Madras High Court
Now Changed As Union Of India vs R.Sankaranarayanan on 12 September, 2023
W.P.No.7562 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated 12.09.2023
CORAM:
THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR
THE HONOURABLE R.JUSTICE P.B.BALAJI
W.P.No.7562 of 2021 and
WMP No.8081 of 2021
Union of India, rep. by the Commissioner,
Large Tax Payer Unit (LTU),
Anna Nagar West Extension,
Chennai 600 101.
Now changed as Union of India,
rep. by the Assistant Commissioner,
O/o the Commissioner of Central Good and
Service Tax & Central Excise,
Chennai South GST Commissionerate,
692, MHU Complex, Anna Salai,
Chennai 600 035. ... Petitioner
Vs.
1.R.Sankaranarayanan
2. The Registrar, Central Administrative Tribunal,
Madras Bench, Additional City Civil Court Building.
High Court Campus, Chennai 600 104. .. Respondents
Page 1 of 19
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Prayer : Writ petition filed under Article 226 of the Constitution of
India seeking to issue a writ of certiorari and quash the order of the
Central Administrative Tribunal, Chennai Bench dated 30.10.2018 in
O.A.No.310/00517/2017.
For Petitioner : Mr.Rajnish Pathiyil,
Senior Panel Counsel
For Respondents : Mr. Memon Karthik Mukundan
Neelakandan for first respondent
ORDER
(Order of the Court was delivered by D.KRISHNAKUMAR, J.)
This writ petition has been filed by the Union of India to quash
the order passed by the Central Administrative Tribunal, Chennai
Bench, dated 30.10.2018 in O.A.No.310/00517/2017, wherein, the
impugned charge memo dated 23.02.2017, issued against the first
respondent has been quashed by the Tribunal.
2. The brief facts leading to the filing of the writ petition is as
follows.
The petitioner is the Union of India and the first respondent
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herein was working as a Senior Intelligence Officer (SIO), on
deputation, in the office of the Directorate General of Central Excise
Intelligence (DGCEI), Chennai Zonal Unit from 01.07.2003 to
29.08.2008. While he was in duty, he had investigated a case of duty
evasion by M/s Industrial & Power Solutions, Ramapuram and he had
conducted a search at the premises on 24.07.2007 and seized certain
goods taxable under Excise Duty Laws. Further, he had prepared a
draft show cause notice under the rules and forwarded to the Additional
Director, Chennai Zonal Unit on 22.08.2008 for approval and he had
also noted in the file that there could be a service tax evasion, which
needed further investigation. As the period of deputation came to an
end on 29.08.2008, the first respondent was relieved from his duties as
SIO at DGCEI, Chennai, vide order dated 27.08.2008 and he was
directed to hand over all the case files that he had attended, to his
successor Mr.P.Srinivasan. The said Successor Mr.P.Srinivasan had
modified the draft show cause notice prepared by the first respondent
and placed the same for approval of the Additional Director. In such
circumstances, the first respondent was issued with a charge memo
dated 23.02.2017, alleging that he was not monitoring the case or its
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W.P.No.7562 of 2021
investigations in relation to M/s Industrial & Power Solutions and due
to non issuance of the show cause notice, there occurred a loss of Rs.15
Lakhs to the Government. Therefore, he filed O.A.No.517/2017 before
the Central Administrative Tribunal, Madras Bench to quash the above
said charge memo. The Tribunal, vide order dated 30.10.2018, had
allowed the application and quashed the charge memo. Challenging the
above said order, the Union of India, has filed the present writ petition.
3. The learned counsel for the petitioner submitted that, the first
respondent, in his file notes -XVII dated 23.01.2008, had mentioned
about the service tax issue, in the case of M/s Industrial & Power
Solutions, Chennai. However, he has not taken any further follow up
with regard to the service tax issue and also had not mentioned about
the same while submitting the draft show cause notice. He further
submitted that, the non issuance of show cause notice in the case of M/s
Industrial & Power Solutions, Chennai was came to the light, only after
the assessee made a representation during October 2014 to the
Chairman, CBEC, New Delhi and after a writ petition filing by him
before this Court. Therefore, after coming to know about the
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W.P.No.7562 of 2021
irregularities on the part of the first respondent, the charge memo was
issued on 23.02.2017. The specific allegation as against the first
respondent is that, he has not monitored the case and proceedings and
has not followed up the issue of service tax and inview of the same, a
loss to the tune of Rs.15 Lakhs occurred to the Government.
3.1. The learned counsel for the petitioner further submitted that,
though there is a delay on the part of the petitioner in issuing the charge
memo, the reasons for the delay was properly explained by the
petitioner, therefore, by accepting the reasons assigned for the delay,
the Tribunal ought to have ordered to proceed the enquiry proceedings.
But it has not been considered by the Tribunal in proper perspective
and following the decision of the Hon'ble Supreme Court in
P.V.Mahadevan Vs.MD.T.N.Housing Board (2205) 6 SCC 636, the
Tribunal has quashed the charge memo on the ground of delay and
laches. Therefore, the order passed by the Tribunal is liable to be set
aside.
4. The learned counsel for the first respondent submitted that,
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W.P.No.7562 of 2021
the first respondent was working as Senior Intelligence Officer (SIO) in
Directorate General of Excise Intelligence (DGCEI), Chennai on
deputation from 01.07.2003 to 29.08.2008 and during this period, a
search was made by him on 24.07.2007 at the premises of M/s
Industrial & Power Solutions, Ramapuram, Chennai with regard to the
evasion of central excise duty and certain records and excisable goods
were seized. He further submitted that, the first respondent had
prepared a draft show cause notice on 22.08.2008, however, he was
relieved from duty on 29.08.2008, at the investigation stage itself and
he had handed over all the files, that he had attended, to his successor,
who in turn completed the investigation and took action to issue a show
cause notice. Therefore, the allegation that there was omission to
monitor the case does not arise. He also submitted that, though the
charges relating to the incident took place in the year 2008, charge
memo was issued on 23.02.2017, after an inordinate delay of 9 years.
As such, the Tribunal has considered the case in proper perspective and
has rightly quashed the impugned charge memo, which does not
warrant any interference by this court and hence, he prayed for
dismissal of the writ petition.
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5. Heard the learned counsel for the petitioner and the learned
counsel for the first respondent.
6. The impugned charge memo, issued as against the first
respondent, dated 23.02.2017, is extracted as under.
Statement of article of charges framed against Shri
R.Sankaranarayanan, Superintendent of Central Excise,
Chennai, the then Senior Intelligence Officer, DGCEI,
Chennai Zonal Unit.
Article-I
That Shri R.Sankaranarayanan, Superintendent of Central
Excise, Chennai was earlier working as Senior Intelligence
Officer, DGCEI, Chennai Zonal Unit.
Shri R.Sankaranarayanan, while working as Senior
Intelligence Officer, DGCEI, Chennai Zonal Unit, along with
others, had attended to the works relating to investigation in
respect of an offence case registered against M/s Industrial and
Power Solutions, Chennai, for alleged non-payment of Central
Excise duty on the Excisable goods manufactured by them. The
case was initiated and investigated by Shri R.Sankaranarayanan,
the then SIO and Shri S.Arulamudu, the then IO under Shri
E.Annadurai and Shri L.Vasu, Assistant Directors. Shri
R.Sankaranarayanan (SIO), who investigated the case, after
submitting the draft show cause notice on 22.08.2008, was
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relieved on 31.08.2008. He had put up the draft show cause
notice on 22.08.2008. At NS XVII, he had stated " during the
same period, I & PS engaged M/s Sathya Engineering Consultant
as sub-contractors to carry out Epoxy cladding of condenser at
Thermal Power Stations, which falls under Maintenance and
Repair Services. Investigations is being carried out on service tax
angle." On verification from the SCN Register, it is seen that
SCN No.77/2010 dated 24.12.2010 had been allotted in respect
of the case pertaining to service tax on M/s I & PS and the
amount involved had been mentioned as 15 lakhs. However, no
such file seems to have been put up and no such file could be
found in the unit. This proves that the controlling officer was
not monitoring the case and / or its proceedings. On account of
the same, there has been a clear loss o revenue of Rs.15 Lacs as
no show cause notice appears to have been issued. Thus, it is
evident that the issue pertaining to service tax had not been
followed up and no SCN submitted for the case.
Thus, Shri R.Sankaranarayanan, Superintendent of
Central Excise, Chennai had failed to maintain devotion to duty
and acted in a manner unbecoming of a government servant in as
much as he had violated Central Civil Services (Conduct) Rules,
1964 contravening the provisions of Rules 3(1)(ii) and (iii) of
Central Civil Services (Conduct) Rules, 1964.
By the above acts of commission and omission, Shri
R.Sankaranarayanan, Superintendent of Central Excise, Chennai
has rendered himself liable for penal action under Rule 14 of
Central Civil Services (Classification, Control and Appeal) Rules,
1965.
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7. As against the above charge memo, the first respondent had
filed the O.A.No.517/2017 before the Tribunal. In the above said
application, the writ petitioner herein has also filed a detailed counter
affidavit by narrating the entire facts.
8 Now, the points to be considered are that,
i) Whether the first respondent has not monitored the case of M/s
Industrial and Power Solutions and its proceedings, during his tenure,
thereby causing revenue loss to the government.
ii) Whether the charge memo, dated 23.02.2017, issued after an
inordinate delay of 9 years, to be ordered to be prosecuted?
9. Point No.1
According to the first respondent, after conducting search on M/s
Industrial & Power Solution, Chennai on 24.07.2007 and seizing
certain records and excisable goods, he had conducted the investigation
on central excise angle and subsequently, he found that the above said
company had engaged M/s Sathya Engineering consultants as sub-
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W.P.No.7562 of 2021
contractors to carry out epoxy cladding of condenser at Thermal Power
Stations, which falls under maintenance and repair services and hence,
there could be a service tax evasion. Therefore, he prepared a draft
show cause notice on 22.08.2008 and forwarded it for getting approval
to the Additional Director, Chennai Zonal Unit and had made an entry
in the note file that, there could be evasion of service tax by the
company, which needed further investigation. In such circumstances,
the first respondent was called back to his parental unit, vide order
dated 27.08.2008 and his tenure of deputation was ended on
29.08.2008 and he had handed over all the case files to his successor
Mr.P.Srinivasan. The above facts were not denied by the writ petitioner.
9.1. It is to be noted that the first respondent had prepared only
a draft show cause notice and had sent it for approval to the authorities
concerned and thereafter, his successor, namely Mr.P.Srinivasan has
modified the said show cause notice and had placed it for approval.
Therefore, it is for his successor to get approval of the show cause
notice and to issue to the tax evasor. The records filed by the writ
petitioner itself shows that, in respect of M/s Industrial and Power
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Solution, Chennai, the show cause notice was approved only on
30.12.2010 by allotting SCN No.77/2010. At the time of approval of
show cause notice, the first respondent had not been worked in the
above said unit. However, for the search conducted on 24.07.2007, the
impugned charge memo was issued to the first respondent on
23.02.2017, alleging that the issue of service tax had not been
monitored and followed up and no show cause notice was submitted.
Therefore, without verifying the relevant factors and records, the
Department had issued the charge memo and the Tribunal has rightly
observed that there is a lack of application of mind on the part of the
disciplinary authority in initiating the proceedings.
10. Point No.2
The another aspect to be considered in the present writ petition is
that, the charge memo was issued on 23.02.2017, after a lapse of 9
years from the date of incident that happened in the year 2008. The
above aspect was duly considered by the Tribunal and has rightly
observed that no satisfactory explanation was given for the delay of 9
years, after relieving the officer from his post to initiate disciplinary
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proceedings. Therefore, by relying upon the decision of the Hon'ble
Supreme Court in P.V.Mahaevan Vs. MD., T.N.Housing Board
reported in 2005(6) SCC 636, (wherein, the Apex Court, in a similar
case, has held that allowing disciplinary proceedings, after a long
gap of time will be prejudicial to the delinquent officer and has
quashed the proceedings) the Tribunal has come to the conclusion that
permitting the Department to continue with the disciplinary
proceedings, as per the charge memo will be against the principles of
natural justice and hence, quashed the charge memo.
11. At this juncture, the learned counsel for writ petitioner
submitted that, charge memo cannot be quashed on the ground that the
proceedings have been initiated at a belated stage. To support his
contentions, he has relied upon a decision of the Hon'ble Supreme
Court in Secretary, Ministry of Defence and others vs. Prabhash
Chandra Mirdha reported in (2012) 11 Supreme Court Cases 565,
particularly paragraph no.12, wherein it is observed as follows.
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“ Thus, the law on the issue can be summarised to the effect that
the charge-sheet cannot be generally be a subject-matter of
challenge as it does not adversely affect the rights of the delinquent,
unless it is established that the same has been issued by an authority
not competent to initiate the disciplinary proceedings. Neither the
disciplinary proceedings nor the charge-sheet be quashed at an
initial stage as it would be a premature stage to deal with the issues.
Proceedings are not liable to be quashed on the grounds that
proceedings had been initiated at a belated stage or could not be
concluded in a reasonable period, unless the delay creates prejudice
to the delinquent employee. Gravity of alleged misconduct is a
relevant factor to be taken into consideration while quashing the
proceedings.
12. The learned counsel for the petitioner has also relied upon the
another decision of the Hon'ble Supreme Court in Chairman, Life
Insurance Corporation of India and others Vs. A.Masilamani
reported in 2013(6) Supreme Court Cases 530, wherein, at paragraph
No.18, it has been stated thus.
“ The court/tribunal should not generally set aside the departmental
enquiry, and quash the charges on the ground of delay in initiation
of disciplinary proceedings, as such a power is dehors the limits of
judicial review. In the event that the court/tribunal exercises such
power, it exceeds its power of judicial review at the very threshold.
Therefore, a charge sheet or show cause notice, issued in the course
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of the disciplinary proceedings, cannot ordinarily be quashed by the
court. The same principal is applicable in relation to there being a
delay in conclusion of disciplinary proceedings. The facts and
circumstances of the case in question have to be examined taking
into consideration the gravity/magnitude of charges involved
therein. The essence of the matter is that the court must take into
consideration all relevant facts and to balance and weigh the same,
so as to determine if it is in fact in the interest of clean and honest
administration, that the judicial proceedings are allowed to be
terminated only on the ground of delay in their conclusion.
13. The above said judgments of the Apex Court are not helping
the case of the writ petitioner. Because, admittedly, the delay in issuing
charge sheet had created prejudice to the first respondent, as he had
already prepared a draft show cause notice and forwarded to the
approval officer on 22.08.2008. Thereafter, he was relieved from the
deputation duty, vide order dated 27.08.2009 and his deputation period
was ended on 29.08.2008. A perusal of the records shows that the
above said show cause notice was returned to the unit and it was
modified and forwarded by the successor, viz., Mr.P.Srinivasan to the
Additional Director at CHZU for approval. Subsequently, the show
cause notice was approved only on 30.12.2010. It is to be mentioned
that, there is no materials placed on the side of the Department to prove
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that the first respondent was responsible for the loss occurred to the
Government.
14. At this juncture, it is useful to rely upon a decision of this
Court in W.P.No.15090 & 15164 of 2021 dated 30.08.2022
(K.Radhakrishnan and another Vs. Tamil Nadu Generation and
Distribution Corporation Limited and others), wherein, it is held as
follows.
14. Inordinate delay in initiating Disciplinary Proceedings:
In the instant case, the 3rd respondent had issued charge memo on
14.06.2019 and initiated disciplinary proceedings on the very same
set of facts and evidence after the lapse of 11 years from the date of
occurrence and nearly two years from the date of acquittal in the
criminal case. The 3rd respondent ought to have levelled all the
charges against the petitioner at the same time. The delay in initiating
and proceeding with the departmental proceedings prejudicially
affects the delinquent employees. Further, in the counter affidavit
filed by the 3rd & 4th respondents, no valid reasons are mentioned for
the inordinate delay of 11 years in commencing the disciplinary
proceedings against the petitioners.
14.1 Since the proposition of law laid down by the Hon'ble
Supreme Court that there cannot be inordinate delay in initiating
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disciplinary proceedings, which has also been followed by the
Hon'ble Division Bench of this Court, as stated above, is squarely
applicable to the facts of the case on hand, where the disciplinary
proceedings were initiated after 11 years of framing charges for
receipt bribe.
14.2 In this context, it is pertinent to rely upon the decision of the
Hon'ble Supreme Court in Noida Entrepreneurs Association vs.
Noida and others reported in 2007 (5) AIC 37 as well as the
Hon'ble Division Bench of this Court in the case of V.Boopathy vs.
Unioin of India (W.P.No.26664 of 2014 dated 01.04.2015),
wherein the Hon'ble Division Bench of this Court at paragraph
No.17 held as follows:-
“17. In the above said facts and
circumstances, it can be very well said that the
initiation of the disciplinary proceedings by the
issuance of the Charge Memo dated 18.12.2013
shall cause serious prejudice to the petitioner
leading to miscarriage of justice. Delay of more
than 16 years, a considerable part of which has not
been satisfactory explained, will result in serious
prejudice to the petitioner leading to miscarriage of
justice. Hence we are inclined to accept the
contention of the petitioner. In this regard, the
Tribunal seems to have misguided itself in
appreciating and applying the instructions given in
the Compendium on Postal Complaints, 1998. We
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are unable to agree with the reasons assigned by the
Tribunal for the dismissal of the Original
Application. We are of the considered view that the
case on hand is a fit one for quashing the
departmental proceedings.”
Therefore, as per the ratio laid down in the above decisions as well as in
the decision of the Apex Court in P.V.Mahadevan Vs.
MD.T.N.Housing Board (2205) 6 SCC 636, we have no hesitation to
hold that the delay in initiating and proceeding with the departmental
proceedings prejudicially affects the delinquent employees and as such,
the charge memo issued against the first respondent cannot be allowed
to be prosecuted, as the same is against the principles of natural justice.
Further, considering all the facts and circumstances of the case, the
Tribunal has rightly quashed the charge memo on the ground of delay
and laches also and we find no reason to interfere with the order passed
by the Tribunal.
15. Inview of the elaborate discussions made in the foregoing
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paragraphs, the point No.1 and 2 are answered in negative as against
the writ petitioner and hence, the writ petition deserves for dismissal.
16. Accordingly, this writ petition is dismissed. No costs.
Consequently, connected miscellaneous petition is closed.
(D.K.K., J.) (P.B.B., J.)
12.09.2023
Index:Yes/No
Internet:Yes/No
mst
To
1. The Assistant Commissioner, Union of India,
O/o the Commissioner of Central Good and
Service Tax & Central Excise,
Chennai South GST Commissionerate,
692, MHU Complex, Anna Salai, Chennai 600 035.
2. The Registrar, Central Administrative Tribunal,
Madras Bench, Additional City Civil Court Building.
High Court Campus, Chennai 600 104.
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W.P.No.7562 of 2021
D. KRISHNAKUMAR, J.
AND
P.B.BALAJI, J.
mst
W.P.No.7562 of 2021
12.09.2023
https://www.mhc.tn.gov.in/judis
