G. Srihari Naidu, vs The Union Of India,
2024 Latest Caselaw 3525 Tel

Telangana High Court

G. Srihari Naidu, vs The Union Of India, on 2 September, 2024

Author: Abhinand Kumar Shavili

Bench: Abhinand Kumar Shavili

  HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI
                       AND
 HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

                WRIT PETITION NO.7922 OF 2019

ORDER:

(per Hon'ble Sri Justice Laxmi Narayana Alishetty)

This Writ Petition is filed aggrieved by the order passed

by the Central Administrative Tribunal, Hyderabad Bench,

Hyderabad, in O.A.No.780 of 2012, dated 19.09.2018.

2. Heard Sri J.Sudheer, learned counsel for petitioner and

the learned Deputy Solicitor General of India appearing for

respondents.

3. The brief facts leading to filing the present writ petition

are as under:

3.1. While the petitioner was working as Superintendent,

Bolarum III Range of Hyderabad-1 Commissionerate, he was

issued with charge sheet, dated 27.04.2006 alleging that during

the period from 21.05.2002 to 31.05.2003, he did not exercise

proper control over the affairs of the factory of M/s. Handum

Industries Limited (HIL), a 100% Export Oriented Unit (EOU), AKS,J & LNA,J

having factory at Medak District, manufacturing re-rolled

products such as M.S.Rods, Bars, Flats, Channels, Angles etc. It

was contended that M/s.HIL imported duty free raw materials

viz., non-alloy steel blooms, billets, slabs and Ingots etc., and

diverted the same to DTA without actually bringing the

products to the factory for their intended use; that the

petitioner accommodated the assessee in filing the fabricated

ER-2 returns for the month of March, 2003, showing clearance

of their finished goods to the tune of 14,286.790 Metric Tonnes,

which is in contradiction to the quantities in the production

registers recovered by the Department of Revenue Intelligence

(DRI) Officers during the search operation in the factory

premises.

3.2. It was contended that the fabricated returns were

antedated and acknowledged by the petitioner as 07.04.2005

and this was done to scuttle the case registered by the DRI

against the said firm. Thus, the applicant failed to maintain

absolute integrity and devotion to duty and acted in a manner

which is unbecoming of a Government servant and therefore, AKS,J & LNA,J

he has rendered himself liable for action under Rule 14 of the

CCS (CCA) Rules, 1965. The petitioner submitted his

explanation to the charge memorandum denying the charges

levelled against him. On denial of charges, an Inquiry Officer

was appointed and after due enquiry, the Inquiry Officer held

that the charge of accommodating the assessee namely, M/s

HIL by acknowledging that the ER-2 return for the month of

March 2003, had been antedated was proved, however, held

that the charge that he did not exercise proper control over the

affairs of the factory M/s HIL, 100% EOU, was not proved.

Accordingly, it was held that the petitioner contravened Rule 3

(1) (i), (ii) and (iii) of the CCS (Conduct) Rules, 1964. The

Disciplinary Authority, after considering the representation of

the petitioner, imposed a major penalty of reduction by four

stages in time scale of pay equivalent to four increments from

Rs.22,630/- to Rs.19,490/- in PB-II i.e., Rs.9,300-34,800/- for a

period of 3 years and 6 months with effect from 02.02.2010.

4. Aggrieved by the order of the Disciplinary Authority, the

petitioner preferred an appeal before the Appellate Authority AKS,J & LNA,J

contending that the Inquiry Officer and the Disciplinary

Authority had relied entirely upon the statement of Sri

P.V.Ramana Reddy, dated 10.01.2004 and Shri Shaik Meera

Mohiddin, dated 16.02.2004, which were recorded under

Section 108 of the Customs Act, 1962 by the DRI behind his

back.

5. The Appellate Authority, by Order dated 23.05.2012

rejected the appeal preferred by the petitioner, confirming the

penalty imposed upon him by the Disciplinary Authority.

Aggrieved by the order dated 23.05.2012 of appellate authority,

the petitioner approached the Tribunal by filing O.A.No.780 of

2012 and the Tribunal was pleased to dismiss the said O.A.,

vide order dated 19.09.2018. Aggrieved by the order of

Tribunal, petitioner filed the present writ petition.

6. It has been contended by the learned counsel for

petitioner that Sri Prasad Rao was the Presenting Officer

before the Inquiry Officer and for the reasons best known to

him, he had examined only one witness i.e., Managing Director

of M/s.HIL. The said witness was cross-examined during the AKS,J & LNA,J

enquiry and he categorically stated that the facts given in the

statement dated 10.01.2004 are not true and the contents of

statement were recorded by the senior Intelligence Officer, DRI

under duress and coercion. He further stated that nothing has

been fabricated and the allegations leveled against the

petitioner are not true and correct.

7. It has been contended that Management Witness i.e.,

Shaik Meera Moinuddin, was not produced for obvious

reasons; that the Management has examined the company

officers, viz., Surya Narayana and Suleman, whose evidence

corroborate that petitioner has not violated any rule nor

antedated ER-2 returns; that the witness who was examined on

behalf of respondent Management categorically stated that

ER-2 return was submitted within the stipulated time in the

month of March, 2003. However, the respondent authorities

without considering the evidence of witnesses, who were

examined on behalf of the respondent-Management, has only

relied upon the statements of P.V.Ramana Reddy and Shaik

Meera Mohiuddin, which were recorded by the DRI and AKS,J & LNA,J

therefore, the findings recorded by the Inquiry Officer that

charge no.2 is proved is contrary to law and perverse finding.

8. It has been contended by the learned counsel for

petitioner that non-production of witnesses by the Department

is fatal to the allegation leveled against the petitioner; that the

Tribunal erred in not taking into consideration the relevant

facts and the material on record, and dismissed the O.A.,

without objectively considering the legal contentions raised by

the petitioner, upholding the punishment imposed by the

respondents, which would have cumulative effect on his

pension consequent to his retirement on 31.08.2013; that on

account of harsh and capital punishment, his retirement

benefits would be affected and was also denied promotion to

the next cadres.

9. It has been further contended that once the regular

enquiry is conducted, the statements recorded in the

preliminary enquiry cannot be looked into until and unless the

witnesses were examined in the regular enquiry, however, the

Inquiry Officer relied upon the statements recorded in AKS,J & LNA,J

preliminary enquiry, which is contrary to law laid down by the

Hon'ble Apex Court. Therefore, the charges leveled against

petitioner are not proved by any legal evidence on record and

thus, the punishment imposed is untenable and unsustainable

in law and finally, prayed to set aside the impugned order

dated 19.09.2018 and allow the writ petition.

10. Learned Deputy Solicitor General of India appearing for

respondents had contended that there is no violation of the

principles of natural justice as the petitioner was given

reasonable opportunity to present his case during the enquiry

proceedings; that the present writ petition is not maintainable

in view of settled legal proposition that judicial review is not

akin to adjudication on merit by re-appreciating the evidence

as an appellate authority. It has been contended that

respondents have followed the requisite procedure while

recording the statements of witnesses; that the contention of

the petitioner that there is no legal evidence on record to

substantiate the charge is devoid of merit; that the Disciplinary

Authority/Appellate Authority has considered the evidence on AKS,J & LNA,J

record and passed a reasoned speaking order appreciating the

evidence to prove the charges leveled against the petitioner,

which was also upheld by the Tribunal and finally, contended

that there are no merits in the writ petition and same is liable to

be dismissed.

11. In support of the contention, learned Deputy Solicitor

General placed reliance on the following decisions:

i) K.I.Pavunny vs. Assistant Collector (HQ), Central Excise Collectorate 1;'

ii) Naresh J.Sukhawani vs. Union of India2;

iii) Surjeet Singh Chhabra vs. Union of India 3;

iv) Illias vs. Collector of Customs,Madras 4;

v) Vinod Solanki vs. Union of Inida5;

vi) P.Pratap Rao Sait vs. Collector of Customs, Cochin 6;

vii) Union of India and others vs. Ashok Kumar and others 7;

viii) Bijoy Ghosh vs. Union of India and others 8;

ix) Senior Superintendent of Post Offices vs. A.Gopalan 9;

(1997) 3 SCC 721

1995 Supp (4) SCC 663

(1997) 1 SCC 508

1968 SCC Online SC 117

(2008) 16 SCC 537

1987 SCC Online CEGAT 821

(2005) 8 SCC 760

WP No.16550 of 2004 of Delhi High Court

(1997) 11 SCC 239 AKS,J & LNA,J

x) Sunil Kumar Banerjee vs. State of West Bengal and others 10

12. Perusal of the material placed on record would show that

petitioner was issued a charge memo dated 27.04.2006 on the

allegation that he did not exercise proper control over the

affairs of the factory of M/s.HIL; that he accommodated the

assessee in filing fabricated ER-2 returns for the month of

March, 2003 showing clearance of their finished goods to the

tune of 14286.790 MTs, which is in contradiction to the

quantities indicated in the production registers recovered by

the DRI officer during the search at the premises of M/s. HIL

and to scuttle away the case registered by DRI and that the said

fabricated returns for the month of March, 2003 was antedated

and acknowledged by the petitioner as 07.04.2005.

13. On denial of the charges by the petitioner, an Inquiry

Officer was appointed and the Inquiry Officer on inquiry held

that the charge of accommodating the assessee viz., M/s.HIL

by acknowledging that the ER-2 return for the month of March,

2003 has been antedated was proved, however the charge that

(1980) 3 SCC 304 AKS,J & LNA,J

he did not exercise proper control over the affairs of the factory

M/s. HIL, was not proved. The Disciplinary Authority, after

considering the inquiry report dated 26.12.2008 and on

considering the representation of the petitioner, imposed the

penalty vide order dated 02.02.2010. The appeals, preferred

against the disciplinary authority dated 02.02.2010 and later,

before the Tribunal, were rejected vide orders dated 23.05.2012

and 19.09.2018, respectively, and upheld the penalty imposed

upon the petitioner by the Disciplinary Authority.

14. Perusal of the oral evidence and the material placed on

record would show that the charges levelled against the

petitioner are based on the statements recorded before the

Customs Officer and the material placed on record. The

Inquiry Officer followed due procedure in conducting the

inquiry; that the Inquiry Officer relied upon the substantive

documentary evidence on record and revealed that "1) there

were differences in manufacturing figures shown in RG-1

register and invoices seized by DRI and ER-2 return filed;

2) No ER-2 returns were forwarded by the petitioner to DRI AKS,J & LNA,J

when files pertaining to M/s.HIL were resumed by the DRI;

and 3) M/s.HIL had used invoices from Sl.Nos.1-872 in the

month of March, 2003 without intimation to the Range Officer,

when compared to use of invoices bearing Nos.1 to 45 for 11

months (April, 2002 to February, 2003).

15. From the above observations, it is established that after

DRI raided the premises of M/s.HIL, M/s.HIL in connivance

with the petitioner, had manipulated a separate G-I Register

for deemed exports to claim enhanced manufacturing in

comparison of the figures reflected in RG-I register to weaken

the case registered by the DRI and thereby the petitioner is

found guilty of active connivance in helping M/s.HIL to

manipulate and submit antedated ER-2 returns. The

Disciplinary Authority, on considering the above observations,

had imposed the punishment.

16. The learned counsel for petitioner principally contended

that the Inquiry Officer and the Disciplinary Authority had

relied entirely upon the statements of Sri P.V.Ramana Reddy,

dated 10.01.2004 and Sri Shaik Meera Mohiddin dated AKS,J & LNA,J

16.02.2004 recorded by the DRI behind his back; that it was the

primary responsibility of the Department to produce the said

Sri Shaik Meera Mohiddin as a prosecution witness as the

Department has relied upon his statement given before the

DRI; that the Management has examined the company officials

viz., Surya Narayana and Suleman and their evidence also

corroborate that the petitioner has not violated any rule nor

antedated ER-2 returns.

17. Per contra, learned Deputy Solicitor General submitted

that requisite procedure has been followed while recording the

statements of witnesses; that P.V.Ramana Reddy, Managing

Director of M/s.HIL, in his statement dated 10.01.2004, has

explained elaborately in a very cogent manner about the affairs

of M/s. HIL; that he stated that there was no production and

clearance during the months of March and April, 2003; that the

last sale of finished goods by M/s.HIL was on 25.02.2003; that

after 25.02.2003, M/s.HIL had not sold any finished goods upto

08.04.2003 and that the production and clearance figures

shown in ER-2 returns filed by them were false and AKS,J & LNA,J

imaginative; that the figures only shown to cover up the

shortage in fulfilling the export obligations.

18. It has been contended that during the recording of

statement of P.V.Ramana Reddy, at no point of time i.e., from

the date of giving statement before DRI on 10.01.2004 to

18.09.2008, he complained about any physical or mental torture

or any coercion or duress by the DRI. However, the retraction

of the confessional statement containing admission of wrong-

doings by the P.V.Ramana Reddy is made at the stage of cross-

examination during departmental enquiry i.e., after 4 ½ years

of his statement; that the deposition during his cross-

examination runs contrary to evidence on record and also

contrary to his own statements given on 13.05.2003, 03.07.2003,

08.10.2003 and 10.01.2004. The statement of Meera Mohiuddin,

Inspector of Central Excise, recorded before the DRI officer, has

not been retracted. Therefore, this Court is of the opinion that

the proper procedure has been followed while recording the

statements of witnesses and the petitioner was furnished with

copies of statements and reasonable opportunity was given to AKS,J & LNA,J

the petitioner to cross-examine all the witnesses. Therefore,

contention of the petitioner that he was denied of proper

opportunity is untenable.

19. In K.I.Pavunny (1 supra), Three-Judge Bench of the

Hon'ble Supreme Court discussed whether the confessional

statement of the appellant made to the Customs Officers under

Section 108 of the Customs Act, 1962 though retracted at a

later stage, is admissible in evidence and could form the basis

for conviction and whether retracted confessional statement

requires corroboration on material particulars from independent

evidence. In paragraph-17 it was held that "By virtue of

authority of law, the officer exercising the powers under the Act is

an authority within the meaning of Section 24 of the Evidence

Act.

"...(4) Though the Customs Officer is an authority within the meaning of Section 24 of the Evidence Act, by reason of statutory compulsion of recording the statement or the accused giving voluntary statement pursuant to his appearing either after issuance of summons or after the appellant's surrender, such statement cannot be characterised to have been obtained by threat, inducement or promise..."

20. In Naresh J. Sukhawani (2 supra), the Division Bench of

the Hon'ble Supreme Court in paragraph-4 held that"...It must

be remembered that the statement made before the Customs

officials is not a statement recorded under Section 161 of the AKS,J & LNA,J

Criminal Procedure Code, 1973. Therefore, it is a material piece of

evidence collected by Customs officials under Section 108 of the

Customs Act. That material incriminates the petitioner inculpating

him in the contravention of the provisions of the Customs Act..."

21. In Surjeet Singh Chhabra (3 supra), the Division Bench

of the Hon'ble Supreme Court in paragraph-3 held that "...It is

true that the petitioner had confessed that he purchased the gold

and had brought it. He admitted that he purchased the gold and

converted it as a kara. It is contended that the petitioner had

retracted within six days from the confession. Therefore, he is

entitled to cross-examine the panch witnesses before the

authority takes a decision on proof of the offence. We find no

force in this contention. The customs officials are not police

officers. The confession, though retracted, is an admission and

binds the petitioner. So there is no need to call panch witnesses

for examination and cross-examination by the petitioner.

22. In A.Gopalan, (9 supra), the Division Bench of the

Hon'ble Supreme Court in paragraph-5 held that "...a criminal

case the charge has to be proved by the standard of proof beyond

reasonable doubt while in departmental proceedings the

standard of proof for proving the charge is the preponderance of

probabilities..."

AKS,J & LNA,J

23. In Illias (4 supra), the Constitution Bench of the Hon'ble

Supreme Court in paragraph-15 relied upon the recent

decisions of Hon'ble Supreme Court i.e., i.e. Romesh Chandra

Mehta v. State of West Bengal [Cr.Appeal No.27 of 1967] and

Dady Adaaji Fatakia v. K.K. Ganguly, Asstt. Collector of Customs

[Cr.Appeal No.46 of 1968]. The view expressed in State of Punjab

vs. Barkat Ram case [(1962) 3 SCR 338] with reference to the

old Act has been reaffirmed on the question under consideration

and it has been held that under the new Act also the position

remains the same. In Dady Adaaji Fatakia case (referred to

supra), the Hon'ble Supreme Court held as under:

"For reasons set out in the judgment in Cr. A. 27/67 (Romesh Chandra Mehta v. State of West Bengal) [ Cr Appeal No. 27 of 1967] and the judgment of this court in Badku Joti Savant case we are of the view that a Customs Officer is under the Act of 1962 not a police officer within the meaning of Section 25 of the Evidence Act and the statements made before him by a person who is arrested or against whom an inquiry is made are not covered by Section 25 of the Indian Evidence Act."

24. In Sunil Kumar Banerjee (10 supra), the Three-Judge

Bench of the Hon'ble Supreme Court held as under:

"4. We do not also think that the disciplinary authority committed any serious or material irregularity in consulting the Vigilance Commissioner, even assuming that it was so done. The conclusion of the disciplinary authority was not based on the advice tendered by the Vigilance Commissioner but was arrived at independently, on the basis of the charges, the relevant material placed before the Enquiry Officer in support of the charges, and the defence of the delinquent officer. ....."

AKS,J & LNA,J

25. In P.Pratap Rao Sait (6 supra), the Hon'ble Division

Bench of the Hon'ble Supreme Court in Para 3 held that "It is a

settled proposition of law that by mere retraction the original

statement does not lose all its evidentiary value. When the

statement is retracted, all that the law requires is to look for some

corroboration from the other evidence available on record."

26. From the above citations, it is evident that the Hon'ble

Supreme Court has consistently held that mere retraction of

original statement does not lose all its evidentiary value; that

when the statement is retracted, all that the law requires is to

look for some corroboration from the other evidence available

on record; that the customs officials are not police officers; that

confession, though retracted, is an admission and binds the

petitioner, so there is no need to call panch witnesses for

examination and cross-examination by the petitioner.

27. The Hon'ble Supreme Court further held that with a

view to arrive at a finding as regards the voluntary nature of

statement or otherwise of a confession which has since been

retracted, the Court must bear in mind the attending

circumstances which would include the time of retraction, the AKS,J & LNA,J

nature thereof, the manner in which such retraction has been

made and other relevant factors.

28. It is evident from the record that the disciplinary

authority has considered the explanation submitted by the

appellant and given opportunity of personal hearing and held

the charge as proved to the extent of accommodating the

assessee by acknowledging the ER-2 returns for the month of

March, 2003 in back date to scuttle the case registered by the

DRI by duly assigning reasons and thereby the petitioner has

contrived Rule 3(1)(i)(ii) and (iii) of CCS (Conduct) Rules, 1964.

29. It is settled principle of law that the writ Court in

exercise of power of judicial review cannot sit as an appellate

forum and re-appreciate the evidence recorded in the domestic

enquiry and to come to a different conclusion from the

conclusion arrived at in the domestic enquiry. The scope of

judicial review against departmental proceedings is very

narrow and confined to whether procedural formalities are

complied; whether delinquent employee was given reasonable

opportunity to establish his defence; whether there is AKS,J & LNA,J

appreciation of material on record before holding the employee

guilty or findings are arrived based on surmises and

conjunctures; whether disciplinary authority considered the

material on record and arrived at independent conclusion;

whether the concerned authority is having bias and prejudice

against the employee and acted against the interest of the

employee without observing due process and with pre-

determined notion of guilt.

30. In disciplinary proceedings against employee proof of

allegation can be on principle of 'preponderance of probabilities'

unlike in criminal proceedings. A master can severe

relationship with his servant on proving misconduct. If master

is a public sector undertaking, such relationship is regulated by

set of regulations. Master is required to follow procedure

envisaged in regulations before severing the relationship. The

substantive requirement of the regulations is whenever

misconduct is alleged, employee must be told of the allegation,

supply material based on which such allegation is made, give

an opportunity to rebut the allegations and on due AKS,J & LNA,J

consideration and by a reasoned order shall take a decision. In

a given facts of the case, charge sheet need not be proved by

leading oral evidence, but can be established based on

documents on record.

31. From the above discussion, facts and circumstances of

the case, and the legal position, this Court is of the considered

view that the Tribunal was justified in dismissing the

O.A.No.780 of 2012, dated 09.09.2018. The Writ Petition is

devoid of any merit and no case is made out to interfere with

the impugned order dated 09.09.2018 passed by the Tribunal.

32. Therefore, Writ Petition fails and is accordingly

dismissed. There shall be no order as to costs.

Pending miscellaneous applications, if any, shall stand

closed.

_________________________________ ABHINAND KUMAR SHAVILI, J

__________________________________ LAXMI NARAYANA ALISHETTY, J Date: 02.09.2024 kkm