Central Administrative Tribunal - Mumbai
Dilip Singh Chauhan vs M/O Railways on 28 June, 2024
1 OA No.412/2016 Central Administrative Tribunal Mumbai Bench: Mumbai - OA No.412/2016 Order reserved on: 03.01.2024 Order pronounced on: 26: 0% .2024 Hon'ble Mr. Justice M.G.Sewlikar, Member (J) | Hon'ble Mr. Rajinder Kashyap, Member (A) Dilip Singh Chauhan, (son of Mohan Singh Chauhan, Date of Birth: 01.01.1956, Age 60 years, Retired as Chief Engineer. (Construction) (Group "A" post) under Chief Administrative Officer, Ernakulam (Kerala) In Office of the General Manager, Southern Railway, Headquarters Office Chennai (Tamilnadu) and 'Residing at: 802, Blue Bay, 5 Floor, Seawood, Post-Nerul, Navi Mumbai - District - Thane, State of Maharashtra-400706.. .. Applicant (By Advocate: Mr. R.G.Walia} Versus 1. Union of India, Through Secretary, Railway Board, Rail Bhavan, New Delhi-110001. 2. Member Engineering, Railway Board, Rail Bhavan, New Delthi-110001. 2 OA No.412/2016 3. General Manager, Southern Railway, Headquarters Office Chennai (Tamilnadu) | Pin Code -600209. 4, §.D.G.M. (Senior Deputy General Manager) (CVO), . Western Railway, Headquarters Office, Churchgate, Mumbai -400020. ves Respondents (By Advocate: Mr. R.R.Shetty) ORDER
By Justice M.G.Sewlikar, Member (J) Challenge in this application is to the charge sheet dated 14 October, 2015 served on the applicant.
2. Facts leading to this application are 'that the _ applicant was working as Group-A officer belonging to the Engineering Department in the Indian Railway Service of Engineers. He retired from service on 31% December, 2015 on superannuation.
3. It is averred that while working on the post of Chief Engineer (Construction) in the Western Railway, the applicant came to be appointed as a Sole Arbitrator 3 OA No.412/2016 in the proceedings initiated by one M/s. Vaman.
Prestressing Company Limited. The dispute was with © "regard to the claim of price variation and the summary __ of the claim was given in the application. The respondent was the Railways. It is further averred that parties to the said dispute/proceedings appeared | before the applicant. They put forth their respective arguments and after consulting the submissions made by the parties and the evidence produced on record, applicant passed an Award on 1* May, 2010. This Award was modified as there were some typographical errors which were: corrected on 6" August, 2010. The | applicant contends that the arbitration proceedings were held as per the provisions of the Arbitration and Conciliation Act, 1996 (Act of 1996). The proceedings before the Arbitrator are akin to the proceedings before the Tribunal or Court. The Arbitrator performs 'judicial/quasi: judicial functions. It is further | contended that at the fag end of his career, i.e., about two months before his retirement, the applicant was served with the chargesheet leveling five charges against him. These charges pertained to the Award 4 , OA No.412/2016 passed by him. It was alleged in the chargesheet that the applicant awarded the claim of Rs.26,08,977/- ignoring the contract laws and in disregard of the provisions contained in Section 28 (3) of the Act of 1996. Second charge was that the applicant awarded reimbursement of freight charges of cement worth Rs.10,20,077 /- in disregard to the mutually agreed Clause 16.1 & 16.4 of the contract as well as the instructions issued by the Railway Board, in this regard... | Third charge was with regard to reimbursement of freight charges for HTS wire used in PSC sleepers, and therefore, awarded the claim of Rs.10,04,232/-. Fourth charge was that the applicant "awarded interest due to abnormal delay in releasing -- payment for PSC sleepers and awarded Rs.82,23,235/- as per claimant's demand that there was no binding contract to that effect. The fifth and the last charge is that the applicant adjudicated two claims on 'loss due. to overheads' and on 'loss of profit' and awarded an. amount of Rs.54,66,618/ - each. Even though there was no binding contract this chargesheet was issued on 14 October, 2015.
5 OA No.412/20164. The applicant replied to the Articles of Charge and contended that he performed the. duties as an Arbitrator, which is a judicial function. The applicant discharged his duties as an Arbitrator which is akin to a judicial/quasi judicial function, and therefore, it' cannot be brought within the ambit of misconduct.
5. Thereafter, the applicant filed this OA challenging the chargesheet. The applicant contends that he was discharging the quasi judicial function as an Arbitrator | and his actions.as an Arbitrator cannot be called in question in departmental proceedings.
6. Respondents filed their reply. They contend that the disciplinary proceedings, which are quasi judicial in -- nature, should not be interfered with in the midst of | the proceedings. The respondents contend that the applicant has been issued with the charge memorandum dated 14% October 2015 by Railway Board, the disciplinary authority. | The applicant submitted his written statement of defence dated 7™ December, 2015 in response to the charge memorandum. On perusing the statement, the 6 OA No.412/2016 Railway Board decided to remit the case for enquiry as per Rule 9 (a) of Railway Servants (Disciplinary and Appeal) Rules, 1968 and appointed Sh. Arun Bhagra, retired Additional General Manager / South Central Railway as enquiry officer and also appointed a Presenting Officer. The enquiry officer fixed the preliminary hearing on 3% June, 2016 and . communicated the same to 'the applicant vide letter dated 4 May, 2016. Instead of proceeding with the . enquiry, the applicant has filed this OA which is premature.
7. The respondents further contend that while working as Chief Engineer in Western Railway, he settled the claim raised by. the firm M/s: Vaman Pestressing Company Ltd. in disregard of Clause 28 (3) of the Act of 1996 and went beyond the conditions of contract by adopting an arbitrary, negligent and reckless approach-in reaching the conclusion for Award in favour of one party, i.e. the claimant. By the above. acts, applicant has not only violated the conditions of. the contract but also acted against the principles contained in Section 28 (3) of Act of 1996, and thereby 7 OA No.412/2016 acted in a manner. which tantamounts to lack of integrity, lack of devotion to duty and unbecoming of a | Railway Servant. In these circumstances, the Railway Administration took a decision to initiate major penalty . proceedings against the applicant. Accordingly, charge memorandum dated 14" October, 2015 came to be served on the applicant. It is contended that. the applicant acted beyond the terms of the contract by adopting. arbitrary, negligent and reckless approach while passing the Award. The retirement 'benefit of the applicant has been withheld because of the pendency of the departmental proceedings against him. They contend that the charges against the applicant are serious, and therefore, they prayed for | the dismissal of the OA. | . 8, The applicant filed the rejoinder. In the rejoinder, the applicant contends that the respondents challenged 'the arbitration awarded before the Hon'ble High Court "vide Arbitration Petition No.497/2012 and the Award has not been stayed. The Railways did not make any allegation of corruption while passing the Award. They -
did not allege malafide, improper motive or make 8 . OA No.412/2016 allegations of corruption against the applicant. The applicant has been unnecessarily victimised. He states in the rejoinder that this 'entire 'departmental proceeding is a brain child of one Sh. C.M.Gupta against whom applicant had taken strict action while he was working as Dy. Chief Engineer, Con. Ratlam and the applicant was then working as Chief Engineer, 'Con. | CCG. | After being appointed as Dy. CVO/CCG/Western Railway, the said Sh. C.M.Gupta due to personal grudge has initiated these proceedings. He contends that there is inordinate and unexplained delay in issuing the charge sheet. On the count ot delay itself, the charge sheet needs to be quashed.
The applicant has passed the Award in accordance with.
the terms of the contract and in accordance with the _ provisions of law, and therefore, charge sheet needs to be quashed.
9, Both learned counsels for the applicant and | respondents filed written arguments. Perused their written arguments.
10. It is contended in the written arguments by the applicant that the applicant was appointed as an 9. . OA No.412/2016 Arbitrator ; for settling the disputes between the respondents and M/s. Vaman Prestressing Company Limited. He conducted five hearings. After perusing the evidence adduced by the patties and after considering the submissions of both the parties, he passed the Award. The applicant worked | as an Arbitrator in discharge of his official duties. Applicant submitted that after passing of the Award, it was -- challenged by the respondents before the Hon'ble High Court. Hon'ble High Court vide judgment and order dated 18% October, 2019 confirmed the Award passed by the applicant. © He contended that the charge does "not contain that the applicant with corrupt/ improper -- | motive passed the Award. The respondents have not alleged malafide against 'the applicant. No. departmental action can be taken against a judicial or' - quasi judicial authority unless the order is actuated with malice or it was passed with corrupt /improper motives. The charge does not indicate that the | | applicant has been imputed with motives. In addition to this, there is unexplained and inordinate delay in 10 OA No.412/2016 initiating departmental enquiry against the applicant. He, therefore, prayed for setting aside the charge sheet. »
11. Respondents filed their written arguments that the gravamen of the charge against the applicant was that whilst working as Arbitrator for adjudicating the claim of Rs.4,34,26,998/- raised by the firm, the applicant passed the Award beyond the conditions of the contract. by adopting an arbitrary, negligent and reckless approach. He has done so by ignoring the contract laws jointly. agreed by both the parties that no PVC will be available during the extended delivery period. but also in disregard of Clause 28(3} of the Act of 1996. The applicant has also granted the reimbursement of freight charges by disregarding the 'mutually agreed clause 16.1 and 16.4 of the contract. and standing instructions issued by the Railway Board in this regard. They contend that the applicant has granted these claims though they had no foundation in the contract and thus he acted against the terms of _ the contract. This amounts to lack of devotion to duty, lack of integrity and conduct unbecoming of a Government servant. In short, the allegation is of 11. OA No.412/2016 massive corruption run by the applicant while acting as an Arbitrator. So far as the delay is concerned, it is contended in the written arguments that the issue in question related to the year 2009 whereas the charge ' sheet was issued to the applicant in the year 2015 after a delay of six years. They contend that if the charge against the delinquent is one of corruption, mere delay should not | be a ground for interference in departmental proceedings and quashing thereof The. gravity and magnitude of the charge will go. to the root | of the matter, and therefore, charge sheet cannot be quashed. For this purpose, he has placed reliance on the case of S.Govinda Menon vs. Union of India and another, AIR 1967 SC 1274 and the case of Anand R. Kulkarni vs. Y.P.Education Society and others, (2013) 6 SCC 515, | | : 12. We have thoughtfully considered the submissions made in the arguments by learned counsel for both the ~ parties.
13. M/s. Vaman Prestressing Company Ltd. had raised a dispute against the Railways. For settlement of this dispute, the applicant was appointed as a Sole 12. OA No.412/2016 Arbitrator. The applicant passed the Award on 18t May, 2010. The respondents after a lapse of five years 'served charge memorandum on the applicant dated | 14 October, 2015. Thus, after a period of almost five and a half years, the respondents issued charge sheet to the applicant.
14. Following are the charges levelled against the applicant: © "Articles of Charge against Shri D. 8. Chauhan, SAG/IRSE, the then CE(C)/CCG/Western Railway, presently working as CE/CN/ERS/Southern Railway. ;
Shri D. S. Chauhan, the then CE/C/CCG/WR, presently working as CE/CN/ERS/Southern Railway, while working in the capacity of Sole Arbitrator, appointed vide DGM(G)'s/CCG letter No. WwW 634/12/2/3/CS-152/Arb./Vaman, dated | 11.02.2009, for adjudicating the Arbitration Claim of Rs. 4,34,26,998/- raised by the firm, M/s Vaman Prestressing Co. Ltd., Navi Mumbai, vide their Arbitration Notice No. VPCL/CS-152/Arbi- claims/08-09 dated 04.08.2008, against CA No. W/634/12/2/3/CS-152 dated 13.8.03, during the year 2010, has settled claims of the claimant contractor, in disregard to the clause 28 (3) of the Arbitration and Reconciliation Act-1996 and going beyond the conditions of the contract by adopting an arbitrary, negligent and reckless approach, in reaching the conclusion for award, in favour of one party i.e. the claimant, in as much as that:-
Article of Charge-l He, while, adjudicating the PVC claim on 145221 Nos. of PSC sleepers supplied during extended' delivery period of the contract, between 01.4.2005 to 31.08.2005, awarded the claim of Rs. 26,08,977/-
not only ignoring the contract clause jointly agreed by both the parties that no PVC will be payable, during the extended delivery period but also in 13 OA No.412/2016 disregard to the clause 28 (3) of the Arbitration and Reconciliation Act- 1996.
Article of Charge-Il He, while, adjudicating the claim on reimbursement of freight charges for cement' awarded the claim for Rs. 10,20,077/- as per the claimant's demand for freight from other than the specified & nearest source approved for freight reimbursement, in disregard to the mutually agreed clause No. 16.1 & 16.4 of the contract, as well as 'the instructions issued by the Railway Board, in this Tegard.
' Article of Charge-IIl --
He, while, adjudicating the claim on 'reimbursement of freight charges for HTS. wire' used in manufacturing of PSC sleepers, awarded the claim for Rs. 10,04,232/- as per the arbitration demand for freight, from other than the nearest source of supply, in disregard to mutually agreed clause No. 16 of the contract which provides for reimbursement 'of freight for HTS wire, as per wagon load classification from nearest source when material is drawn from the nearest source and otherwise for lower of the actual freight paid & average of. the freight from nearest two sources.
Charge-IV He, while, adjudicating the claim on 'interest due to abnormal delay in releasing the payment for 74472 Nos. of PSC sleepers manufactured by the firm beyond the contractual provision, awarded Rs, 82,23,235/- as per claimant's demand, even, though _ there was no binding contract with the firm for production of any quantity in excess of the already manufactured specified number of PSC sleepers. The award of interest for non-existent delay in payment, when, there was no enforceable agreement in existence, is not based on a cogent reasoning and was, thus, made in disregard to the mutually agreed provisions under clause 0402 of IRS conditions of contract, for quantity beyond the scope of the contract.
Charge-V He, while, adjudicating two claims on loss due to overheads' and on 'loss of profit, awarded an amount of Rs. 54,66,618/- each, against these two claims, 14 OA No.412/2016 based on the difference of sleepers manufactured up to 31.3.04 and the firm's production target for the year 2003-04 i.e. 93528 Nos., even, though there was no. binding contract in existence for manufacturing of this quantity at the material time. As, there was no agreement in existence for any such quantity and the claimant firm itself is responsible _ for fetching supply orders from the Government by. participating in further tenders, the question of loss due to overheads' or loss of profit' on account of Railways does not arise. Despite this, awards on ~ these two heads were made in an irregular manner, in favour of the claimant. .
By the above acts of omission and commission, the said Shri D.S.Chauhan, has not only violated the conditions of the contract, clause 28 (3) of the Arbitration and Reconciliation Act-1996 and clause 0402 of IRS conditions of contract, as brought out above, but also acted in a manner which tantamount to lack of integrity, lack of devotion to duty and unbecoming of a Railway servant, thus, contravening the provisions as contained in Rule 3.1 (i), (ii) & (i) of the Railway Services (Conduct) Rules, 1966."
15. Thus, from these charges it appears that the applicant has passed the Award alleging that the applicant has gone beyond the terms of the contract and has acted in contravention of the provisions of Section 28 (3) of Act of 1996.
16. Before embarking on the enquiry as to whether the charge sheet needs to be quashed or not, the law laid down by the Hon'ble Supreme Court in this regard will have to be taken into consideration.
17. It is no doubt true that the applicant discharged the duties as a judicial and quasi judicial authority.
15 . OA No.412/2016Simply, because a judicial or quasi judicial authority acts in that capacity it cannot be said that such an .
authority /officer cannot be brought into the ambit of Conduct Rules. If their act is actuated with malice, improper motive or corruption, such officers though | acted judicially or quasi judicially can be proceeded with in a departmental enquiry. It has been held in the case of Zunjarrao Bhikaji Nagarkar vs. Union of India and others, (1999) 7 SCC 409 that:
"17, In Union of India vs. K.K. Dhawan [(1993) 2 SCC 56) respondent was working as Income Tax Officer. A charge Memorandum was served on him ' that it was proposed to held an inquiry against him under Rule. 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965. In
- the 'statement of article of charge framed against him, it was alleged that he completed assessment of nine firms in "an irregular manner, in undue haste and apparently with a view to conferring undue favour upon the assesses concerned".
- An application filed by the respondent against the. proposed action was allowed by the Central Administrative Tribunal and it was held that orders passed by the respondent as Income Tax Officer were quasi judicial and could not have formed the basis of disciplinary action. Charge Memorandum was, thus, set aside. The question before this Court: was whether an authority enjoyed immunity from disciplinary proceedings with respect to matters decided by him in exercise of quasi judicial functions. After examining the early decisions of this Court in V.D. Trivedi vs. Union of India [(1993) 2 SCC 55]; Union of India vs. R.K. Desai [(1993) 2 SCC 49]; Union of India vs. A.N. Saxena [(1992} 3 SCC 124Jand also in S. Govinda menon vs. Union of India [AIR 1967 SC 1274] this Court held as under :
16 OA No.412/2016"28. Certainly, therefore, the officer who exercises judicial or quasi judicial powers acts negligently or recklessly or in order to confer undue favour on a person is not acting as a Judge. Accordingly, the contention. of the respondent has to be rejected. It is important to bear in mind that in the present case, we are not concerned with the correctness or legality of the decision of the respondent but the conduct of the respondent in discharge of his duties as an officer. The legality of the orders with reference to the nine assessments may be questioned in appeal or revision under _ the Act but we have no doubt in our mind that the Government is not precluded from taking the disciplinary action for violation of the Conduct Rules. Thus, we conclude that the disciplinary action can be taken in the. following cases :
{i) Where the officer had acted in a manner as would refiect on his reputation for integrity or good faith or devotion to duty;
(ii) if there is prima facie material to show recklessness or misconduct in the discharge of his duty; |
(iii)if he has acted in a manner which is unbecoming of a Government servant;
(iv) if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers; |
(v) if he had acted in order to unduly favour a party; |
(vi) if he had been actuated by corrupt motive, however, small the bribe may be because Lord Coke said long ago "though the bribe may be small yet the fault is great".
29. The instances above catalogued are not
-exhaustive. however, we may add that for a mere technical violation or merely because the order is wrong and the action not falling under the above enumerated instances, disciplinary _ action is not warranted. Here, we may utter a word of caution. Each case will depend upon the facts and no absolute rule can be postulated. "
17 OA No.412/201618. InUnion of India | & Ors. vs. Upendra Singh [(1994) 3 SCC 357] question was again raised _if the Central Administrative Tribunal was right in staying the disciplinary proceedings against the respondent who was served with a charge-sheet. It was alleged against him that while working as Deputy Commissioner of Income- Tax, he gave illegal and improper directions to the assessing officer to complete the assessments of three firms under Section 143(1) of the Income Tax Act even though at the relevant time proceedings under Section 144A of the Income Tax Act were ' pending before him and these cases did not come within the purview of summary assessment scheme of Amnesty Scheme of the Central Board of Direct Taxes and, therefore, respondent had violated Rule 3(1))}, 3() Gi) and 3(1)fiii) of the CCS (Conduct) Rules, 1964. Aggrieved by the interim order of the Tribunal, Union of India come to this Court. Again this Court examined its earlier decisions and said that the Tribunal or Court can interfere only if on the charged framed (read with imputation or particulars of the charges, if any) no misconduct or other irregularity alleged can be said to have been made | out or the charges framed are contrary to any law and that at that stage the Tribunal had no- jurisdiction to go into the correctness or truth of the charges. Order of the Tribunal was set aside.
19. iInDy. Inspector General of Police vs. KS. Swaminathan [(1996) 11 SCC 498] a charge memo imputing misconduct on the part of the respondent, an inspector of police, was issued to him. Tamil Nadu Administrative Tribunal on an application filed by the respondent set aside the charge memo on the ground that the charges were vague. On appeal to this Court, it was held that at the stage of framing of the charge, the statement of facts and the charge sheet supplied are required to be looked into by the Court or the tribunal as to the nature of the charges, i.c., whether the statement of facts and material in support thereof.supplied to the delinquent officer would disclose the alleged misconduct. This Court observed that the tribunal, therefore, was totally unjustified in going into the charges at that stage.
20. InM.S. Bindra vs. Union of India & Ors. {(1998) 7 SCC 310] the appellant was served with an order of compulsory retirement. His challenge to this order did not find favour with the © Central Administrative Tribunal. On appeal to this Court it was observed that judicial scrutiny of any "18 OA No.412/2016 order imposing premature compulsory retirement is permissible if the order is rather arbitrary or mala
- fide or if it is based on no evidence. Then this Court observed as under :
"13. While viewing this case from the next angle for judicial scrutiny, i.e., want of evidence or material to reach such a conclusion, we may add that want of any material is almost equivalent to the next situation that from the available materials, no reasonable man would reach such a conclusion, While evaluating the materials, the authority should not altogether ignore the reputation in which the officer was held till recently. The maxim "nemo firut repente turpissimus" (no one becomes dishonest all of a sudden) is not unexceptional but still it is a salutary guideline to judge human conduct, particularly in the field of administrative law. The authorities should not keep their eyes totally closed towards the overall estimation in which the delinquent officer was held in. the recent past by those who were supervising him earlier. To dunk an officer into the puddle of "doubtful integrity", it is not enough that the doubt fringes on a mere hunch. That doubt should be of such a nature as would reasonably and consciously be entertainable by a reasonable man on the given material. Mere possibility is hardly | sufficient to assume that it would have happened. There must be preponderance of probability for the reasonable man to entertain doubt regarding that possibility. Only then there is justification to ram an officer with the lable "doubtful integrity"."
21. In M/s. Hindustan Steel Ltd. vs. The State Orisa [AIR 1970 SC 253] the authorities under the Orissa Sales Tax Act, 1947 had imposed penalty on the appellant. One of the question 'before this Court was whether the Tribunal is right in holding that penalties under Section 12(5) of the Act had been rightly levied and whether in view of the serious dispute of the law it cannot be said that there was sufficient cause for not applying for registration. This , Court then said as under:
"8. . Under the Act penalty may be imposed for failure to register as a dealer: Section 9(4) read with Section 25(1)(a) of the Act. But the liability to pay penalty does not arise 19 OA No.412/2016 merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of. conduct conitumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a. consideration of all the relevant circumstances. Even if a minimum penalty is . prescribed, . the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company . as a dealer acted in the honest and genuine belief that the Company was not a dealer. Granting that they erred, no case for imposing penalty was made out."
22. In the case of Madan Mohan Choudhary vs. State of Bihar and others (1999 (3) SCC 396), this Court set aside the order of compulsory retirement of . the appellant, a member of the Bihar Superior Judicial Service, on the ground that there was no material on record to reasonably form an opinion that compulsory retirement of the officer was in public interest.
XXX XXX XXK
24. Tn State of Madhya Pradesh vs. Bharat Heavy Electricals [(1998) 99 ELT 33 (SC}] this Court _ examined the validity of Section 7(5) of the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par _ Kar Adhiniyam, 1976, which provides for levy. of penalty. Earlier the Madhya Pradesh High Court in a writ petition had held the provisions of the Act were ultra vires and also violative of Articles 14 and 19 of the Constitution. Sub-section (5) of Section 7 of the Act relevant for cur purpose is as under:
20 OA No.412/2016"7, Registered dealers to issue bill etc. stating that goods soid are local goods. -
(5) Where a registered dealer referred to in sub-section (1) or sub- section (2) has, in the course of his business,.sold local goods to 'other registered dealers and has failed to make the statement referred to in sub-
section (1} [...], it shall be presumed that he has facilitated the evasion of entry tax on the local goods so sold and accordingly he shall be liable to pay penalty equal to ten times the amount of entry tax payable on such goods as if they were not goods of local origin."
. 25. After considering the stand of the State Government that presumption raised in sub-section | (5) of Section 7 was rebuttable and that the said provision did not provide for a fixed rate of penalty _and that the -assessing-authority has discretion to impose reasonable amount of penalty, this Court held:
"From the aforesaid it follows that Section 7(5} has to be construed to mean that the presumption contained therein is rebuttable and secondly the penalty of ten times the amount of entry tax stipulated therein is only
- the maximum amount which could be levied and the assessing authority has _ the discretion to levy lesser amount, depending upon the facts and circumstances of each case. Construing Section 7(5) in this manner the decision of the High Court that Section
--7(8) is ultra vires cannot be sustained."
26. It will be thus seen that once there was a case of imposition of penalty only the amount of penalty . to be levied was left to the discretion of the assessing authority on the facts of the case.
27. In Government of Tamil Nadu vs. K.N. - 'Ramamurthy (1997 (7) SCC 101) it has been held that failure to exercise quasi judicial power properly amounts to misconduct. In this case, the respondent working as Deputy Commercial Tax Officer was served with the following charges:
"(i) That he failed to analyse the facts involved in each and every case referred to above;21 7 OA No.412/2016
{ii) that he failed to check the accounts deeply and thoroughly while making final assessment;
(iii) that he failed to subject the above turnover to tax originally; and fiv) that he failed to safeguard government revenue to a huge extent of Rs.44,850."
XXX XXX XXX
29. In.State of Punjab and ors. vs. Ram Singh Ex- Constable (1992 (4) SCC 54) this Court referred to the definition of 'misconduct' as given in Black's Law Dictionary and Aiyar's Law Lexicon and said as under:-
"6. Thus it could be seen that the word 'misconduct' though not capable of precise definition, on reflection receives its connotation from the. context, | the delinquency in its performance and. its effect on the discipline and the nature of the duty. It may involve moral turpitude, it must be improper or wrong behaviour; unlawful behaviour, willful in character; forbidden act, a transgression of established and definite ' rule of action or code of conduct but not mere error of judgment, carelessness or negligence in performance of the duty; the act complained of bears forbidden quality or character. Its ambit has to be construed with reference to the subject matter and the context wherein the term occurs, regard being had to the scope of the statute and the - public purpose it seeks to serve."
18. From this authority, the principles that can be culled. out in respect of the officer who exercises judicial and quasi judicial functions for initiating disciplinary proceedings are as under:
"(i) Where the officer had acted in a manner as would reflect on his reputation for integrity or good faith or | devotion to duty;22 OA No.412/2016
{ii} if there is prima facie material to show recklessness or misconduct in the discharge of his duty;
(iii)if he has acted in a manner which is unbecoming of a Government servant;
(iv) if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers;
(v) if he had acted in order to unduly favour a party;
(vi) if he had been actuated by corrupt motive, however, small the bribe may be because Lord Coke said long ago "though the bribe may be small yet the fault is great"."
-19. Keeping these principles in mind, we now refer to the articles of charge in para 13 ibid served on the applicant.
20. From the articles of charge, itis clearly seen that the applicant has not been alleged with corrupt motive. The only allegation is that the applicant while settling claims of the claimant disregarded Section 28 (3) of Act of 1996 and went beyond the conditions of the contract by adopting arbitrary, negligent and reckless approach 'in reaching the conclusion of Award in favour of one- party, Le. the claimant.
21. Merely making allegations that the approach of the applicant was arbitrary, negligent and réckless is not enough. In para 40 of the case of . Zunjarrao 23 OA No.412/2016 Bhikaji Nagarkar (supra), the Hon'ble Supreme Court explained the concept. of negligence so far as it concerns with. quasi judicial authority. In para 40, Hon'ble Supreme Court observed thus: -
"40, When we talk of negligence in a quasi judicial. adjudication, it is not negligence perceived as carelessness inadvertance or omission but as culpable negligence. This is how this court in State of Punjab & Ors, @& Ors. vs. Ram Singh Ex- Constable [(1992) 4 SCC 54] interpreted 'misconduct' ' not coming within the purview of mere error in. judgment, carelessness or negligence in performance of the duty. In the case of K.K. Dhawan (1993 (2) SCC 56}, the allegation was of conferring undue ~ favour upon the assessees. It was not a case of negligence as such. In Upendra Singh's case (1994 (3) SCC 357), the charge was that he gave illegal and.
improper directions to the assessing officer in order to unduly favour the assessee. Case of KS. Swaminathan (1996 (11) SCC 498), was not where the respondent was acting in any quasi judicial . capacity. This Court said that at the stage of framing of the charge the statement of facts and the charge- sheet supplied are required to be looked into by the Court to see whether they support the charge of the alleged misconduct. In M.S. Bindra's case (1998 (7) - . $CC .310) where the appellant was compulsorily _ retired this Court said that judicial scrutiny of an order imposing premature compulsory retirement is . permissible if the order is arbitrary or mala fide or based on no evidence. Again in the case of Madan "Mohan Choudhary (1999 (3) SCC 396}, which was also a case of compulsory retirement this Court said that there should exist material on recotd to reasonably form an opinion that compulsory retirement of the officer was in public interest. In K.N. Ramamurthy''s case (1997 (7} SCC
101), it was certainly a case of culpable negligence. One of the charges was that th e officer had failed to safeguard Government revenue. In Hindustan Steel Ltd.'s case {AIR 1970 SC 253), it was said that where proceedings are quasi judiciai penalty will not ordinarily be imposed unless the party charged had acted deliberately in defiance of law or was guilty of 24 OA No.412/2016 conduct contumacious or dishonest or acted in ' conscious disregard of its obligation. This Court has said that the penalty will not also be imposed merely because it is lawful so to do. In the present case, it is not that the. appellant did not impose penalty because of any negligence on his part but he said it was not a case of imposition of penalty. We are, however, of the view that in a case like this which was being adjudicated upon by the appellant imposition of penalty was imperative. But then, there is nothing wrong or improper on the part of the appellant to form an opinion that imposition of. penalty was not mandatory. We have noticed that Patna High Court while interpreting Section 325 IPC held that imposition of penalty was not mandatory which again we have said is not a correct view to take. A wrong interpretation of law cannot be a ground for misconduct. Of course it is a different _ matter altogether if it is deliberate and actuated by 'mala fides."
22. In paras 41, 42 and 43 of the case of Zunjarrao _ Bhikaji Nagarkar (supra), Hon'ble Supreme Court observed thus:
23.
"41. When penalty is not levied, the assessee certainly benefits. But it cannot be said that by not levying the
- penalty the officer has favoured the assessee or shown undue favour to him. There has to be some basis for the disciplinary authority to reach such a conclusion even prima facie. Record in the present case does not show if the disciplinary authority had any information within its possession from where it could form an opinion that the:
appellant showed 'favour' to the assessee by not imposing the penalty, He may have wrongly' exercised his jurisdiction. But that wrong can be corrected in appeal. That cannot always form basis for initiating disciplinary _ proceedings for an officer while he is acting as quasi judicial authority. It must be kept in mind that being a quasi judicial authority, he is always subject to judicial supervision in appeal."
From the observations of the Hon'ble Supreme Court it is seen that mere allegations of negligence, 25 OA No.412/2016 carelessness, recklessness or arbitrariness is not- enough. There has to be culpable negligence. There has to be some basis for the disciplinary authority to _ reach such a conclusion even prima facie. It does not. appear from the record annexed with the OA that the disciplinary authority had any material with it to show that there was a culpable negligence on the part of the Arbitrator, i.e., the applicant. -- Howsoever erroneous "decision it may be, it cannot be said that the judgment is actuated with malice, negligence or reckless approach. It is pertinent to mention that the respondents challenged this Award before Hon'ble High 7 Court of Bombay and the Hon'ble High Court confirmed | the Award passed by the Arbitrator. The observations of the Hon'ble High Court in this regard would show that the applicant did not act with negligence or reckless approach. Hon'ble High Court of Bombay held in para 9 as under: _ | OD. ee sevens As held by the Supreme Court in that case, if, on a question of fact, the arbitrator arrives at a finding which exhibits a possible view, a view which is supported by some evidence, the challenge court ought not to interfere with the same. If there. is some-evidence to support.a finding of the arbitrator, then without going inte sufficiency of such evidence, the challenge court should accept the assessment. In the present case, the arbitrator's assessment of darnages exhibits a reasonable 26 OA No.412/2016 approach and it is supported by some evidence. The award does not exhibit any irrelevant or non- germane material considered by the arbitrator or any relevant or germane material or circumstance disregarded by him for arriving at his conclusions. The views expressed by the arbitrator cannot be termed as views, which no fair or judiciously minded person could have taken or views that would shock the conscience of the court. The award 'on loss of overheads and profits, accordingly, does not merit any interference."
24. Hon'ble High Court of Bombay has held that the assessment of damages made by the Arbitrator exhibits a reasonable approach and it is supported by some evidence. It is further held that the Award does not. exhibit any irrelevant or non-germane material considered by the Arbitrator or any relevant or germane material or circumstances disregarded by him for arriving at his conclusion. So far as Article of Charge-1 is concerned, Hon'ble High Court has dealt with it in para 10 as under:
TOL ees The learned arbitrator observed that it was a matter of record that the original quantity of sleepers ordered by the Petitioner was 2,40,000;. it was this quantity which was to be supplied within the original delivery period, i.e. upto 31 March 2005. Further, under clauses 20.1 and 20.2 of the contract, the Petitioner could order, respectively, 30% plus 30%, ic. total 60%, -of- original quantity, that is to say, a further quantity by 1,44,000 sleepers. The arbitrator, accordingly, held that the Petitioner could have ordered a total quantity of 3,84,000 sleepers under the terms of the contract and it was this quantity which the a7 OA No.412/2016 Respondent would have to produce and supply within the original delivery period and at the contract price and terms. The arbitrator held that anything beyond this quantity could not have been ordered by the Petitioner under the same contract, as the same would be beyond the terms of the contract. The arbitrator then considered that it was not in dispute that 6,08,000 sleepers in all were ordered from the Respondent and it was at this juncture that the Respondent asked for extension of the delivery period beyond the original date of 31 March 2005. This was not a case where, - for supply of contractual quantity, extension of delivery period was asked for; the extension was asked for supply of quantities beyond the contractually permissible quantities. The arbitrator held that, in the premises, the Respondent was entitled to extension of delivery period as.a matter of course and there was no reason why the price variation clause ought not to apply or the price of additional quantity should be paid as of the date of the original delivery period, ic. as of 31 March 2005. Once again, no fault can be found with this assessment of the learned arbitrator. This is a perfectly reasonable and possible view of the contract and no interference is warranted under Section 34-of the Act."
25. Hon'ble High Court has held that no fault can be found with the assessment made by the Arbitrator and this is a perfectly, reasonable and plausible view of the contract. In paras 11 & 12, Hon'ble High Court. of Bombay held as under:
-"11.. Coming now to the award of freight for supply of cement and HTS wires, it may be noted that the arbitrator had to construe clause 16 of the contract for this claim. Clause 16 required that irrespective of location or number of sources from where cement or HTS wires had to be procured, Railway freight for wagon load classification during the month of production from the nearest source of SGCI Inserts 28 OA No.412/2016 was to be paid to the contractor if the material was drawn from the nearest source; if it was not drawn from the nearest source, actual freight or average freight of the nearest of the two sources, whichever is lower, should be paid to the contractor. The arbitrator construed this clause and also assessed the evidence before him on the availability of cement and HTS wires. The arbitrator held that it was an admitted fact that M/s. Digvijay Cement, the nearest approved source, had expressed its inability to supply cement on account of major technical reasons and maintenance of plant. The Respondent had produced in this behalf a letter of August 2003 from M/s. Digvijay Cement. The arbitrator also observed that it was an admitted position that since the nearest approved source, namely, Digvijay Cement, was unable to supply cement, the claimants had brought the required cement from. M/s. Aditya Cements of Shambhupura. The arbitrator noted that as the basic facts in the present case were not disputed by the Petitioner, such as the fact of nearest approved source being ~ unable to supply the required cement and the Respondent, with prior intimation to the Petitioner, having procured cement from M/s.Aditya Cement, Shambhupura, under the contract conditions, the. Petitioner was bound to reimburse freight charges from the actual source from where the cement was procured. So also in the case of HTS wires, the learned arbitrator relied on the correspondence indicating the approved source's inability to supply the required HTS wires. The arbitrator relied on the Respondent's letter bringing this fact to the notice of the' Petitioner and the Petitioner's Chief Track Engineer, in turn, placing these facts on record and seeking permission from the Railway Board. The arbitrator noted that though the Railway board did not communicate any decision in the matter, since, in the meantime, the Respondent had to procure the materials from other available near sources and these materials were used with the knowledge and consent of the Petitioner for the contract work, the 'Respondent was bound to be paid freight charges 'for the material procured from actual sources. The conclusion on the claim of freight does not suffer from any infirmity. The arbitrator's interpretation of the contract and assessment of evidence in this behalf meet the standards of reasonable and possible conclusions as explained by the Supreme Court and do not merit interference under Section 34 of the Act.29 OA No.412/2016
12. As regards the other claims awarded, these are mainly claims for delayed payment. These being matters of fact, and these being awarded on a possible view of the matter, there is hardly any scope for debate. If at all, there could be some argument on the rate of interest. But, even as regards the rate of interest awarded, there is nothing shocking to the conscience of the court. It is not a rate which no fair or judiciously minded person could have awarded. It does not accordingl call for any interference."
26. Hon'ble High Court | observed that it was | an admitted position that since the nearest approved source was unable to supply the cement, the claimants had brought the required cement from M/s. Aditya Cement, Shambhupura. These | facts were not disputed by the respondents herein. Thus, the Award passed by the applicant has been confirmed by Hon'ble. High Court of Bombay. Hon'ble High Court held that the applicant/ Arbitrator awarded the damages on the basis of some evidence. A decision of a quasi judicial authority can be said to be arbitrary when it is based on no evidence or it has drawn the conclusion on the basis of evidence which an ordinary prudent man would never draw. The observations of Hon'ble High Court of Bombay clearly show that the Award 'was based on the evidence. The entire charge sheet is 30 OA No.412/2016 based on the premise that the applicant acted in variation of the terms of the contract. His Award is not . based on the terms of the contract, and therefore, they | levelled it as arbitrary, reckless and negligent. The applicant cannot be called negligent as respondents have not shown any evidence that applicant is_ negligent. Respondents also have no evidence to show that the applicant has acted arbitrarily. Simply because he has passed the Award which according to the respondents i is against the terms of the contract, the Arbitrator cannot be hauled up in departmental proceedings. For hauling up, the Arbitrator who is discharging the functions of a quasi judicial authority, mere allegation of negligence is not enough. There has to be material with the disciplinary authority to show that negligence was a culpable negligence. In the case at hand, .the disciplinary authority has not adduced | any evidence to show that there was any culpable. negligence on the part of the applicant. Moreover, Hon'ble High Court has held that the Arbitrator, i.e., the applicant has not gone beyond the terms of the contract. When he has not gone beyond the terms of 31 OA No.412/2016 the contract, the allegation of arbitrariness, recklessness and negligence do not survive. In these circumstances, it cannot be said that the applicant acted in an arbitrary manner or his approach was careless or reckless.
27. Having regard to the discussion made above, it cannot be said that there is prima facie material for proceeding with the enquiry.
28. Learned counsel for respondents filed an additional affidavit showing that there was no delay on the part of the respondents. The Award was passed on 1% May, 2010 and the preventive check was conducted on 25 November, 2010. On 30" August, 2011 questionnaire was issued to the applicant. On 21% December, 2011 reply to questionnaire was received. On 24" January, 2013 vigilance investigation report by competent officer was received. These events show that the respondents were taking steps for initiating departmental enquiry against the applicant. Therefore, in our opinion, there is no delay and delay is properly explained in this view of the matter.
32 OA No.412/201629. Thus, there is no evidence to show that applicant passed the Award in an arbitrary and reckless manner. In judicial review, it is not permissible for the Tribunal to check the correctness of the Award. It is the function of the Appellate or Revisional Authority. What the Tribunal has to see in judicial review is whether while passing the Award, the Arbitrator or public servant in discharge of his official duties acted with © improper motive, corrupt motive or there was negligence, arbitrariness or reckless approach. As indicated earlier, all these aspects are conspicuously absent, and therefore, we do not find any substance in the charge sheet. The reply of the respondents and the argument of the respondents do not indicate that there was any material with the disciplinary authority to show that there was negligence on the part of the applicant. They are alleging negligence simply because according: to the respondents he did not pass the Award in consonance with the contract and that is the reason they are calling it arbitrary, reckless and negligent approach. Hon'ble High Court has not held that the applicant has gone beyond the contract while 33 OA No.412/2016 passing the Award. In such circumstances, it cannot "be called as Award actuated with malice or absence of due diligence.
30. In this view of the matter, it will be futile exercise, if the enquiry is allowed to be proceeded with. Hence, we deem it appropriate to set aside the charge sheet. Application is, therefore, allowed. Charge sheet dated 1st May, 2010 is set aside. Retiral benefits be paid to the applicant within three months from the date of receipt of a certified copy of this order. No order as to costs.
31. Pending MA, if any, stands disposed of : accordingly.
(Rajinder Kashyap) (m.d).Sewlikar) Member (A). 7 Member (J) SD'