Telangana High Court

T. Vaikuntam, vs The State Of Telangana, on 28 May, 2025

Author: Nagesh Bheemapaka

Bench: Nagesh Bheemapaka

          HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

               WRIT PETITION No. 21828 OF 2017

ORDER:

The challenge mounted in this Writ Petition is to the

notice dated 25.5.2017 issued by the 2nd respondent

purportedly informing about conduct of de novo enquiry against

petitioner and appointment of Inquiry Officer.

2. The brief facts of the case are:-

Petitioner was appointed as a Packer-cum-Helper in

1981; thereafter, he was promoted as Sales Assistant and

Junior Manager in 2009. It is stated, during physical

verification held on 31.03.2010, a deficit in stocks to the tune of

Rs.6,41,653.20 ps. was noticed in APCO SE, Sanga Reddy and

petitioner, the then Junior Manager, who was only available

employee in the unit was made responsible for the said deficit.

Charges were framed against by the Divisional Marketing

Officer, Secunderabad dated 08.11.2020. They are:

Charge No.1: That, he has created physical stock deficit of Rs.6,41,653.20 ps as on 31.3.2010 in Sanga Reddy SE, and caused loss to the APCO Society which is gross misconduct governing Rule No.43 XI of the Special Bye-laws of APCO employees.

Charge No.2: He has failed to maintain stock ledges up-to date manually or the computerization of stock position as on 31.3.2010 intentionally to cover deficit.

Though enquiry was initiated by central office vide

proceedings dated 09.03.2011 and Enquiry Report dated

25.04.2011 was submitted, at the instance of petitioner, the

issue was referred for conducting de-novo enquiry duly

appointing another Enquiry Officer vide proceedings dated

18.05.2015. The reason appears to be at the behest of the letter

addressed by petitioner stating that at the time of joining of

Sri V. Sudarshan, Senior Manager, Sri. T. Vykuntam (petitioner

herein) had handed over stocks and as per the stock list, the

said Sudarshan alone was holding the charge.

The Enquiry Officer afforded opportunity of cross-

examination to both the sides and after a detailed enquiry, gave

his findings in vide report dated 23.06.2015, relevant portion of

the same is extracted hereunder:

" The charged employee has requested the complaint Authority to arrange for the re-verification of the transactions of the unit ever since joining of Sri.V. Sudharsan, Sr. Mangar in APCO SE, Sangareddy. The Management Representative/Management Witness did not presented any statements of re-verifications which reveals that no re-verification got conducted.

Further it is also not established whether Sri. V. Sudhrasan, Sr. Manager, quitted with the stock responsibility at APCO SE, Sangareddy either while goint on leave/absconding or atleast before joining in newly transferred place i.e., Abids HLH, since the HOC, TOC is inevitable to decide the possessing or non possessing of the stock responsibility.

As can be seen from R(a) form dated 31.03.2007, the charged employee had not signed at TOC on par with Sri V. Sudharsan, Senior

Manager, thereby it is construed that the charged employee discharged from the charge of stocks etcetera held in APCO SE, Sanga Reddy as on 31.03.2007 and appears that charged employee was not only attending to his duty as Sales Assistant but also representing Sri. V. Sudharsan, Senior Manager (leave/absconding). Hence it cannot be decided evidently that both worked with joint responsibility in the unit, from 31.3.2007 onwards.

Further it is observed that, though sri V. Sudharsan Sr. Manager went on leave/absconding as the case may be was transferred to Abids HLH, the office could have procedurally insisted him first to join at APCO SE, Sangareddy and got relieved from the stock responsibility held by him in the unit, since, Sri. V. Sudharsan holds responsibility on stocks during his leave period as he was not handed over the charge of stocks while going on leave or before joining at new place i.e., Abids HLH, procedurally by way of HOC/TOC process.

Sri V. Sudharsan, Sr. Manager, while on leave/absconding has not given the charge of stocks held in the unit as on the date of his leaving the unit, since it was not established in the Denovo Enquiry evidently by way of HOC/TOC lists that, Sri. V. Sudharsan has handed over the charge to Sri. T. Vykuntam. Giving keys of the unit to Sri. T. Vykuntam for keeping the unit opened without its closure and just because of presence of Sri. T. Vykuntam, Sales Assistant during physical stock verifications and representing Sri. V. Sudharsan, it cannot be deemed that, Sri. V. Sudharsan, Sr. Manager was free from joint stock responsibility at APCO SE, Sangareddy, Sri. T. Vykuntam/charged employee has also dealt correspondence with the office of the Divisional Marketing Officer, vide his letters dated 19.8.2009, 11.11.2009, 28.1.2010 and 1.12.2010 and so on. While, so the office would have cautiously acted and asked Sri. V. Sudharsan, Sr. Manager to first to get relieved from APCO SE, Sangareddy procedurally by following HOC/TOC process, which is invariable in the commercial units. Instead it appears that the office was kept quite and simply allowed Sri. V. Sudharsan to joint at Abids HLH directly, without observing HOC/TOC process at Sangareddy SE.

As per the R(a) Form in dt.31.3.2007 it is evidently clear that Sri. T. Vykuntam has handed over the stocks to Sri. V. Sudharsan, Sr. Manager.

It is not established whether Sri. V. Sudharsan Sr. Manager on leave/absconding handed over the charge to stocks to Sri. T. Vykuntam procedurally by way of HOC/TOC process.

It is also not established whether re-verification of accounts has been conducted in APCO SE, Sangareddy, ever since, joining of Sri. V. Sudharsan Sr. Manager in APCO SE, Sangareddy.

The denovo enquiry is to be conducted from the very beginning altegother afresh. Where as the Management Representative has just relied upon the written statement of the earlier Management Representative of the Domestic Enquiry conducted earlier, which the charged employee had objected that, earlier Domestic Enquiry was not proper and injustice was done to him.

In the light of the views as above holding Sri. T. Vykuntam, the then Jr. Manager for the deficit appears not correct, since, as per the R(a) from dt. 31.3.2007, the charged employee did not hold the responsibility on the stocks held in APCO SE, Sangareddy, ever since the charge of the stocks taken by Sri. V. Sudharsan, the then Sr. Manager, Sangareddy SE.

Since, the R(a) Form dt.31.3.2010 is signed by the charged employee under protest duly mentioning the verification properly not done and Management is required to cause re-verification in the presence of charged employee in the interest of natural justice. As the R(a) Form itself controversial the charge relied upon such controversial R(a) Form will not stand on its own. Hence I conclude that the charge No.1 is held as not proved.

Similarly, the version of the Charged employee is that, he do not know the maintenance of the daily transactions in the unit and he was unaware of the computerization. The computerization in APCO was established in 2000-2001. Further, when, he is unware of computerization, he cannot be demanded for the computerization of stock position. During the course of Denovo Enquiry, the Management Representative/Management Witness have not established clearly that, the charged employee possess thorough knowledge of computerization in the units, it is improper to allege that, the charged employee failed to maintain the stock ledgers and their update. Moreover, decades back there was introduction of computerization in APCO and later questioning the maintenance of manual ledger appears

unfair. Hence, Charge No.2 has no validity and hence it is held as not proved.

Sd/-

Enquiry Officer.

Respondent thereafter did not initiate any action

and did not pass any orders. Meanwhile, petitioner's

suspension was raised and he was reinstated into service

pursuant to the proceedings of the 1st respondent dated

24.07.2014 and he was continued in service. That being so, he

attained the age of superannuation on 31.10.2016. The 2nd

respondent had also filed criminal case for alleged

misappropriation in C.C.No.785 of 2012 before JFCM,

Sangareddy. However, Addl. JFCM was pleased to pass

judgment dated 26.11.2018 dismissing the said case and

petitioner was acquitted. After about two years, the 2nd

respondent had once again issued proceedings dated

25.05.2017 impugned herein for conducting de-novo enquiry

and issued notice appointing management representative as a

management witness and also parallelly-appointed Inquiry

Officer. It is this proceeding and appointment of Inquiry Officer

after earlier enquiry culminated into enquiry report dated

23.06.2015, is under challenge in this Writ Petition.

3. Respondents 2 to 4 filed counter-affidavit reiterating

the contents in enquiry report dated 23.6.2015 and in addition

for the first time, had taken new stand at Paras 12 and 13 that

the Competent Authority had perused the de novo enquiry

report and observed that Enquiry Officer had not given any

findings about misappropriation of funds of the Apex Society of

Rs.6,41,653.00 and in view of the same, it was ordered to re-

enquire the matter. As such, the Enquiry Officer was appointed

to conduct enquiry into the charges in order to elicit the fact

regarding misappropriation of amount. Hence, the contention of

petitioner that the action of the respondents in issuing the

notice dated 24.05.2017 is illegal and without assigning any

reasons is not correct since the enquiry is not in complete

nature and nothing had been said about recovery of amounts

and it is ordered for re-enquiry to elicit the facts of deficit and

recovery of amount towards misappropriation from the

responsible employee.

4. Heard Sri G.Ravi Mohan, learned counsel for

petitioner as well as Sri Rajkumar Rudra, learned Standing

Counsel for the 2nd respondent.

5. It is an admitted fact that a notice was issued to

petitioner initially for recovery of the entire amount of

Rs.6,41,653-20 ps. on the allegation of misappropriation of

funds. The same was challenged by petitioner in Writ Petition

No.14377 of 2010 contending that issuance of directions to

remit the amount without conducting any enquiry and without

issuing memo, charge sheet is illegal, arbitrary and in violation

of Bye-laws, as such sought for stay. This Court initially granted

interim stay of the said notice, however, vide order dated

08.09.2023, the said Writ Petition was dismissed as infructuous

since subsequently enquiry has been initiated and enquiry

report dated 23.6.2015 also came into existence treating the

charges against petitioner as held not proved. Therefore, the

contention of respondents regarding the fact that the Enquiry

Officer has spoken nothing about recovery of amounts cannot

be countenanced.

6. Further, this Court finds strange as to how the 2nd

respondent after a period of two years without assigning any

reasons and without affording opportunity of hearing on

differing with the findings of the Enquiry Officer in his report

dated 23.6.2015, issued proceedings dated 25.5.2017. Such

action of the respondents is totally impermissible under law.

The disciplinary authority failing to give an opportunity of

representation to the charged employee before differing with the

findings, is against the ruling of the Hon'ble Apex Court in

Managing Director, E.C.I.L., Hyderabad v. B.Karunakar

(II) 1. It is to be noted that de novo enquiry proceedings, dated

25.5.2017, shall be held as void ab-initio for the reason that the

first Enquiry Officer conducted exhaustive enquiry dealing with

charges 1 and 2. Charges against petitioner were already

dropped by the Enquiry Officer as they were held not proved.

Accordingly, the Enquiry Officer submitted his report dated

23.06.2015 on completion of the enquiry. After completion of

the first enquiry, the decision to initiate de novo enquiry dated

25.05.2017, once again subjecting petitioner to second enquiry,

is in total violation of the principles of natural justice and also

against the dictum laid down in B.Karunakar(II)'s case. As per

the judgment of the Constitution Bench, when the first Enquiry

Officer's findings recorded in favour of the delinquent officer are

proposed to be overturned by the disciplinary authority, the

principles of natural justice requires that employee should have

a fair opportunity to meet, explain and controvert before he is

condemned. In other words, it was contended by learned

counsel that when the findings in favour of the delinquent

officer are proposed to be overturned by the Disciplinary

Authority, a fair opportunity should be granted to delinquent

officer before the disciplinary authority proceeds to differ with

(1993 (4)SCC 727)

such conclusion, as otherwise, he would be condemned

unheard.

7. In the instant case, ironically, in respect of charges,

a de novo enquiry was ordered and the Enquiry Officer once

again proceeded against petitioner to deal with charges which

were already dropped by the earlier Enquiry Officer. This

approach of the second Enquiry Officer is totally non-est in the

eye of law. It is not the case of respondents even from their

counter-affidavit that Enquiry Report dated 23.06.2015

concluded is based on no evidence at all [see Union of India v.

P. Thayagarajan 2). The Enquiry Officer while conducting a

detailed enquiry had undertaken the exercise of depositions

from the parties and also afforded opportunity of cross-

examination and thereafter gave his findings and held that

charges against the petitioner are not proved. It is also not

forthcoming from the impugned proceedings dated 25.05.2017

under which provision de-novo enquiry is being initiated and

how the Authority had differed from the findings of the earlier

Enquiry Officer in his report dated 23.06.2015. In the absence

of the same, it can be easily concluded that impugned

proceedings do not sustain the judicial scrutiny more

(1964) 4 SCR 718]

particularly in the light of the decision rendered in

B.Karunakar (II)'s case.

8. When the Enquiry Officer has finally found

petitioner not guilty in respect of charges 1 and 2, de-novo

enquiry proceedings dated 25.05.2017 asking him to appear for

enquiry again has to be looked into with all seriousness. No

doubt, it is true that Disciplinary Authority is entitled to differ

from the findings of the Enquiry Officer, if the Disciplinary

Authority is not satisfied with his findings, but the law imposes

an obligation upon the Disciplinary Authority to follow certain

mandatory procedures. In this context, it is pertinent to

recollect the ratio laid down by the Constitution Bench of the

Supreme Court in B.Karunakar supra, followed by another

judgment of the Apex Court in Punjab National Bank v. Kunj

Behari Misra 3. As per the ratio in B.Karunakar's case, the

first stage of enquiry is not completed till the disciplinary

authority has recorded his findings. Because, the first stage

ends where the disciplinary authority arrives at its conclusions

on the basis of the evidence, the Enquiry Officer's report and the

delinquent employee's reply to it. The second stage begins when

the disciplinary authority decides to impose penalty on the basis

(1998)7 SCC 84

of its conclusions. Therefore, at this stage, principles of natural

justice would demand that the Authority who proposes to decide

against the delinquent officer must give a hearing. The reason

being when the Enquiry Officer holds that charges are proved,

then that report has to be given to the delinquent who can make

a representation to the disciplinary authority before he takes

further action which may be prejudicial to the delinquent

officer. In the present case, the Enquiry Report dated

23.06.2015 is in favour of delinquent/petitioner but the

disciplinary authority proposes to differ with such a conclusion

and proposes to go for a de novo enquiry. Then, that authority,

which is deciding against the delinquent officer, must give an

opportunity of hearing, otherwise, delinquent would be

condemned unheard. When admittedly, the Enquiry Officer, by

its report dated 23.6.2015, held that charges levelled against

petitioner were not proved by the management, then the

disciplinary authority before going for a de-novo enquiry should

have issued a notice to petitioner to show cause as to why the

disciplinary authority should not differ with the findings of the

Enquiry Officer and go for a de novo enquiry. As the said

procedure has not been followed, the entire proceedings

initiated after the initiation of de novo enquiry cannot be legally-

sustained.

9. In the light of the reasons aforementioned, this

Court finds that issuance of proceedings dated 25.05.2017 by

the 2nd respondent for de novo enquiry without following the

mandate as narrated above does not sustain in the eye of law as

such the same is liable to be set-aside as void ab initio.

10. In the result, the Writ Petition is allowed setting

aside the proceedings dated 25.05.2017 issued by the 2nd

respondent. No costs.

11. Consequently, Miscellaneous Applications, if any

shall stand closed.

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NAGESH BHEEMAPAKA, J

28th May 2025

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