Central Administrative Tribunal - Delhi
Shri M.L. Sharma vs Union Of India Through Secretary on 6 March, 2009
Central Administrative Tribunal Principal Bench, New Delhi O.A.No.1738/2007 This the 6th day of March 2009 Honble Shri Shanker Raju, Member (J) Honble Dr. Veena Chhotray, Member (A) Shri M.L. Sharma S/o late Shri S.L. Sharma Aged about 60 years R/o A-112, Pratap Nagar Street No.15, Mayur Vihar-I Delhi-91 Retired as Grade I officer of Indian Company Law Service In the Ministry of Corporate Affairs Shastri Bhawan, New Delhi ..Applicant (By Advocate: Shri A.K. Behera) Versus Union of India through Secretary Ministry of Corporate Affairs A Wing, 5th Floor, Shasti Bhawan, Dr. R.P. Marg, New Delhi ..Respondent (By Advocates: Shri A.K. Bhardwaj and Shri R.K. Sharma) O R D E R
Shri Shanker Raju:
Applicant, who retired on superannuation as Grade I officer of Indian Company Law Service, by virtue of this OA, has impugned the Presidential order dated 20.9.2006 whereby pursuant upon disciplinary proceedings for major penalty, President in consultation with Union Public Service Commission imposed upon the applicant a penalty of compulsory retirement.
2. Applicant, who joined government service on 23.12.1968 as Assistant in Department of Company Affairs, had applied for Grade-I post of Indian Company Law Service. He was selected to the post of Joint Director (Legal) on 7.8.1990 in the office of Regional Director, Bombay and held certain positions. Before his superannuation, disciplinary proceedings under Rule 14 of CCS (CCA) Rules, 1965 were initiated vide memorandum dated 26.3.2002 on the allegations of violation of Rule 18 of CCS (Conduct) Rules, 1964, as he had indulged himself in transaction of immovable property of Rs.1 lakh without reporting it to the Government. Also leveled is an allegation that during 1993-1996, being the owner of the house inherited from his father in will, he made additional construction in his house and invested a sum of Rs.9,67,645/- without reporting it to the prescribed authority. Applicant was also alleged not to have informed as per Rule 4 of CCS (Conduct) Rules about his relatives being shareholders of one company M/s. Janthal Agro Foods (P) Ltd. and also on induction of her daughter as Director of the company on 11.10.1995 from whom the applicant had official dealing. This was also not reported to the authorities. Also assailed is that he made transactions as members of Hindu undivided joint family and had not informed the competent authority. Lastly, he was found to have been in possession of disproportionate assets to the known legal sources of income. The inquiry was conducted by the Central Vigilance Commission whereby a detailed inquiry report of Commissioner of Departmental Inquiries was given and the inquiring authority had not proved any of the articles of charge. CVC was consulted on second stage advice, which recommended a major penalty and thereafter vide memorandum dated 18.5.2004 the disciplinary authority disagreed on Articles I, II, III and V of the charges and on response by the applicant, in consultation with UPSC vide impugned order, imposed a penalty, which gives rise to the present OA.
3. Shri A.K. Behera, learned counsel appearing for applicant while referring to the disagreement states that the disagreement arrived on all articles of charges, which had not been proved by the inquiry officer through his detailed findings and is on extraneous consideration, which is beyond the scope of the inquiry, as no evidence had been adduced in respect of any of the charges and the disciplinary authority imputing his own knowledge misinterpreted the rules and inflicted the punishment on disagreement.
4. Learned counsel in respect of article I states that no defence has been adduced to bring the case of the applicant within the ambit of misconduct, as defined under Rule 18 of CCS (CCA) Rules, as the sum of Rs.1 lakh was handed over to him not by his family members but for the benefit of certain persons. The promissory notes and the cheques issued do not indicate that the same has been issued in the name of the applicant. As such, the reasoning assigned in the disagreement is pervert.
5. Article II of the charge has been commented upon by the applicant on the ground that his father was alive in 1996 and merely the will was executed in his name and property tax was deposited by him would not mean that the property is in his name without probating the will, which is yet to be done and as such he cannot be treated as a owner of the property. The construction of the first floor was made by his brother and without any proof of the amount incurred mere conjectures and surmises have been relied upon to disagree.
6. Regarding article III, it is stated that her daughter being a Director is not in employment of the company. As such, applicant cannot be held guilty of Rule 4 of CCS (Conduct) Rules ibid.
7. As regards disproportionate assets in article V, learned counsel would contend that first of all no reasons have been assigned to arrive at such a finding and regarding finding of disproportionate assets, it is stated that the investment allegedly made in construction of the house, which is not proved to be invested by him, cannot be his assets to be clubbed with the income to hold the charge of acquiring disproportionate assets proved.
8. Learned counsel states that without awaiting the reply to the disagreement, the disciplinary authority sought advice of CVC, which was heavily relied upon to hold the applicant guilty. As such it deprives the applicant of a reasonable opportunity to rebut. It is stated that the version of the applicant and his rebuttal to the disagreement arrived at was not at all considered by the CVC.
9. Learned counsel would also contend that the disagreement arrived at is a final view of the matter where the charges are proved. As such, the right to represent being a useless formality the disagreement is not approved by the Apex Court in Yoginath D. Bagde v. State of Maharasthra & another, (1999) 7 SCC 739.
10. Learned counsel states that the order passed by the disciplinary authority has not at all taken into consideration on discussion the contentions put forth by the applicant in response to the disagreement. As such, the order is without application of mind and a non-speaking one.
11. To buttress his contentions, learned counsel relies upon the following decisions of Apex Court:
Union of India & others v. H.C. Goyal, AIR 1964 SC 364, M.V. Bijlani v. Union of India & others, 2006 (3) SLR SC 105; and Central Bank of India Limited v. Prakash Chand Jain, AIR 1969 SC 983.
12. Lastly, learned counsel for applicant states that compulsory retiring the applicant a few months before his normal retirement on superannuation on the charges, which are assuming to the proved, is a violation of the rules.
13. Learned counsel would contend that the present is a case of no misconduct and mere error of judgment and negligence does not fructify culpable damage is not a misconduct within the ambit of law.
14. On the other hand, learned counsel for respondents vehemently opposed the contentions and stated that in the disciplinary proceedings scope of the Tribunal to interfere in the findings of the inquiry officer and disciplinary authority is limited.
15. It is stated that substitution of view is not permissible. It is also stated that in a similar situation the decision of the Tribunal in Baleshwar Dayal v. Union of India & others (OA-2033/2007)decided on 22.5.2008 covers the issue.
16. The decision of Apex Court in High Court of Judicature at Bombay through its Registrar v. Shashikant S. Patil & another, 2000 SCC (L&S) 144 has been relied upon to contend that prejudice caused has to be established, failing which the inquiry would not be vitiated.
17. Learned counsel also contended that the disagreement arrived at is a reasoned one and no final view in the matter is taken and applicant has been given opportunity to object by way of his comments to the disagreement and thereafter a reasoned order has been passed, which shows application of mind by disciplinary authority.
18. As regards charge I, he stated that only requirement is intimation, which was not given. As such the same has been proved. Regarding charge II, it is stated that the applicant has not tendered any explanation of money and as regards charges III, it is stated that his daughter, being a Director of company, was running the company, which amounts to conducting business and in such an event, when the company has an official dealing with the applicant, who was holding the post of ROC, a clear misconduct is made out.
19. Regarding charge V, it is argued that the applicant has invested an amount on construction. As such, the property has been treated as disproportionate asset and the charge leveled against the applicant is proved.
20. In the rejoinder, reiteration of the contentions in OA has been made.
21. We have carefully considered the rival contentions of the parties and perused the material placed on record.
22. In a disciplinary proceeding, interference of the Tribunal in judicial review is though limited but not restricted. Procedural illegality causing prejudice and also in a case of no misconduct and finding recorded being based on no evidence and suspicion and surmises are the exceptions for interference.
23. On perusal of the records, one of the issues is that the disagreement arrived at by the disciplinary authority vide memo dated 18.5.2004 in fact is a final view of the matter taken by the disciplinary authority, as on proving the charges an opportunity has been accorded to the applicant to represent. This amounts to a useless and empty formality and post-decisional hearing.
24. In Yoginath D. Bagdes case (supra), which is a case concerning judicial officer, when a final view of the matter on proving the charge has been taken to disagree with the inquiry report, the same was not considered to be a tentative conclusion. In the instant case, apart from charge IV, all other articles of charge have been disagreed by the disciplinary authority without giving any indication as to the disagreement being tentative, yet the charges have been established and proved and thereafter an opportunity is accorded. This is pre-determination of the issue and even before receipt of the representation by the applicant, a final view of the matter on the basis of CVCs advice, which has recommended imposition of major penalty, the disagreement note cannot be sustained in law.
25. Moreover, what we find that as per CVC guidelines issued in 2000, two stages inquiry is obligatory; one at the time of issue of the charge sheet and second before passing a final order. A reference of CVC has gone at second stage advice along with tentative conclusion of the disciplinary authority. However, the representation preferred by the applicant against the disagreement is not referred to and instead a second stage advice was sought by the CVC after receipt of the representation on disagreement by the disciplinary authority. A procedure adopted to seek CVCs advice has deprived the applicant a reasonable opportunity, as his rebuttal and justifiable grounds to respond to the disagreement note were not available before the CVC and oblivious of it, the advice tendered, though may not be binding, has been relied upon, which is violative of principle of audi alteram partem and an infraction to principles of natural justice. As such, non-consideration of representation / reply filed by the applicant against disagreement has greatly prejudiced him.
26. An administrative authority while acting on quasi-judicial side, unless recording of reasons is dispensed with, it is obligatory to record reasons, which not only makes transparency in the order but also shows application of mind. Recording of reasons would not be at the ipsi dixit of the authorities but should have been in the context of the submissions made. It may be true that sometimes the disciplinary authority passes a long order running into several pages, yet the application of mind by consideration of the defence of the concerned is conspicuously missing. In legal parlance, as ruled by the Apex Court in Bhikhubhai Vithlabhai Patel & others v. State of Gujrat & another, 2008 (4) SCALE 278, consideration connotes to think over on all relevant aspects of the matter, including defence contentions.
27. The disciplinary authority when acts the exercise should be fair and bonafide and discretion be exercised judiciously, as ruled by the Apex Court in Karnataka State Financial Corporation v. N. Narasimahaiah & others, (2008) 5 SCC 176. It is the duty of the disciplinary authority to record reasons, as ruled in Divl. Forest Officer, Kothagudem & others v. Madhusudhan Rao, (2008) 3 SCC 469.
28. With the above backdrop in Narpat Singh v. Rajasthan Financial Corporation, 2007 (11) SCALE 458, the Apex Court has held that a non-speaking order passed by the disciplinary authority is an illegality.
29. Applicant in his representation against the disagreement took several pleas in defence. The disciplinary authority has stated in brief the contentions of the applicant on articles of charge. However, except referring to the UPSCs advice, no reasons have been recorded by the disciplinary authority as to the defence of the applicant and only on the basis of UPSCs advice and the disagreement note, the disciplinary authority held the applicant not only guilty of the charge but also imposed upon him an extreme penalty of compulsory retirement.
30. In our considered view, the applicant has been prejudiced and deprived of a reasonable opportunity, as his defence contentions have not at all been considered in legal parlance, which shows non-application of mind by the disciplinary authority. Even if the impugned order runs into 18 pages, yet in the context of consideration of the defence of the applicant and recording of reasons, it is a bald and non-speaking order.
31. Though we have no jurisdiction to sit as an appellate authority over the findings arrived at by the departmental authorities. However, substitution of our own views in place of the views of departmental authorities is also not the scope in judicial review, yet as per the decisions of the Apex Court in Kuldeep Singh v. Commissioner of Police & others, JT 1998 (8) SC 603, H.C. Goyals case (supra) and M.S. Bijlanis case (supra) to examine in the context of no misconduct and extra material being relied upon, as contended by the applicant, we have every jurisdiction to go into the evidence and the defence adduced in support of the charges leveled against the applicant.
32. A similar view has already been taken by us recently in Shri Baljit SIngh Sondhi v. Union of India & another (OA-2092/2007 with connected OA-520/2008) decided on 12.2.2009.
33. Applicant has been alleged to have given an amount of Rs. 1 lakh to one Shri Akhilesh Sharma and a letter written on 3.4.2001 acknowledged that the amount does not belong to him, which was share of his nephew, Master Giriraj Kumar Sharma in the HUF of his grand father Shri Swalal Sharma. As Master Giriraj Kumar Sharmas father expired long back and he has to be looked after, the money was given to him for the benefit of Master Giriraj Kumar Sharma.
34. For a misconduct under Rule 18 of CCS (Conduct) Rules as per Govt. of Indias decision No.8 (2) (iv) whereby transactions as members of Hindu undivided joint family do not require Governments prior permission. In such cases, transaction in immovable property should be reported to the prescribed authority.
35. In fact, there is absolutely no evidence as to the six promissory notes worth Rs.1 lakh given to the applicant and the cheques issued with blank name does not show that the same were in the account of the applicant. This amount belongs to one Ms. Geeta and she does not belong to HUF. In such an event, the only requirement of the rule is when transaction has gone in respect of HUF, reporting should have to be done but no such transaction of immovable property has taken place, rather the money belonged to some other person and had been passed through the applicant to Shri Chauhan for looking after Master Giriraj Kumar Sharma. Accordingly, for want of any evidence merely because the applicant has accepted the amount of Rs.1 lakh from Ms. Geeta, there is no proof, as was given as loan to Shri Chauhan. As such, neither any misconduct is made out nor is Decision No.8(2)(iv) ibid attracted. Accordingly, this charge has been disagreed to without any justifiable reasons and has been established by the disciplinary authority on suspicion and surmises.
36. Regarding charge of acquiring of property on will from his father and also investment of almost Rs.10 lakhs in making additional construction, it is pertinent to note that mere will is not sufficient to transfer a title in respect of a person and he cannot be an absolute owner of the property bequeathed on him, as ruled by the Apex Court in Binapanikar Chowdhury v. Satyabrata Basu & another, (2006) 10 SCC 442 whereby an executor is barred to assert right under the will or from establishing any right under the will not be probated on letter of Administration. No doubt, on a will, the property at Pratap Nagar was only bequeathed on him, which does not legally bestow the title of the property in the name of the applicant. While coming to the conclusion of investment on account of construction of the house, the disagreement arrived at on this article of charge by the disciplinary authority only on the ground that as per the will, the legal ownership of the property vests in the name of the applicant, as such any investment made on construction would have to be implied and attributed to the applicant. This is only suspicion and surmises. We have gone through the evidence and found that no material has come forth to justify that this amount has been invested by the applicant on construction of the house, rather the brother of the applicant, who was residing in the same house, has carried out that construction work and as merely because the applicant has a will in his name, in legal parlance, ownership does not vest without probate of a will and in such an event, on a presumption that as the will has been in the name of applicant, ownership has been construed, is against the law and for want of any proof of construction in the house and investment made thereof by the applicant, the charge has been established on disagreement merely on suspicion and surmises and there is no evidence to establish it.
37. As regards charge V, though disproportionate assets have been construed against the applicant, the only disproportionate asset is the alleged undisclosed investment in the construction of property and as we have already concluded that the respondents have miserably failed to establish this charge, any reference to this charge on account of disproportionate asset would also be pervert and this charge has been established on disagreement and merely on suspicion, surmises and conjectures.
38. Regarding charge of applicants daughter being a Director of company, which has an official dealing, it is found that she was not in the employment of company and in such an event, even Rule 4 of CCS (Conduct) Rules, does not apply. The disciplinary authority disagreed with this part of charge though admitted that the role of Director was not that of an employee but he carried onerous responsibility and has a fiduciary relationship with the shareholders of the company and on a greater level and on onerous responsibility it should have been communicated to the respondents. Rule 4 of CCS (Conduct) Rules has applicability only when it is before hand established that the relative of a government servant is employed in company and if this employment is not an employment, as admitted by the disciplinary authority, then applicant is not supposed to give information or seek permission.
39. We are of the considered view that no misconduct has been made out to warrant any imposition of punishment upon the applicant.
40. From the above, we conclude that the charges leveled against the applicant have been established on disagreement by the disciplinary authority on no evidence, suspicion and surmises, as such no misconduct is found to have been committed by the applicant, for which he could either be held guilty or punished.
41. Resultantly, OA stands allowed. Impugned order is set aside. As the applicant has already attained the age of superannuation, he would be deemed in service from 20.9.2006 till he retired on superannuation and shall be entitled for all the consequences in law, including the retiral benefits in accordance with rules. The payments thereof shall be made to the applicant within a period of two months from the date of receipt of a copy of this order. No costs.
( Dr. Veena Chhotray ) ( Shanker Raju ) Member (A) Member (J) /sunil/