Jharkhand High Court
Housing & Urban Development ... vs Arun Kumar Gupta on 14 January, 2021
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W. P. (C) No. 3193 of 2019
Housing & Urban Development Corporation Limited, Ranchi.... Petitioner
Versus
1. Arun Kumar Gupta
2. Chairman and Managing Director, Housing and
Urban Development Corporation Ltd., New Delhi
3. Chief Vigilance Officer, Housing and
Urban Development Corporation Ltd., New Delhi
4. J. Prem Nawaj, Executive Director (Human Resource Development)
Housing and Urban Development Corporation Ltd., New Delhi
5. H.T Suresh, Executive Director (Retail Finance)/Inquiry
Officer, Housing and Urban Development
Corporation Ltd., New Delhi .... Respondents
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CORAM: Hon'ble Mr. Justice Aparesh Kumar Singh
Hon'ble Mrs. Justice Anubha Rawat Choudhary
Through Video Conferencing
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For the Petitioner : Mr. P.A.S.Pati, Advocate
For the Respondent no. 1 : Mr. Mantra Narayan Thakur, Advocate
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09/14.01.2021 Heard learned counsel for the petitioner and learned counsel for the
respondent no.1.
2. By the impugned order dated 9th May, 2019 (Annexure-4) rendered by
learned Central Administrative Tribunal, Patna Circuit Bench at Ranchi in O.A.
No. 051/00867/2018, the learned Tribunal has though refused to interfere in the
inquiry proceeding initiated against the applicant in the year 2018 for total 61
charges under 14 scheme, however, it has laid down a time limit of 90 days for its
conclusion, failing which, HUDCO has been directed to release all his retiral
benefits without any delay.
3. Respondent-HUDCO/writ petitioner herein approached this Court being
aggrieved thereof. Petitioner sought interim stay of the impugned direction in the
instant writ petition through I.A No. 8146 of 2019. The prayer for interim stay was
considered on 25th September, 2019 after hearing learned counsel for the writ
petitioner and the applicant/respondent. This Court upon consideration of the rival
plea passed the following order:
"The impugned order directing the HUDCO to conclude the
disciplinary proceeding within a period of 90 days, on failure
of which they would be required to pay pensionary benefits to
the applicant was stayed. However, it was made clear that the
writ petitioner cannot withhold payment of leave encashment
amount during pendency of the disciplinary proceeding.
The impugned direction is stayed to the aforesaid extent.
Let a categorical affidavit be filed by the writ petitioner as
required above within a period of four weeks.
Learned counsel for the applicant/writ-petitioner also
prays for and is allowed the same time to file counter affidavit.
Matter be listed after re-opening of Diwali Puja Vacation
so that rejoinder if any may be filed to the respective affidavits
of the parties.
I.A. No. 8146 of 2019 stands disposed of."
4. Writ petitioner being aggrieved thereof preferred Special Leave to
Appeal (Civil) No. 26546 of 2019. However, by order dated 16th November, 2019
(Annexure-1 to the supplementary affidavit dated 14th January, 2020), the Special
Leave Petition was dismissed by Hon'ble Supreme Court.
5. Counter affidavit has been filed by the respondent herein and rejoinder
thereto has also been filed. Because of the lock down due to Covid-19, the matter
was taken up on 4th November, 2020. Learned counsel for the petitioner took time
to permit a fresh time line for conclusion of the departmental proceeding as the
departmental proceeding also could not proceed due to the lock down. By order
dated 10th December, 2020, respondent no. 1-employee was directed to appear
before the Enquiry Officer on 14th December, 2020 and participate in the enquiry.
Petitioner was directed to follow all standard protocols as prescribed by the State
Government in conduct of the proceedings.
6. When the matter was taken up on 17th December, 2020, a plea was
raised by learned counsel for the applicant/respondent no. 1 that though the leave
encashment amount of Rs. 1,17,117/- has been paid after deduction of TDS, but
the remaining half pay leave encashment of Rs. 4, 97,046/- has been withheld,
which is not permissible in law. Learned counsel for the petitioner has thereafter
filed a supplementary affidavit on 8th January, 2021 and 12th January, 2021
responding to the plea of half pay leave encashment raised by the applicant and
also the projected time line to conclude the departmental proceeding.
7. On the part of the petitioner, Mr. P.A.S. Pati has referred to the
HUDCO Leave Rules 14(1)(A) and Rule 31(A)(1) of HUDCO Conduct
Disciplinary and Appeal Rules, 1976. He has placed reliance upon the recent
decision of the Apex Court in the case of Chairman-cum-Managing Director,
Mahanadi Coalfield Limited Versus Rabindranath Choubey reported in 2020
SCC OnLine SC 470. He submits that Rule 31(A)(1) permits continuance of
disciplinary proceeding after superannuation of the employee by a deeming
fiction. As per the Rule 14 (1)(A), no encashment of half pay leave will be allowed
in case of resignation/dismissal/termination. The instant Rule has also been quoted
at page -34 of the writ petition. He submits that the issue, whether it is permissible
in law for the employer to withhold payment of gratuity of the employee even
after his superannuation from service because of the pendency of the disciplinary
proceeding against him?, and (ii) where the department inquiry had been instituted
against an employee while he was in service and continued after he attained the
age of superannuation, whether the punishment of dismissal can be imposed on
being found guilty of misconduct in view of the provisions under Rule 34.2 of the
CDA Rule 1978? have been answered by the Larger Bench of Three Judges
Benches of the Hon'ble Supreme Court in the case of Mahanadi Coalfields Ltd.
(supra) by majority of two to one. He has referred to paragraph nos. 55, 69, 70
and 71 of the majority judgment. He further submits that HUDCO Rules are pari
materia to 34.2 of CDA Rules applicable in the Mahanadi Coalfields
Ltd.(supra). In the petitioner's organization also, disciplinary proceeding can be
continued after superannuation of the employee deeming him to be in service.
Further, all such major punishments which are stipulated by the disciplinary rule,
can also be imposed upon the employee after superannuation in the light of the
ratio rendered by the Apex Court in the case of Mahanadi Coalfields Ltd.(supra)
at paragraph nos. 55,69,70 to 71. It is submitted that the issue relating to payment
of half pay leave encashment amount was also considered by this Court in its
interim order dated 25th September, 2019, which stood affirmed by the Apex Court
by dismissing the Special Leave Petition no. 26546 of 2019. The issue is no longer
open for the applicant/respondent herein to be re-agitated in the same manner.
8. Learned counsel for the petitioner submits that the disciplinary
proceedings have recommenced during unlock phase pursuant to the order dated
10th December, 2020 passed by this Court. The employee has appeared and the
enquiry proceedings have almost been completed in respect of 5 of the schemes. A
total number of 61 charges under 14 schemes are under inquiry. The details of the
schemes have been furnished in the supplementary affidavit dated 12 th January,
2021 also indicating the number of charges under each of the schemes and the
number of witnesses to be examined in respect of each of such charges. It is
submitted that as per the projected time line, examination of the witnesses may be
completed by the end of May, 2021. Thereafter, 02-03 weeks shall be required by
the Presenting Officer for submission of the report, another 15 days for submission
of the report by the Charged Officer and one month shall be required by the
Enquiry Officer for submission of the report to the Disciplinary Authority subject
to cooperation by the Charged Officer in a time bond manner. In view of this, it is
anticipated that the proceedings shall be concluded by submission of final report
by the Enquiry Officer by the end of July 2021 to the Disciplinary Authority,
however, it is subject to co-operation and adherence of the schedule by the
Charged Officer, examination-in-chief by the Presenting Officer and availability
of the witness on the schedule dates as they are located at different locations. The
inquiry officer is at the level of Executive Director and being head of the Strategic
Business Units (SBUs) of Social Housing, Value Added Real Estate Housing,
Individual Home Loan i.e. Retail Finance, Pradhan Mantri Awas Yogna (Urban)-
(PMAY (U)- Credit Link Subsidy Schemes (CLSS), Special Project and holding
the charge of Lucknow Regional Office. Recently, Inquiry Officer has been
nominated as Territorial Chief of Four Regional Offices and is also responsible for
the achievement of targets by taking up the matter with all Regional Offices
especially in the last quarter of the financial year, when there is much work to be
done. However, exigency which cannot be envisaged at this juncture may cause
some adjustment on the date of inquiry proceeding. As such a longer time till July,
2021 has been requested on behalf of the petitioner for conclusion of the inquiry
proceeding. He submits that the writ petition may be disposed of by interfering
with the order of learned CAT so far as the substantive directions relating to
conclusion of the departmental proceeding within a short time period of 90 days is
concerned and the condition that if the departmental proceeding is not concluded
within this time limit, HUDCO will have to release all retiral benefits to the
applicant without any delay. It is submitted that since the interim order dated 25th
September, 2019 stands affirmed by the Apex Court, the direction of learned CAT
for conclusion of the departmental proceeding within a time period of 90 days with
certain condition also effectively goes away. Therefore, a reasonable time period
may be stipulated for conclusion of the departmental proceeding. Applicant is
otherwise not eligible for payment of half leave encashment amount in view of the
submissions made above and moreover, since punishment such as
removal/dismissal from service can be imposed upon him even after
superannuation in the light of the Rule position in the HUDCO and the decision of
the Apex Court in the case of Mahanadi Coalfields Ltd. (supra).
9. Learned counsel for the applicant/respondent no. 1 has referred to the
contents of the counter affidavit filed by him on 25th October, 2019. He submits
that though learned CAT refused to interfere in the departmental proceeding but
considering the delay in its conclusion since 2018 a reasonable time limit of 90
days was stipulated, failing which, HUDCO was directed to release all his
retirement benefits without any delay. The charges relate to a period stretching
more than a decade on account of his tenure in different offices. Learned counsel
for the respondent has submitted that default in any of these schemes are also on
account of poor monitoring and lapses on the part of the Regional Chief and his
Associates while he was posted in Ranchi. All the schemes were running well in
respect of loan repayment, therefore, he is not responsible for any fault in respect
of disbursement and repayment of loan since he was never been sanctioning
authority or headed the Appraisal Committee. Applicant has throughout
cooperated in the departmental proceeding. The proceedings were initiated only 10
days before his retirement on 28th February, 2018. Mr. Thakur, learned counsel for
the respondent further submits that the proceedings have lingered not only on
account of delay in its initiation but lapses on the part of the petitioner
organization. Even after the interim stay granted by this Court to the order of
learned CAT on 25th September, 2019, proceedings remained pending. However,
respondent has been appearing before the Enquiry Officer pursuant to the order
dated 10th December, 2020 passed by this Court. He submits that the petitioner has
been taking unduly long time for its conclusion. The projected time line for
conclusion of inquiry proceeding till July 2021 is once again unreasonable.
Learned counsel for the respondent has reiterated the plea relating to payment of
half pay leave encashment amount. He further submits that the amendment to the
Service Rule does not have the legislative sanction, as it has been issued by an
office order no. 745 of 2013 dated 17th September, 2013 (Annexure-2 to the reply
of the petitioner dated 8th January, 2021).
10. We have considered the submission of learned counsel for the parties
and taken into the account the relevant material pleadings, Service Rules
applicable in HUDCO and gone through decisions rendered by the Apex Court in
the case of Mahanadi Coalfields Ltd. (Supra). This Court by interim order dated
25th September, 2019 had stayed the operative direction of learned CAT regarding
conclusion of the disciplinary proceeding within a period of 90 days hedged with
the condition that on failure to do so, HUDCO will be required to pay the
pensionary benefits to the applicant. However, this Court made it clear that the
leave encashment amount could not be withheld during pendency of the
disciplinary proceedings. This court also took note of Rule 31(A)(1) brought into
force by the amendment notified on 22nd January, 2010 to the HUDCO Conduct
Disciplinary and Appeal Rules, 1976, whereunder departmental proceedings can
be continued after superannuation but no pay or allowance would be admissible to
the concerned Charged Officer. This court had also taken note of the HUDCO
Leave Rules 14 (referred to by the writ petitioner at page-34 of the Memo of the
writ petition) which did not contemplate withholding of leave encashment amount,
except that no encashment of half leave would be allowed in case of
resignation/dismissal/termination. Taking note of the extant Rules on the subject,
it was held that petitioner HUDCO could not withhold payment of leave
encashment amount during pendency of the disciplinary proceeding. The interim
order dated 25th September, 2019 stood affirmed by the Apex Court on dismissal
of the Special Leave Petition No. 26546 of 2019 on challenge by the petitioner. In
effect, the operative direction of the learned CAT to conclude the disciplinary
proceeding within a period of 90 days was interfered with by this Court and
affirmed by the Apex Court. The disciplinary proceedings have thereafter
recommenced after lock down and the applicant/respondent herein has started
participating in the inquiry proceeding pursuant to the order dated 10 th December,
2020 passed by this Court. The departmental proceeding covering 61 charges in 14
schemes in total, could not have been concluded within a time limit of 90 days as
stipulated by learned CAT. The whole purpose of inquiry to the charges would
have been frustrated if such stipulation is allowed to stand. The issue whether
departmental inquiry can be continued after superannuation against an employee
and whether punishment of dismissal can be imposed upon the employee, if found
guilty of misconduct, has been answered in the affirmative by the Apex Court in
the case of Mahanadi Coalfields Ltd. (supra). The Apex Court in answer to
Issue no. 1 has also held therein that in such a case and the provisions of the Rule
in question ( pari materia to the Rules applicable in HUDCO Organization)
punishments, which are prescribed under the disciplinary Rules, minor as well as
major both can be imposed. Apart from that, it was held that recovery can also be
made of the pecuniary loss caused as per Rule 34.3 of the CDA Rules, which takes
care of the provisions under Sub Section 6 of Section 4 of the Payment of Gratuity
Act, 1972. Recovery is in addition to a punishment that can be imposed after
attaining the age of superannuation The legal fiction provided in the Rules of
deemed continuation in service has to be given full effect. The Apex Court at
Paras- 69, 70 and 71 of the majority judgment, has held as under:
"69. In view of the various decisions, it is apparent that under Rule 34.2
of the CDA Rules inquiry can be held in the same manner as if the
employee had continued in service and the appropriate major and minor
punishment commensurate to guilt can be imposed including dismissal
as provided in Rule 27 of the CDA Rules and apart from that in case
pecuniary loss had been caused that can be recovered. Gratuity can be
forfeited wholly or partially.
70. Several service benefits would depend upon the outcome of the
inquiry, such as concerning the period during which inquiry remained
pending. It would be against the public policy to permit an employee to
go scot-free after collecting various service benefits to which he would
not be entitled, and the event of superannuation cannot come to his
rescue and would amount to condonation of guilt. Because of the legal
fiction provided under the rules, it can be completed in the same manner
as if the employee had remained in service after superannuation, and
appropriate punishment can be imposed. Various provisions of the
Gratuity Act discussed above do not come in the way of departmental
inquiry and as provided in Section 4(6) and Rule 34.3 in case of
dismissal gratuity can be forfeited wholly or partially, and the loss can
also be recovered. An inquiry can be continued as provided under the
relevant service rules as it is not provided in the Payment of Gratuity
Act, 1972 that inquiry shall come to an end as soon as the employee
attains the age of superannuation. We reiterate that the Act does not
deal with the matter of disciplinary inquiry, it contemplates recovery from
or forfeiture of gratuity wholly or partially as per misconduct committed
and does not deal with punishments to be imposed and does not
supersede the Rules 34.2 and 34.3 of the CDA Rules. The mandate of
Section 4(6) of recovery of loss provided under Section 4(6)(a) and
forfeiture of gratuity wholly or partially under Section 4(6)(b) is furthered
by the Rules 34.2 and 34.3. If there cannot be any dismissal after
superannuation, intendment of the provisions of Section 4(6) would be
defeated. The provisions of section 4(1) and 4(6) of Payment of Gratuity
Act, 1972 have to be given purposive interpretation, and no way interdict
holding of the departmental inquiry and punishment to be imposed is not
the subject matter dealt with under the Act.
71. Thus considering the provisions of Rules 34.2 and 34.3 of the CDA
Rules, the inquiry can be continued given the deeming fiction in the
same manner as if the employee had continued in service and
appropriate punishment, including that of dismissal can be imposed
apart from the forfeiture of the gratuity wholly or partially including the
recovery of the pecuniary loss as the case may be."
11. Apparently, if an inquiry can be held in the same manner as if the
employee had continued in service as is the position in the present case, an
appropriate major and minor punishment commensurate to guilt can be imposed
including dismissal as provided in Rule 14(1) (A) of the Leave Pay Rules referred
to by learned counsel for the petitioner. The reason for such an interpretation is
that several service benefits would depend upon the outcome of the inquiry, such
as concerning the period during which inquiry remained pending. The Apex Court
has held that it would be against the public policy to permit an employee to go
scot-free after collecting various service benefits to which he would not be
entitled, and the event of superannuation cannot come to his rescue and would
amount to condonation of guilt. Because of the legal fiction provided under the
Rules, it can be completed in the same manner as if the employee had remained in
service after superannuation, and appropriate punishment can be imposed. In
reference to the provisions of Payment of Gratuity Act, 1972 vis-à-vis the Service
Rules governing the disciplinary inquiries, the Apex Court at Para-70 of the
judgment has reiterated that the Act of 1972 does not deal with the matter of
disciplinary inquiry. It contemplates recovery or forfeiture of gratuity wholly or
partially as per misconduct committed and does not deal with the punishments to
be imposed and does not supersede the Rules 34.2 and 34.3 of the CDS Rules. The
mandate of Section 4(6) of recovery of loss provided under Section 4(6) (a) and
forfeiture of gratuity wholly or partially under Section 4(6)(b) is furthered by the
Rules 34.2 and 34.3 of the CDA Rules. If there cannot be any dismissal after
superannuation, intendment of the provisions of Section 4(6) would be defeated.
The provisions of Section 4(1) and 4(6) of Payment of Gratuity Act, 1972 have to
be given purposive interpretation, and no way interdict holding of the
departmental inquiry and punishment to be imposed is not the subject matter dealt
with under the Act of 1972.
12. The Rule 31(A)(1) of HUDCO Conduct Disciplinary and Appeal Rules,
1976 and Rule 14 (1) (A) of the HUDCO Leave Rules applicable to the present
case are being quoted hereunder for proper appreciation. It by a deeming fiction
permits disciplinary proceedings to be continued against an employee who has
superannuated.
" Rule 31(A)(1): The officer against whom disciplinary
proceedings have been initiated will cease to be in service on
the date of superannuation but the disciplinary proceedings
will continue as if he/she was in service until the
proceedings are concluded and final order is passed in respect
thereof. The concerned officer will not receive any pay and/or
allowance after the date of superannuation. He/She will also
not be entitled for the payment of retirement benefits till the
proceedings are completed and final order is passed thereon
except (employer & employee) contribution to CPF."
Rule 14(1)(A): "The half pay leave account of every employee
shall be credited with half pay leave in advance, in two
instalments of ten days each on the first day of January and
July of every calendar year. Further, the Unavailed Half pay
can be carried forward from year to year and accumulated
without any limit. However, at the time of
retirement/voluntary retirement/death such accumulated leave
can be considered for encashment subject to overall limit of
300 days (including earned leave). The cash equivalent
payable to half pay leave would be equal to leave salary as
admissible for half pay plus DA. To arrive at half pay salary,
the calculation followed in case of earned leave will be
adopted. However, in order to take up the shortfall in Earned
Leave, no commutation of Half pay leave would be
admissible. No encashment of half pay leave will be allowed
in case of resignation/dismissal/termination.
As such, punishments, which are contemplated under the departmental
Rules can also be imposed after retirement of the employee on conclusion of such
a disciplinary proceeding. It is contemplated under Rule 14 (1)(A) of HUDCO
Leave Rules that no encashment of half leave will be allowed in case of
resignation/dismissal/termination. Those could be a contemplated penalty, in case
disciplinary proceeding ends up in the indictment of the employee/Charged
Officer.
13. In those circumstances, the plea raised by the respondent that half pay
leave encashment could not have been withheld not only stood answered by virtue
of the order dated 25th September 2019 passed by this Court and affirmed up to the
Apex Court but also upon re-appreciation of the Rule position in this regard in the
HUDCO Organization in the light of the decision of Mahanadi Coalfields Ltd.
(Supra) as well.
14. We are not convinced with the submission of the learned counsel for
the respondent that there is no legislative sanction to the amendment to the Leave
Rules. A bare perusal of the notification contained at Annexure-2, office order
dated 745 of 2013 dated 17th September, 2013 to the affidavit dated 8th January
2021, shows that such an amendment has been effected by a conscious decision of
the Board of Directors in its 521st meeting held on 12th September, 2013. The
office order under the signature of the executive direction (HE) is only a
ministerial act notifying amendment to the Rules. Therefore, such a plea does not
have any force in the eye of law.
15. Petitioner has projected a time line up to end of July, 2021 for
conclusion of the disciplinary proceedings giving the details of the charges to be
inquired into in respect of different 14 schemes, the number of witnesses to be
examined and likely to be cross-examined by the charged employee/respondent,
the time to be taken by the Presenting Officer to present his brief/report and
thereafter the time of one month for inquiry officer for submission of the inquiry
report. Leaned counsel for the petitioner has conveyed that considering the number
of charges concerning 14 different schemes and involving financial irregularities,
due regard has been paid to the observance of proper procedure and principles of
natural justice, so that the rights of the delinquent employee are not denied by
concluding the proceeding in a hurried manner.
16. We have given anxious thought to the projected time line proposed by
the petitioner. No doubt, there are 61 charges in total arising out of 14 schemes to
be inquired into. However, we are of the view that the inquiry proceedings can be
concluded after following proper procedure and due observance of principles of
natural justice as well within a period of 5 months, of course, the Charged
Officer/respondent no. 1 also fully cooperating in the proceedings. The petitioner
can rework the schedule and ensure that the proceedings are concluded in a time
bound manner within the aforesaid time. It cannot be lost sight of that the
proceedings have been initiated in 21st February, 2018. As such, the petitioner is
required to conclude the disciplinary proceedings within a period of 5 months,
preferably by end of June, 2021. The applicant/respondent shall cooperate in the
proceedings. On failure to do so, it would be open for the inquiry officer and the
disciplinary authority to proceed in the matter in accordance with law. The order
of learned CAT to that extent is interfered with.
17. Writ petition is partly allowed in the manner and to the extent indicated
hereinabove.
(Aparesh Kumar Singh, J.)
(Anubha Rawat Choudhary, J.)
Jk
