Bombay High Court
Tejram Kanhobaji Shrikhande vs Maharashtra State Handloom ... on 19 April, 2002
Equivalent citations: [2003(96)FLR110], (2002)IIILLJ674BOM, 2002(3)MHLJ385
Author: J.P. Devadhar
Bench: R.K. Batta, J.P. Devadhar
JUDGMENT J.P. Devadhar, J.
1. By this petition, the petitioner seeks a writ to quash and set aside termination order dated 3-1-1987 and to direct the respondent to reinstate him in service from the date of said order dated 3-1-1987 with continuity in service and full backwages in the post of Vigilance and Audit Officer. Petitioner has also challenged the validity of Rule 28 of the Maharashtra State Handloom Corporation Limited Staff Recruitment and Service Rules (for short, the "Rules") as ultra vires Article 14 of the Constitution of India. However, this prayer regarding validity is not pressed at the hearing of the writ petition as the impugned order dated 3-1-1987 is not passed under Rule 28 of the said Rules.
2. The facts relevant for the purpose of present petition are as follows. On 2nd February 1972 the petitioner was appointed as Accountant by the respondent Corporation. On 13th August 1973 the petitioner was promoted as Chief Accountant. On 12th April 1980 the petitioner was promoted as Assistant Accounts Officer (Marketing). On 21st October 1981 the petitioner was further promoted as Accounts Officer (Commercial). On 25th March 1986 the petitioner was posted to Audit Section to work as Vigilance and Audit Officer. The petitioner was also entrusted with the additional duties of labour Officer from time to time.
3. By an order dated 3rd January 1987 the respondent Corporation sought to terminate the services of the petitioner without holding any enquiry. A perusal of the said order of termination dated 3rd January 1987 shows that the termination was due to loss of confidence being failure on the part of the petitioner to report serious financial irregularities at Wholesale Depot at Bombay for the period from April 1985 to March 1986 where one Degaonkar was Depot Manager. It is also stated in the order of termination that Shri D. G. Degaonkar, Depot Manager in his statement had implicated the audit party including petitioner in manipulating the accounts and withdrawal of huge amounts for their personal gains. It is further stated that due to inefficient working of the petitioner with the Accounts Section for about 14 years, the Corporation had suffered loss of Rs. 10 lacs approximately on the sale of Consignee Sales which has now become time barred as the recovery was not executed at proper time by the petitioner. Challenging the said order of termination, present petition has been filed.
4. Mr. Puranik, learned counsel for the petitioner submitted that the issue raised in the petition is squarely covered by the decision of this court dated 16th September 1987 in Writ Petition No. 2442 of 1986, Suresh P. Dhole v. The MS Handloom Corporation Limited and two others. In that case, petitioner's services were also terminated on account of loss of confidence and this Court, following the decisions of the Supreme Court in Chandu Lal v. The Management of Pan American World Airways Inc., and Kamal Kishore Lakshman v. Management of Pan American World Airways Inc., , held that loss of confidence by the employer in the employee is a feature which certainly affects the character or reputation of the employee and, therefore, the plea of loss of confidence in the employee indeed casts a stigma. Accordingly, it was urged by learned counsel for petitioner that the impugned order of termination dated 3-1-1987 is liable to be quashed and set aside.
5. Mr. A. B. Chaudhari, learned Advocate for respondent Corporation submitted that the Committee headed by the Managing Director of the respondent Corporation was aware of the position that loss of confidence amounts to stigma on the officer and departmental enquiry is necessary, but the Committee felt that in the present case, it would not be feasible to hold enquiry as it would be risky to continue petitioner any longer inviting loss of vital documents at his hands or at his behest. Learned counsel for respondent corporation also relied upon paragraph 4 of the Committee's report which reads as under:--
"4. Shri D. G. Dagaonkar who was then holding the charge of the Depot Manager of this Whole Sale Depot has confessed in his statement (written) on 2nd January 1987 that over Rs. 3,50,000/- was spent on purchases of various costly items like gold, imported items, sarees, readymade garments, boarding, lodging, taxi charges and ail other types of expenditure incurred on Shri T. K. Shrikhande's party that is audit party and on Shri Shrikhande. Shri D. G. Dagaonkar has also handed over concrete documentary proofs."
Accordingly, it was submitted that there were ample reasons for not holding Departmental Enquiry against the petitioner. It was submitted that Shri S. P. Dhole who succeeded before this Court, was subsequently subjected to Departmental Enquiry wherein charges against him were proved by the Corporation and, therefore, his services were terminated and his case is pending before the Labour Court and in case of one Shri Mohod, termination has been upheld by the Labour Court. In this view of the matter, it was submitted that there was voluminous evidence against the petitioner and hence; petition is liable to be dismissed.
6. After hearing both the Advocates and perusing record, we are of the opinion that once it is admitted by the respondent that an order of termination casts stigma on the petitioner then services of the petitioner could not be terminated without holding a Departmental Enquiry. The reason given by the respondent Corporation that it would not be feasible to hold enquiry against the petitioner as it would be risky to continue him any longer inviting loss of vital documents at his behest, is totally frivolous. When there were serious charges against the petitioner, the respondent Corporation could have very well suspended him and keep valuable and incriminating documents in its custody. It appears that where large scale manipulation had taken place in 14 years and more than ten lacs of rupees were siphoned off illegally, the Committee must have felt that if Departmental Enquiry is held, more and more skeletons may come out of the cupboard during the Departmental Enquiry and just to avoid such exposure, the Departmental Enquiry was dispensed with. Otherwise, knowing fully well about the legal implications that casting such serious aspersions in the termination order amounts to stigma, the respondent Corporation could not have held that it is not feasible to hold Departmental Enquiry against the petitioner. The conduct of the respondent Corporation in circumventing law and passing the order of termination knowing fully well that such an order cannot be passed without holding Departmental Enquiry clearly shows high-handedness and totally arbitrariness on the part of the respondent Corporation.
7. The entire case of the respondent Corporation is based upon the confessional statement of Depot Manager, Shri Degaonkar and the documents furnished by him. Neither the petitioner was confronted with the said confessional statement of Shri Degaonkar nor the explanation of the petitioner was sought on the alleged documents furnished by said Degaonkar. Admittedly, the said Depot Manager, Shri Degaonkar was involved in the scam and his services have been terminated by the respondent-Corporation. Under the circumstances, to treat his confessional statement implicating the petitioner cannot be treated as gospel truth. We are not holding that the petitioner is not involved in the scam. All that we observe is that when the respondent know that the serious charges levelled against the petitioner constitute stigma, then it ought to have held Departmental Enquiry against the petitioner before issuing termination order.
8. It is well established in law that termination simpliciter without any stigma is permissible, but wherever the termination order is attached with stigma, then such termination order passed without holding Departmental Enquiry is liable to be quashed and set aside.
9. In the case of Chandraprakash Shahi v. State of UP, , the Apex Court while extensively reviewing the case law on termination simpliciter or punitive, held that where there are allegations of serious misconduct for which preliminary enquiry is conducted behind the back of employee to ascertain truth and then termination is brought about, such termination, having regard to the other circumstances of the case has to be taken as founded on misconduct and, therefore, to be treated as punitive. In the light of the aforesaid decision of the Apex Court, the termination order dated 3-1-1987 based on the resolution of the Committee which stigmatic and punitive in nature, is liable to be quashed and set aside.
10. Mr. A. B. Choudhari, learned counsel for respondent-Corporation relied upon decision of the Apex Court in the case of Union of India and Anr., v. Tulsiram Patel, and contended that action of the respondent Corporation in dispensing with the enquiry was justified. In our opinion, the said decision is distinguishable on facts and in any event the ratio laid down by the Apex Court in that case does not support the contention of the respondent. Firstly, in that case, the employee was governed by Article 311 of the Constitution whereas in the present case, petitioner's case is not covered by Article 311. Secondly, even in that case, the Apex Court has held that what is requisite is that holding of an enquiry is not practicable in the opinion of a reasonable man taking a reasonable view of the prevailing situation. It was further held as follows:--
"It is not possible to enumerate the cases in which it would not be reasonably practicable to hold the inquiry, but some instances by way of illustration may, however, be given. It would not be practicable to hold enquiry where the government servant, particularly through or together with his associates, so terrorizes, threatens or intimidate witnesses who are going to give evidence against him with fear of reprisal as to prevent them from doing so or where the government servant by himself or together with or through others threatens, intimidates and terrorizes the officer who is the disciplinary authority or members of his family so that he is afraid to hold the enquiry or direct it to be held. It would also not be reasonably practicable to hold the inquiry where an atmosphere of violence or of general indiscipline and insubordination prevails, and it is immaterial whether the concerned government servant is or is not a party to bringing about such an atmosphere. In this connection, we must bear in mind that members coerce and terrify while an individual may not. The reasonable practicability of holding an inquiry is a matter of assessment to be made by the disciplinary authority. Such authority is generally on the spot and knows what is happening. It is because the disciplinary authority is the best judge of this that Clause (3) of Article 311 makes the decision of the disciplinary authority on this question final. A disciplinary authority is not expected to dispense with a disciplinary inquiry lightly or arbitrarily or out of ulterior motives or merely in order to avoid the holding of an inquiry or because the Department's case against the government servant is weak and must fail. The finality given to the decision of the disciplinary authority by Article 311(3) is not binding upon the court so far as its power of judicial review is concerned and in such a case the court will strike down the order dispensing with the inquiry as also the order imposing penalty....."
11. In the instant case, since punitive action was sought to be taken against the petitioner, it was obligatory on the part of the respondents to hold departmental enquiry. No material has been placed before us to establish as to how it is impracticable to hold departmental enquiry. Moreover, the claim of the respondent is falsified by the fact that even in the case of Suresh P. Dhole the respondent had raised similar plea and on being rejected by Court, the respondent did conduct departmental enquiry and on establishing the charges have terminated the services of said Suresh Dhole. In this view of the matter, we have no hesitation in holding that the action of the respondent in dispensing with the Departmental Enquiry is wholly arbitrary and unreasonable and the order of termination dated 3-1-1987 being stigmatic and punitive in nature, has to be quashed and set aside.
12. Mr. A. B. Chaudhari, learned counsel for respondent then relied upon the decisions of the Apex Court in the case of Ex. Constable Chhotelal v. Union of India and Ors., and Managing Director, UP Warehousing Corporation and Anr. v. Vijay Narayan Vajpayee, and contended that in view of the serious charges levelled against the petitioner, no order of reinstatement with backwages be passed. We agree with the submissions made on behalf of the respondent. In fact, similar order was passed by this Court as far back as on 16th October 1987 in Writ Petition No. 2442 of 1986 in the case of Suresh P. Dhole. It cannot be said that the petitioner was unaware of the said legal proceedings initiated by his colleague whose services were also terminated on similar grounds. Neither the petitioner nor the respondent has chosen to move this Court and get this petition disposed of in the light of the decision of this Court in the case of Suresh P. Dhole. It appears that both the petitioner and the respondent were desirous of keeping the litigation pending as far as possible. Since the petition succeeds on account of the failure on the part of the respondent in holding departmental enquiry and looking to the serious charges levelled against the petitioner, we are not inclined to grant backwages to the petitioner.
13. We accordingly set aside the termination order dated 3-1-1987 passed against the petitioner and permit the respondent Corporation to hold Departmental Enquiry, if so desired, in accordance with law and pass appropriate orders thereon. In the facts and circumstances of the case, we decline to grant backwages to the petitioner. Accordingly, rule is made absolute in terms of prayer Clause (a) only. However, there will be no order as to costs.