Madras High Court
D.T.Boopathy vs The Principal Secretary To Government on 5 June, 2012
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Order Reserved on 29.11.2018 Order Pronounced on:28..01..2019
CORAM
THE HON'BLE MR.JUSTICE V.BHARATHIDASAN
Writ Petition No.11293 of 2014
D.T.Boopathy
... Petitioner
-Versus-
1.The Principal Secretary to Government,
Commercial Taxes and Registration Department,
Government of Tamil Nadu,
Fort St. George, Chennai 600009.
2.The Inspector General of Registration,
Chennai 600028.
... Respondents
Writ Petition filed under Article 226 of the Constitution of India,
praying to issue a Writ of Certiorari calling for the entire records of
the 2nd respondent relating to the disciplinary proceedings in
No.12493/A1/2011 including the order dated 05.06.2012 and as
confirmed by the 1st respondent by his proceedings under G.O.(D)
No.662, dated 03.12.2013 and to quash the same.
For Petitioner : Mr.V.Karthic, Senior
Counsel for
Mr.V.G.Suresh Kumar
For Respondent(s) : Mr.P.P.Purushothaman,
Govt. Advocate for R1
and R2
http://www.judis.nic.in
2
ORDER
Challenging the order of punishment of stoppage of increment for a period of three years without cumulative effect, excluding the leave period, imposed by the 2nd respondent by his proceedings in No.12493/A1/2011 dated 05.06.2012 and the consequential rejection of appeal by the 1st respondent in and by G.O.(D) No.662, Commercial Taxes and Registration (K) Department, dated 03.12.2013, the petitioner is before this court with the instant writ petition.
2. The brief facts leading to the filing of the instant writ petition is as follows: The petitioner was a Sub Registrar in the Registration Department under the Tamil Nadu Government. While he was functioning as Sub Registrar at Anaimalai, on 01.10.2011, two documents of conveyance were presented for registration one was by M/s.Kothari Industrial Corporation Limited in favour of one M/s.Water Fall Estate (East) Limited and the other was by M/s.Kothari Industrial Corporation Limited in favour of one M/s.Water Fall (West) Limited and the company had claimed the benefit of exemption of stamp duty granted by the Tamil Nadu http://www.judis.nic.in 3 Government under notification in G.O.Ms.No.1224, Revenue Department, dated 25.04.1964 on the ground that the transfer was between the companies limited by shares as define in the Companies Act, 1956, wherein 90% of the issued share capital of the transferee company is the beneficial ownership of the transferor company. The petitioner had entertained a doubt regarding the exemption of stamp duty claimed by the companies and hence, he had sought for a clarification from the District Registrar (Administration), Tiruppur, as the monetary implications in the transactions were huge. The District Registrar, in turn, sent a reply to the petitioner stating that it was unnecessary for him to give any opinion and that the District Registrar had directed the petitioner to form his own opinion in the matter. Thereafter, based on the auditor's opinion and the other documents produced by the companies, the petitioner had registered the documents giving the benefit of remission of stamp duty and had released the documents to the transferee companies. Thereafter, the Audit Department had raised an objection regarding under valuation of the instruments on the ground that the exemption permissible under the Government Order referred to above was not applicable to the transferor company. Thereafter, a proceedings under Section http://www.judis.nic.in 4 33-A of the Indian Stamp Act was initiated for recovery of deficit of stamp duty. The transferor company challenged the demand raised by the registration department for deficit of stamp duty by way of writ petition and the matter went up to the Hon'ble Supreme Court. Ultimately, the Hon'ble Supreme Court rejected the case of the transferor company. Thereafter, a disciplinary proceeding was initiated against the petitioner under Rule 17(b) of the Tamil Nadu Civil Servants (Discipline and Appeal) Rules [in short "the Rules"] for having caused loss of revenue to the tune of Rs.2.34 crores and a departmental enquiry was ordered. In the enquiry, the enquiry officer found that the charges against the petitioner were proved, ultimately, the disciplinary authority had imposed a punishment of stoppage of increment for a period of three years without cumulative effect. Challenging the above said order of punishment, the petitioner filed an appeal before the 1st respondent - appellate authority which was also dismissed. It is these orders which are now under challenge in this writ petition.
3. The 2nd respondent filed his counter affidavit contending that while the petitioner was working as Sub Registrar at Anaimalai, http://www.judis.nic.in 5 he had registered the deeds in question and granted exemption of stamp duty invoking the benefit under G.O.Ms.No.1224, Revenue Department, date 25.04.1964. Subsequently, during internal audit it was found that the notification provides for remission of stamp duty only if the transfer is between the parent company and the subsidiary company provided that the parent company should hold not less than 90% of the issued share capital of the subsidiary company, but, in the instant case, the transferor company subscribed only a portion of the share capital issued by the subsidiary companies and the remaining portion of the share capital were not at all issued by the transferee companies. Hence, according to the 2nd respondent, the Government Order, cited supra, is not all all application to the present case and the companies are not entitled for remission of stamp duty under the Government Order. By his act, the petitioner had caused huge revenue loss to the Government to the tune of Rs.1.30 crores and Rs.1.02 crores respectively. Thereafter, proceedings under Section 33-A of the Indian Stamp Act were initiated which were challenged by the transferor company and the matter went up to the Supreme Court, but, the transferor company could not succeed in their case. In those above circumstances, a disciplinary proceedings came to be http://www.judis.nic.in 6 initiated against the petitioner for having caused revenue loss to the tune of Rs.2.34 crores and after enquiry, he was imposed with the punishment of stoppage of increment for a period of three years without cumulative effect, excluding the leave period. The disciplinary authority had showed leniency while awarding punishment and there is no merit in the writ petition and the same is liable to be dismissed.
4. Mr.V.Karthic, the learned senior counsel for the petitioner would submit that the petitioner while working as Sub Registrar at Anaimalai had only discharged his quasi judicial function in the matter of grant of remission of stamp duty and in the absence of any specific allegation of culpable negligence or malafide intention or allegation of extraneous consideration, the respondents cannot initiate disciplinary proceedings against the petitioner. According to the learned senior counsel, at any rate, the act of the petitioner can only be presumed as wrong interpretation of the notification in the matter of granting remission of stamp duty for which the disciplinary proceedings cannot be maintained and no charge could be framed against the petitioner.
http://www.judis.nic.in 7
5. The learned senior counsel further submitted that even as per the findings of the disciplinary authority as well as the appellate authority, only due to some confusion the exemption was granted and no ulterior motive attributed to the petitioner. After having given such a finding, the respondents ought not to have found the petitioner guilty of the charges. The learned senior counsel would further add that the allegation against the petitioner is that the had caused revenue loss to the Government but whereas, the company had paid the entire deficit of stamp duty on 07.06.2018 and as such there is no revenue loss caused to the Government. He had also produced a Xerox copy of the order passed by the District Registrar (Administration), Coimbatore, in this regard.
6. Per contra, the learned Government Advocate contended that while registering the documents in question, the petitioner had passed on the benefit of remission of stamp duty wrongly to the transferor company without adhering to the circular issued by the Government and by his negligent act, he had caused huge revenue loss to the Government. Further, according to the learned Government Advocate, when the circular is very clear that the parent http://www.judis.nic.in 8 company should hold not less than 90% of the issued share capital of the subsidiary companies and the documents produced for registration clearly showed that the parent company did not have 90% of the issued share capital of the subsidiary companies, the petitioner ought not to have passed on the benefit of remission of stamp duty to the transferor company. When the demand for deficit of stamp duty came to be challenged by the petitioner by way of writ petition, this court dismissed the claim of the petitioner and the transferor company took up the matter up to the supreme court but, they could not succeed in their case. Only after having considered all those materials and after giving sufficient opportunity to the petitioner during enquiry, the enquiry officer had found him guilty of the charges and the disciplinary authority had shown leniency upon the petitioner and had imposed only a lesser punishment which was ultimately confirmed by the appellate authority which does not require any interference at the hands of this court.
7. I have considered the rival submissions carefully.
8. Before considering the rival submissions, it would be useful http://www.judis.nic.in 9 to refer to the charge framed against the petitioner:-
"jpU/D.T. g{gjp Mfpa jh';fs; jpUg;g{h; gjpt[ khtl;lk; Mizkiy rhh;gjpthsuhf gzpahw;wpanghJ M/s.Kothari Industrial Corporation Limited vd;w epWtdk;. M/s.Waterfall Estate (East) Ltd., kw;Wk; M/s.Waterfall Estate (West) Ltd., vd;w Jiz epWtd';fSf;F vGjp[f; bfhLj;j fpiua Mtz vz;fs; Kiwna 2558/2001 kw;Wk; 2582/2001 Mfpatw;wpw;F murhiz vz;1224. tUtha;. ehs; 25/04/1964y; fz;l ,dk; 38y; Fwpg;gpl;lg;gl;l epge;jizfs; g{h;j;jp bra;ag;glhj epiyapy; nkw;go ,U Mtz';fSf;Fk; murhizf;F Kuzhf Kj;jpiyj; jPh;it tpyf;F mspj;J gjpt[ bra;jjpd; K:yk; muRf;F Kj;jpiuj; jPh;it ,Hg;g[ Kiwna U:/1.32.00.000 kw;Wk; U:/1.02.00.000 Mf bkhj;jk; U:/2.34 ; Ph;fs;"
nfho ,Hg;g[ Vw;gLj;jpa[ss
9. The allegation against the petitioner is that while functioning as Sub Registrar at Anaimalai, he had registered two documents by granting the benefit of stamp duty exemption without satisfying the conditions stipulated in G.O.Ms.No.1224, Revenue Department, dated 25.04.1964 and thereby caused revenue loss to the tune of Rs.2.34 crores to the Government. The above said Government Order provides remission of stamp duty only if the transfer is between the parent company and the subsidiary company provided that the parent company should hold not less than 90% of the issued share capital of the subsidiary company. According to the respondents, in the instant http://www.judis.nic.in 10 case, the transferor company held only 100% of the subscribed share capital and not the issued share capital. So, the benefit of remission of stamp duty cannot be granted. Now, the contention of the petitioner is that when the instruments were presented before him for registration, he had raised a doubt regarding the exemption claimed by the companies, immediately he sought for a clarification from the District Registrar, who, in turn, refused to give any opinion, instead, he directed the petitioner to decide the issue on his own. Thereafter, based on the auditor report and also the other documents, the petitioner had granted the benefit of remission of stamp duty and as such no malafide intention could be attributed to the petitioner. Further, there is no allegation that the petitioner had gained any monetary benefit out of it.
10. The petitioner, being the Sub Registrar is only exercising a quasi judicial power while determining the stamp duty payable on any instrument under The Indian Stamp Act and he is only adjudicating the issue involved in the determination of proper stamp duty payable on the instrument. Mere carelessness or inadvertence or omission, while exercising the quasi judicial power is not sufficient http://www.judis.nic.in 11 to initiate disciplinary proceedings for misconduct unless it has been established or alleged that the delinquent officer has acted with culpable negligence or ill-motive or on some extraneous consideration. The Hon'ble Supreme Court in Zunjarrap Bhikaji Nagarkar v. Union of India and others, (1999) 7 SCC 409 has held as follows:
"43. If every error of law were to constitute a charge of misconduct, it would impinge upon the independent functioning of quasi-judicial officers like the appellant. Since in sum and substance misconduct is sought to be inferred by the appellant having committed an error of law, the charge-sheet on the face of it does not proceed on any legal premise rendering it liable to be quashed. In other words, to maintain any charge-sheet against a quasi-judicial authority something more has to be alleged than a mere mistake of law, e.g., in the nature of some extraneous consideration influencing the quasi-judicial order. Since nothing of the sort is alleged herein the impugned charge- sheet is rendered illegal. The charge sheet, if sustained, will thus impinge upon the confidence and independent functioning of a quasi-judicial authority. The entire system of administrative adjudication whereunder quasi-judicial powers are http://www.judis.nic.in 12 conferred on administrative authorities, would fall into disrepute if officers performing such functions are inhibited in performing their functions without fear or favour because of the constant threat of disciplinary proceedings.
44. Considering whole aspects of the matter, we are of the view that it was not a case for initiation of any disciplinary proceedings against the appellant. The charge of misconduct against him was not proper. It has to be quashed."
11. The above said judgement has been followed by this court in S.Muthuramu v. State of Tamil Nadu, rep. its Chief Secretary to Government Public (Special-A) Department, Chennai, (2008) 3 MLJ 766 wherein this court has held that in the absence of any motive or / and recklessness attributed against the delinquent officer, charges are not maintainable.
12. Subsequently, yet another learned single judge of this court in B.K.Gunasekaran v. State of Tamil Nadu (W.P.No.14682 of 2009 dated 25.02.2010) had taken the similar view. http://www.judis.nic.in 13
13. Keeping the above principle in mind, let us now consider the instant case. The disciplinary authority, while holding that the charge against the petitioner was proved, had given a clear finding that the decision had been taken in a confused state of mind based on the report from the auditor and non furnishing of clarification by the District Registrar concerned and no ulterior motive could be attributed to the petitioner. The relevant portion of the order of the 2nd respondent / disciplinary authority is as follows:
"Fw;w";rhl;lg;gl;l mYtyh; nkw;go gzpf;F g[jpath; vd;w epiyapy; nkw;go Mtz';fis gjpt[ bra;Js;shh;/ Fw;w";rhl;lg;gl;l mYtyh; Mtzj;jpd;
jd;ik Fwpj;J khtl;lg;gjpthshplk; bjspt[iu nfhhpa[ss
; epiyapy;.
khtl;l;ggjpthsh; ,e;j Mtzg;gjpt[ bjhlh;ghf chpa mwpt[iu tH';ftpy;iy vd;gJ bjhpfpwJ/ khepyf; fzf;fhah; jzpf;if mwpf;ifapd;go nkw;go Mtz';fspy; ,Hg;g[ Vw;gl;Ls;sJ mwpag;gl;L gpd;dh; ,Hg;gpid tR{ypf;f rl;lg{h;t etltof;ifa[k; nkw;bfhs;sg;gl;L. ,jid vjph;j;J rk;ge;jg;gl;l epWtdk; jhf;fy; bra;j ePjpg;nguhizfSk; js;Sgo bra;a;gl;L. rl;lg;g{h;t eltof;if Ch;$pjk; bra;ag;gl;Ls;sJ/ nkYk;. ,e;j Mtz';fSld; jhf;fy; bra;ag;gl;l gl;la fzf;fhahpd; jtwhd mwpf;iffs; Fw;w";rhl;lg;gl;l mYtyh; ,e;j Mtzg;gjpt[ bjhlh;ghf FHg;gkhd epiyf;F js;sg;gl;lJk;. gpd;dh; khtl;lg;gjpthsh; ,J Fwpj;J chpa mwpt[iu mspf;fhjJk;. nkw;go Mtz';fspd;
K:yk; rhh;gjpthsh; ,Hg;g[ Vw;gLj;jpa[ss
; jw;fhd fhuzk; MFk; vd;gJ
g[ydhfpwJ/ ,e;j Mtzg;gjpt[fs; K:yk; muRf;F Vw;gl;l ,Hg;g[ bjspthf epU:gzkhfpa[ss ; J/ vdpDk;. ,e;j Mtzg;gjpt[ K:yk; Vw;gl;l ,Hg;gpw;F Fw;w";rhl;lg;gl;l mYtyh; kPJ ntW VJk; cs;;nehf;fk; fw;gpf;f ,ayhj epiyapYk;. ,Hg;gpid tR{ypf;f rl;lg;g{h;t eltof;iffs; nkw;bfhs;sg;gl;L. mj;jifa eltof;iffis ePjpkd;wk; rhpahdJ vd nkw;go epWtdk; jhf;fy;
http://www.judis.nic.in 14 bra;j ePjpg;nguhizfs; K:yk; cWjp bra;Js;sJ. /////////"
The appellate authority had also taken the similar view and held that the petitioner did not act with any ulterior motive.
14. From the above finding, it is very clear that the petitioner had acted based on a wrong interpretation of the circular and he was not actuated by any malafide intentions. He might have exercised his jurisdiction wrongly while exercising quasi judicial power and the same cannot be the basis for the initiation of disciplinary proceedings. In the said circumstances, charges framed against the petitioner itself is not maintainable and consequentially, the punishment imposed upon the petitioner is also liable to be set aside.
15. In the result, this writ petition is allowed and the impugned order is set aside. No costs.
Index : yes. 28..01..2019
Internet : yes.
Speaking / Non Speaking Order
kmk
http://www.judis.nic.in
15
To
1.The Principal Secretary to Government, Commercial Taxes and Registration Department, Government of Tamil Nadu, Fort St. George, Chennai 600009.
2.The Inspector General of Registration, Chennai 600028. http://www.judis.nic.in 16 V.BHARATHIDASAN.J., kmk Pre Delivery Order in W.P.No.11293 of 2014
28..01..2019 http://www.judis.nic.in