Food Corporation Of India vs S. Nayagam on 15 April, 2008

[Cites 7, Cited by 1]

Madras High Court

Food Corporation Of India vs S. Nayagam on 15 April, 2008

Heard the arguments of Mr. P.D. Audikesavalu, learned counsel representing the appellants and Mr. Kandavadivel Doraisami, learned counsel appearing for the first respondent and have perused the records.

2. This writ appeal is directed against the order of the learned Judge dated 27.6.2006 made in W.P. No. 35688 of 2002. Before the learned Judge, the first respondent filed the writ petition seeking to set aside the first appellant's order dated 19.8.2002 confirming the second appellant's order dated 07.12.2001 and for a consequential direction to the appellants to retain him as an Assistant Grade I (General) on par with his juniors.

3. The first respondent was employed as an Assistant Grade II in the District Office at Cuddalore under the Food Corporation of India. He also claimed that he was the leader of the Trade Union of SC/ST Employees working in the Corporation. On 21.02.2000, he was given a charge-memo in terms of the FCI (Staff) Regulations. The seven charges relate to non-maintenance of accounts for the purchase and issuance of printing and stationery articles for the years 1997-98, 1998-99 and in June 1999, he purchased stationery worth of Rs.1,00,517/- as against the budgetary allotment of Rs.80,000/- for the year 1999-2000. He also was charged for the misappropriation and embezzlement of FCI funds towards the purchase of printing and stationery materials and he also claimed over time wages every month from April 1996 to January 1997 and he tampered the house-keeping indents submitted by various sections and FST depots in Cuddalore District. He disobeyed the posting order shifting him from house-keeping section of District Office to the Administrative branch. He was also charged that he made false allegations against the then District Manager (second respondent) for having produced false Community Certificate and that he had not paid Income-Tax properly.

4. It is the stand of the first respondent that the charge-memo was issued at the instigation of the second respondent as he was personally piqued over the conduct of the first respondent. In that view of the matter, the first respondent made the present second respondent as a fourth respondent to the main writ petition in his individual capacity. The first respondent denied the charges which lead to the appointment of an Enquiry Officer. In the said departmental enquiry, the second respondent was examined on the side of the appellant and the first respondent, apart from himself, examined four witnesses. Ten Exhibits were marked on the side of the appellant and four Exhibits were marked on the side of the first respondent.

5. The Enquiry Officer, by his report dated 22.01.2001, found that except charges 2 and 4, the other five charges were proved. After furnishing a copy of the report and getting his representation, the third appellant, being the disciplinary authority, agreed with the conclusions reached by the Enquiry Officer. Since the loss caused to the FCI was to the tune of Rs. 35,274.15, by an order dated 29.02.2001, a penalty of recovery of Rs. 15,000/- was imposed on the first respondent and the same was to be given effect to in 15 instalments. The said penalty was also given effect to and the first respondent did not prefer any appeal against the said penalty.

6. The Executive Director, Vigilance and the Chief Vigilance Officer of the FCI Headquarters reviewed all the vigilance cases during their visit to Chennai during July / August 2001 and during that period, it was decided to review the aforesaid penalty in exercise of the power conferred in terms of Regulation 74(4) of the FCI Staff Regulations, 1971. In exercise of that power, it was found that the recovery of loss of Rs.15,000/- made against the first respondent was considered inadequate considering the gravity of the charges proved against him.

7. In the light of the above, a show cause notice dated 21.9.2001 was issued by the second appellant asking him to show cause as to why the recovery should not be enhanced besides imposition of any other penalty contemplated under Regulation 54. The first respondent submitted his explanation dated 12.10.2001. The second appellant, by an order dated 07.12.2001, after considering the explanation held that the first respondent should be reverted to the post of Assistant Grade III (General) and also to be debarred for promotion for a period of five years starting from the year 2002. He was also fixed at the minimum time scale of pay in the post of Assistant Grade III. But, however, his seniority was fixed in the top of the seniority list of that grade and it was also directed that during the punishment period, he will draw annual increments but the penalty ordered will not be cancelled. It was stated that after undergoing the penalty, his case will be considered for promotion.

8. The first respondent filed writ petition being W.P. 25314 of 2000. However, the same was dismissed by directing him to prefer an appeal to the first appellant. Accordingly, the first respondent preferred an appeal and the said appeal was rejected by the first appellant by an order dated 19.8.2002. It was this order, confirming the earlier order of punishment, which was under challenge before the learned single Judge.

9. The learned single Judge, after hearing both sides, came to the conclusion that the order enhancing the punishment on the suo motu revision is not permissible since already a punishment of penalty of Rs.15,000/- was imposed on the first respondent. Reliance was placed on the judgment of the Supreme Court in Union of India and another vs. S.C. Parashar [2006 (3) SCC 167]. Reliance was placed on paragraph 12 of the said judgment wherein imposition of several penalties both major and minor was considered to be illegal. Consequently, the learned Senior Judge set aside the enhanced penalty and restored the original penalty.

10. Mr. P.V. Audikesavalu, learned counsel appearing for the appellants submitted that Regulation No. 54 does not bar imposing any of the penalties mentioned therein and so far as withholding of promotion and reduction to a lower stage in the time scale of pay are concerned, they are only minor penalties whereas reduction to a lower time scale of pay or post which will also ordinarily bar the promotion of the employees, have been considered as a major penalty. The case relied on by the first respondent on S.C. Parashar's case (cited supra) has no relevance to the case on hand. The learned counsel for the appellants also submitted that there was nothing wrong in the appellate authority invoking the suo motu revisional power provided under Regulation 74 and the same reads as follows:

74. Review:

(1) ** (notwithstanding anything contained in these regulations, the Board may, at any time either on its own motion or otherwise, call for the records of any inquiry and review any order made under these regulations), and

(a) confirm, modify or set aside the order; or

(b) confirm, reduce, enhance or set aside the penalty imposed by the order, or impose any penalty where no penalty has been imposed; or

(c) Remit the case to the authority which made the order or to any other authority directing such authority to make such further inquiry as it may consider proper in the circumstances of the case; or

(d) pass such other orders as it may deem fit;

*Provided that no order imposing or enhancing any penalty shall be made by the reviewing authority unless the employee concerned has been given a reasonable opportunity of making a representation against the penalty proposed and where it is proposed to impose any of the penalties specified in clauses (v) to (ix) of Regulation 54 or to enhance the penalty imposed by the order sought to be viewed to any of the penalties specified in those clauses; no such penalty shall be imposed except after an inquiry in the manner laid down in Regulation 58."

It was stated that by the introduction of Regulation 74(4) the appellate authorities have also been delegated with the powers of suo motu revision.

11. The learned counsel for the appellants relied upon the judgment of the Supreme Court in Union of India v. P.D.Yadav [(2002) 1 SCC 405] wherein the learned Judge held that the respondent therein visited double punishment may not be correct. In that judgment, it was held that a penalty of conviction in a Court Martial and thereafter forfeiture of pension if made, will not amount to double jeopardy. However, this decision does not help the case of the appellants.

12. Reliance was placed on the decision of the Supreme Court reported in State of Haryana v. Balwant Singh [(2003) 3 SCC 362] wherein a question arose as to whether an employee being punished twice will attract the bar under Article 20(2) of the Constitution. The Supreme Court, after referring to P.D.Yadav's case (cited supra), held that punishment of a major penalty followed by recovery of amount of the loss being determined by a subsequent order of the Tribunal, will not amount to double jeopardy.

13. In Union of India v. G. Veerasamy [(2003) 10 SCC 251], the Supreme Court held that the Railway Establishment Code empowered the disciplinary authority to impose the punishment of reduction to lower time scale of pay and also to fix the pay. In that case, the order of the Tribunal holding the same as a double jeopardy was set aside and in paragraph 6, the Supreme Court held as follows:

Para 6: "The language of clause (vi) of sub-rule (1) of Rule 6 of the Rules, in our opinion, is clear. After reduction to the lower time scale the disciplinary authority has to fix the pay in terms of Rule 1322 of the Establishment Code. The Establishment Code clearly empowers the disciplinary authority to allow to draw any pay not exceeding the maximum of the lower post or time scale. We are unable to accept the reasoning of the Tribunal that it amounts to double punishment inasmuch as unless pay is fixed after reduction he may be entitled only to draw pay on the lowest of the time scale."

14. It must be noted that in Commissioner of Rural Development v. A.S. Jagannathan, [(1999) 2 SCC 313], the Supreme Court set aside the order of the Tribunal in having interfered with a punishment on the ground that imposition of stoppage of increment, recovery of pay as well as treating the period of suspension without pay would amount to three punishments. The following passage found in paragraph 5 will make the position clear:

Para 5: "The Tribunal clearly had no jurisdiction to interfere with the punishment imposed by the disciplinary authority under the order of 4-6-1991. The Tribunal has purported to pass the order on the ground that three punishments cannot be imposed for the same charge. Now, the Tamil Nadu Civil Services (Classification, Control and Appeal) Rules prescribe various penalties that may be imposed under Rule 8. One of the penalties under Rule 8 is of withholding of increments. Another penalty which can be imposed under Rule 8(v)(a) is recovery from pay of the whole or part of any pecuniary loss caused to the State Government by negligence or breach of orders. Under the Tamil Nadu Pension Rules, Rule 9(1)(b), such pecuniary loss can also be recovered from the pension of the employee if the pecuniary loss is caused by negligence or grave misconduct while in service and the employee has been found guilty of such misconduct or negligence. In the present case, the disciplinary authority has clearly found that there were serious charges against the respondent which were established against him in a disciplinary enquiry which was properly conducted. The disciplinary authority has rightly observed that looking to the serious nature of the charges proved, a minor punishment of only stoppage of two increments without cumulative effect has been imposed on the respondent by taking a lenient view since he is about to retire. The order for recovery of the loss caused on account of the respondents negligence and misconduct is also permissible under the Tamil Nadu Civil Services (Classification, Control and Appeal) Rules as also under the Tamil Nadu Pension Rules, the former permitting recovery from pay and the latter permitting recovery from pensionary benefits after retirement. The Tribunal is wrong in holding that if an order is passed for recovery of the amount lost from the employee, no punishment can be imposed on him. The disciplinary authority, in the present case, was entitled to impose the punishment of stoppage of two increments without cumulative effect. At the time of passing the final order, the disciplinary authority was also entitled to pass order relating to the suspension period pending enquiry. It has directed that the period during which the respondent was under suspension be treated as service period but without pay. The order must be read as a whole. In the present case, the disciplinary authority has awarded punishment and given directions looking to the nature of the charges proved. The Tribunal was not entitled to interfere with the punishment so accorded."

15. The learned counsel also brought to notice of this Court the judgment of the Punjab and Haryana High Court rendered by a single Judge reported in 2001 (34) Lab. I.C. 3574 (P&H) relating to Darshan Singh Sidhu v. Food Corporation of India and another. In that case, more or less a similar situation relating to the very same FCI came to be considered. The following passages found in the last four paragraphs of the said judgment may be usefully extracted below:

"In Depot Manager, APSRT Corporation v. N. Ramulu (1997) II SCC 319 it was held that it is true that reimbursement of the loss caused to Appellant A.P. State Road Transport Corporation has been shown to be a penalty under Regulation 8(v) of the Regulations. But the penalty for the act of negligence was removal from service. The explanation to Regulation 8, however, enumerates various penalties which are not to be treated as penalties and one of them is as clause (5) thereof says: "the penalty of recovery from pay of the whole or part of any pecuniary loss caused to the Corporation by an employee's negligence or breach of orders may be imposed in addition to any other penalty which may be inflicted in respect of the same act of negligence or breach of orders." This clause clearly says that the penalty for recovering loss caused to the management under Regulation 1(v) shall not preclude the management from imposing any other penalty. The High Court was, therefore, wrong in thinking that this was a case of double jeopardy. The order passed by the learned single Judge was eminently just and fair and the Division Bench of the High Court should not have interfered with that order."

"In this case also the imposition of the recovery of one year basic pay cannot be viewed as penalty as the recovery was foisted upon him for the loss caused to FCI by his misconduct. For misconduct attributed to him punishment of stoppage of three increments without cumulative effect was imposed upon him."

"In State of U.P. v. Girija Dayal Srivastava (1988) 3 Serv LR 359 it was held that two punishments can be awarded i.e. one for the loss caused and the second for the misconduct."

"In this case, the punishment of stoppage of three increments without cumulative effect has to be viewed as penalty for the misconduct attributed to him. Recovery from his pay in lieu of the pecuniary loss caused to the Corporation by him cannot be viewed as penalty as he caused loss to the Corporation and the Corporation sought to compensate itself by imposing upon him this recovery. It is not double jeopardy as there was no vexation of him twice over for the same misconduct."

16. In the light of the above, the order of the learned Judge placing reliance upon S.C. Parashar's case, to set aside the punishment order is not justified. Further, the finding of the Judge that the appellants cannot enhance the penalty in terms of Regulation 74 is also contrary to Regulation 74(4). The finding of the learned Judge that the appellate authority has confirmed the order of the earlier punishment by order dated 19.8.2002 is a misreading of the said order and what was confirmed by the appellate order is the order passed while exercising revisional power by the first appellate authority. In the present case, the appellate authority, viz., the second appellant, who had by the exercise of power under Regulation 74(4) of the FCI (Staff) Regulations, exercised suo motu power as such a power has been delegated to him by the amendment made w.e.f. 10.7.1997. It is on his revision, the punishment was enhanced by an order dated 07.12.2001. It was only that order which was appealed against by the first respondent and the same was confirmed the appellate authority, viz., the first appellant.

17. In the present case, with reference to the findings that five out of seven charges were proved by the enquiry officer and consequently, the penalty issued vide order dated 29.3.2001, were never put to challenge either before any statutory authority or before this Court or before the learned single Judge. Even though an attempt was made by the first respondent that he was prevented from filing an appeal due to persuasion by his superior that if he pays the penalty, he will be rewarded with promotion and, therefore, he had paid the amount and he was given promotion from Assistant Grade II to Assistant Grade I, the same cannot be accepted. Insofar as the petitioner had accepted the penalty issued by order dated 29.3.2001 and also paid the penalty amount, it will clearly show that the charges against him have been proved. The charges are clearly serious misconducts which can even be visited with the major penalty of dismissal also. The attempt of mala fide levelled against the second respondent by the first respondent was neither substantiated before the learned single Judge nor before us.

18. In view of the above, there is no serious attempt made by the learned counsel for the first respondent to go into the nature of evidence as well as the finding rendered in the departmental enquiry. Therefore, the learned Judge had granted the relief only on a technical ground and also placing reliance upon S.C.Parashar's case.

19. We do not find any legal prohibition in the FCI (Staff) Regulations that a person cannot be visited with more than one penalty. It is our opinion that if an employee can be dismissed on charges of serious misconduct, then any penalty less than dismissal either individually or in combination can also be imposed on him. In this context, we are in full agreement with the views expressed by the learned single Judge of the Punjab and Haryana High Court rendered in Dharshan Singh Sidhu's case (cited supra). Even otherwise, in the present case, the penalty was only debarment of promotion for a period of five years and reversion. The recovery was due to the loss caused to the appellant Corporation and, therefore, the learned single Judge was wrong in setting aside the punishment imposed on the first respondent by suo motu revisional power exercised by the appellate authority.

20. In the light of the above, the writ appeal will stand allowed and the order of the learned Judge in W.P. No. 35688 of 2001 dated 27.6.2006 will stand set aside. The penalty imposed vide order dated 07.12.2001 confirmed by the first appellant by order dated 19.8.2002 will stand restored. However, there will be no order as to costs.

							(P.K.M., J.)    (K.C., J.)
								      15..4..2008
Index	: Yes

Internet	: Yes

gri


									P.K. MISRA, J.  
and            
          						            	K. CHANDRU, J.     
											gri








Pre-Delivery Judgment in
W.A. No. 980 of 2007






Delivered on
      15..4..2008

Unlock Advanced Research with PRISMAI

Madras High Court