Gujarat High Court
R J Ratanghayara vs State Of Gujarat & on 22 January, 2016
Author: Akil Kureshi
Bench: Akil Kureshi
C/SCA/89/2000 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 89 of 2000
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
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1 Whether Reporters of Local Papers may be allowed to see the
judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as to
the interpretation of the Constitution of India or any order
made thereunder ?
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R J RATANGHAYARA....Petitioner(s)
Versus
STATE OF GUJARAT & 1....Respondent(s)
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Appearance:
MRS KETTY A MEHTA, ADVOCATE for the Petitioner(s) No. 1
GOVERNMENT PLEADER for the Respondent(s) No. 1
MR HS MUNSHAW, ADVOCATE for the Respondent(s) No. 2
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
Date : 22/01/2016
ORAL JUDGMENT
1. The petitioner has challenged an order dated 31.12.1999 as at Annexure-A to the petition under which he came to be compulsorily retired from service by the respondent No.2 - Gujarat Water Supply and Sewerage Board ("the Board" for short).
2. Brief facts are as under:-
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HC-NIC Page 1 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT 2.1 The petitioner was employed by the State Government and was, at the relevant time, working as Deputy Executive Engineer. The State Government constituted the Board under the Gujarat Water Supply & Sewerage Board Act, 1978 ("the Act" for short) for the rapid development and proper regulation of water supply and sewerage services in the State. Section 20 of the Act pertains to transfer of Government employees to the Board. Sub-section (1) thereof provided that on and after the establishment of the Board, the State Government may, from time to time, direct that the services of such of the existing officers and servants of the State Government in the Gujarat Public Health Engineering Service, shall stand terminated and their posts shall stand abolished from the specified date and from such date, become the officers or servants of the Board. Sub-section (2) of Section 20 provided that every permanent or temporary employee of the Gujarat Public Health Engineering Service in respect of whom a direction is issued under sub-section (1) shall, on and from the appointed date, be a permanent or temporary employee of the Board, as the case may be, against a permanent or temporary post, which shall stand created in the establishment of the Board with effect from the appointed date. Sub-section (9) of Section 20, which starts with Page 2 of 20 HC-NIC Page 2 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT non-obstante clause, provided certain exceptions. Clause
(b) thereof provided that notwithstanding anything contained in the foregoing sub-sections, the transfer of a person employed as aforesaid against whom any disciplinary proceeding is pending, shall, initially be provisional and the State Government shall review such transfer after the final order as a result of such disciplinary proceedings is passed and thereafter pass such order as may appear to it to be appropriate in the circumstances of the case.
2.2 In exercise of powers under Section 20 of the Act, the Government of Gujarat issued a notification dated 10.02.1988 and provided as under:-
"2. Government, in exercise of powers conferred vide sub-section (1) of section 20 of the Gujarat Water Supply and Sewerage Board Act, 1978 (Gujarat Act No.18 of 1979) is now pleased to abolish these posts under Government, which were kept in abeyance. These posts would thus stand transferred to the Gujarat Water Supply and Water Sewerage Board, and these would cease to exist under Government.
3. In exercise of powers conferred by sub- section (1) of Section 20 of the Gujarat Water Supply and Sewerage Board Act, 1978, Government of Gujarat is hereby pleased to transfer the services of the officers /employees specified in the schedule appended to the notification/orders mentioned in the preamble to the Gujarat Water Supply and Sewerage Board on permanent basis with effect from 01.04.1981."Page 3 of 20
HC-NIC Page 3 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT 2.3 Pursuant to the said notification dated 10.02.1988, the Government issued circular dated 12.02.1988 and provided as under:-
"3. In exercise of powers conferred by Sub- section (1) of Section 20 of the Gujarat Water Supply and Sewerage Board Act, 1978, Government of Gujarat is hereby pleased to transfer the services of the officer/employees specified in the Schedule appended to the Notifications/orders mentioned in the preamble to the Gujarat Water Supply and Sewerage Board on permanent basis with effect from 1-4-1981."
2.4 It is not in dispute that the name of the petitioner was covered under the said circular dated 12.02.1988. In terms of the said notification dated 10.02.1988 and Government's subsequent circular dated 12.02.1988, ordinarily, the services of the petitioner would stand transferred to the Board.
2.5 However, shortly thereafter, on 28.03.1988, Government issued a notification in the form of amendment to the notification dated 10.02.1988 and added para-7 as under:-
"These transfers are subject to sub-section 9 of section 29, other sub-sections of section 20 and various other relevant provisions of GWSS Act. Those employees/officers of PHE Wing against whom disciplinary proceedings were initiated and/or completed between 1-4-81 to 10-2-88 are transferred provisionally as per the provisions of Sub-section 9 of Section 20- (I)."Page 4 of 20
HC-NIC Page 4 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT 2.6 In the meantime, when the petitioner was working in the Rural Water Resources and Research Department, Rajkot, allegations of financial irregularities were made against him in connection with payment to the contractors. A Criminal Case alleging offences punishable under Sections 409, 467, 477A, 420B, 114/34 of the Indian Penal Code read with Section 5(2) of the Prevention of Corruption Act was filed against the petitioner. On account of such involvement, the petitioner was also placed under suspension by order dated 05.06.1982. However, the Special Judge, Rajkot ordered to drop charges against the petitioner for want of sanction. The State Government challenged the said order before the High Court by filing Criminal Revision Application, but withdrew the same on 17.08.1983. 2.7 On account of such developments, the petitioner succeeded in Special Civil Application No.5756 of 1983 when the High Court by order dated 16.12.1983 provided that since there was no criminal case pending against the petitioner, he cannot be continued under suspension. He was ordered to be reinstated in service.
2.8 The Government lodged fresh criminal case against the petitioner with respect to the same allegations by filing Criminal Case No.10 of 1986. The petitioner was acquitted of the charges by the trial Page 5 of 20 HC-NIC Page 5 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT Court by judgment dated 12.08.1991 on the ground that the prosecution failed to prove the case against the petitioner. Against such judgment of the trial Court, the State Government preferred Criminal Appeal No.307 of 1992, which came to be dismissed by the High Court by judgment dated 17.02.2009.
2.9 The petitioner was involved in yet another criminal case where he was placed under suspension by an order dated 20.04.1993 for being allegedly involved in a trap case on 09.02.1993, when according to this order, unaccounted Rs.60,000/- was found from his suitcase. The trap was laid on the allegations of the contractor that the petitioner had demanded bribe of Rs.17,000/-. This criminal case also resulted into petitioner's discharge since the learned Special Judge by his order dated 03.06.2007 dropped the charges against the petitioner for want of proper sanction. In such order, however, it was provided that the prosecution would be at liberty to proceed further after obtaining proper and valid sanction according to law. It is undisputed that no further steps were taken by the State to pursue the allegation with adequate sanction.
3. By the impugned order dated 31.12.1999, the Board, in exercise of powers under Rule 161 of BCSR, compulsorily retired the petitioner by offering three Page 6 of 20 HC-NIC Page 6 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT months notice pay. It is this order the petitioner has challenged principally on two grounds. The case of the petitioner is that in view of the amendment dated 28.03.1988 in the notification dated 10.02.1988, the service of the petitioner was never transferred to the Board. He would continue, therefore, to be a Government servant. The Board did not, therefore, have any authority to compulsorily retire him. The second ground of the petitioner's challenge is that even on merits, the order was bad in law. The same was passed without considering the petitioner's entire service record and without forming any bonafide belief that the service of the petitioner was no longer useful to the Board. The order was founded on unestablished allegations of corruption by the petitioner and the same was thus stigma. Without holding a proper inquiry, such order could not have been passed.
4. On the other hand, case of the respondents canvassed by Shri Munshaw is that the petitioner was absorbed in the services of the Board right from the date of passing of the circular dated 12.02.1988. The petitioner received all his emoluments, pay revisions and promotions in the Board. He never questioned this position and therefore, he is estopped from contending that he continued to be a Government servant. Regarding Page 7 of 20 HC-NIC Page 7 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT merits of the case, Counsel submitted that duly constituted Committee considered the case of the petitioner. Upon completion of requisite number of years of service, the order was passed after taking into account the relevant material. The petitioner was involved in two bribe cases. His integrity was thus doubtful. Doubtful integrity is one of the grounds on which the competent authority could exercise powers under Rule 161 of the BCSR. The allegations contained in the criminal case were not the foundation for passing the order.
5. Having this heard learned Counsel for the parties and having perused documents on record, I may first advert to the question of authority of the Board to compulsorily retire the petitioner. As noted, one would have to advert to the factual aspects in the context of the notification issued by the Government placing the Government staff at the disposal of the Board. In this context, the relevant fact would be that on account of pending criminal case involving offences punishable under Sections 409, 420, etc. of the Indian Penal Code and Section 5(2) of the Prevention of Corruption Act, the petitioner was placed under suspension by the Government by order dated 05.06.1982. Criminal case ended in discharge of the petitioner for want of sanction. The Page 8 of 20 HC-NIC Page 8 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT High Court thereupon by order dated 16.12.1983 in SCA No.5656 of 1983 held that since no criminal case survived, the petitioner cannot be continued under suspension. He was ordered to be reinstated. It was later on in the year 1986 that the Government instituted fresh criminal case, in which the petitioner was acquitted by the trial Court by an order dated 12.08.1991.
6. In the year 1993, the petitioner was once again visited with the order of suspension on account of involvement in a trap case on 09.02.1993. In this trial also, the Government failed when the Special Court by order dated 03.06.2007 dropped the charges for want of sanction.
7. We may recall upon constitution of the Board, the Government placed several Government servants at the disposal of the Board in exercise of powers under Section 20 of the Act. The first notification was issued on 10.02.1988 for such purpose. In terms of said notification, Government also issued circular dated 12.02.1988 and placed at the disposal of the Board several Government servants. Posts they were holding in the Government stood demolished and they would then on be treated as servants of the Board. Undoubtedly, petitioner was one of the persons covered under the said Page 9 of 20 HC-NIC Page 9 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT circular dated 12.02.1988. Had this been the only Government decision, perhaps, the petitioner would not have been right in contending that he was not absorbed in the services of the Board. However, shortly thereafter, the Government issued an amendment notification dated 28.03.1988 and added para-7 to the notification dated 10.02.1988. Under this para, it was provided that the transfers made under notification dated 10.02.1988 would be subject to provisions of sub-section (9) of section 20 and other sub-sections thereof and the provisions contained in the Act. It was further provided that the employees and officers against whom disciplinary proceedings were initiated and/or contemplated (in my opinion mistyped as completed) between 01.04.1981 to 10.02.1988 would be transferred provisionally as per the Sub-section 9 of Section 20.
8. We may recall Section 20 of the Act provided for transfer of Government employees to the Board. Clause-(b) of sub-section (9) however provided that the transfer of a person against whom any disciplinary proceeding is pending, would be provisional and the State Government would review such transfer after the final order as a result of such disciplinary proceedings is passed. In terms of sub-section (9) of Section 20, therefore, in case of a Government servant against whom Page 10 of 20 HC-NIC Page 10 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT disciplinary proceeding was pending, his transfer to the Board would only be provisional. Only upon completion of the disciplinary proceedings and on the basis of the order that may be passed, the position would be reviewed and appropriate order would be passed. In consonance with sub-section (9) of Section 20, therefore, the amendment notification provided that in case of employees or officers against whom disciplinary proceedings were initiated or were contemplated between 01.04 to 12.02.1988, their transfers would only be provisional.
9. The disciplinary action against the petitioner was contemplated, if not stated to have been initiated, is beyond doubt. It was pending criminal prosecution in corruption case that the petitioner was placed under suspension in the year 1982. This order of suspension survived till the year 1983 when the High Court quashed the same on account of dropping of the criminal case for want of sanction. Even though no fresh order of suspension was passed when the prosecution was relaunched with proper sanction in the year 1986, it cannot be disputed that based on the outcome of such criminal case, the petitioner would be visited with departmental action. The relaunched criminal prosecution in the year 1986 survived till the year 1999. First the trial Court acquitted the petitioner by the judgment dated 12.08.1991 Page 11 of 20 HC-NIC Page 11 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT and thereafter, the High Court dismissed the Government appeal on 17.02.2009. Even if we were to disassociate the period of pendency of Government appeal against acquittal, the criminal case against the petitioner was pending before the Special Court right from the year 1986 till his acquittal, as noted above, on 12.08.1991. Thus, during the crucial period between 01.04.1981 to 10.02.1988 referred to in the amendment notification dated 28.03.1988, the disciplinary proceedings were contemplated against the petitioner. In that view of the matter clearly, the service of the petitioner was transferred to the Board only provisionally.
10. The purpose behind enacting sub-section (9) of Section 20 and the consequential amendment in the notification is not far to seek. The Government would continue to hold control of disciplinary action against any Government servant against whom inquiry is already initiated and in that view of the matter, would not transfer his services permanently in the Board. Only upon completion of the disciplinary proceedings, would the Government review the situation and pass such order as found appropriate.
11. Mere mention of the name of the petitioner in the annexure to the circular dated 12.02.1988, under which services of several Government officers were Page 12 of 20 HC-NIC Page 12 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT transferred to the Board, would not change the situation. The amending notification dated 28.03.1988 would override any such circular and effectively would bring about the situation where the services of the petitioner and similarly situated other employees would stand transferred only provisionally and not permanently. If the stand of the Government was that upon his acquittal in the year 1991, mere pendency of the criminal appeal would not give rise to any contemplation of departmental proceedings, the Government had to pass an order making absorption of the petitioner in the Board absolute from the earlier position of provisional transfer of his service. Nothing of this sort was done. In my opinion, therefore, the petitioner continued to be a Government servant and the Board did not have authority to compulsorily retire him.
12. Coming to the question of the merits of the order, one may notice that the Committee of the Board constituted for such purpose considered the case of the officers upon crossing the age of 50/55 years including the case of the petitioner. His case was recommended for compulsory retirement on the following basis:-
"Shri R.J.Ratanghayara when he was discharging his duties as Deputy Engineer, Bhuj, in connection with the work of water tank, stand post, etc., he had demanded sum of Rs.11,500/- and further sum of Rs.5,500/- totalling to Page 13 of 20 HC-NIC Page 13 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT Rs.17,000/- at the rate of 4% of the bill payment of Rs,2,87,000/- to the contractor Arjanbhai Bandhaniya of Anjar, for which a trap was laid and he was caught in such trap. Upon final verification unaccounted Rs.60,000/- was found from his suitcase. Thereupon, he was placed under suspension by order dated 20.04.1993. On the basis of Government resolution and subject to the outcome of the criminal case, he was reinstated in service on 24.12.1998. Thus, between 20.04.1993 to 24.12.1998, he was under suspension. ACB case against Shri R.J.Ratanghayara is currently pending. He was caught by the Anti Corruption Bureau on 20.04.1993. Integrity of Shri R.J.Ratanghayara is doubtful. As per Government resolution dated 28.07.1987, in case of premature retirement, one of the permissible criteria is doubtful integrity. Efficient, able and mentally alert officer can also be compulsorily retired on the ground of doubtful integrity.
Against Shri R.J.Ratanghayara, in case of irregularity in yield test, the Government has preferred criminal appeal which is pending before the High Court."
13. It can this be seen that the only basis for recommending the petitioner for compulsory retirement was his involvement in two criminal cases. In the first para, noted above, the Committee referred to his involvement in the case of trap which was conducted on 09.02.1993. In the second para, reference is made to his involvement in the earlier criminal case, in which he was already acquitted, but the acquittal appeal of the Government was pending before the High Court.
14. It is undoubtedly true that after completion of specified number of years of service or crossing of Page 14 of 20 HC-NIC Page 14 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT certain age, the Government retains right to compulsory retire a Government servant principally on the ground that his service is no longer useful. Such powers are exercised, as is popularly referred to, for chopping of dead wood. In this context, the Court recognizes a great degree of discretion on part of the competent authority. In case of Posts and Telegraphs Board and Ors. Vs. C.S.N. Murthy, reported in AIR 1992 SC, page No.1368, the Supreme Court held that an order of compulsory retirement is not a punishment, implies no stigma. Order of compulsory retirement has to be passed by the Government on forming the opinion that it is in the public interest to retire a Government servant compulsorily. Such opinion is to be formed on subjective satisfaction of the Government. Principles of natural justice have no place in the context of an order of compulsory retirement. The Government would consider the entire service record, regard being had to the performance during the later years before taking such a decision. Even un- communicated adverse remarks could be taken into consideration.
15. In case of Baikuntha Nath Das & Anr. Vs. Chief District Medical Officer, Baripada & Anr., reported in AIR 1992 SC, page No.1020, it was reiterated that the order of compulsory retirement would be passed on subjective Page 15 of 20 HC-NIC Page 15 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT satisfaction of the authority upon consideration of the entire service record, more importance being given to the record of the later years.
16. In case of Union of India Vs. V.P.Seth & Anr., reported in AIR 1994 SC page No.1261, it was reiterated that un-communicated adverse remarks can be taken into consideration while passing the order of compulsory retirement and that the order not being in the nature of penal order, the rule of audi altram partem would not apply.
17. Under the circumstances, if the employer passes an order of compulsory retirement after considering the entire service record of employee and finds him no longer useful and therefore, forms a belief in the public interest to retire him, ordinarily, the role of the Court would be extremely narrow. However, in the present case, the order of compulsory retirement is not passed on the ground that his service was no longer useful. It is not the case of the employer that his service record was such that his service could not have been continued in public interest. In fact, the background note for recommending his compulsory retirement suggests that he was ordered to be compulsorily retired only on the ground of doubtful integrity. The issue of doubtful integrity is a tricky one and the employer must have some material at its Page 16 of 20 HC-NIC Page 16 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT command to compulsorily retire an employee whose service is being terminated long before age of superannuation. In the present case, what is pressed in service is the involvement of the petitioner in two criminal cases. In both, the prosecution failed completely. In the first case instituted in the year 1982, charges were dropped for want of sanction. When the prosecution was relaunched, the prosecution failed to prove the charges and the petitioner was therefore, acquitted. Appeal against acquittal was dismissed by the High Court, upholding the judgment of the Special Court. In the second case, the proceedings were dropped for want of sanction with a liberty to file a fresh case after proper sanction, which was never done. Thus, on mere involvement of the petitioner without his role being established and the charges proved against him, the petitioner is being compulsorily retired without any semblance of any departmental inquiry or collecting any material departmentally. Surely, the powers of compulsory retirement cannot be exercised to short- circuit, bypass or scuttle a departmental inquiry. Despite the petitioner's discharge or acquittal in criminal case, it was always open for the Department to hold a departmental inquiry and as the current trend goes, even it be simultaneous and parallel.
Nevertheless, without holding such inquiry, the final
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C/SCA/89/2000 JUDGMENT
order, obviously, cannot be passed. Without collecting
any material, merely on the ground of involvement in
criminal cases, even to form a belief of doubtful
integrity, was entirely questionable. Courts have made a
clear distinction between an order of termination founded on the grounds of misconduct and one where such alleged misconduct is merely a motive or basis. There are long lines of decisions, reference to all of them is not necessary. We may only refer to the judgment in case of Chandra Prakash Shahi Vs. State of U.P. & Ors., reported in AIR 2000 SC, page No.1706, in which, in the context of question of termination of temporary or probationer employee, whether the order is simplicitor or punitive, came up for consideration. The discernible distinction between the misconduct being of a motive or foundation for passing such an order was highlighted. It was observed as under:-
"28. The important principles which are deducible on the concept of "motive" and "foundation", concerning a probationer, are that a probationer has no right to hold the post and his services can be terminated at any time during or at the end of the period of probation on account of general unsuitability for the post in question. If for the determination of suitability of the probationer for the post in question or for his further retention in service or for confirmation, an enquiry is held and it is on the basis of that enquiry that a decision is taken to terminate his service, the order will not be punitive in nature. But, if there are allegations of misconduct and an enquiry is Page 18 of 20 HC-NIC Page 18 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT held to find out the truth of that misconduct and an order terminating the service is passed on the basis of that enquiry, the order would be punitive in nature as the enquiry was held not for assessing the general suitability of the employee for the post in question, but to find out the truth of allegations of misconduct against that employee. In this situation, the order would be founded on misconduct and it will not be a mere matter of "motive".
29. "Motive" is the moving power which impels action for a definite result, or to put it differently, "motive" is that which incites or stimulates a person to do an act. An order terminating the services of an employee is an act done by the employer.
What is that factor which impelled the
employer to take this action. If it was
the factor of general unsuitability of the
employee for the post held by him, the action would be upheld in law. If, however, there were allegations of serious misconduct against the employee and a preliminary enquiry is held behind his back to ascertain the truth of those allegations and a termination order is passed thereafter, the order, having regard to other circumstances, would be founded on the allegations of misconduct which were found to be true in the preliminary enquiry."
18. Under the circumstances, even on merits, the order of compulsory retirement cannot be sustained. On both grounds, therefore, petition succeeds. Impugned order dated 31.12.1999 is set aside. The petitioner, now having crossed age of superannuation, would be only entitled to consequential monetary benefits, which include the actual salary minus pension received by him and resultant effect on pension of his full service up to the age of superannuation. Rule is made absolute.
Page 19 of 20 HC-NIC Page 19 of 20 Created On Tue Jan 26 01:55:37 IST 2016 C/SCA/89/2000 JUDGMENT (AKIL KURESHI, J.) SHITOLE Page 20 of 20 HC-NIC Page 20 of 20 Created On Tue Jan 26 01:55:37 IST 2016