Karnataka High Court
Sri. B.N. Dhotrad vs The Board Of Directors/Cum-Appellate ... on 19 July, 2006
Equivalent citations: ILR2006KAR3163, 2006 (5) AIR KAR R 395
Author: S. Abdul Nazeer
Bench: S. Abdul Nazeer
ORDER S. Abdul Nazeer, J.
1. The question for consideration in this writ petition is 'whether an Officer, holding a post on in-charge basis, can exercise the substantive powers of the post ?'
2. Brief facts of the case are as follows:
Petitioner was an Assistant Task Force Commander in the Karnataka Land Army Corporation Limited (for short 'Corporation'), a Government of Karnataka Public Sector Undertaking. When he was working in the office of the Assistant Director of the Corporation, Bijapur, certain charges of misuse of advance amount and materials and default in making payment to material suppliers were levelled against him. In this connection, the Managing Director who is also the Disciplinary Authority had issued a show-cause notice on 16.07.1997. The Disciplinary Authority passed an order dated 29.03.2000 (Annexure 'A') whereby three annual increments of the petitioner was with-held with cumulative effect and recovery of No. 4,72,892.53 was directed against him. The petitioner preferred an appeal against the said order on 03.05.2000. The Board of Directors being the Appellate Authority by their Resolution dated 29.12.2000 (Annexure 'C'), rejected the appeal and an intimation dated 23/24.04.2001 was sent to the petitioner accordingly. The petitioner has challenged the orders of the Disciplinary Authority and the Appellate Authority in this writ petition.
3. I have heard the learned Counsel for the parties and perused the materials placed on record. Learned Counsel for the Corporation has made available the original records for the perusal of this Court.
4. Learned Counsel for the petitioner would contend that the impugned order of penalty passed by the Disciplinary Authority is without jurisdiction. The Disciplinary Authority was not appointed in accordance with law and he does not possess the required qualification and eligibility to hold the post of Managing Director. He was only a Technical Director appointed on contract basis and he was placed in-charge of the post of the Managing Director. A post of the Managing Director can be filled up with a person holding a post of a Senior I.A.S. Officer or Engineer-in-Chief in the Government of Karnataka. A person placed in-charge of Managing Director cannot exercise any substantive powers of the Office. Therefore, the order impugned is totally without jurisdiction. It is further contended that the appellate order is also not in conformity with the law.
5. On the other hand, learned Counsel for the Corporation would contend that the Trade Union of the employees of the Corporation of which the petitioner is a member had filed a writ petition in W.P. No. 29032/1999 challenging the appointment of Sri. V.R. Gudi as in-charge Managing Director. In the said case, an interim order was passed by this Court on 12.04.2000, rejecting the prayer of the petitioners therein restraining Sri. V.R. Gudi from discharging the functions of a Managing Director. Therefore, the order passed by the in-charge Managing Director is valid and enforceable in law. He has also justified the appellate order.
6. In reply, learned Counsel for the petitioner contends that, no doubt, the Trade Union of the employees of the Corporation had challenged the order of appointment of Sri. V.R. Gudi as in-charge Managing Director in W.P. No. 29032/1999. This Court while passing the interim order has clearly observed that the interim prayer granted is subject to the validity of the order of appointment of the in-charge Managing Director. Statement of objections was filed by the State Government to the said writ petition on 05.02.2000, wherein it was stated that the in-charge Managing Director will be relieved from the position as soon as they find a suitable person for the said post. Subsequently, the in-charge Managing Director has retired. Therefore, the validity of his appointment was not considered by this Court and the writ petition was disposed of as having become unnecessary. It is re-iterated that the in-charge Managing Director had no jurisdiction to pass the substantive order.
7. I have carefully considered the arguments of the learned Counsel made at the Bar.
8. Perusal of the records show that a regular Managing Director/Disciplinary Authority had issued charge sheet to the petitioner on 12.03.1996. The petitioner has been asking the Disciplinary Authority for certain copies of the documents to enable him to file the reply. In the meantime, Lt. Col. V.R. Gudi (retired) was appointed as the Technical Director of the Corporation vide order dated 21.03.1995 (Annexure 'E'). An Official Memorandum was issued by the State Government as per Annexure 'F' on 09.01.1998 placing him in-charge of the post of Managing Director. The in-charge Managing Director has appointed an enquiry officer by his order dated 12.03.1998. The petitioner has sent a letter on 20.06.1998 seeking certain clarification as to whether a retired contract employee holding in-charge arrangement can constitute a departmental enquiry committee and sit as Disciplinary Authority. The petitioner has refused to participate in the enquiry proceedings thereafter. Finally, the order at Annexure 'A' was passed by the in-charge Managing Director on 29.03.2000. The appeal filed against the said order was also rejected by the Appellate Authority.
9. The Karnataka Land Army Corporation Cadre and Recruitment Rules, 1996 (for short 'Rules') provides for the conditions of service, method of recruitment, procedure for appointment, misconduct, pay and allowances, etc. Chapter 9 contains the disciplinary and appeal Rules. Rule 94 provides for imposition of penalties. It is as follows:
Rule 94 PENALTIES: The following penalties may for good and sufficient reasons and as hereinafter provided, be imposed on the employees namely;
i) fine in the case of employees of Category IV,
i) censure,
ii) withholding of increments,
iii) recovery from pay of the whole or part of any pecuniary loss caused by negligence or breach of orders of the competent authorities of the corporation,
v) reduction to a lower grade or post or to a lower stage in a time scale,
vi) compulsory retirement,
vii) dismissal from service.
Punishments (i) and (ii) may be imposed by Deputy Directors in respect of employees working under them. The Managing Director may impose any of the penalties on any employee.
It is clear from the Rules that Managing Director is alone competent to impose penalties under Sub-rules (iii) to (vii) of Rule 94. The method of recruitment of Managing Director is provided in Sl. No. 1 of Schedule III to the Rules. It is as follows:
SI No. 1 MANAGING DIRECTOR
- 1 POST
Name of the Post : Managing Director
Scale of Pay : Rs.5150-6600
Method of appointment : To be appointed
by Government by
deputation
of a senior scale
IAS Officer of a
suitable
Engineer-in-Chief
an such terms and
conditions as may
be fixed from time
to time.
10. It appears that there were certain deficiencies in the existing Rules of the Corporation. Therefore, the Corporation has passed a resolution in its 74th Meeting adopting the Karnataka Civil Service Regulations (for short 'K.C.S.R.') and made them applicable to employees of the Corporation. This Court in Shankar v. Karnataka Land Army Corporation Limited ILR 1996 KAR 1407 has held that adopting K.C.S.R. is to supplement the existing Rules so as to cover all situations as were not specifically provided for or covered by the Rules framed by it. It has been further held that K.C.S.R. would be applicable only in regard to matters which were not otherwise covered by the Rules framed in the Corporation. The adoption of K.C.S.R. was not a measure to abrogating the existing Rules and whenever the Corporation Rules made a provision, the KCSR would have no application. Since there is no provision to appoint an in-charge Managing Director, the Corporation appears to have appointed the in-charge Managing Director in accordance with the provisions of the K.C.S.R.
11. It is settled that a person who is appointed to a post in accordance with law by a competent authority has a lien to the post. He is so appointed because, he possesses the qualification prescribed for the post. The qualification prescribed for a post has immense relevance to the quality and content of the jobs and functions of a post and their discharge in public employment. It is more so in the case of pivotal posts/ offices such as of Managing Director of a Public Sector Undertaking.
12. In-charge arrangements and promotion are well understood in Civil Service. Posting an Officer in the lower post to discharge the duties of the higher post without promotion is only an in-charge arrangement. It is the exigencies of public service that will be the relevant consideration and not the consideration of seniority while making such arrangement. A person was posted on independent charge basis does not hold the post on promotion. Under Rule 32 of KCSR, any employee in the next below post/cadre can be placed in charge or independent charge of a higher post. Similarly, in accordance with Rule 68 of the K.C.S.R., a Government servant can be appointed to be in-charge of the current duties of an office in addition to his own duties. He need not be the senior most. Generally, such arrangements are made for a short period. Therefore, no presumption can be raised that the substantive power attached to the Office of Managing Director is not likely to be abused. In exercise of these powers he may mar the service career of all other employees who are likely to compete with him for promotion. Therefore, he is not supposed to discharge the substantive functions of the post/office which he holds on in-charge basis. In the book 'Services under the State' by Justice M. Rama Jois, it has been observed at page 366 in relation to in-charge arrangement in higher post as under:
Promotion to the higher post means the appointment of a civil servant to a higher post on a regular basis either temporary or permanent in accordance with the rules. Incharge arrangement and promotion are well understood terms in civil service. Posting an officer in the lower post to discharge the duties of a higher post without promotion is only an incharge arrangement and it cannot be touted as a promotion. He does not get the salary of the higher post but only gets the prescribed charge allowance While making such arrangement, it is the exigencies of public service that will be the relevant consideration and not the consideration of seniority. A person so posted on independent charge basis does not hold the post on promotion but he still continues to be in the lower post and only discharges the duties of higher post as a temporary measure.
13. In Ramakant Shripad Sinai Advalpalkar v. Union of India and Ors. AIR 1991 SC 1145 the Apex Court has held that asking an officer who substantivety holds the lower post merely to discharge the duties of a higher post cannot be treated as a promotion. He only discharges the duties of the higher post as a stop-gap arrangement. It is held thus:
Asking an officer who substantively holds a lower post merely to discharge the duties of a higher post cannot be treated as a promotion. In such a case he does not get the salary of the higher post, but gets only that in service parlance is called a ''charge allowance". Such situations are contemplated where exigencies of public service necessitate such arrangements and even consideration of seniority do not enter into it. The person continues to hold his substantive lower post and only discharges the duties of the higher post essentially as a stop-gap arrangement.
(emphasis supplied) It has been further held that "in-charge arrangement" is not a recognition of or is necessarily based on seniority. At para 6 of the judgment, it is held as under:
The third contention is that appellant's 'in charge' arrangements in the higher post had continued for so long a period that a determination of equivalence on the basis of his lower substantive post would become arbitrary. This contention ignores the fact that an 'in charge' arrangement is not a recognition of or is necessarily based on seniority and that, therefore, no rights, equities or expectations could be built upon it. The third contention is also unmeritorious.
(emphasis supplied)
14. Although, it is difficult to define the terms "Substantive Power" or "Substantive Function", still it is not uneasy to illustrate the concept. The policy decisions and the actions to implement them fall within the realm of "Substantive Functions". Generally, in service jurisprudence, all the powers which the service Rules vest in the Authority or Office, expressly or by necessary implication may be termed as substantive powers. In the given case, rules vest inter alia the following powers in the Office of Managing Director: 1) Appointment and Promotion, 2) Disciplinary Control, 3) Recovery on account of Damage, 4) Appeal in Disciplinary matters, 5) Pay fixation, 6) Transfers & Posting, etc. In addition to this, the quasi-judicial functions, perhaps come within the scope of substantive powers and therefore, the Disciplinary action is necessarily to be initiated only by the substantive appointee and not by the in-charge holder of the post. Similarly, the Rule making, power to enter into contracts, the general administration of the affairs of the management are also substantive functions. A Division Bench of this Court in M. Maridev (M. Mariyappa) v. State of Mysore and Ors. reported in 1968 (1) Mys. L.J. page 325 held that when an officer is placed in-charge of the current duties of a vacant post in a higher appointment, he cannot exercise any of the statutory powers of the office. He can only perform the day today office duties. It has been held thus:
Officiating appointments, and in charge arrangements are well understood terms in civil service. When an officer is appointed to officiate in a higher appointment, he is invested with the powers of the higher post, but when he is placed in charge of the current duties of a vacant post in a higher appointment whether in addition to fats own duties or independently, he cannot exercise any of the statutory powers of the office: he can merely perform the day to day office duties only.
(emphasis supplied) In Girija Shankar Shukla v. Sub-Divisional Officer, Harda and Ors. AIR 1973 Madhya Pradesh 104 a Full Bench of the Madhya Pradesh High Court held that a person appointed to be in-charge of current duties of the office did not hold the rank and therefore could not discharge the statutory functions assigned to the Office. It has been held at para 17 thus:
From the decisions of the Supreme Court it follows that a person appointed permanently or to officiate on a post holds that rank, whereas a person who is placed only in current charge of duties of a post does not hold, that rank. Accordingly, those functions or powers of the post which depend on the rank cannot be discharged by a person who is placed only in current charge of the duties of that post.
Again at para 38 it has been held as under:
...An Officer appointed to hold the current charge of the duties of a higher post cannot exercise the statutory powers attached to that post unless there is a statutory provision to this effect.
15. It is to be noted here that the State Government has issued circulars from time to time under Rule 32 of the K.C.S.R., which state that placing Officer in full or independent charge of higher posts should be discouraged and stopped altogether. One of the circular found in the K.C.S.R. Rules compiled by the Association of State Accounts Department (1998 Edition) at pages 72 and 73 is as under:
1. Government have directed in the Order No. GAD 93 SRR 62 dated 20.12.1962 that the practice of placing officers in full or independent charge of higher posts should be discouraged and stopped altogether in view of the fact that such arrangements cause hardship to the person posted and that such vacancies lasting for more than four months should be filled regularly and in accordance with the Recruitment Rules and not by making incharge arrangements.
16. In the instant case, Sri. V.R. Gudi was placed incharge as the Managing Director on 09.01.1998. As per the relevant Rules of the Corporation, only a Senior Scale IAS Officer or a suitable Engineer-in-chief may alone be appointed as the Managing Director. It is true that the employees' Union of the respondent - Corporation had filed a writ petition before this Court in W.P. No. 29032/1999 and in that case an interim order was passed on 12.04.2000 stating that so long as the order of appointment of V.R. Gudi as the incharge Managing Director dated 09.01.1998 and 10.03.1998 held the field, the question of restraining him from discharging any functions as Managing Director does not arise. It has been further observed that the main prayer in the said writ petition and the interim prayer would depend upon the validity of the said orders passed by the State Government It has been further observed that it is for the State Government to justify and support the said orders. The State Government has filed its objections staling that the appointment of Sri. V.R. Gudi is purely temporary till further orders and immediately on finding a suitable person he will be relieved from the position of the Managing Director. The writ petition was disposed of on 11th October 2004 as having become infructuous since the incharge Managing Director had retired. In this petition, the validity of appointment of Sri. V.R. Gudi either as a Technical Director of the Corporation or as the in-charge Managing Director does not fall for consideration. The fact remains that the in-charge Managing Director has acted as a Disciplinary Authority and has passed the impugned order at Annexure 'A'.
17. From the discussions made above, it is dear that a Government servant appointed to be in-charge of current duties of an office cannot exercise any substantive powers of the office. He cannot discharge the statutory functions assigned to the post. He can merely perform the day today office duties because the powers other than substantive powers do not adversely affect the interest or rights of others. In the instant case, though the charge sheet was issued by the regular Managing Director, Mr, V.R. Gudi, the in-charge Managing Director has constituted the departmental enquiry committee and has acted as Disciplinary Authority. Therefore, the enquiry proceedings from the stage of constitution of departmental enquiry committee is illegal and is requires to be quashed. Similarly, the appellate order is equally bad and it also requires to be set aside.
18. In the result, writ petition succeeds and it is accordingly allowed. It is held that the enquiry proceedings from the stage of appointment of an enquiry officer to hold departmental enquiry is illegal and the same is hereby quashed. Consequently, the order at Annexure 'C' dated 29.12.2000 and Annexure 'A' dated 29.03.2000 in No. KLAC/EST/CR-8/99-2000 (EV) are hereby quashed. The matter is remitted back to the respondent - Corporation for fresh disposal in accordance with law and in the light of the observations made above. The Corporation is directed to appoint a fresh enquiry Officer and proceed further in the matter according to law. No costs.