Delhi High Court
Paresh Nath Sharma vs Uoi & Ors. on 6 July, 2018
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 9th February, 2018
Pronounced on: 6th July, 2018
+ W.P.(C) 5482/2004
PARESH NATH SHARMA ..... Petitioner
Through: Mr. Sanat Kumar, Sr. Advocate
with Mr. Awnish Kumar, Mr.
Anish Chawla & Ms. Shirya,
Advocates.
versus
UOI & ORS. ..... Respondents
Through Mr. B.S. Shukla, CGSC for R-
1, 2 & 4
Mr. Rahul Chaudhary, Sr.
Standing Counsel for R-3
Mr. Sanjay Sharma, Advocate
for R-3
CORAM:
HON'BLE MR. JUSTICE C.HARI SHANKAR
% JUDGMENT
C. HARI SHANKAR, J.
1. Disciplinary proceedings, initiated against the petitioner vide
charge-sheet dated 4th May, 2001 proceeded, via Inquiry Report dated
26th June, 2002, to their culmination by way of order dated 9 th
December, 2002, whereby the petitioner was dismissed from service,
and his gratuity forfeited. An application, filed by the petitioner,
seeking review of the said decision, was also dismissed, vide order
dated 2nd September, 2003. The petitioner prays that the Inquiry
Report dated 26th June, 2002, the order dated 9th December, 2002 and
the order dated 2nd September, 2003, be quashed and set-aside.
2. On 10th April, 1995, the petitioner was appointed Director
(Finance) in the office of respondent No.3 (hereinafter referred as
"MMTC"), for a tenure of five years. The said tenure expired on 14th
May, 2000. A selection board recommended re-appointment of the
petitioner for five more years, pending which the petitioner was
continued as Director (Finance) vide order dated 13th November, 2000.
As, in the interregnum, a preliminary inquiry was conducted, into
certain complaints against the petitioner, this second appointment
never fructified.
3. On 4th May, 2001, a charge-sheet was issued to the petitioner,
proposing holding of an inquiry, against him, under Rule 25 of the
MMTC Employees Conduct, Discipline and Appeal Rules, 1975. It
contained five Articles of Charge. The petitioner filed his reply, to the
charge-sheet, on 10th May, 2001. Apparently finding the same
insufficient to drop the Charges, regular departmental inquiry was
conducted. The Inquiry Officer (hereinafter referred to as "IO"), in his
Inquiry Report dated 26th June, 2002, held Articles I, IV and V of the
Articles of Charge against the petitioner not to have been proved,
Article-III to be partly proved and Article-II to have been proved. The
Disciplinary Authority (hereinafter referred to as "DA") disagreed
with the findings of the IO as, in his view, all Articles of Charge,
against the petitioner, stood duly proved. The DA, therefore, referred
the matter to the Central Vigilance Commission (CVC), for its
"second stage advice", enclosing, therewith, the records of the case,
including the reasons for its disagreement with the findings of the IO,
insofar as they held some of the Articles of Charge, against the
petitioner, not to have been proved, or only to have been partly
proved. The CVC responded, vide Note dated 13th September, 2002,
concurring with the view of the DA. The DA, accordingly, issued
Memorandum, dated 17th September, 2002, to the petitioner,
communicating its disagreement with the findings, in the Inquiry
Report dated 26th June, 2002, insofar as they were in the petitioner‟s
favour, and enclosing, therewith, the Memo issued by the CVC. The
petitioner‟s response, thereto, is not on record; however, vide order
dated 9th December, 2002 (impugned by the petitioner), the DA,
reiterating the view expressed by him in his disagreement memo, held
all the Articles of Charge, against the petitioner, to have been proved
and, consequently, imposed, on the petitioner, the penalty of dismissal
from service, accompanied by forfeiture of his entire gratuity and
disqualification from future employment in the Government and its
organisations. The petitioner filed an application, before the Minister
of Commerce and Industry, seeking a review of the impugned
decision, dated 9th December, 2002, of the DA. Vide order dated 2nd
September, 2003 (also impugned by the petitioner), the said
application for review was also dismissed as "devoid of any merit".
The petitioner, consequently, is before me, having invoked, against the
aforementioned decisions of the DA and the reviewing authority, the
jurisdiction of this Court under Article 226 of the Constitution of
India.
4. It is necessary to note here, that the petitioner had earlier moved
this Court, consequent on issuance, to him, of the charge-sheet on 4th
May, 2001, by way of CWP 4946/2001. The petitioner prayed, in the
said proceedings, that he be permitted to continue in service pending
conclusion of the DA initiated against him vide the said charge-sheet.
The said prayer was, however, expressly rejected by a learned Single
Judge of this Court, vide judgment dated 29th April, 2002, which held,
in unambiguous terms, that "the petitioner cannot claim any right to
continue in service".
5. Given the limited nature of the controversy, it would be
appropriate to deal, seriatim, at the outset, with the various Articles of
Charge, in the charge-sheet dated 4th May, 2001(supra), issued to the
petitioner.
6. The charge-sheet, which proposed holding of an inquiry, against
the petitioner under Rule 25 of the MMTC Employees Discipline and
Appeal Rules, 1975, contained five Articles of Charge. All five
Articles of Charge dealt with the period when the petitioner held dual
Charge as Director (Finance) and Director (Agro) of the Respondent
No.3-Corporation (hereinafter referred to as "MMTC").
7. Article I
7.1 Article-I dealt with a contract, for export of 50,000 MT of white
rice to Indonesia, through MTPL, Singapore, a wholly-owned
subsidiary of MMTC. It was alleged that, while the delegation of
powers, within the MMTC, stipulated that contracts, of value in excess
of ₹ 5 crores, could be concluded only with the approval of the Sale
Purchase Committee (SPC) of the MMTC, the petitioner, without
obtaining such approval, concluded the aforementioned contract, of
export of 50,000 MT white rice to Indonesia, at his own level, by
approving the signing of the contract, even though the value of the
contract was ₹ 43 crores. The contract, it was stated, was concluded,
by the petitioner, over fax dated 8th August, 1995, with the shipments
requiring to be dispatched between 15th September, 1995 and 31st
October, 1995. It was alleged that, on 17th August, 1995, a note had
been put up by the Agro Products Division of the MMTC, seeking
SPC approval for the contract, followed by another Draft Note, dated
21st August, 1995, put up to the petitioner by the General Manager
(Agro), for consideration by the SPC, in which modifications were
suggested. The petitioner, however, it was alleged, did not put up the
note to the SPC and, instead, approved signing of the contract, as
already noted hereinabove, at his own level. Pointing out that there
was no valid reason given, for not obtaining approval of the SPC for
finalisation of the said contract, it was alleged that, because of the
petitioner‟s action, the SPC did not have the opportunity to deliberate
on all aspects of profitability of the transaction.
7.2 The petitioner, answering the said Article of Charge, submitted
that the contract for supply of 50,000 MT white rice, to Indonesia, was
actually a continuation of an ongoing contract, whereunder supply of
an earlier quantity of 30,000 MT had already been approved,
concluded and signed on fax. Submitting that the contract for the
subsequent quantity of 50,000 MT had been sent for approval to the
SPC, but was not put up by the Company Secretary, as certain
modifications were required to be incorporated, it was pointed out
that, on 19th September, 1995, the Board of Directors of MTPL, which
was chaired by the then Chairman-cum-Managing Director (CMD) of
MMTC, who was also the CMD of MTPL, approved the said contract.
The petitioner further pointed out that the Board of Directors (BOD)
of MTPL consisted of all the functional directors of MMTC, who
were also members of the SPC of MMTC. All these directors had,
therefore, approved the said contract. In the circumstances, it was
submitted that it was incorrect to allege that the approval, of the
contract for supply of 50,000 MT white rice, to Indonesia, was
finalised behind the back of the SPC. At worst, it was submitted that a
technical omission may have been said to have occurred. In any case,
submitted the petitioner, the entire transaction was approved, by the
SPC of MMTC on 19th March, 1996, without any
reservation/comments/qualification whatsoever.
7.3 The Inquiry officer (hereinafter referred to as "the IO"),
consequent upon a detailed analysis of the facts, held this Article of
Charge not to have been proved against the petitioner. The reasoning
of the IO, as contained in his Inquiry Report dated 26th June, 2002,
may be set out thus:
(i) The petitioner was informed, vide note dated 25th August,
1995, that MTPL had already entered into a contract, for supply
of 50,000 MT white rice, on 8th August, 1995, with the same
Indonesian buyer, as a repeat order, on the strength of backup
offers already made by MMTC. In this manner, MTPL
expressed urgency in signing back-to-back contract with
MMTC, to cover the commitment thus already made by them
with the foreign buyer. This was also evident from Exhibit S-7,
which was a fax message from the Managing Director (MD) of
the MTPL, to the effect that, if acceptance, for the contract, was
not received till September, 1995, the contract might possibly
be offered to some other supplier.
(ii) Immediately, an agenda note was initiated and sent for
obtaining the approval of the SPC, on 13th September, 1995.
(iii) However, the note was returned by the Company
Secretary on 15th September, 1995, for incorporating certain
modifications, obviously under the instructions of the then
CMD.
(iv) In the meantime, the contract with MTPL had to be
approved for signature, keeping in view the urgency expressed.
(v) Thus, after obtaining oral instructions of the CMD, the
contract was approved for signature. This was vouchsafed by
the respondent‟s witness SW-1 (Dharampal), in his
examination-in-chief during the inquiry proceedings.
(vi) Before the modifications could be incorporated in the
Agenda Note and re-submitted to the SPC, the Board of MTPL
approved the contract between MMTC and MTPL, on 19th
September, 1995. The Board of MTPL consisted of the
Chairman and other functional Directors of MMTC, as
confirmed by DW-5 in the course of inquiry. The SPC of
MMTC also consisted of its Chairman and functional Directors,
as confirmed by SW-3. Effectively, therefore, the SPC was
already seized of the matter, and had assessed the viability of
the contract.
(viii) The above contract, for 50,000 MT, was signed on the
same analogy as was done in the case of the previous contract
of 30,000 MT entered into, by MTPL, for supply of rice to the
same buyer, which was approved by the petitioner‟s
predecessor, though it had been approved only by the MTPL
Board, consisting of the Chairman and other functional
Directors of MMTC, which was considered sufficient. No SPC
approval had been obtained in that case either.
(ix) Moreover, there was mutuality of interest between
MMTC and MTPL, which was its wholly-owned subsidiary; it
was, therefore, inconceivable that, while approving a contract as
the Board of MTPL, it would not be approved by the same
Chairman and other functional Directors, in their capacity as
Members of the SPC of Directors in the MMTC.
(x) Another important issue was the commitment, made by
MTPL, to an outside agency in Indonesia, for supply of 50,000
MT. The contract was entered into, on 8th August, 1995, by
MTPL. MTPL, thereby, was irrevocably committed to fulfil its
contractual obligation, so that the back-to-back contract with
MMTC was essentially an internal arrangement, duly approved
by the MTPL Board, which included the members who were
also the Chairman and functional Directors of the SPC of
MMTC.
(xi) Ex post facto approval, to the entire transaction, was
accorded in the 435th meeting of the SPC of MMTC, held on
19th March, 1996. The Agenda Note for the said meeting
(Ex. D-16) provided complete disclosure of the contract
between MTPL and MMTC which, therefore, stood approved in
the said meeting without any reservation whatsoever.
(xii) The existing delegation of powers of the MMTC (Ex. S-
1) defined the power of the Director to include entering into
purchase and sale contracts by open tender, limited tender or
negotiation, within the policy accepted by the Board, in respect
of imports, exports and internal procurement.
(xiii) The contention, of the petitioner, that the system of "ex
post facto" sanction was discontinued, by the decision of the
Board of Directors of MMTC in December, 1995, was not
correct. The MMTC had, in the list of documents sought to be
relied upon by it and annexed to the charge-sheet issued to the
petitioner, enlisted, at Serial No 9, a document, purporting to be
a policy decision, taken in December, 1995, to the effect that no
ex post facto approval should be permitted; however, this
document stood withdrawn, from the charge-sheet, vide
Corrigendum dated 28th May, 2002, so that it no longer lay in
the mouth of MMTC to contend that ex post facto approvals
were impermissible. Moreover, Ex.D-21, which was
specifically shown to SW-3 in cross-examination, indicated that
the SPC had been giving ex post facto approvals regularly and
routinely, even after December, 1995. SW-3 was a functional
Director in MMTC and was also a member of the SPC and was
a party to the decisions taken by the SPC. He was, therefore,
estopped from denying the validity of such decisions. In fact,
more than 50% of the cases, where the SPC granted ex post
facto approvals, related to transactions during the period 1994
to 1998, for which charge was held by SW-3, and this fact had
not been denied by SW-3, when pointedly put to him in cross-
examination. The grant of ex post facto approval, of the SPC, to
the finalisation of the contract, for supply of 50,000 MT to the
Indonesian buyer, therefore, had sanctity. Reliance was also
placed, in this connection, on the judgement of the Supreme
Court in L.I.C. of India v. Escorts, AIR 1986 SC 1370, which
held that "approval" included ex post facto approval, and that no
distinction could be drawn between the two. This was also
corroborated by the reply, of SW-2, the General Manager of
MMTC, to Question No 4 put to him.
7.4 The Disciplinary Authority, on examining the above findings of
the IO, tentatively expressed its disagreement therewith, in the
following terms, and sought the opinion of the Central Vigilance
Commission (CVC) thereon:
" The Inquiry Officer in his findings has held the Charge
is not proved on the grounds that (a) the copy of the
document regarding the decision of the policy division
against post-facto approval was deleted by the DEA/not
produced by the prosecution and (b) „although the Charged
officer has acted in haste to keep the commitments made to
the buyer in this transaction the fact that his decision has been
endorsed by SPC subsequently, he should not be held
responsible for any lapse at this stage‟.
The Disciplinary Authority disagrees with (a) above in
that the Charge relates to violation of delegation of powers
which is evident and therefore the IO‟s views are not tenable
regarding the deletion/existence or otherwise of policy
decision regarding post-facto approval.
As regards (b) above, the Disciplinary Authority holds
that the contention of the Inquiry Officer that the decision of
the Charged officer has been endorsed by Sale/Purchase
Committee (SPC) subsequently is not correct/tenable. The
SPC in its 435th meeting held on 19.3.96 as per agenda note
dated 26.2.96 item no 5 (referred defence documents D-16)
approved the procurement/purchase of rice laced under split
orders from 7 new parties for supplying quantity of 32932
MTs of value of ₹ 2745.77 lakhs and disposal thereof. The
approval given by Shri PN Sharma for signing of the contract
for export of rice from Kandla to Indonesia and amount of ₹
43 crore was beyond his delegated powers of ₹ 5 crores.
The Charge thus stands proved."
7.5 The CVC, for its part, merely observed, in its noting dated 13 th
September, 2002, whereunder the file was sent back to the MMTC,
that it "concur with the Departments viewpoint".
7.6 Vide Memorandum dated 17th September, 2002, the DA
communicated, to the petitioner, its proposed disagreement with the
findings of the IO and enclosed, with the said Memorandum, the
"advice" of the CVC.
7.7 It appears that the petitioner responded, thereto, vide letter
dated 3rd October, 2002; however, no copy of the said response has
been filed by the petitioner.
7.8 Vide order dated 9th December, 2002 (impugned by the
petitioner), the DA held Article-I, of the Articles of Charge against the
petitioner, to have been proved. The observations, in this regard, as
contained in the said Order, read thus:
" That Shri PN Sharma has violated the delegation of
powers by approving the signing of the contract for export of
rice for ₹ 43 crores as against his delegation of powers up to ₹
5 crores. This again was violated as the same was to be
exercised to be jointly by Director (Finance) with one other
Director to be nominated by the Chairman.
The Sale/Purchase Committee (SPC) had not
approved/ratified the contract of ₹ 43 crores for export of rice
to MTPL, Singapore through Kandla in its 435th Meeting held
on 19.3.1996.
Even the SPC approval for local procurement from 7
private parties of 33,000 MT at a cost of ₹ 27.46 crores and
disposal thereof does not indicate the
Division/director/date/transaction.
The withdrawal of document/Exhibit No S-39 of the
Chargesheet relating to banning of ex post facto approval
does not change the fact of violation of Delegation of
Powers."
7.9 In his review petition, the petitioner challenged the above view
of the DA, qua Article-I of the Articles of Charge against him,
contending that (i) the withdrawal of Document No 29, in the list of
documents attached to the charge-sheet issued to the petitioner,
indicated that the procedure for grant of ex post facto approval
continued to be in vogue, (ii) Ex.D-21, in fact, contained a list of more
than 40 decisions of the SPC according similar ex post facto approval,
(iii) as such, the decision of the petitioner having been ratified by the
SPC, no violation of the rules relating to delegation of powers in the
MMTC could be alleged against him and (iv) the Agenda Note, dated
26th February, 1996 (Ex.D-16), which was circulated to the SPC at the
time of grant of such ex post facto approval, made specific reference
to the contract, with MTPL, for supply of 50,000 MT rice, as a repeat
order from MTPL. As such, it was submitted, the approval, of the
said Agenda Item, by the SPC, in his 435th meeting held on 19th
March, 1996, justified the decision of the petitioner in toto. The
petitioner also drew attention, in his review petition, to the other
observations, entered by the IO in his favour, to which no allusion was
to be found in any of the communications of the DA.
7.10 The impugned Order, dated 2nd September, 2003, whereby the
review petition of the petitioner was rejected, merely reiterates the
observation, in the earlier communications of the DA, to the effect
that "the Charged Officer had signed the contract for export of 50,000
MT Indian white rice to Indonesia for an amount of ₹ 43 crores
whereas the Charged Officer had the delegated powers upto ₹ 5 crores
only be exercised jointly along with another Director" and that "the
entire transaction was handled without adhering to basic systems and
procedures and requisite approvals". As such, it was opined, in the
said Order, that the Review Petition, of the petitioner, did not contain
any "new point of fact/material"and that it, therefore, merited
rejection.
8. Article-II
8.1 This Article of Charge dealt with the procedure followed for
procuring rice from the local market, on inability being expressed, by
the Food Corporation of India (FCI), to supply the requisite quantity
of rice for export. It was alleged that the petitioner failed to adopt a
systematic and transparent process for procuring rice from the local
market, and did not follow any norms/procedures in this regard.
Specifically, the following lapses, in the manner in which the said rice
was procured from the local market, were alleged:
(i) The press advertisements, inviting offers, did not mention
any closing date for submission thereof.
(ii) Though twenty-eight parties had submitted offers, in
response to the advertisement, including Punjab State
Cooperative Supply and Marketing Federation Ltd, none of the
said offers were considered; instead, discussions were held with
three parties who had offered to supply, but were not among the
said twenty-eight parties. Intent letters were, ultimately, placed
on six parties, who, too, were not among the said twenty-eight.
As such, the basis of identification, and selection, of the parties,
for supply of rice, was not clear. It appeared that rice had
arbitrarily been procured from six selected parties.
(iii) The offer of one of the parties, namely M/s Neelkanth
International (hereinafter referred to as "Neelkanth") was sent
directly to the petitioner, instead of being deposited in the Box
Number indicated in the advertisement.
(iv) There was no indication as to why the possibility of
procuring rice from State Cooperatives, which had abundant
stocks, was not explored.
(v) Though the procurement, from the domestic market, was
made between October, 1995 and February, 1996, prior
approval of the SPC was not taken, thereby violating the
delegation of powers in the MMTC. Ex post facto approval, to
the procurement, was accorded, by the SPC, on 19 th March,
1996; however, by then, the system of granting ex post facto
approval had been done away with.
(vi) The selected parties did not deliver rice as per schedule,
resulting in the contract having to be cancelled by MTPL and
resultant loss to MMTC.
8.2 The petitioner, in his reply, dated 10th May, 2001, to the charge-
sheet, responded, to Article-II of the Articles of Charge against him,
thus:
(i) Consequent on refusal and failure, of FCI, to supply the
requisite quantity of rice, vigorous efforts were made, to secure
supply from FCI, including personal efforts of the CMD,
MMTC, who met the Minister of Food and Civil Supplies, the
Secretary, Department of Food and the Chairman, FCI, but
without any result. As such, in order to honour the contractual
commitment made with the Indonesian buyer, efforts had to be
made to procure rice from other sources on an urgent basis, as
the time for complying with the contract was fast running out.
(ii) The twenty-eight parties, who responded the
advertisement, were unwilling to provide any firm commitment
as to quantity, value or delivery schedule.
(iii) In the case of Punjab State Cooperative Supply and
Marketing Federation Ltd (hereinafter referred to as
„MARKFED‟), the General Manager (Agro) had personally
contacted his counterpart, in MARKFED for finalisation of the
contract, but MARKFED declined the offer, as they were
unable to meet the delivery schedule set by MMTC. This stood
confirmed by a letter issued by the Corporation, which was
annexed to the reply.
(iv) Apart from M/s Vinod Associates, Kota, no other party,
who responded to the Notice inviting Tenders, turned up for
discussions; consequently, no further action was taken on their
offers, as per notings on the file.
(v) It was much later that orders were placed on other
suppliers. The Order on M/s Jumbu Kumar and Sons was
placed on 2nd November, 1995, and the order on Neelkanth was
placed on 17th November, 1995. Orders on other prospective
suppliers were placed later.
(vi) As the fact that MMTC required rice was, by then, well
known in the market, other parties approached MMTC, with
offers. Given the urgency of the situation, the Agro Division
had no option but to negotiate with these parties.
(vii) In any event, the procurement, from the domestic market,
was duly approved by the SPC, in its 435th meeting held on 19th
March, 1996, without any reservation. The SPC was informed
that, owing to lack of response, offers submitted outside the
tender, by other parties, had to be negotiated and procurement
done on the basis thereof, keeping in mind best prices available.
(viii) In the circumstances, the above process, for procuring
rice, was the only available alternative, and was wholly fair and
transparent. The contractual obligations, with the existing
foreign buyer, could not have been fulfilled otherwise.
(ix) Adequate quantities of rice were supplied, by the parties,
by the end of December, 1995, with the remaining quantity
being supplied by 10th January, 1996. The allegation that the
parties had failed to perform was, therefore, incorrect. The
cancellation of the contract was not owing to failure, on the part
of the contacted parties, to supply rice, but was attributable to
the failure, on the part of M/s TRANSCHART (the chartering
wing of the Ministry of Surface Transport) to provide suitable
vessels. The cargo was available at port; however, owing to the
failure of TRANSCHART to provide vessels, the contract had
to be cancelled. Reference was invited, in this context, to a
communication, dated 28th December, 1995, from
TRANSCHART, wherein TRANSCHART expressed its
inability to provide vessels in time. Vessels, which were
initially offered by TRANSCHART and accepted by the Agro
Division of MMTC, were also rejected, at the end of
TRANSCHART itself, for one reason or the other. As such, the
cancellation of the contract was owing to non-availability of
vessels and the failure of TRANSCHART in this regard.
8.3 Before the IO, the petitioner contended, additionally, thus:
(i) The offers submitted by the 27 parties, who responded, to
the newspaper advertisement, had been analyzed, as was
evident from notes dated 18th October, 1995 and 27th October,
1995 (Ex. D-13). SW-1 Dharampal, who was the Deputy
General Manager of Agro Division, after analyzing the offers,
came to the conclusion that the offers were not suitable. He
shortlisted only two parties, of which, M/s Vinod Associates,
Kota, was contacted by SW-1, but he did not turn up for
negotiations. MARKFED, Punjab, the second "viable supplier"
were also contacted, but was not in a position to supply rice as
per the stipulated delivery schedule, and indicated that they
were in a position to supply after March, 1996. This was
confirmed by DW-1, who was Senior Manager of MARKFED,
and was the person who had made the offer to MMTC, in his
deposition before the IO. Ex.D-13, which was the note
containing the analysis of the offers received consequent to the
newspaper advertisement, was proved by SW-1 and confirmed
in his cross-examination.
(ii) In these circumstances, as time was running out, and the
commitments to the Indonesian buyer had to be honoured,
action was required to be taken on a war footing. It was in these
circumstances, that the offers received directly in MMTC were
considered. SW-1 had admitted, in reply to Question No.13 put
to him that, owing to the tight schedule, sincere efforts were
made by senior officers to procure rice from private parties.
The allegation that the process followed was not transparent,
therefore, stood belied, even by the evidence of SW-1 in
examination-in-chief.
(iii) The allegations regarding non-following of proper
procedure for procurement of rice from the local market and
arbitrary selection of suppliers without following due
procedure, was not proved by any of the witnesses produced by
the respondent. No "prescribed procedure" had been referred
to, by the respondent. In the absence of any stipulated or
prescribed procedure, the petitioner had necessarily acted on the
basis of a need-based assessment, especially in view of the time
constraint and lack of serious bidders, as those who responded
to the advertisement were unable to guarantee compliance
within the prescribed delivery schedule. In such circumstances,
the manner in which procurement of the rice was effected, by
the petitioner, was wholly justified, and was, on the face of it,
fair and transparent. In international contracts, the overriding
priority was to honour commitments made, so that the goodwill
and stature of the respondent, in the international market, was
maintained.
(iv) Selection of parties, out of offers received in the Agro
Division, was the practice followed even at the time SW-3 was
holding Charge thereof, and stood vouchsafed by Ex.D-9, D-10
and D-11, which related to contracts awarded to parties on
negotiation basis, by SW-3 himself, in his capacity as Director
(Agro).
(v) The allegation that the contract was cancelled owing to
non-supply of sufficient rice, in time, by the selected supplier,
was contrary to facts. Rice, in the required quantity, was
available at port within the prescribed and scheduled time, but
could not be exported owing to failure, on the part of
TRANSCHART to provide vessels, as already noted
hereinabove. This was also proved by the evidence of SW-1, as
well as fax message dated 22nd December, 1995, from SW-1 to
MTPL, which clearly showed that over 16,000 MT rice had
already reached Kandla. This clearly indicated that, even on
22nd December, 1995, the Agro Division was in a position to
start shipment, and was hindered from doing so only owing to
non-availability of vessels, which was entirely attributable to
failure on the part of TRANSCHART.
(vi) In fact, the Agro Division, too, made every effort to
ensure availability of vessels. The remarks of DW-6, the Chief
General Manager (Shipping), in Ex.D-19, indicated that two
vessels, namely M.V. Megdelena and M.V Arunachal Pradesh,
offered by TRANSCHART, were accepted by MMTC.
However, TRANSCHART failed to finally fix the vessels, and
ultimately withdrew the vessels offered earlier. This was
corroborated by DW-6 in his deposition before the IO. As such,
the allegation that cancellation of the contract by MTPL was
owing to non-supply of rice within the scheduled time by the
supplier selected by the petitioner, was incorrect.
8.4 The IO, in his Inquiry Report, observed as under:
(i) In the newspaper advertisement, no mention had been
made regarding the last date for responding thereto, the terms
for supply, quantities required and other terms and conditions of
the offer, including supply schedule.
(ii) None of the twenty-eight parties, who responded to the
advertisement, was selected for supply of rice. The parties
selected had directly approached the Agro Division of MMTC,
and personally discussed the matter with the petitioner.
(iii) Though there was, undoubtedly, urgency involved, owing
to the commitments made by the MMTC to the Indonesian
buyer, the procedure adopted for finalising the deal with private
parties, who approached the MMTC directly, lacked
transparency.
(iv) As the amount involved was substantial (about ₹ 43
crores), it was obligatory on the part of the petitioner to follow a
procedure which was proper and transparent in all respects.
(v) A perusal of the record reveal that no last date, for
submitting offers, was indicated in the advertisement. As
supplies were to be made in a time bound manner, it was
necessary to fix a target date for responding to the
advertisement.
(vi) There was no evidence to indicate that the offers received
in response to the advertisement were duly considered by the
competent authority, and comparative statement with regard to
rates, schedule or supply of goods etc. was made by the
petitioner. The petitioner should have made a comparative
statement of rates etc. for arriving at a fair and transparent
decision.
(vii) It was not clear as to how the parties, who were
ultimately selected, could come into contact with MMTC
directly. As the amount involved was substantial, the right
course for MMTC would have been to re-advertise in the
newspaper, for supplies, rather than for negotiating with a few
parties who had approached MMTC. In case, the petitioner felt
that time was short, he should have pre-planned well in advance
and ensured guaranteed supply of rice from assured suppliers
for further export, before entering into the contract with MTPL.
(viii) If the supply was not forthcoming from FCI, the contract
should have been allowed to lapse, rather than acting in haste
and purchasing rice through private parties in a non-transparent
and hurried manner. This reflected "over enthusiasm and haste
on the part of the CO, which is against the general principles
and canons of financial propriety".
On the basis of the above reasoning, the IO held Articles of Charge-II,
against the petitioner, to stand proved.
8.5 A copy of the above Inquiry Report was forwarded, to the
petitioner, by the DA, along with his Disagreement Memo dated 17th
September, 2002 (supra). It appears, from the record, that the
petitioner filed submissions, in response thereto, on 3rd October, 2002,
which were received by the DA on 10th/11th October, 2002. However,
as already noted hereinbefore, no copy of the said representation has
been placed on record by the petitioner.
8.6 Vide the order dated 9th December, 2002 (supra), which is
impugned by the petitioner and to which reference has already been
made hereinabove, the DA held, in respect of Article-II of the Articles
of Charges against the petitioner, as under:
"The advertisements issued in various newspapers in the first
week of October was for clearly for procurement and not for
„empanelment‟ because an amount of 31,000 MT rice was
procured upto the first quarter of 1996 and put in private
warehouses in Kandla for executing the contract with MTPL.
The contract was cancelled because the MMTC
scheduled and re-scheduled/rejected the fixing of vessels
offered on 28.12.1995, 10.1.96 and three other vessels were
also rejected by the Agro Division and no due to inability of
TRANSCHART to provide vessels. Only 26,000 MT of rice
as against contracted 50,000 MT had converged at Kandla
upto the cancellation of the contract i.e. on 18.1.1996.
There is no evidence of analysis of the offers from 27
parties which were arbitrarily rejected. Rice was procured
arbitrarily from selected parties who failed to deliver the
quantity which ultimately led to cancellation of the contract"
8.7 The petitioner, in his review petition, preferred against the
aforementioned order dated 9th December, 2002, submitted that the IO
had entirely overlooked Ex.D-13, which clearly indicated that offers
received from the twenty-seven parties, who responded to the
advertisement, were duly analyzed vide notes dated 18th October, 1995
and 27th October, 1995 of the DGM (Agro), on the basis of which
analysis two parties were short-listed for supply of rice. However,
neither of the said two parties came forward to make supplies as per
the delivery schedule suggested by MMTC. It was further pointed out
that the finding, of the IO, to the effect, that there was no analysis of
the twenty-seven offers received, was contrary to Ex. D-13 as well as
the evidence of SW-1, DGM (Agro), who was in-Charge of the Agro
Division. The suggestion, of the IO, that MMTC should have issued
fresh advertisement in the newspaper for exploring other possibilities,
it was submitted, was impossible, as MMTC was already running out
of time, and there was a commitment to be honoured. Similarly, the
suggestion, of the IO, that the petitioner should have allowed the
contract to lapse, indicated that the IO was unconscious of the
consequence of violation of the contract, which would not only have
resulted in MMTC having to incur huge amounts by way of penalties
and damages, but would have also eroded the reputation of MMTC in
the international market. In fact, submitted the petitioner, he had made
all sincere efforts to fulfill the contract and, owing to default on the
part of TRANSCHART, the contract could not fructify. Regarding the
further observation, of the IO, to the effect that MMTC ought to have
made assured arrangement for supply of rice, the petitioner submitted
that FCI had given a full back-up after accepting the earnest money
deposit of ₹ 60 lacs. The petitioner further submitted that it was never
the intention of MMTC to purchase the rice from private buyers, and
that it was compelled to do so owing only to the circumstances in
which it was placed. The allegation that proper procedure had not
been followed, it was submitted, was effectively without any evidence
having been led by MMTC, regarding the alleged "prescribed
procedure"; rather, Ex. D-8 clearly indicated that decisions were to be
taken on case to case basis. Further, Ex. S-1 indicated that purchases
could be made either through open tender, limited tender or
negotiation. It was only because of the reneging, by FCI, towards the
end of October, 1995, on its commitment to supply rice, that, in order
to meet its export commitment, advertisements were issued by
MMTC, through the petitioner, for empanelment of suppliers. This
position stood confirmed by the evidence of SW-1. Besides, this
procedure was not unprecedented, as was apparent from Ex. D-9, D-
10 and D-11, which were similar contracts, approved by the
petitioner‟s predecessor and awarded to private parties, based on
negotiations. The offers of twenty-seven parties, who had responded
to the advertisement, it was pointed out, had been analyzed by SW-1
(Dharampal), the DGM (Argo), who came to the conclusion that the
offers, except in the case of two parties, were not suitable. Of the said
two parties, M/s Vinod Associates never turned up for negotiations,
and MARKFED, Punjab was in a position to supply rice as per the
stipulated delivery schedule, as confirmed by DW-1, the Senior
Manager of MARKFED, in his deposition before the IO. Ex. D-13, it
was pointed out, was the note wherein the offers received, pursuant to
the newspaper advertisement, had been analyzed, and this fact stood
acknowledged by SW-1 during cross-examination. In these
circumstances, the petitioner submitted that the manner in which he
had sourced rice, from local suppliers, consequent on the failure, by
FCI, to live up its commitments, was entirely transparent and in the
interests of ensuring that there was no breach of the contract entered
into, by MMTC, with the Indonesian supplier, as also to safeguard the
reputation of MMTC in the international market.
8.8 As already noted hereinabove, the aforementioned review
petition, submitted by the petitioner, was rejected by an effectively
non-speaking order dated 2nd September, 2003, which is impugned in
the present proceedings.
9. Article III
9.1 Article-III of the Articles of Charge against the petitioner
alleged that preferential treatment had been extended, by the
petitioner, to Neelkanth and to M/s Jwalaji Trading Company
(hereinafter referred to as "Jwalaji"). In the case of Neelkanth, this
allegation was founded on the following three facts:
(i) Whereas other suppliers were required to furnish bank
guarantee equivalent to 2% of the FOB value of the rice,
Neelkanth, which supplied a bulk of the quantity, was permitted
to furnish only Fixed Deposit Receipt (FDR) which, unlike a
bank guarantee, would not be readily encashable.
(ii) While all other parties were required to bear the godown
rent, in the case of Neelkanth, godown rent, beyond 45 days of
receipt of the rice, was required to be borne by MMTC.
(iii) Rice, supplied by Neelkanth, was accepted even after
cancellation of the contract, and payment released theiragainst,
as approved, by the petitioner, on 9th January, 1996.
In the case of Jwalaji, it was alleged that, despite the party having
failed to supply rice, the bank guarantee furnished by it was not
invoked and was, instead, allowed to be utilized for supply of rice
against another contract.
9.2 The petitioner in its reply dated 10th May, 2001, to the charge-
sheet, categorically denied having extended any preferential treatment
either to Neelkanth or to Jwalaji. Regarding the allegation of
preferential treatment to Neelkanth, it was submitted as under:
(i) The requirement of FDR, from Neelkanth, required
endorsement from the bank, which rendered it as good as cash.
It was pointed out that the FDR was available at the disposal of
MMTC, and could have been encashed without any reference to
Neelkanth. While Bank Guarantees could be arranged with 10
to 15% deposit, FDRs required 100% cash backing and were,
therefore, considered good and sound security in commercial
trading activities. It was further pointed out that, in MMTC,
FDRs had been frequently accepted, for ensuring performance
by the contracting parties. Further, in the case of FDRs, the risk
of stay by courts was also lessened.
(ii) Insofar as charging of godown rent was concerned, the
petitioner submitted that godown rent was uniformly charged
from all suppliers upto 45 days, whereafter ground rent was
borne by MMTC and that no special favour had been shown to
Neelkanth.
(iii) Regarding the third allegation, to the effect that rice had
been accepted from Neelkanth even after cancellation of the
contract, and payment released thereagainst, it was submitted
that, while the petitioner had taken a decision to stop
procurement with effect from 9th January, 1996, Dharampal, the
DGM (Agro), put up a note (Annexure-XII to the reply)
recommending acceptance of 3084.95 MT rice, delivered by
Neelkanth, after 9th January, 1996. On verification from
MMTC, Kandla, it was ascertained that the said quantity of rice
already stood delivered and accepted in the godown after
completion of all documentation. Inasmuch as the rice stood
accepted by MMTC, Kandla, it was submitted that the petitioner
was presented with a fait accompli, leaving him no option but to
release payment against the rice so accepted.
Regarding Jwalaji, it was submitted that, before the vessel, on which
the rice supplied by it was to be loaded, could take berth and the rice
loaded thereon, a message was received, to the effect that port
operations stood closed. MTPL refused to extend the shipment period,
as a result of which the contract was cancelled. As the vessel had not
yet reported for loading, it was decided not to accept the rice supplied
by Jwalaji, so that no question of invocation of bank guarantee could
arise.
9.3 Further, before the IO, the petitioner denied the allegation that
FDRs were not readily encashable or that, by accepting FDRs from
Neelkanth, undue favour had been shown to it. In actual fact, a Call
Deposit Receipt (wrongly referred to as an FDR) had been obtained
from Neelkanth, which was equivalent to a cash deposit in MMTC‟s
current account and could be withdrawn by MMTC any time. That
apart, DW-4 had, in his deposition before the IO, clearly stated that
FDRs were frequently accepted in MMTC in lieu of bank guarantees,
and that, in fact, FDRs were more secure, as the funds would be lying
in the name of MMTC and could be withdrawn at any time. Regarding
payment of godown rent, it was submitted that there was no
expectation that the cargo would remain held up at the port due to
cancellation of contract, and what was expected was that the cargo
would reach within one month of its arrival. Payment of godown rent,
by MMTC, beyond 45 days, was eventually agreed for all suppliers;
the only difference being that, in the case of Neelkanth, the condition
was entered in its Letter of Intent during negotiation. As such, no
favour had been shown to Neelkanth even in this respect.
9.4 The IO, in his Inquiry Report, dealing with this Article of
Charge, held, nevertheless, that, while the contention, of the petitioner,
that there were various alternatives available for obtaining security for
ensuring performance, and that FDR was equal to cash deposit and
could be withdrawn by MMTC at any time at its discretion, "may be
true, the CEO should have followed a uniform pattern in respect of all
the parties and the fact that he has accepted FDR in favour of one
party whereas Bank guarantee in respect of other parties, shows a
discriminatory and favourable treatment extended to one party even
though both could be invoked/encashed eventually in case of need." It
was further observed that, "going by the logic explanation given by
the CEO for obtaining FDR, the same holds good in respect of other
parties in which case he should have extended this condition
uniformly to all the other parties if it was in the interest of MMTC."
Further, with respect to the payment, by MMTC, of godown rent, to
the extent of storage of the rice in stock beyond 45 days, in the case of
Neelkanth, the IO holds that the insertion of a clause, to this effect, in
the terms and conditions of the Letter of Intent issued to Neelkanth,
whereas no such condition was to be found in Letters of Intent issued
to other parties, "also shows that discriminatory treatment was shown
to Neelkanth". The IO, however, accepted the explanation proffered
by the petitioner, with respect to the acceptance of rice, from
Neelkanth, beyond the date of cancellation of contract and release of
payment thereagainst, as also the contention that no preferential
treatment had been extended to Jwalaji.
9.5 Qua this Article of Charge against the petitioner, the DA did not
express any disagreement with the findings of the IO. As such, in the
punishment order dated 9th December, 2002, the DA merely reiterated
the finding, of the IO, that preferential treatment had been extended to
Neelkanth, by permitting it to furnish an FDR, instead of a Bank
Guarantee.
9.6 In the circumstances, the petitioner, in his review petition, again
urged the following submissions which had neither been taken into
account by the IO, nor by the DA:
(i) Re. Permission, to Neelkanth, to furnish FDR/Call
Deposit Receipt:
(a) Inasmuch as Neelkanth had been permitted to give
cash deposit, instead of bank guarantee, it was not
possible to understand how it could be alleged that
favourable treatment had been extended to it.
(b) FDRs/CDRs were routinely accepted, in MMTC,
in view of bank guarantee. As such, it could not be
alleged that the petitioner had departed from any
prevalent norms.
(c) CDR was much better security, as the entire cash
was available to MMTC at its will, as compared to a bank
guarantee, which could be obtained at nil/10%/20%
margin, to invoke which MMTC would have been at the
mercy of the bank.
(d) All that was required was that a performance
guarantee be obtained from the supplier. Such
performance guarantee could be in the form of a bank
guarantee, FDR, CDR or any other type of guarantee,
which was capable of invocation.
(ii) Re. Payment of ground rent, by MMTC, in the event of
rice continuing to remain in the godown beyond 45 days:
This, it was reiterated, was a facility extended to all
suppliers, and not just to Neelkanth. The only difference
was that, in the case of Neelkanth, a clause, to that effect,
had been inserted in the Letter of Intent. The allegation
that favourable treatment had been extended to
Neelkanth, thereby, was, therefore, unsubstantiated. In
fact, non-charging of ground rent beyond 45 days, was a
fair trade practice, as the stocks were held up owing to
non-availability of the vessel and cancellation of the
contract, for which the suppliers were in no way
responsible.
9.7 The review petition of the petitioner, as already noted
hereunder, was rejected by an unreasoned and non-speaking order.
10. Article IV:
10.1 Article IV of the Articles of Charge against the petitioner was
directed against his decision to release 85% of payment, to suppliers
of rice, on the basis of Trust Receipts given by them, without actual
weighment or independent verification of quantity. These Trust
Receipts had been furnished by the suppliers. Subsequent to
cancellation of the export order, the stock of rice was taken by
MMTC, into possession, on joint custody basis, again without actual
weighment, on the basis of Trust Receipts and the Surveyor‟s Report.
The Surveyors Report itself stated that no actual weighment had been
done, and used the words "said to be" and "as declared". It was
further alleged that shifting of stock, amongst the godowns, also took
place without actual weighment, resulting in non-reconciliation of the
stocks. As a result of such want of proper verification by the
petitioner, it was alleged that MMTC had suffered loss of ₹ 17.39
crores.
10.2 Responding to the above Article of Charge, the petitioner
submitted, before the IO, that
(i) as per the Letters of Intent, the load report results, in
respect of quality, quantity and backing of the shipment, were to
be treated as final and, on the basis thereof, 85% of the payment
was required to be made on presentation of godown receipts
showing receipt of goods, the goods themselves being
hypothecated to MMTC, along with the certificate, of M/s
S.G.S. International, regarding quality, weight and
specifications,
(ii) Item No.13 in of the Letters of Intent further provided
that the balance 15% would be released after the shipment was
fully completed, and all requisite documents were furnished by
the party to the satisfaction of the buyer,
(iii) in the case of FOB contracts ensuring supply of the
contracted quantity and quality of rice, on board the ship, was
the responsibility of the seller, at whose end actual weighment
was to be done,
(iv) the payment of 85%, made at the time of arrival of the
contracted material was, therefore, purely provisional in nature,
(v) it was not correct to allege that payments were made only
on the basis of "Trust Receipts" issued by the suppliers agents;
the officers at the Kandla office of MMTC had duly
countersigned the "Trust Receipts", after physically counting
the rice bags supplied, as was apparent, inter alia, from Exhibit
S-19, which was a note, dated 29th January, 1996, regarding
payment made to Neelkanth,
(vi) SW-2, the General Manager of MMTC had, in reply to a
question put to him, clearly deposed that the "Trust Receipts"
had been in vogue in MMTC, and extensively used for purchase
of material during the course of exports, and that such a
procedure was a matter of routine; to similar effect was the
deposition of DW-4, the then Chief General Manager (Finance)
of MMTC,
(vii) final payment for supplies was to be made only after
adjustment of shortages, etc., noticed, if any, on actual
weighment while loading the vessels,
(viii) it was over a year after he had handed over Charge as
Director (Agro) on 31st March, 1996, that a shortage of 147 MT
of rice was reported and recovered from the suppliers; as
against this, physical verification of the stocks, even in March,
1997, did not reveal any abnormal shortages, as deposed by
DW-4, and evidenced by Ex. D-28,
(ix) on cancellation of the contract, the rice in the godowns
remained in the joint custody of MMTC and the suppliers,
pending final weighment and finalisation of payment, as was
deposed by DW-4 in his examination-in-chief,
(x) as such, it was incorrect and unfair to allege that losses
had occurred owing to part/provisional payment having been
made, on the basis of the assessed weight reflected in "Trust
Receipts", which had been duly acknowledged by the officials
of MMTC at Kandla,
(xi) the Trading Accounts for rice, at Kandla (Ex. D-28)
indicated that, as on 31st March, 1996, there was no shortage,
(xii) DW-4 had explained, in replies to specific questions put
to him, that physical verification of the stores was carried out,
and report of excesses and shortages, where they were
abnormal, prepared and, on the basis of the recommendations of
the Commodity Director, put up to the Board, and that the
Trading Accounts, prepared on the basis of physical
verification, showed no losses in the year ending 31st March,
1996, on which date the petitioner handed over charge as
Director (Agro),
(xiii) as such, it could not be alleged that any shortage of rice
occurred during the tenure of the petitioner,
(xiv) the alleged statement of shortages was unverified and
unsigned by any authority, and had not been confirmed by SW-
4 or SW-5; in any event, no witness had attributed the shortage,
if any, to short supply by the suppliers, and
(xv) the evidence adduced by various witnesses (especially
SW-4) indicated, in fact, that the shortages, found to have
occurred, were attributable to natural causes such as
deterioration, loss of moisture, spoilage and rodent infestation.
10.3 The IO, in his Inquiry Report, held, in respect of Article IV of
the Articles of Charge against the petitioner, thus:
"After going through the prosecution and the defence
arguments and documentary and oral evidences it is
clear that trust receipts were accepted as a normal trade
practice in the export of Agro and commodities and the
shortage to the tune of 2885 MTs as alleged in the
Charge could be as result of pilferage/order long
storage resulting in moisture loss, loss on account of
rodents for which the CEO cannot be held
responsible."
10.4 The DA, predictably, disagreed with the above finding, of
the IO, with respect to Article IV, opining, in that regard, as
under:
"The Inquiry Officer has held the Charge is not
proved. The Disciplinary Authority however holds the
Charges partly proved for the reason that the wrong practice
of accepting goods without weighment was being followed by
Shri PN Sharma while he held the Charge of Director
(Finance)/Dir (Agro) in MMTC. Although the wrong
procedure was followed by the officers of MMTC in Kandla
Sh. PM Sharma was in the know and aware of the same and
did not rectify the same.
The Charge therefore stands partially proved."
10.5 In the impugned punishment order dated 9th December, 2002,
the DA held thus, with respect to Article IV:
" The total rice procured of 32,931.15 MT was
accepted by MMTC on the basis of "Trust Receipts"
furnished by respective handling agents, appointed by
the suppliers. The Trust Proceeds further mentioned
that the goods are „stated to be‟ hype to MMTC.
Payments were released to the suppliers by MMTC
Corporate Office on the basis of quantities indicated in
Trust Receipts.
Subsequent to cancellation of contract the stock
of rice was taken by MMTC in possession in joint
custody without actual weighment on the basis of
Trust Receipts and surveyors reports. The Surveyor
(M/s S. G. S. India Ltd) also relied upon the quantity
as declared by the suppliers while certifying the
quantity.
A shortage of 2885.426 mt was detected leading
to a loss of rupees 2.41 crores. The total loss in the
transaction due to disposal of rice in the domestic
market after cancellation of the contract for export is ₹
17.39 crores."
10.6 Inasmuch as none of the contentions, advanced by the
petitioner, in defence to the above Article of Charge, before the IO,
was considered by the DA, either while expressing his disagreement
with the findings of the IO, or while passing the impugned order,
dismissing the petitioner from service, the petitioner, in his Review
Petition, reiterated the said grounds. As the contentions of the
petitioner already stand exhaustively enumerated hereinabove, they
are not being repeated here, so as not to burden this judgement -
which is, possibly, already over-prolix - any further.
10.7 As has already been noticed hereinabove, the Review Petition
of the petitioner was dismissed by an effectively non-speaking order,
dated 2nd September, 2003, also impugned by the petitioner in these
proceedings. With respect to the subject matter of Article IV, the said
order merely records thus:
"Total rice procured was accepted by MMTC on the basis of
„Trust Receipts‟ furnished by respective handling agents,
appointed by the suppliers. Subsequent to cancellation of
contract, the stock of rice was taken by MMTC in possession
in joint custody without actual weighment on the basis of
Trust Receipts and surveyors report when price was disposed
of in the domestic market, a shortage of 2885.426 MT was
detected."
Apart from the above, the order merely recites, as already noted
hereinbefore, that "the review petition of Shri PN Sharma dated 14th
May, 2003 contains no new point of fact/material".
11. Article V:
11.1 Article V, of the Articles of Charge, against the petitioner,
alleged that the petitioner had failed to supervise the performance of
his subordinates in discharge of their duties, which was reflected in
release of payment without proper weighment, leading to huge
shortages in the stock at the time of the disposal, the loss for which
had to be borne by the MMTC. It was also alleged that, owing to
insufficient fumigation, the stock of rice was found to be infested with
live insects and weevils. As such, the only new allegation, in this
Article of Charge, was essentially, the alleged infestation, of the stock
of rice with insects etc., owing to insufficient fumigation thereof.
11.2 The IO has noticed that this Article of Charge was sought to be
supported by Ex. S-26 to Ex. S-28 and Ex. S-30, which reflected
shortage in stock observed at the time of disposal of rice in 1998,
more than two years after taking delivery of the stock, as also after the
relinquishment, by the petitioner, of charges as Director (Agro) on 31st
March, 1996. It had been pleaded by the petitioner, in response to this
Article of Charge, that the said loss was not on account of any failure
by his subordinates and, further, that there was no evidence of any
loss during his incumbency. It was also pleaded that any loss, if at all,
was attributable to the failure, of TRANSCHAR, to provide vessels on
time.
11.3 The IO found that the MMTC had not been able to produce any
documentary and/or evidence in support of this Article of Charge. It
was further found that it would be stretching the point too far, to hold
the petitioner accountable for insufficient fumigation, resulting in
infestation of rice, without any tangible, oral or documentary evidence
in support thereof. As such, he held the charge not to be proved.
11.4 In its Disagreement Memo, the DA has observed, with respect
to this Article of Charge as under:
"Article V-
The Inquiry Officer has held the charge as not proved. The
Disciplinary Authority however holds the charge as proved
for the reason that non-discovery of shortages at the time of
disposal does not imply that there was no shortage while
receiving delivery which was on the basis of mere Trust
receipts without actual weighment. Further payments were
released on the basis of mere certificates of suppliers and
handling agents who were interested parties. As such Shri PN
Sharma cannot be absolved of omissions and commissions as
regards selection of suppliers and laxity shown in fixing of
vessels during his tenure. Since this reflects on poor planning
and execution of the whole transaction both while selecting
the firms and fixing vessels, resulting in the huge losses of
approximately Rs.17 crores to MMTC/government due to
gross misconduct and acts of omission and commission.
This charge has been held to be proved."
11.5 The impugned punishment order dated 9th December, 2002
observes, with respect to Article V, as under:
"During his tenure as Director (Finance) and Director
(Commodity) the entire transaction has been handled by
violating the delegation of powers, arbitrarily rejecting and
selecting parties, accepting goods without actual weighment
and on the basis of certificates of supplies/handling agents
who were interested parties. Preferential treatment was
extended to M/s. Neelkanth International. The proposal for
export to Praha was processed in February, 1996 and a
quantity of 11,000 MT exported to and rejected by M/s. ICC,
Praha, Czech @ US$ 260 per MT was found rotten due to
inadequate fumigation at Kandla."
11.6 In his review petition, the petitioner, after first submitting that
the alleged lapses, referred to in Article V, already stood explained by
him, went on, with reference to export of rice to ICC, Praha, to submit
that, in fact, the negotiated price was highly profitable and that 11000
MT rice was actually exported, resulting in a handsome profit to
MMTC. This shipment, too, it was pointed out, was made six months
after relinquishment, by the petitioner, of charge as Director (Agro).
Further, it was pointed out that overseeing of the operations at Kandla
constituted no part of petitioner‟s duty and that, in fact, no shortage
was revealed in stock verification during the tenure of the petitioner.
No responsibility for any shortage, discovered after demitting of
office by the petitioner, it was submitted, could not be laid at his door.
11.7 As already noted hereinabove, the review petition of the
petitioner was dismissed without reasons.
12. The petitioner is, now, before this Court.
Analysis
13. This Court is alive to, and conscious of, the fact that it does not
sit in appeal over the decision of the disciplinary authority, and is not
meant to re-appraise the evidence, which would result in a fresh
inquisitorial expedition into the thickets of the charges against the
petitioner. The peripheries of the jurisdiction of this Court, whether
under Article 226 or Article 227 of the Constitution of India, are well-
demarcated and well-delineated. There are decisions, galore, of the
Supreme Court on the point, many of which have been overtly critical
of the tendency, of constitutional courts exercising high prerogative
writ jurisdiction, to convert themselves into appellate authorities, re-
examining, threadbare, the charges against the employee concerned,
and scanning, with a tooth-comb as it were, the findings of the Inquiry
Officer, and the decision of the disciplinary authority that follows as a
sequel thereto.
14. Having said that, the policy of restraint, which the court
observes while dealing with administrative, or even quasi-judicial,
decisions of administrative authorities, is self-imposed, and is
intended to be a reflection of the federal structure of our polity, which
mandates mutual respect, and maintenance of a healthy distance
between the legislature, executive and judiciary, with each organ
confining its peregrinations to its own well-recognized boundaries.
The proscription, against courts from venturing into the domain of the
executive, whether such executive exercises its authority
administratively, or quasi-judicially, is the sole consideration that has
prompted courts, time and again, from travelling that one extra mile,
while exercising their power of judicial review. If, however, justice
has, in fact, set up residence that one extra mile beyond, it is the duty
of the court, in its unending quest to ensure the availability of justice
to every denizen of this country, to strain its sinews and travel the
distance. While adhering its this policy of self-imposed restraint, the
court is always required to be conscious of the fact that, in the
ultimate eventuate, its constitutional duty is to render, and uphold the
rendition of, justice. Justice is the high watermark of all that a judicial
authority can hope, or aspire, to attain, and the attainment of that
zenith has, at each and every instant of its functioning, to guide its
discretion, and the manner of exercise thereof. Where justice has,
apparently, been sacrificed by the authorities below, no restraint,
whatsoever, can operate, to chain the court, or prevent it from forging
ahead and undoing the wrong, the commission of which the facts, as
placed before the court, apparently disclose. If, in its zeal to exercise
restraint, and not interfere beyond a point, with the decision of the
executive authority below, the court consciously allows injustice to go
unredressed, it has failed, and failed unpardonably.
15. A delicate balance has, therefore, necessarily to be struck, by
the court, between upholding the ultimate cause of justice, and
undoing injustice, where it has occurred, and the fossilized policy of
judicial restraint, while reviewing, judicially, decisions of executive,
or quasi-judicial authorities. Which of the two considerations
predominates, however, can never really be in doubt. Where injustice
has apparently occurred, the court cannot refuse to redress the
situation, or remedy the injustice, merely because, in doing so, the
restraining shackles of judicial review may suffer damage. If they do,
so be it.
16. It is with the above approach in mind, that I have embarked,
even if somewhat riskily, on the above detailed analysis of the charges
against the petitioner, his response thereto, the findings of the IO
thereon, and the ultimate decision of the DA. In doing so, I find that a
somewhat startling picture emerges.
17. What are the actions, of the petitioner, for which he has been
faulted, and where, in the estimation of the disciplinary authority, has
he faltered, and faltered so inexcusably as to render his continuance in
the petitioner-organization an impossibility? For the DA, clearly, has
left no stone unturned in chastising the petitioner for his
transgressions; he has not only dismissed the petitioner from service,
but has also forfeited his entire gratuity and further directed that the
petitioner would not be eligible for any other governmental job; in
short, the highest and most extreme punishment that could possibly
have been imposed.
18. Is this justified ?
19. Let me revisit the acts of the petitioner, and the manner in
which, according to the MMTC, he misconducted himself.
20. A Revisitation
20.1 As a repeat order to earlier supply of 30,000 MT, the
Indonesian buyer placed another order for 50,000 MT. As the value
of the order was in excess of ₹ 5 crores, an immediate proposal was
put up, for obtaining the approval of the SPC of MMTC, to the
contract. However, the Company Secretary suggested certain
modifications and, by the time the modified proposal was ready for
being put up to the SPC, the Board of Directors of MTPL approved
the contract. As the members of the Board of Directors of the MTPL
were also the members of the SPC of MMTC, the petitioner approved
conclusion of the contract. This was the same practice, as had been
followed in the case of the earlier dispatch of 30,000 MT white rice,
to the same Indonesian supplier, and to which the contract of 50,000
MT was a repeat order. Ex post facto approval, to the contract, was
also accorded, by the SPC of MMTC, in its meeting held on 19 th
March, 1996. In these circumstances, the IO held that the petitioner
could not be said to have misconducted himself, in approving
conclusion of the contract for supply of 50,000 MT white rice.
Ignoring all these facts, the DA chose to disagree with the finding of
the IO, observing, in the process, that the IO had based his decision on
the ex post facto approval, granted to the contract, by the SPC. No
heed was paid, by the DA, to the repeated submission, of the
petitioner, that, in fact, no impropriety, procedural or otherwise, the
said to have taken place, in the petitioner approving signature of the
contract for supply of 50,000 MT on the basis of the approval, thereof,
by the Board of Directors of MTPL, who were also the members of
the SPC of MMTC, without waiting for the same persons again, to
accord their approval to the contract, in their capacity as members of
the SPC. The DA opined that the charge, against the petitioner, of not
having followed the prescribed procedure, by concluding the contract
without prior approval of the SPC, and without any justification for
not obtaining such prior approval, stood proved. It is obvious that this
finding, of the DA, returned without any application of mind to the
facts, or the circumstances in which the petitioner, following the
procedure which had earlier been adopted in the case of supply of
30,000 MT rice to the same foreign buyer, approved conclusion of the
contract, suffers from manifest perversity.
20.2 When FCI defaulted in supply of the requisite quantity of rice
for export, advertisement was issued, in the newspaper, inviting offers
from other domestic suppliers. 27 suppliers responded. The offers
extended by all the suppliers were duly considered by Dharampal, the
DGM, as manifested by a detailed note recorded, in this regard, and
exhibited as Ex. D-13, which found the offers of only two suppliers as
meriting consideration, as none of the other suppliers were willing to
supply the stipulated quantity of rice within the stipulated time period.
These two suppliers were Vinod Associates and MARKFED, Punjab,
who were, therefore, invited. Vinod Associates did not, however,
respond, and MARKFED expressed its inability to meet the delivery
schedule stipulated by MMTC. As time was of the essence, and
fulfilment of the contract was being held up, the offers, which had
been received independently from outside parties, were considered,
and accepted. These parties supplied the requisite quantity of rice
within time; however, the rice could not be exported owing to failure,
on the part of TRANSCHART, in providing vessels, on which the rice
could be loaded and sent, in time. All these facts were vouchsafed
and evidenced by the documents on record, as well as by the
depositions of witnesses, including witnesses of MMTC, who had
appeared before the IO and tendered evidence. In these
circumstances, the charge, against the petitioner, that the reason, and
the manner, in which contract had been concluded with domestic
suppliers who had not responded to the advertisement published in the
newspaper, was difficult to understand, obviously had no merit. By
acting as he did, the petitioner ensured that the requisite quantity of
rice, ready for export, was available at the port in time. Instead of
appreciating the manner in which the petitioner acted in this case, the
IO found the petitioner to have misconducted himself, solely because
he did not proceed in the manner in which, according to the IO, he
ought to have proceeded. The IO opined, in his Inquiry Report, that
the petitioner should have prepared a comparative statement with
regard to rates and supply of goods, or re-advertised the contract in
the newspaper, or preplanned the supply well in advance to ensure
guaranteed supply of rice from assured suppliers for further export or,
failing everything, allowed the contract to lapse. The basis for the
suggestions, of the IO, is not forthcoming anywhere on the record.
Neither, for that matter, did the chargesheet, issued to the petitioner,
advance any such "suggestions", regarding the manner in which the
petitioner ought to have acted, consequent on the default of the FCI.
The petitioner, in his subsequent representations to the DA, clearly
pointed out that the suggestions were not only impractical and, in fact,
impossible to implement, but that, had the petitioner allowed the
contract to lapse, MMTC would have had to suffer heavy amounts by
way of damages and penalty, as well as significant erosion of its
worth in the international market. How, and in what manner, the acts
of the petitioner had prejudiced the MMTC, or its interests, is not
forthcoming anywhere on the record. Even if, for that matter, it were
to be assumed that the petitioner could have acted in the manner
suggested by the IO, the fact that he did not, and chose, instead, to
accept the rice from the suppliers who directly contacted the MMTC,
cannot be categorised as "misconduct". Significantly, there is no
allegation, or finding, that the petitioner was attempting to favour the
private parties from whom the rice was procured and sent to port. In
the absence of any such suggestion, far less evidence, the decision, of
the petitioner, to accept rice from the suppliers with whom contract
were ultimately finalised, instead of proceeding in the manner in
which the IO suggested he ought to have proceeded, it could hardly be
suggested that the petitioner had committed any "misconduct".
20.3 Next came the charge that the petitioner had favoured
Neelkanth. This, it was alleged, was evidenced by the fact that,
instead of bank guarantee, security from Neelkanth was taken in the
form of FDR/Cash Deposit Receipt, and that godown charges were
recovered, from Neelkanth, only up to a period of 45 days, whereafter
they were borne by MMTC. There was no allegation that acceptance
of security had necessarily to be by way of bank guarantee. The IO,
significantly, found no difference, security-wise, between the FDR
and the Bank Guarantee; his only finding was that the petitioner ought
to have followed a uniform practice. Assuming, for a moment, that
lack of uniformity, in the manner in which security was ensured, by
the petitioner, from the suppliers of rice, it is not possible to
comprehend how the petitioner could be said to have favoured, or
extended preferential treatment to, Neelkanth, by requiring an FDR to
be submitted by it, instead of a bank guarantee.
20.4 The charge that preferential treatment had been extended to
Neelkanth by requiring to pay rent, on the stocks remaining in the
godown, only up to 45 days, with MMTC shouldering the burden
thereafter, was incorrect even on facts. The petitioner clearly pointed
out that godown rent, from all suppliers, was recovered only up to a
period of 45 days, whereafter MMTC bore the rent, as the continued
detention of the stock could not be attributed to any act, or omission,
on the part of the suppliers. This submission, of the petitioner, has not
been doubted or questioned, either by the IO or by the DA. Even so,
the IO, as well as the DA, held the allegation of preferential treatment
having been extended, by the petitioner to Neelkanth, to stand proved,
merely because, in the Letter of Intent issued to Neelkanth, a specific
clause, limiting the liability of Neelkanth to godown rent only till 45
days, was inserted, whereas no such specific clause was to be found in
the Letters of Intent issued to the other suppliers. Once it was
admitted that, in fact, as a uniform practice, godown rent from the
suppliers of rice was charged only for 45 days, whereafter MMTC
bore the burden for further delay in export of the goods, and that this
practice was uniformly followed across the board in respect of all
suppliers, it is impossible to understand how the allegation of
preferential treatment having extended, by the petitioner, to
Neelkanth, could be said to have been proved. The submissions of the
petitioner, on this aspect of the matter, have been ignored by IO as
well as DA.
20.5 The fourth, and, effectively, the last substantive Article of
Charge against the petitioner, was that he had accepted rice, from the
suppliers, without actual weighment, on the basis of "Trust Receipts",
furnished by them, as well as "Surveyor‟s Reports". The petitioner
pointed out that, even as per the clauses of the Letters of Intent placed
on the suppliers, 85% of payment was required to be released to them
on the basis of the Trust Receipts and estimation provided by the
Surveyor, i.e. S. G. S. International. It was further pointed out that
at least two of the witnesses, SW-1 and DW-4, had deposed, during
inquiry, that release of payment, against "Trust Receipts" was a matter
of routine practice. The concomitant allegation, that, as a result of the
petitioner having accepted the supplies without actual weighment, loss
had resulted to MMTC, as the rice was found, on actual weighment at
a later point of time, to be short, was also factually incorrect, as, at the
time of handing over, by the petitioner, of charge as Director (Agro)
on 31st March, 1996, the stocks were reconciled, and no shortage was
found. The petitioner contended, and justifiably, that, if any shortage
was detected later, responsibility therefor could hardly be laid at the
door of the petitioner. In any event, once the submission, of the
petitioner, that release of 85% payment against "Trust Receipts", was
a matter of practice, and routinely followed, was accepted, the very
basis of the Article of Charge stood demolished. The IO, correctly
appreciating this fact, held that release of payment against Trust
Receipts was actually a matter of routine practice, and that the
petitioner could not, therefore, have been faulted in following the
same. The DA, significantly, also accepts that release of payments
against Trust Receipts was a practice followed the past, by other
officers of the MMTC, but faults the petitioner for not having
"rectified the matter". How, and why, the petitioner should have done
so, is left to the realm of conjecture. That apart, this finding, of the
IO, clearly travels beyond the boundaries of the chargesheet issued to
the petitioner, which contained no such allegation. The DA, too, is
conspicuously silent regarding the established procedure in this
regard, or the alternate procedure which, in his estimation, the
petitioner ought to have adopted.
20.6 The allegation of supervisory failure, as leveled against the
petitioner in Article V of the Articles of Charge, hardly merits any
consideration. There is complete non-application of mind, by the
MMTC, on this aspect. The petitioner clearly pointed out, in his
review petition, that the allegation of loss having been incurred in the
export of rice to ICC, Praha was actually incorrect and that, in fact,
MMTC had earned handsome profits in the said transaction. It was
again reiterated, by the petitioner, that no shortages had been
discovered during his tenure, submitting, further, in this regard, that
any shortage discovered after the relinquished charges as Director
(Agro) could obviously not be attributed to the petitioner. These
submissions have fallen on deaf ears.
20.7 I am constrained, in the circumstances, to agree that the
opinion, of the IO, that this charge was effectively just thrown up in
the air without any evidence, documentary or otherwise, to support it.
This is quite apart from the fact that the allegations, as contained in
the Disagreement Memo of the DA and, thereafter, in the findings
returned by the DA in the punishment order dated 9 th December,
2002, were beyond the Article of Charge itself.
21. The picture that emerges from a holistic appreciation of the
above facts, is, as already observed hereinabove, stark. Significantly,
there is no allegation, against the petitioner, of his having been
actuated by corrupt motives, or with any intent to favour a particular
party. Though certain oblique allegations, regarding preferential
treatment having been extended to Neelkanth, were made, the
petitioner satisfactorily explained that no such preferential treatment,
had, in fact, been shown to the said party. It is clear that the petitioner
had, placed in the circumstances in which we found himself, acted
according to his best judgment, and that, while there may have been a
difference of opinion, on the part of the IO and/or DA, regarding the
practicability, or even the correctness, of the procedure adopted by the
petitioner, no impropriety, far less illegality, could be attributed to
him. Decisions taken by the petitioner, which were subsequently, duly
approved by the SPC, have also sought to be questioned, and used as a
basis to penalize the petitioner. The decisions of the petitioner, which
have formed the basis of the disciplinary proceedings to which he had
been subjected, were decisions taken in his administrative capacity,
within the authority vested in him to do so, and there is nothing to
indicate that, in taking the said decisions, the petitioner was actuated
by any, except the most bona fide motives. The petitioner, clearly,
explained each and every action of his, which had been sought to be
questioned, by the MMTC; unfortunately for him, however, his
explanation has not received adequate consideration, at least by the
DA, even while disagreeing with the findings of the IO. It is most
disconcerting to note that the only stage at which any application of
mind, to the petitioner‟s defence, or to the sustainability of charges
against him, appears to have been accorded, was by the IO. The DA,
clearly, has, blindly, sought to disagree with the IO and, having done
so, has not entered any finding on the submissions of the petitioner in
his defence. The review petition of the petitioner has met with an
identical fate.
22. In fact, the entire exercise, once the ink on the Inquiry Report
of the IO had dried, was an apparent eyewash, with the possible
intention of doing lip service to the principles of due process and fair
play. The reasons for disagreement, cited by the DA, are no more
than a reiteration of the allegations against the petitioner in the
charge-sheet. Given the fact that the IO had arrived at his conclusions
after a detailed analysis, the least that the DA was expected to do,
when expressing such strong disagreement with the findings of the IO,
was to address the reasons provided by the IO for arriving at the said
findings. No attempt, even perfunctory, to undertake any such
exercise, by the DA, is apparent on record. This court is constrained
to observe that the manner in which the DA has proceeded, after the
submission of Inquiry Report by the IO, indicates a preconceived
decision to remove the petitioner from service. This impression is
fortified by the total warrant of consideration, either in the impugned
punishment order dated 9th December, 2002 or, subsequently, in the
impugned review order dated 2nd September, 2003, to any of the
submissions advanced by the petitioner. As a result, the petitioner,
who, placed in an unenviable position, addressed the issues that came
up before him to the best of his ability and judgement, has had,
unnecessarily, to face the rigours of a disciplinary proceeding,
followed by the ignoring of an order dismissing him from service and,
as a result, has had to endure the pendency of the present litigation, in
this court, for over a decade and a half.
23. "Misconduct", deconstructed
23.1 It is necessary, before parting company with this case, to
reiterate the legal principles regarding the scope and ambit of the
expression "misconduct", when used in service jurisprudence. It may
be mentioned that Rule 5 of the MMTC Employees Conduct,
Discipline and Appeal Rules, 1975 and lists, "without prejudice to the
generality of the term „misconduct‟", as many as thirty acts which, if
committed, "shall be treated as misconduct". Of these, clause (5)
covers "acting in a manner prejudicial to the interests of the
Company" and clause (9) covers "neglect of work or negligence in the
performance of duty including malingering or slowing down of
work". The other clauses of Rule 5 have no application, and it is not
necessary to burden this decision by any reference thereto.
23.2 The Supreme Court has, in decision after decision, explained, in
a manner which leaves no room for doubt, the scope and ambit of the
expression "misconduct". In paras 5 and 6 of its decision in State of
Punjab vs Ram Singh, (1992) 4 SCC 54, the Supreme Court rules
thus:
"5. Misconduct has been defined in Black's Law
Dictionary, Sixth Edition at page 999 thus:
"A transgression of some established and definite rule
of action, a forbidden act, a dereliction from duty,
unlawful behavior, wilful in cha of racter, improper or
wrong behavior, its synonyms are misdemeanor,
misdeed, misbehavior, delinquency, impropriety,
mismanagement, offense, but not negligence or
carelessness."
Misconduct in office has been defined as:
"Any unlawful behavior by a public officer in relation
to the duties of his office, wilful in character. Term
embraces acts which the office holder had no right to
perform, acts performed improperly, and failure to act
in the face of an affirmative duty to act."
P. Ramanatha Aiyar's Law Lexicon, Reprint Edition 1987 at
page 821 defines „misconduct‟ thus:
"The term misconduct implies a wrongful intention,
and not a mere error of judgment. Misconduct is not
necessarily the same thing as conduct involving moral
turpitude. The word misconduct is a relative term, and
has to be construed with reference to the subject matter
and the context wherein the term occurs, having regard
to the scope of the Act or statute which is being
construed. Misconduct literally means wrong conduct
or improper conduct. In usual parlance, misconduct
means a transgression of some established and definite
rule of action, where no discretion is left, except what
necessity may demand and carelessness, negligence
and unskilfulness are transgressions of some
established, but indefinite, rule of action, where some
discretion is necessarily left to the actor. Misconduct is
a violation of definite law; carelessness or abuse of
discretion under an indefinite law. Misconduct is a
forbidden act; carelessness, a forbidden quality of an
act, and is necessarily indefinite. Misconduct in office
may be defined as unlawful behaviour or neglect by a
public officer, by which the rights of a party have been
affected."
6. Thus it could be seen that the word „misconduct‟
though not capable of precise definition, on reflection
receives its connotation from the context, the delinquency in
its performance and its effect on the discipline and the nature
of the duty. It may involve moral turpitude, it must be
improper or wrong behaviour; unlawful behaviour, wilful in
character; forbidden act, a transgression of established and
definite rule of action or code of conduct but not mere error
of judgment, carelessness or negligence in performance of the
duty; the act complained of bears forbidden quality or
character. Its ambit has to be construed with reference to the
subject matter and the context wherein the term occurs,
regard being had to the scope of the statute and the public
purpose it seeks to serve. The police service is a disciplined
service and it requires to maintain strict discipline. Laxity in
this behalf erodes discipline in the service causing serious
effect in the maintenance of law and order."
(Emphasis supplied)
23.3 Paras 9 to 12 of the earlier decision of the Supreme Court, in
U.O.I. v. J. Ahmed, (1979) 2 SCC 286, are instructive on the point:
"9. The five charges listed above at a glance would convey
the impression that the respondent was not a very efficient
officer. Some negligence is being attributed to him and some
lack of qualities expected of an officer of the rank of Deputy
Commissioner are listed as charges. To wit, Charge 2 refers
to the quality of lack of leadership and Charge 5 enumerates
ineptitude, lack of foresight, lack of firmness and
indecisiveness. These are qualities undoubtedly expected of a
superior officer and they may be very relevant while
considering whether a person should be promoted to the
higher post or not or having been promoted, whether he
should be retained in the higher post or not, or they may be
relevant for deciding the competence of the person to hold the
post, but they cannot be elevated to the level of acts of
omission or commission as contemplated by Rule 4 of the
Discipline and Appeal Rules so as to incur penalty under
Rule 3. Competence for the post, capability to hold the same,
efficiency requisite for a post, ability to discharge function
attached to the post, are things different from some act or
omission of the holder of the post which may be styled as
misconduct so as to incur the penalty under the rules. The
words "act or omission" contemplated by Rule 4 of the
Discipline and Appeal Rules have to be understood in the
context of the All India Services (Conduct) Rules, 1954
("Conduct Rules" for short). The Government has prescribed
by Conduct Rules a code of conduct for the members of All
India Services. Rule 3 is of a general nature which provides
that every member of the service shall at all times maintain
absolute integrity and devotion to duty. Lack of integrity, if
proved, would undoubtedly entail penalty. Failure to come up
to the highest expectations of an officer holding responsible
post or lack of aptitude or qualities of leadership would not
constitute as failure to maintain devotion to duty. The
expression "devotion to duty" appears to have been used as
something opposed to indifference to duty or easy-going or
light-hearted approach to duty. If Rule 3 were the only rule in
the Conduct Rules it would have been rather difficult to
ascertain what constitutes misconduct in a given situation.
But Rules 4 to 18 of the Conduct Rules prescribe code of
conduct for members of service and it can be safely stated
that an act or omission contrary to or in breach of prescribed
rules of conduct would constitute misconduct for disciplinary
proceedings. This code of conduct being not exhaustive it
would not be prudent to say that only that act or omission
would constitute misconduct for the purpose of Discipline
and Appeal Rules which is contrary to the various provisions
in the Conduct Rules. The inhibitions in the Conduct Rules
clearly provide that an act or omission contrary thereto so as
to run counter to the expected code of conduct would
certainly constitute misconduct. Some other act or omission
may as well constitute misconduct. Allegations in the various
charges do not specify any act or omission in derogation of or
contrary to Conduct Rules save the general Rule 3 prescribing
devotion to duty. It is, however, difficult to believe that lack
of efficiency, failure to attain the highest standard of
administrative ability while holding a high post would
themselves constitute misconduct. If it is so, every officer
rated average would be guilty of misconduct. Charges in this
case as stated earlier clearly indicate lack of efficiency, lack
of foresight and indecisiveness as serious lapses on the part
of the respondent. These deficiencies in personal character or
personal ability would not constitute misconduct for the
purpose of disciplinary proceedings.
10. It would be appropriate at this stage to ascertain what
generally constitutes misconduct, especially in the context of
disciplinary proceedings entailing penalty.
11. Code of conduct as set out in the Conduct Rules
clearly indicates the conduct expected of a member of the
service. It would follow that conduct which is blameworthy
for the government servant in the context of Conduct Rules
would be misconduct. If a servant conducts himself in a way
inconsistent with due and faithful discharge of his duty in
service, it is misconduct (see Pierce v. Foster, [17 QB 536,
542]). A disregard of an essential condition of the contract of
service may constitute misconduct [see Laws v. London
Chronicle (Indicator Newspapers, [(1959) 1 WLR 698])].
This view was adopted in Shardaprasad Onkarprasad
Tiwari v. Divisional Superintendent, Central Railway,
Nagpur Division, Nagpur, [61 Bom LR 1596], and Satubha
K. Vaghela v. Moosa Raza, [10 Guj LR 23]. The High Court
has noted the definition of misconduct in Stroud's Judicial
Dictionary which runs as under:
"Misconduct means, misconduct arising from ill
motive; acts of negligence, errors of judgment, or
innocent mistake, do not constitute such misconduct."
In industrial jurisprudence amongst others, habitual or gross
negligence constitute misconduct but in Utkal Machinery
Ltd. v. Workmen, Miss Shanti Patnaik, AIR 1966 SC
1051 : (1966) 2 SCR 434 : (1966) 1 LLJ 398 : 28 FJR 131 in
the absence of standing orders governing the employee's
undertaking, unsatisfactory work was treated as misconduct
in the context of discharge being assailed as punitive. In S.
Govinda Menon v. Union of India, (1967) 2 SCR 566 : AIR
1967 SC 1274 : (1967) 2 LLJ 249 the manner in which a
member of the service discharged his quasi judicial function
disclosing abuse of power was treated as constituting
misconduct for initiating disciplinary proceedings. A single
act of omission or error of judgment would ordinarily not
constitute misconduct though if such error or omission results
in serious or atrocious consequences the same may amount to
misconduct as was held by this Court in P.H. Kalyani v. Air
France, Calcutta, AIR 1963 SC 1756 : (1964) 2 SCR
104 : (1963) 1 LLJ 679 : 24 FJR 464 wherein it was found
that the two mistakes committed by the employee while
checking the load-sheets and balance charts would involve
possible accident to the aircraft and possible loss of human
life and, therefore, the negligence in work in the context of
serious consequences was treated as misconduct. It is,
however, difficult to believe that lack of efficiency or
attainment of highest standards in discharge of duty attached
to public office would ipso facto constitute misconduct. There
may be negligence in performance of duty and a lapse in
performance of duty or error of judgment in evaluating the
developing situation may be negligence in discharge of duty
but would not constitute misconduct unless the consequences
directly attributable to negligence would be such as to be
irreparable or the resultant damage would be so heavy that
the degree of culpability would be very high. An error can be
indicative of negligence and the degree of culpability may
indicate the grossness of the negligence. Carelessness can
often be productive of more harm than deliberate wickedness
or malevolence. Leaving aside the classic example of the
sentry who sleeps at his post and allows the enemy to slip
through, there are other more familiar instances of which a
railway cabinman signals in a train on the same track where
there is a stationery train causing head-on collision; a nurse
giving intravenous injection which ought to be given
intramuscular causing instantaneous death; a pilot
overlooking an instrument showing snag in engine and the
aircraft crashes causing heavy loss of life. Misplaced
sympathy can be a great evil (see Navinchandra
Shakerchand Shah v. Manager, Ahmedabad Coop.
Department Stores Ltd., (1978) 19 Guj LR 108, 120). But in
any case, failure to attain the highest standard of efficiency in
performance of duty permitting an inference of negligence
would not constitute misconduct nor for the purpose of Rule 3
of the Conduct Rules as would indicate lack of devotion to
duty.
12. The High Court was of the opinion that misconduct in
the context of disciplinary proceeding means misbehaviour
involving some form of guilty mind or mens rea. We find it
difficult to subscribe to this view because gross or habitual
negligence in performance of duty may not involve mens rea
but may still constitute misconduct for disciplinary
proceedings."
(Emphasis supplied)
23.4 The contours of the expression "misconduct" were subjected,
once again, to incisive examination, by the Supreme Court, in Ravi
Yashwant Bhoir v. Collector, (2012) 4 SCC 407, in which, after
referring to the definitions of "misconduct", in Black‟s Law
Dictionary and P. Ramanatha Aiyar‟s "Law Lexicon" (which have
already been noted hereinabove), it was held as under:
"13. Mere error of judgment resulting in doing of negligent
act does not amount to misconduct. However, in exceptional
circumstances, not working diligently may be a misconduct.
An action which is detrimental to the prestige of the
institution may also amount to misconduct. Acting beyond
authority may be a misconduct. When the office-bearer is
expected to act with absolute integrity and honesty in
handling the work, any misappropriation, even temporary, of
the funds, etc. constitutes a serious misconduct, inviting
severe punishment. (Vide Disciplinary Authority-cum-Regl.
Manager v. Nikunja Bihari Patnaik (1996) 9 SCC 69 : 1996
SCC (L&S) 1194, Govt. of T.N. v. K.N. Ramamurthy[(1997)
7 SCC 101 : 1997 SCC (L&S) 1749 : (1997) 7 SCC
101 : AIR 1997 SC 3571], Inspector Prem Chand v. Govt. of
NCT of Delhi [(2007) 4 SCC 566 : (2007) 2 SCC (L&S) 58]
and SBI v. S.N. Goyal [(2008) 8 SCC 92 : (2008) 2 SCC
(L&S) 678 : (2008) 8 SCC 92 : AIR 2008 SC 2594].)
14. In Govt. of A.P. v. P. Posetty [(2000) 2 SCC 220 :
2000 SCC (L&S) 254], this Court held that since acting in
derogation to the prestige of the institution/body and placing
his present position in any kind of embarrassment may
amount to misconduct, for the reason, that such conduct may
ultimately lead that the delinquent had behaved in a manner
which is unbecoming of an incumbent of the post.
15. In M.M. Malhotra v. Union of India [(2005) 8 SCC
351 : 2005 SCC (L&S) 1139 : AIR 2006 SC 80], this Court
explained as under: (SCC p. 362, para 17)
"17. ... It has, therefore, to be noted that the word
„misconduct‟ is not capable of precise definition. But
at the same time though incapable of precise
definition, the word „misconduct‟ on reflection
receives its connotation from the context, the
delinquency in performance and its effect on the
discipline and the nature of the duty. The act
complained of must bear a forbidden quality or
character and its ambit has to be construed with
reference to the subject-matter and the context wherein
the term occurs, having regard to the scope of the
statute and the public purpose it seeks to serve." A
similar view has been reiterated in Baldev Singh
Gandhi v. State of Punjab [(2002) 3 SCC 667 : AIR
2002 SC 1124].
16. Conclusions about the absence or lack of personal
qualities in the incumbent do not amount to misconduct
holding the person concerned liable for punishment. (See
Union of India v. J. Ahmed [(1979) 2 SCC 286 : 1979 SCC
(L&S) 157 : (1979) 2 SCC 286 : AIR 1979 SC 1022].)
17. It is also a settled legal proposition that misconduct
must necessarily be measured in terms of the nature of the
misconduct and the court must examine as to whether
misconduct has been detrimental to the public interest.
(Vide Bank of India v. Mohd. Nizamuddin [(2006) 7 SCC
410 : 2006 SCC (L&S) 1663 : AIR 2006 SC 3290].)
18. The expression "misconduct" has to be understood as a
transgression of some established and definite rule of action,
a forbidden act, unlawful behaviour, wilful in character. It
may be synonymous as misdemeanour in propriety and
mismanagement. In a particular case, negligence or
carelessness may also be a misconduct for example, when a
watchman leaves his duty and goes to watch cinema, though
there may be no theft or loss to the institution but leaving the
place of duty itself amounts to misconduct. It may be more
serious in case of disciplinary forces.
19. Further, the expression "misconduct" has to be
construed and understood in reference to the subject-matter
and context wherein the term occurs taking into consideration
the scope and object of the statute which is being construed.
Misconduct is to be measured in the terms of the nature of
misconduct and it should be viewed with the consequences of
misconduct as to whether it has been detrimental to the public
interest."
23.5 The tone, and tenor, of the expressions used, to delineate the
scope and ambit of "misconduct", are unmistakable. The decisions
cited above refer to misconduct as "a transgression of some
established and definite rule of action, where no discretion is left,
except what necessity may demand", "a forbidden action",
"dereliction from duty", "unlawful behaviour, wilful in character",
"improper or wrong behaviour", acts which the officer concerned in
"had no right to perform", "failure to act in the face of an affirmative
duty to act", "wrongful intention", "violation of definite law",
conduct, of the officer "inconsistent with due and faithful discharge of
his duty", "arising from ill motive". It has been emphasised that the
act complained of "must bear a forbidden quality or character".
23.6 While, thus, setting out the nature of the acts which would
tantamount to "misconduct", the decisions cited above also emphasise
what would not constitute "misconduct". Thus, it is held, in the above
decisions, that "a mere error of judgement", mere "negligence",
"unskilfulness", "carelessness"," mere negligence in performance of
duty", "lack of leadership", "ineptitude", "lack of foresight",
indecisiveness, lack of "competence for the post", "capability to hold
the same", "efficiency requested for a post" or "ability to discharge
functions attached to the post", "failure to come up to the highest
expectations of an officer holding a responsible post", "lack of
aptitude", "failure to attain the highest standard of administrative
ability while holding a high post", or "deficiencies in personal
character or personal ability", would not constitute misconduct.
Carelessness or negligence, too, it has been held, would ordinarily not
amount to "misconduct", though, in exceptional cases, they might.
These exceptional cases, however, are cases similar to "the sentry who
sleeps at his post and allows the enemy to slip through", "a railway
cabin man signalling in a train on the same track where there is a
stationary train causing head-on collision", "a nurse giving
intravenous injection which ought to be given intramuscularly,
causing instantaneous death", or "a pilot overlooking an instrument
showing snag in engine and the aircraft crashes causing heavy loss of
life". In such extreme cases, it has been held by the Supreme Court,
though the act may not be tainted by wrongful or culpable intention,
and may not be deliberate, it would still amount to "misconduct",
given the seriousness of the consequences resulting from the act, and
the nature and degree of care and caution expected to be exercised by
the officer concerned, given the position in which he is placed. The
significance of these examples, as cited by the Supreme Court in J.
Ahmed (supra), cannot be lost. Obviously, the Supreme Court has
taken pains to emphasise that, save and except in such extreme cases,
resulting in serious loss to life and limb, or equally catastrophic
consequences, acts which may be negligent, or careless, could not,
ordinarily, be characterised as "misconduct".
23.7 This court has, in its recent decision in T. C. Jindgar v. Rural
Electrification Co., 2018 SCC Online 8575, culled out the following
propositions, relating to the jurisprudential contours of the expression
"misconduct", as emerging from the above decisions:
(i) Mere negligence or carelessness is not "misconduct".
(ii) Incompetence, incapability to hold a post, and want of
requisite efficiency are also not "misconduct".
(iii) Failure to come up to the highest expectations of an
officer holding a responsible post, lack of aptitude or qualities
of leadership are also not "misconduct". "Misconduct"
implies blameworthy conduct.
(iv) Conduct inconsistent with due and faithful discharge of
duty is "misconduct".
(v) Disregard of a mandatory condition of the contract of
service of an employee may constitute "misconduct".
(vi) "Misconduct" means conduct arising from ill-motive.
(vii) A single act of omission, or error of judgment, would not
ordinarily constitute "misconduct"; however, if such act or error
results in serious or atrocious consequences it may amount to
"misconduct".
(viii) Similarly, carelessness or negligence resulting in
atrocious consequences, may constitute "misconduct". This
would ordinarily apply in extreme cases, as is apparent from the
illustrative examples given by the Supreme Court, akin to a
sentry sleeping at his post; thereby allowing the enemy to slip
through a railwayman signaling in a train on a track which there
already stood a stationary train, resulting in a head-on collision,
a nurse giving an injection intravenously instead of muscularly,
thereby causing instantaneous death, or error on the part of a
pilot in overlooking a snag in the engine, resulting in the crash
of the aircraft, causing heavy loss of life. The consequences
contemplated in these examples, i.e. the enemy slipping in
through the border, head on collision between two trains, death
owing to erroneous administration of an injection, and a crash
of an aircraft resulting in heavy loss of life, make it clear that it
is only the most extreme and drastic consequences which could
justify categorization of mere carelessness or negligence, on the
part of an officer, as "misconduct".
(viii) Gross or habitual negligence in performance of duty may,
however, constitute "misconduct", even in the absence of mens
rea.
(ix) Misconduct must ordinarily be willful in character, and
not merely an error of judgment. It must involve a transgression
of some established or definite rule of conduct, or doing of
some act which is forbidden.
(x) Action which is detrimental to the prejudice of an
institution, may in given cases, amount to "misconduct".
23.8. On the issue of negligence, a clarificatory caveat would be in
place. While simple cases of negligence would not amount to
"misconduct", extreme cases of negligence, as noted above, which
result in disastrous catastrophic consequences, would. There is,
however, an intermediate species of cases, which are generally
parenthesized as cases of "gross or habitual negligence". Such cases,
too, as noted above, may constitute "misconduct". It is in cases such
as these, that the court has to maintain a fine balance. Cases of gross
or habitual negligence are, needless to say, actionable by way of
disciplinary proceedings; after all, employees do not have a carte
blanche to be negligent, and are not employed in an organisation so
that they discharge their duties negligently. Negligence has, therefore,
to necessarily invite corrective action. Where the negligence is
simple, such corrective action may only be by way of an
administrative warning, or an adverse entry in the employee‟s
confidential report, or his being superseded for promotion or suffering
loss of seniority, etc. Where, however, the negligence is found to be
gross, or habitual, disciplinary action is undoubtedly warranted. The
court has always to be alive to the fact that there is a fundamental
distinction between "mere negligence" and "gross or habitual
negligence". In cases of disciplinary action, and consequent
punishment, in cases of "gross" or "habitual" negligence, on the part
of the employee, the exercise of jurisdiction, by the writ Court, is
largely confined to examining whether the punishment awarded, or
imposed, on the employee concerned, was, or was not, proportionate
to the misconduct committed by him.
23.9 This court has, in a recent decision, had occasion to cogitate on
the higher degree of probity, and propriety, expected of senior
functionaries in government departments, as well as in public sector
undertakings, in the honest and efficient discharge of whose duties the
landlord and the landless have, alike, a pre-eminent public interest.
The obverse is, however, equally true. If senior officials in public
sector undertakings are expected to be circumspect in the manner in
which they discharge their duties, equal circumspection is expected,
of the undertaking itself, while seeking to question, or fault, decisions
taken by such officials in lawful exercise of the discretion vested in
them. Where the exercise of such discretion, or the discharge of duty
by the official, is tainted by mala fides or corrupt motives, or is found
to be callously negligent, disciplinary action is undoubtedly
warranted. In other cases, however, it would be wholly unjustified to
subject the officer concerned, to the indignity of a disciplinary
proceeding, and all its agonizing sequelae, merely because, in the
opinion of the disciplinary authority, the officer could have acted
otherwise, or exercise his discretion in another manner. Decisions
have, often, to be taken by such officers on the spur of the moment,
keeping in mind the best interests of the organisation or department,
of which they are an integral part. To start subjecting such
decisions, taken bona fide, to a microscopic analysis, and proceed
against the officer(s) on the ground that the decision lacked in the
requisite degree of prudence - as opposed to propriety - would not
only be grossly unfair to the officer, but would, in the ultimate
analysis, be deleterious to the interests of the organisation and,
therefore, to public interest itself. This Court has come across several
such instances, in which, sans any element of want of bona fides in
acting as he did, the officer has been subjected to disciplinary
proceedings merely because, had he acted otherwise, financial loss,
which the organisation has had to suffer, could have been avoided. It
is undoubtedly true that the financial interests of an organisation,
especially where the organisation is a department of the government,
or a public sector undertaking, has, at all times, to guide the decisions
of officials, and employees, of such departments or undertakings. At
the same time, where there is nothing to indicate that the officer, or
employee, has acted in conscious disregard of such financial interests,
the fact of loss having ensued cannot, by itself, constitute the basis to
allege commission of "misconduct", by the officer. Officers cannot
be penalised for losses suffered by the organisation, where they have
acted in the best interests of the organisation, and as per their best
judgement, untainted by mala fides, ulterior motives, or corrupt
considerations. Else, the proverbial sword would forever be hanging
over the heads of these officers, thereby inhibiting them from acting
on the basis of their best judgement, or analysis, of the situation - a
position which no civilised legal system can tolerate.
24. Tested on this anvil, it is clear that no misconduct can be
attributed to the petitioner. There is no evidence of any of the acts,
regarding which he was subjected to disciplinary proceedings, having
been tainted by mens rea, or any wilful intention to transgress an
established rule of conduct. It is unfortunate that, despite the Supreme
Court having taken such pains, to set out, extensively, the ambit of the
expression "misconduct", subjective decisions, of officers holding
responsible positions, taken in the exigencies of the circumstances in
which they find themselves, are, even today, being made subject
matter of disciplinary proceedings, causing endless hardship and
trauma to the officer concerned. Undoubtedly, if the acts of an officer
are tainted by malice, a wilful intention to transgress propriety, or
corrupt motives, no leniency, whatsoever, can be shown to him, or
her, and the officer concerned has to endure the inevitable
consequences of his, or her, action. It would be folly, however, to, as
in the present case, subject executive decisions taken by officers
holding responsible positions, such as the petitioner, to a microscopic
scrutiny and, merely because, in the perception of the establishment,
the action was imprudent, negligent or careless, proceed against the
officer departmentally. The entire exercise of disciplinary action,
taken in the present case against the petitioner, stands vitiated, ab
initio, having been initiated, and proceeded with, in complete
ignorance, or, possibly, in deliberate disregard, of what constitutes
"misconduct", as to justify action against the officer guilty thereof.
This court is convinced that, placed in the circumstances in which he
found himself, the petitioner acted in the best interests of the
organisation, trusting his judgment in the bargain. It is impossible, in
these circumstances, to hold that any misconduct had been committed
by the petitioner.
25. This Court is constrained to observe that the petitioner has met
with a very raw deal at the hands of the respondents. Bona fide
decisions taken by him have been treated as the justification to
dismiss him from service, with scant regard to the detailed
explanation, submitted by him, at every stage explaining his conduct.
Most of the actions taken by the petitioner were on the lines of the
actions taken by his predecessors in similar circumstances, and were,
in every case, actuated by the urgency of the situation which,
significantly, has not been questioned, at any stage, either by the IO or
by the DA. In the circumstances, basic civility demanded that, before
throwing the petitioner out of his job, some modicum of application of
mind, to his defence and to the various submissions made by him, was
extended. This Court is constrained to presume that, for reasons
recondite, a concerted effort, to remove the petitioner from the
organization, was made, and was successful. As a result, the petitioner
lost his job, and has had to suffer the ordeal of this litigation for over a
decade and half as on date.
26. The nature of the punishment awarded to the petitioner also
convinces this court that the disciplinary authority, in proceeding
against him, was not acting bona fide. This court has had occasion, in
the past, to emphasise the consequences of removing an employee
from service. In the present case, the punishment imposed on the
petitioner was not mere "removal", but dismissal, with forfeiture of
his entire gratuity, and an added caveat that he would be ineligible to
secure any other governmental employment. It is obvious that the
petitioner has, deliberately, been visited with the most extreme
punishment which, under the applicable Rules, could be imposed on
him. The punishment awarded to the petitioner is, indeed, so severe,
as to result in civil death, wiping out the petitioner, as well as his
family and those dependent on him, financially, professionally and
socially. In deciding to terminate the service of an employee, every
employer is expected to exercise the highest degree of caution, and
display the greatest degree of circumspection, indicating that a
conscious decision has been taken, to the effect that, given the
magnitude of the misconduct committed by the officer, the possibility
of imposition of any lesser punishment stands unequivocally ruled
out. No such application of mind is, needless to say, forthcoming in
the present case.
27. The proceedings against the petitioner, starting from the
issuance of the charge-sheet dated 4th May, 2001, therefore, stand,
completely vitiated on facts as well as law.
28. Having thus adjudicated on the legality of the disciplinary
proceedings instituted against the petitioner by the MMTC, and
having held the said proceedings, as also the order of dismissal, of the
petitioner, from service, passed as a culmination thereof, to be unjust
and illegal, this Court finds itself in a piquant situation. As has been
observed at the start of this judgment, the petitioner‟s five year tenure,
as Director (Finance), in the MMTC, came to an end on 14 th May,
2000. He was actually recommended, by the competent selection
board, for continuation of his tenure as Director (Finance) for a further
term of five years, vide decision dated 13th November, 2000. This
decision could never, however, fructify, as in the interregnum,
preliminary inquiry was initiated, against the petitioner, on complaint
received against him, which resulted in the issuance, to him, of the
charge-sheet dated 4th May, 2001, which is the genesis of the present
proceedings. The petitioner, in these circumstances, had moved this
Court, by way of CWP 4946/2001, praying that he be allowed to
continue in service as Director (Finance), pending completion of the
disciplinary proceedings against him. The said writ petition was
disposed of, by a learned Single Judge of this Court, vide judgment
dated 29th April, 2002. The prayer, of the petitioner, for being allowed
to continue in service as Director (Finance) in the MMTC, pending
completion of the disciplinary proceedings instituted, against him, was
categorically rejected, holding, in unambiguous terms, "the petitioner
cannot claim any right to continue in service". The MMTC, was,
however, given liberty to continue with, and conclude, the disciplinary
proceedings expeditiously. While granting the said liberty, this Court
also observed that "there is no doubt that once there is cessation of the
service of the petitioner, there will be no question involved of
termination of his services as a consequent of departmental
proceedings". At the same time, the learned Single Judge also directed
that, though the MMTC could not be restrained from filling up the
post of Director (Finance), "if the petitioner is exonerated after
departmental proceedings and the post has still not been filled up, the
case of the petitioner shall be considered favourably in view of the
fact that the petitioner had been selected by PESB and only
impediment in the appointment of the petitioner was the refusal of
respondent No.4 to issue the vigilance certificate". As it happened, the
departmental proceedings concluded, not in the petitioner‟s
exoneration, but in his dismissal from service. The petitioner has
contended, and rightly, that, apart from the departmental proceedings
against him being vitiated on merits, the respondent could not have
dismissed him from service, once his tenure as Director (Finance)
already stood expired on 14th May, 2000, and his prayer for extension
of the said tenure stood rejected by this Court. As such, even for this
reason, the decision, of the DA, to dismiss the petitioner from service,
was clearly illegal. So far as the petitioner is concerned, that,
however, is neither not there, as there could be no question of
reinstating him in the service of the MMTC, or even of deeming him
to have been reinstated in the service of the MMTC, his tenure as
Director (Finance) having come to an end on 14th May, 2000.
29. In any event, in view of my decision, hereinabove, that the
order of punishment dated 9th December, 2002, was unsustainable in
law, the direction to withhold the petitioner‟s gratuity would also, per
consequence, be set aside. The sequitur would be that the petitioner
would be entitled to all the retiral benefits due to him, assuming his
service, with the MMTC, to have come to an end on 14th May, 2000.
30. I have queried, of the petitioner, regarding the practical
consequence that would follow, were he to succeed in the writ
petition. He has submitted, forthrightly, that, in practical terms, the
only benefit to which he would be entitled would be by way of release
of his gratuity which stands withheld as a consequence of the
impugned orders. Apart from this, the petitioner submits that his main
effort was to ensure that the blemish, cast on him by the impugned
orders, was removed.
31. The writ petition of the petitioner, is, therefore, allowed, in
terms of the prayers contained therein, by quashing the inquiry report
dated 4th May, 2001, the order of punishment dated 9th December,
2002 and the review order dated 2nd September, 2003.
32. Consequent to the setting aside, by me, of the inquiry report,
the order of punishment and the review order, passed against the
petitioner, the respondent is directed to release, to the petitioner, his
entire gratuity which stands withheld by the respondent as a result of
the impugned orders.
33. This Court is convinced that the petitioner was subjected to
protracted disciplinary proceedings, an entirely illegal order of
dismissal from service and, thereafter, to suffer the ordeal of the
present proceedings before this Court, for no fault of his. This Court is
also convinced that the above acts of the MMTC were completely
wanting in bonafides, and, as the petitioner alleges, appears to have
been instituted with the intention of ensuring that the petitioner was
not reappointed as Director (Finance) for five years after 4th May,
2000. Given the agony and hardship that the petitioner has,
undoubtedly, had to undergo as a result of the acts of the MMTC, this
Court is of the view that the MMTC is required to be burdened with
costs, which are quantified at ₹ 50,000/-.
34. All payments, in accordance with the directions contained in
paras 32 and 33 hereinabove, are directed to be released, to the
petitioner, by MMTC, within a period of four weeks from the date of
receipt of a certified copy of this judgment.
35. The writ petition is allowed in the above terms.
C.HARI SHANKAR
(JUDGE)
JULY 6, 2018
dsn/bh
