being on the

advice of the CVC, such an order could not have been passed without supplying the

petitioner a copy of the advice of the CVC. She also state that action against the

petitioner being complete and final with the issuance of order dated July 17, 2015 by the

respondent no.1 whereby the competent authority has conveyed displeasure to the

petitioner for the irregularities alleged to have been committed, nothing further required

to be done nor is permissible in law, the respondents could not have withheld the retiral

benefits. She would also refer to an amendment brought to Rule 30A of CCI Limited

Conduct, Disciplinary and Appeal Rules in the following manner:

"The employee against whom disciplinary proceedings have been initiated will cease to be in service on the date of superannuation but the disciplinary proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof. The concerned employee will not receive any pay and/or allowance after the date of superannuation. He will also not be entitled for the payment of retirement benefits till the proceedings are completed and final order is passed thereon except his own contribution of CPF".

4. It is her case that the retiral benefits are not bounty but property and cannot be

withheld without due process of law and according to her concedingly there is no rule

stipulating, even if no disciplinary proceedings have been initiated against the petitioner

before retirement, still the retiral benefits can be withheld. In this regard, she would

rely upon the Judgment of the Supreme Court in the case reported as 2013 (12) SCC

2010 State of Jharkhand and Ors. v. Jitender Kumar Srivastava and Anr. On the

aspect of supply of CVC advice before passing impugned order is concerned, she would

rely upon the judgment of the Supreme Court in the case reported as 1993 (1) SCC 13

State Bank of India and Ors. v. D.C. Aggarwal and Anr.

5. On the other hand Mr. Umesh Sharma, learned counsel appearing for the

respondent no.1 would draw my attention to the counter-affidavit filed by the said

respondent to contend that a complaint dated June 1, 2011 was received through CVC's

OM dated October 10, 2011 alleging that, Cement was sold by CCI on credit to M/s.

Maruti Enterprises, Dimapur and M/s. Nagaland Hardware Store, Imphal during

November, 2010 to January, 2011 without taking equivalent security deposit and

uncovered sale was protected by taking post-dated cheques. A report on the above

allegation was forwarded to CVC after examining the report from the CVO, CCI and

comments of CMD, CCI dated October 16, 2012 in response to the letter of the

vigilance of the respondent no.1 dated October 8, 2012 to the petitioner, who was then

holding the post of the CMD of the respondent no.2 / organization. The comments

dated October 16, 2012 were forwarded by the Director (HR) of the respondent no.2

clearly stating that they were issued with the approval of the petitioner. It is his

submission that the petitioner was provided an opportunity to explain his position and

the same was examined by the respondent no.1 while forwarding the report to CVC.

Thereafter, CVC vide OM dated December 24, 2014 observed that sale on credit was

allowed against the combined value of security deposit and post-dated cheques. The

values of sale transactions during November, 2010 - January, 2011 were always more

than the value of available security deposit with CCI. Since PDC (post-dated cheques)

cannot be termed as security tool, it was noted that the respondent no.2 / CCI's interest

were not adequately safeguarded during sale transactions and undue financial leverage

was given to the buyers. Vigilance report has mentioned that CCI Board in its meeting

dated January 24, 2011 has directed to restrict the credit sale value up to the limit of BG

/ SD submitted by the parties. He would state two parties were allowed to take cement

of the value of Rs.2.74 Crores and Rs.2.57 Crores on credit by submitting SD of only

Rs.52 Lacs. This direction of CCI Board was not followed and undue benefits were

passed on the two parties. CVC had asked to fix responsibility for the above

irregularities.

6. According to Mr. Sharma, CVO, CCI had further investigated the issue on the

directions of the respondent no.1 and a detailed report was received from him. From the

report of CVO, CCI, it was observed that the petitioner was fully aware of the fact that

cement was being sold in excess of bank guarantee / security deposit to two parties in

violation of marketing guidelines. It is his submission that as the petitioner had retired

as CMD and in terms of the CCI/CDA Rules, disciplinary proceedings could not be

initiated against him after retirement, the competent authority approved, taking of

following actions against the petitioner for the irregularities committed by him: (i)

conveying displeasure of the competent authority; (ii) exclusion of the petitioner from

the centralized list of persons maintained by Department of Public Enterprises for

consideration for appointment as Independent Director on the Board of Directors of

CPSEs. He would state that after the advice of CVC and approval of the competent

authority an order conveying displeasure of the competent authority was issued vide

letter dated July 17, 2015. Further a communication with respect to exclusion of the

petitioner for consideration for appointment as Independent Director was conveyed to

the Secretary, Department of Public Enterprises vide letter dated September 10, 2015.

A copy thereof was marked to the CVC, CCI and the petitioner herein. He states, the

exclusion of the petitioner for Independent Director of the Board was taken as per the

advice of the CVC and approval of the Minister after considering the reports on the

matter received from CVO, CCI and comments of the petitioner. In other words, the

final decision was taken by the competent authority after examining all the aspects of

the case and after consultation with CVC. In so far as the release of the retiral benefits

are concerned, he states, in the absence of any vigilance clearance from the CVC, the

benefits have not been released.

7. Mr. Sanjiv Sen, learned Senior Counsel appearing for respondent no.2 would

make similar submissions as made by Mr. Sharma. He has drawn my attention to the

counter-affidavit filed by respondent no.2 to the petition.

8. Having heard the learned counsel for the parties, the issue which arises for

consideration is whether (i) the respondent no.2 would have withheld the retiral benefits

of the petitioner and (ii) excluded the petitioner for consideration as Independent

Director on the Board of Directors of CPSEs.

9. In so far as issue no.(i) is concerned, there is no dispute that the petitioner had

attained the age of superannuation of September 30, 2014. The terms of appointment of

petitioner annexed as Annexure P-7 contemplates that the petitioner as Chairman and

Managing Director of the respondent no.2 CCI, was to be governed by the Conduct and

Discipline Rules framed by the CCI with a modification that the disciplinary authority

in his case would be the President of India. The relevant amendment brought to Rule

30A of the CCI Conduct, Discipline and Appeal Rules, which is already extracted above

clearly stipulates the disciplinary proceedings, which have been initiated while an

employee is in service on the date of superannuation would continue even thereafter as

if he is in service; the employee will not receive any pay or any other allowances after

the date of superannuation. It is also stated, he would not be entitled to retirement

benefits till the proceedings are complete and final order is passed therein except his

own contribution to CPF.

10. It is a conceded case of the parties that no disciplinary proceedings had been

initiated against the petitioner while he was in service on the subject matter of

allegations which was investigated by the CVC or for that matter for any other

misdemeanor. At least nothing has been brought to the notice of the court in that regard.

In the absence of disciplinary proceedings having been initiated against the petitioner on

or before September 30, 2014, no ground existed for withholding the retiral benefits of

the petitioner. No doubt, the allegations against the petitioner were serious, but nothing

precluded the authorities to issue a chargesheet before his date of superannuation on

September 30, 2014. That apart, it is important to note that vide communication dated

July 17, 2015, which according to the respondents was issued on the advice of the CVC,

the competent authority, i.e., the President has communicated displeasure to the

petitioner for the irregularities committed by him. The said order, even though has not

been challenged, is a final order in so far as the irregularities are concerned. If that be

so, the issue of irregularities which were investigated by the CVC had attained finality.

Surely, the terminal benefits could not have been withheld. The reliance placed by Ms.

Bhattacharya on the judgment of the Supreme Court in the case of State of Jharkhand

and Ors. v. Jitender Kumar Srivastava and Anr.(supra) is justified, wherein in Para 17

the Supreme Court has held as under:-

17. It hardly needs to be emphasized that the execution instructions are not having statutory character, and therefore, cannot be termed as law within the meaning of the aforesaid Article 300-A. On the basis of such a circular, which is not having force of law, the appellant cannot withhold even a part a pension or gratuity. As we noticed above, so far as statutory Rules are concerned, there is no provision for withholding pension or gratuity in the given situation. Had there been any such provision in these Rules, the position would have been different."

11. The plea of the learned counsel for the respondents that there was no vigilance

clearance from the CVC for release of the retiral benefits is concerned, the same would

be inconsequential for more than one reason, (i) it has not been pointed out by the

learned counsel for the respondents as to what action they have taken to write to CVC

for giving the vigilance clearance. To say that they are not empowered to communicate

with the CVC is not justified. Surely, respondent no.1 which has been communicating

with the CVC could have written to the CVC in that regard and sought the vigilance

clearance, (2) even in the absence of vigilance clearance in view of the position of the

Rules and the law of the Supreme Court, the respondents could not have withheld the

retiral benefits after displeasure on the irregularities has been conveyed to the petitioner.

The order dated December 10, 2015, is set aside. I only note the attention drawn by Ms.

Bhattacharya to letters at Page 184 of the paper book wherein she had referred to certain

cases of respondent no.2 / organization to contend that the benefits were withheld to

certain officers because of the pendency of the disciplinary proceedings on the date of

superannuation.

12. In so far as the plea of Ms. Bhattacharya that the exclusion of the petitioner for

consideration for appointment as Independent Director is concerned, the same was by

relying upon the comments given by the respondent no.2 / organization on October 16,

2012 on a communication received from the respondent no.1 and as such could not have

been considered as a reply of the petitioner and that too without supplying a copy of the

CVC advice is appealing.

13. I have seen the communication dated October 16, 2012, which were general

comments of the respondent no.2 / Company when the petitioner was the CMD of the

company. Nothing has been placed on record to show that specific comments were

asked from the petitioner on the proposed action of excluding him for consideration as

Independent Director in different companies of CPSEs. Such an action would be in

conformity with the principles of natural justice to enable the petitioner reply to the

proposed action. The same should be by giving a copy of the advice of the CVC, to

enable the petitioner know the reasons for the said action. Accordingly, the order dated

September 10, 2015 to the extent a decision has been communicated to the petitioner

excluding him for consideration as Independent Director on the Board of Directors of

CPSE is set aside.

14. In view of my above discussion, the petitioner shall be entitled to the retiral

benefits with interest @ 9% per annum to be released within a period of two months.

As I have set aside the order dated September 10, 2015, respondents shall be within

their rights to seek reply from the petitioner on the proposed action of excluding the

petitioner from the panel for consideration as Independent Director in different

companies of CPSEs by giving a copy of the advice of the CVC within four weeks to

enable the petitioner file reply to the same within three weeks thereafter and consider

the same and pass a final order within four weeks from the receipt of reply. If the

petitioner is still aggrieved, he can seek such remedy as available in law. The petition

stands disposed of. No costs.

CM Nos. 7698/2016 (for stay) & 10460/2016 (for direction)

Dismissed as infructuous.

V. KAMESWAR RAO, J SEPTEMBER 27, 2017/jg