Central Administrative Tribunal - Delhi
S.S. Balani vs Union Of India Through Secretary on 13 November, 2013
Central Administrative Tribunal Principal Bench OA No. 1729/2012 Reserved on: 24.07.2013 Pronounced on: 13.11.2013 Honble Dr. K.B. Suresh, Member (J) Honble Dr. Birendra Kumar Sinha, Member (A) S.S. Balani S/o late Sh.M.L. Balani R/o 329, Double Storey, New Rajinder Nagar, New Delhi. Applicant (By Advocate: Shri M.L. Sharma) Versus Union of India through Secretary Ministry of Corporate Affairs, Shastri Bhawan, New Delhi 110 001. Respondent (By Advocate: Shri Tanveer Ahmed) O R D E R Dr. Birendra Kumar Sinha, Member (A):
The instant Original Application has been filed under Section 19 of the Administrative Tribunals Act, 1985 against the OM dated 20.06.2011 dismissing the applicant from service on charges of gross misconduct of accepting illegal gratification for signing a Circular Resolution for listing of shares of M/s. Alka Spinners Ltd. In Ahmedabad Stock Exchange (hereinafter referred to as ASE) being the Member of Listing Committee as a Nominee of Securities and Exchange Board of India (hereinafter referred to as SEBI).
2. The facts of the case, in brief, are that the applicant was selected by the UPSC and subsequently posted as Registrar of Companies w.e.f. 24.02.1999. In May, 1999, the applicant was informed by the Executive Director of ASE orally that the SEBI has nominated him as SEBI Nominee Director on the governing Board of ASE vide letter dated 21.04.1999. This letter was, however, shown to the applicant for the first time when the charge sheet had been served upon him. The applicant did not attend to any of the duties in the capacity of Nominee Director from May, 1999 to March, 2000. The ASE was initially registered under the Societies of Registration Act, 1860 in 1910 and was subsequently converted to a Limited Company w.e.f. 01.03.2005. The case of the applicant is that SEBI had been put in place under SEBI Act, 1992 to protect the interests of investors and securities and to promote the development of and to regulate the securities market. SEBI is an entity separate from the Government which has no control of its functioning. The Listing Committee is a non-statutory Committee of the Stock Exchange, which functions under the supervision and control of the Governing Board of ASE. The applicant performed the functions of the Member on Listing Committee in purely private capacity on honorary basis. On 20.09.1999, one M/s. Alka Spinners Ltd. filed Listing Application with ASE and the same was signed by 3 out of 4 Members excluding the applicant. As per the Rules of ASE, the listing decisions are to be taken by majority and the fact that it had been signed by 3 out of 4 Members was sufficient for listing of the same. However, the matter was referred to the firm of practicing Company Secretary M/s. Acharya & Associates, Ahmedabad on 11.01.2000 for expert opinion. On 13.01.2000, the Executive Director of ASE forwarded some papers and not the application pertaining to listing of shares of M/s. Alka Spinner Ltd. to the applicant for his prior opinion. The applicant got the matter verified and the office of Registrar of Companies (hereinafter referred to as ROC) informed ASE on 20.01.2000 regarding certain irregularities connected to compliance of Companies Act by the firm and proceeded to recover a sum of Rs.1.00 lac approximately on account of increase in authorized capital by the Company which was being evaded by the Company for last so many years. The office of ROC also made observations on evasion of taxes amounting to Rs.90.00 lacs by the Company who omitted to give any opinion regarding the listing of shares.
3. The expert opinion from M/s. Acharya & Associates was received by the ASE on 11.04.2000. The applicant also submits that a circular resolution dated 05.01.2000 clearly showed that since the majority of the Members i.e. > had signed the circular resolution dated 05.01.2000, the question of applicants signing did not make a difference. Moreover, the applicant claims that the resolution was fraudulent, fact of which he is not aware, but listing of shares is not the duty of the ROC. Still annoyed with the decision of disclosure of tax evasion amounting to Rs.90.00 lacs by the Company, the applicant claims that one Satish Panchariya, Director of M/s. Alka Spinners Ltd. i.e. Complainant with active collusion with Dy. Superintendent of Police of CBI Jagroop Meena laid a false trap on gun point at 22:00 hrs on 28.03.2000. The applicant was produced before the Court and immediately granted bail on 29.03.2000 at 16:00 hrs. Though a chargesheet had been on 08.12.2009, but no trial had commenced.
4. The applicant has assailed the impugned order on the grounds, as enumerated below:-
The complainant was habitual offender and had been committing financial frauds regularly and that he wanted to perpetrate another fraud by getting the shares listed for ASE.
The decisions in respect of listing of shares were to be taken by the Listing Committee by majority. Since 3 out of 4 Members, as stated above, had signed the proposal, there was no occasion for the applicant to either demand illegal gratification or for Satish Pancariya complainant in the CBIs case to pay the same.
The letter dated 20.04.1999 nominating the applicant as SEBI Nominee Director on the Listing Committee is without reference to rules, procedures or any law and is hence without jurisdiction.
There has been violation of the rules of natural justice as IO/PO failed to supply copies of statements of prosecution witnesses recorded ex parte at the pre-inquiry stage by one D.K. Gaur, Officer of the CBI nor were the copies of all documents provided to the applicant.
The applicant had gone armed during the trap operation which is quite against the norms and the trap was carried out at gun point. This very fact is good enough to vitiate the entire proceedings.
The respondents obtained second stage opinion of the CVC without having given the applicant an opportunity to show cause.
The penalty of dismissal imposed on the applicant is without authority and jurisdiction as the ASE is a private body autonomous in nature.
The telephonic conversation between the applicant and the complainant is claimed to have been taped and no transcribed copy of the conversation was produced before the IO or provided to the applicant contrary to the directives of the Honble Supreme Court in the matter of Ram Singh versus Col. Ram Singh [AIR 1996 (SC) 3].
There is no evidence of the applicant having demanded or received any bribe apart from what is stated by the CBI. This is on account of deep complicity between the CBI and the complainant Satish Panchariya.
Though the case had been transferred to the Inspector D.K. Gaur of CBI, yet he was neither made as one of the witnesses nor had his statement been recorded.
5. The respondents have filed a counter affidavit opposing the averments of the applicant. The respondents contend that M/s. Alka Spinners Ltd. had applied for listing of shares with ASE in September, 1999 after the merger of its sister concern M/s.Pancharia Spinners Limited. This was a unique case because additional listing of shares under Section 494 under Companies Act, 1956 and M/s. Alka Spinners Ltd. did not want to pay the heavy fees of experts. It was, therefore, decided to seek the expert opinion from the ROC. The ROC had also raised certain queries from M/s. Alka Spinners Ltd. to complete pre-merger, pre-listing obligations. The Company complied with most of these instructions. In the meantime, the applicant insisted on changing the procedure of signing sequence of the circular resolution pertaining to listing of shares of M/s. Alka Spinners Ltd., which were agreed upon by the ASE. When the applicant did not sign the resolution, which had been sent to his office, the said Satish Pancharia, Managing Director of M/s. Alka Spinners Ltd. invited the applicant to dinner in a hotel on 27.03.200, where he demanded Rs.2.00 lacs, which was agreed upon by Satish Pancharia on 28.903.2000. The said Satish Pancharia informed the CBI, which arranged to tape the conversation, that the applicant agreed to Rs.1.00 lac at this residence on 28.03.2010 and remaining amount after 3-4 days. The trap had been laid as per the procedure prescribed and was not attended by irregularities. A total cash of Rs.1.10 lacs was discovered in addition to graft money at the time of search operation at the residence of the applicant who could not satisfactorily explain the source of cash and gifts. The sanction of prosecution was duly granted to the CBI. The applicant was proceeded against simultaneously for grave misconduct. All documents were provided to him and fully opportunity was afforded to him to represent his case. It is the case of the respondents that the charged officer had the duty to submit the list of documents required which he was asked repeatedly, but he did not follow the requisite procedure and the enquiry had to be conducted on merit.
6. All the rules and procedures prescribed for departmental enquiry have been followed and documents provided. A cassette along with certified copy of examination report (as per para 19 of the enquiry report) containing the conversation of the applicant with the complainant was made available to the applicant a well as in the enquiry. The respondents have further submitted that the point regarding gun being carried out by the complainant Satish Pancharia and the trap being facilitated at gun point had been made a part of the defence and had not been found tenable. The respondents submit that the applicant is a regular government employee as such is liable for prosecution. The respondents have also denied that there was no occasion on part of the complainant Satish Pancharia to pay money as three out of four Members have already signed the proposal stating that the mater had been referred to him in capacity of an expert to give legal opinion which weighed a lot.
7. The matter had been pending with the applicant for a long time and as Nominee Director of the SEBI, he was definitely in a position to influence the outcome of the case. The respondents further submit that the ASE is recognized by the Government of India as a permanent stock exchange under Securities Contract (Regulation) Act, 1956. It was on the insistence of the applicant that the ASE had agreed to change the procedure of signing sequence of the circular resolution of listing of shares of M/s. Alka Spinners Ltd. Despite this, the applicant had sent the resolution back three times without having signed it either in favour or against the resolution during January, 2000 to March, 2000. This betrays his ulterior motive. The respondents further submit that the applicant was a regularly appointed Government servant. The respondents further submit that under Section 22 of the SEBI Act, 1992, all Members, officers and employees of the SEBI Board are deemed to be public servants within the meaning of Section 21 of the Indian Penal Code and, as such, are governed by the CCS (Conduct) Rules, 1964. The respondents have denied the averment of the applicant that the charge is based on documentary evidence supported by telephonic conversion on the ground that the enquiry officer had given sufficient opportunities to the applicant but he insisted upon stalling the enquiry till the conclusion of the criminal proceedings. It is an undisputed fact that the amount involved in illegal gratification was recovered from the residence of the applicant and was supported by his hand wash and telephonic conversation. The respondents also dismiss the allegation regarding the entire episode being stage managed at gun point by the fact that the applicant and the complainant had cold drinks together. Had it been otherwise, the applicant would not have allowed the complainant entry into his house and served cold drinks to him particularly when the complainant was neither his relative or his neighbor.
8. The applicant has filed rejoinder rebutting the contentions of the respondents raised in the counter reply and has reiterated the averments made by him in his Original Application. The applicant has also drawn the attention of the Tribunal to the admission of the respondents that due to a typographical error, the operative section under which the merger has taken place was mentioned as 494 in place of 394. This serves to vitiate the entire chargesheet. The applicant has further submitted the prosecution has relied upon the conversation demanding the illegal gratification. However, after 9 years he had been given the compact disc (CD) and not the cassette. Further, the FD has not been made a part of the prosecution documents. In support of this point, the applicant has relied upon the decision of Honble Supreme Court in the matters of Z.B. Bukhari versus B.R. Mehra [AIR 1975 (SC) 1788]; Ram Singh versus Col. Ram Singh [AIR 1986 (SC) 3]; and Yusuf Ali Esmail versus State of Maharasthra [AIR 1968 (SC) 147]. The applicant has further submitted in the rejoinder that there were no eye witnesses to this incident and Dy. Superintendent of Police had stopped the eye witnesses from proceeding with him. The applicant has further reiterated his allegation regarding not being supplied the advice of the CVC which is mandatory as per the decision of the Honble Supreme Court in the matter of Union of India versus S.K. Kapoor [2011 (4) SCC 589], which vitiates the entire enquiry.
9. Learned counsel for the respective parties more or less argued as per their pleadings.
10. We have carefully perused the pleadings of the parties, the documents adduced by them, and have also listened the oral submissions made by their respective counsels on the basis thereon we find that the following issues become germane to the case:-
Whether the applicant is within the ambit of the Central Civil Services (Classification, Control & Appeal) Rules, 1965?
Whether, after three of the four Members having already signed the Resolution, the applicant was, in any way, in a position to influence the outcome of the case?
Whether there is any malafide getting established so as to vitiate the proceedings?
Whether non-supply of the report of CVC to the applicant vitiates the proceedings?
What relief, if any, could be provided to the applicant?
11. In respect to the first issue the arguments of the parties have already been noted. The applicant is charged with the following Article of Charge:-
That the said Shri Shyam Sunder Balani while functioning as Registrar of Companies, Gujarat, Ahmedabad, during the period March, 2000, committed gross misconduct in as much as he demanded Rs. Two lakh as illegal gratification and accepted an illegal gratification of Rs. One lakh from one Shri Satish Pancharia, Managing Director of M/s. Alka Spinners Limited, Ahmedabad, for signing Circular Resolution for listing of shares of the said Company in Ahmedabad Stock Exchange (ASE), being a Member of the Listing Committee as a Security and Exchange Board of India nominee Director of ASE.
Thus, the said Shri Shyam Sunder Balani by doing the aforesaid acts failed to maintain absolute integrity and devotion to duty and acted in a manner highly unbecoming of a Government servant and thereby contravened the provisions contained in Rule 3 of Central Civil Services (Conduct) Rules, 1964.
12. The applicant was proceed against under Rule 14 of the Central Civil Services (Classification, Control & Appeal) Rules, 1965 in capacity of Grade-I officer of Indian Company Law Service (ICLS). Admittedly prior to his suspension, the applicant was working as Registrar of Companies in the office of Registrar of Companies, Gujarat, Ahmedabad.
13. Further the applicant has submitted in the OA that he had joined Government service as Section Officer on 01.04.1987, subsequently promoted to the post of Assistant Director (Cost) in the Department of Expenditure and in 1997 as Junior Administrative Grade Officer in the Department of Company Affairs (now Ministry of Corporate Affairs). It is noticed from the record that the SEBI generally appoints one Nominee ROC or RD from the Government of India, Ministry of Corporate Affairs in each of the Governing Councils/Board of 22 Stock Exchanges in the country as per the Rules of the SEBI to have greater expertise and better advice on issues relating to Company. Hence, the applicant, being the officer of the Ministry of Corporate Affairs, was appointed as SEBI Nominee Director on the Governing Body of the ASE and also a Member of the Listing/De-listing Committee of the ASE.
14. Section 3(1) of the CCS (CCA) Rules, 1965 (hereinafter referred to as Rules 1965) provides as under:-
3. Application (1) These rules shall apply to every Government Servant including every civilian Government Servant in the Defence Services, but shall not apply to
(a) any railway servant, as defined in Rule 102 of Volume I of the Indian Railways Establishment Code;
(b) any member of the All India Services;
(c) any person in casual employment;
(d) any person subject to discharge from service on less than one month's notice.
(e) any person for whom special provision is made, in respect of matters covered by these rules, by or under any law for the time being in force or by or under any agreement entered into by or with the previous approval of the President before or after the commencement of these rules, in regard to matters covered by such special provisions. Admittedly, Rules 1965 apply to the applicant his being a Government servant. The fact that SEBI nominated him as SEBI Nominee Director on the Governing Board of ASE stands admitted vide OM dated 21.04.1999, which has been placed on record. The contention of the respondents is that under the SEBI Act, the institution is competent to appoint an ROC of the area on their own as a SEBI Nominee Director in which the Stock Exchange is situated without writing to the Ministry. However, in case of any objection to the afore nomination, the matter would be taken up with the SEBI. In the case of transfer of ROC, his successor will be nominated. The system has been put in place in the name of ROC and not by individual name. The respondents have also given example of one N.K. Bhola, ROC, Ahmedabad who had been appointed as SEBI Nominee Director on the Boards of Stock Exchange of Ahmedabad, Vadodara and Rajkot by the SEBI. Even we take note of the argument of the respondents that the applicant is admitted to have attended one of the meetings of the Board in 1999 and he cannot, therefore, now turn around and say that his nomination was against the rules. In view of the facts admitted, it is evident that Nomination of the ROC as Nominee Director was the order of the day and even the applicant had agreed to the same by consent by participating in one of the meetings. It is also to be taken note of that the fundamental purpose behind establishment of SEBI as provided under Section 11(1) of the SEBI Act, 1992 (hereinafter referred to as Act of 1992) is to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, by such measures as it thinks fit. Under Section 11(2) of the Act of 1992 (d) & (e), the functions of the SEBI include promoting and regulating self-regulatory organizations and prohibiting fraudulent and unfair trade practices relating to securities markets. Section 11(2)(m) of the Act ibid further provides that it may perform other such functions as may be prescribed. Since SEBI has been established as an Act of Parliament and its functions have been defined and are broad based, both provisions of rules as well as the past practice establish that the nomination of the applicant as the Member of the Listing Committee was not without jurisdiction and was made in his official capacity. Hence, we hold that the applicant continues to be a public servant in terms of Section 22 of the Act which provides that all members, officers and other employees of the Board shall be deemed to be public servants under the meaning of Section 21 of the Indian Penal Code when acting or purporting to act in pursuance of any of the provisions of this Act. Hence, there is no error whatsoever in proceeding against the applicant under Rule 14 of the Rules of 1965. This issue is according held against the applicant.
15. In so far as the Issue No.2 is concerned, it is an admitted position that the Listing Committee of the ASE comprised of four Members i.e. Executive Director, SEBI Nominee (ROC), President and Treasurer of ASE. Further, the resolution had been signed by the President, Executive Director and the Treasurer of ASE but it had not been singed by the then ROC, who was a SEBI Nominee Director. It is the case of the respondents that after signing the Resolution by Executive Director and other Director/Office Bearers, the same was personally delivered to the ROC office. The function of the ROC is to ensure that the directives of the SEBI are fully complied with while listing of the Company. It is further the submission of the respondents that it had been the continuing practice that the proposal would be submitted to the SEBI Nominee Director after the same had been approved by the President, Executive Director and Treasurer of ASE.
16. It has also to be considered here that the instant case was not a normal case as it had involved merger of Companies. We fully agree with the argument of the applicant that Rule 174 of the Stock Exchange Rules, Bye-laws & Regulations, 1957 provide that any question before a Committee shall be decided by a majority of the votes cast at a meeting and in case of equality of votes the Chairman shall have a casting vote in addition to the vote to which he is entitled to as a Member. Going by this logic, the Company could have been listed on the basis of the signatures obtained from 3 of the 4 Members. This was also done after the applicant had been trapped by the CBI and removed from office. The point here is different. The applicant was in the Listing Committee in the capacity of a Member of the SEBI and his job was to ensure that the rules, regulations and other guidelines provided by the SEBI are fully implemented. The other Members of SEBI were fully aware of the fact that this being a unique case, application of mind on the part of the applicant was required. At the same time, we cannot also overlook the fact that the proposal had been submitted to the applicant and it remained with him for a period of three months between January, 2000 and March, 2000. During this period, the file was returned three times without having appended the signatures by the applicant. The applicant had claimed that the complainant had defaulted in payment of taxes and duties and as such the applicant had asked him to pay a sum of Rs.1.00 lac on account of which the complainant was annoyed with him. However, if that be the case, the applicant has had plenty of opportunity to record the same objection on the proposal and refuse to put his endorsement, but why he has not done this is something that cannot be ascertained from the records and the pleadings. If his signature was of no consequence, he could have simply recorded this and the option was always there with him. Having not done that, the applicant now cannot turn around and say at this juncture of time that his signature was of no consequence and no one would pay him anything for the same. For all that it matters, the complainant might have, under the genuine belief, stated that the applicant being a SEBI Nominee Director was required to interpret the rules as he had some kind of veto power. In recognition of these facts, we decide this issue against the applicant.
17. In so far as Issue No.3 is concerned, the applicant has argued that the trap was managed at gun point. The complainant had carried a pistol along with 5 cartridges during the trap operation and he was allowed to do so by the head of the Raiding Party that being Jagroop Meena, Dy. Superintendent of Police. There is no provision in the CBI Manual that the applicant would go armed for the trap operation and the entire proceeding is vitiated by this act. The applicant further alleged that he was threatened and tortured in order to secure a successful trap operation by the Raiding Party of the CBI. This point was submitted before the enquiry who found that there was no evidence on record that the complainant and the Dy. Superintendent of Police, CBI were friends. The issue was never raised by him during the enquiry. The enquiry officer further found that there was no evidence whatsoever that the applicant was tortured and/or threatened. For the sake of clarity, the comments of the enquiry officer are extracted hereinbelow:-
7.6.3 IOs Comments COs contentions that he was tortured and threatened is not supported by any evidence. It is highly unlikely that the complainant would have tortured and threatened him when he knew that the CBI team is waiting outside. SW-1 stated, On the entry of team, the complainant Shri Pancharia was found sitting on the sofa having cold drinks. He explained about the demand of bribe and handing over of bribe amount to Shri Balani. Such a scenario hardly supports COs contention that he was tortured and threatened by the complainant. SW-6 stated that after giving the pre decided signal to CBI officers, within the next two-three minutes CBI officers along with the witnesses entered the flat. SW-1 deposed that hand washes of Shri Balani were taken in the presence of Panch witnesses. The bribe amount was seized. Therefore, the COs contention that he never demanded and accepted the bribe amount is not borne by facts.
18. It may be concluded that had the trap been laid on gun point, as has been alleged by the applicant, then both the complainant and applicant would not have been sitting together sharing a cold drink. In this regard, we also take note of the findings of the enquiry officer that it is not possible to compromise seven officers from different departments who constituted the Raiding Party. On the other hand, it is also a fact that chemical quoted currency notes were recovered from the possession of the applicant in addition to another amount of Rs.1.10 lacs which he could not have satisfactorily explained. The IO and the disciplinary authority vide the impugned order have gone in depth into that and we have no reason to doubt the same. Another fact that we wish to state here, at this very juncture, is that the Tribunals to set its boundaries with regard to judicial review. Time in and time out, Honble superior Courts have held that the scope of judicial review of departmental proceedings is indeed very limited. The Courts/Tribunals cannot substitute its own views or findings over that have been recorded by the enquiry officer or the disciplinary authority. It has to be considered here that the enquiry officer is face to face with the witnesses, records findings undergoing the process of examination-in-chief and cross-examination, peruses the preliminary documents, and appreciates the same. The disciplinary authority has also the occasion of having a direct interface with the charged officer. Such an advantage is not available to the Tribunal. In the case of S.R. Tewari versus Union of India & Another (Arising out of S.L.P. (C) No.22263-22264 of 2012 decided on 28.05.2013), Honble Supreme Court has held as under:-
22. The role of the court in the matter of departmental proceedings is very limited and the court cannot substitute its own views or findings by replacing the findings arrived at by the authority on detailed appreciation of the evidence on record. In the matter of imposition of sentence, the scope for interference by the court is very limited and restricted to exceptional cases. The punishment imposed by the disciplinary authority or the appellate authority unless shocking to the conscience of the court, cannot be subjected to judicial review. The court has to record reasons as to why the punishment is disproportionate. Failure to give reasons amounts to denial of justice. The mere statement that it is disproportionate would not suffice. (Vide: Union of India & Ors. v. Bodupalli Gopalaswami, (2011) 13 SCC 553; and Sanjay Kumar Singh v. Union of India & Ors., AIR 2012 SC 1783).
23. In Union of India & Ors. v. R.K. Sharma, AIR 2001 SC 3053, this Court explained the observations made in Ranjit Thakur (supra) observing that if the charge was ridiculous, the punishment was harsh or strikingly disproportionate it would warrant interference. However, the said observations in Ranjit Thakur (supra) are not to be taken to mean that a court can, while exercising the power of judicial review, interfere with the punishment merely because it considers the punishment to be disproportionate. It was held that only in extreme cases, which on their face, show perversity or irrationality, there could be judicial review and courts should not interfere merely on compassionate grounds.
24. The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is against the weight of evidence, or if the finding so outrageously defies logic as to suffer from the vice of irrationality. If a decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the findings would not be interfered with. (Vide: Rajinder Kumar Kindra v. Delhi Administration, AIR 1984 SC 1805; Kuldeep Singh v. Commissioner of Police & Ors., AIR1999 SC 677; Gamini Bala Koteswara Rao & Ors. v. State of Andhra Pradesh thr. Secretary, AIR 2010 SC 589; and Babu v. State of Kerala, (2010) 9 SCC 189).
Hence, where there is evidence of malpractice, gross irregularity or illegality, interference is permissible. This is further supported by the decision of the Honble Supreme Court in the matter of GAIL (India) Ltd. Versus Gujarat State Petroleum Corporation Ltd. [Civil Appeal No.8263 of 2013 arising out of SLP(C) No.21932 of 2013 decided on 17.09.2013] wherein the Honble Apex Court taking the support from the decision in Arun Agrawal v. Union of India & Others [2013) 7 SCC 1] has recorded as under:-
28. In Arun Kumar Agrawal v. Union of India and others (2013) 7 SCC1, this Court was called upon to consider the scope of judicial review of complex economic decision taken by the State or its instrumentalities. The Government of India, ONGC and Shell entered into a production sharing contract with a private enterprise for exploration and exploitation of crude oil and natural gas in respect of the Rajasthan Block. After due deliberation, the Government of India endorsed the decision taken by ONGC. While refusing to interfere with the decision of the Government, this Court observed: "We notice that ONGC and the Government of India have considered various commercial and technical aspects flowing from the PSC and also its advantages that ONGC would derive if the Cairn and Vedanta deal was approved.
This Court sitting in the jurisdiction cannot sit in judgment over the commercial or business decision taken by parties to the agreement, after evaluating and assessing its monetary and financial implications, unless the decision is in clear violation of any statutory provisions or perverse or taken for extraneous considerations or improper motives. States and its instrumentalities can enter into various contracts which may involve complex economic factors. State or the State undertaking being a party to a contract, have to make various decisions which they deem just and proper. There is always an element of risk in such decisions, ultimately it may turn out to be correct decision or a wrong one. But if the decision is taken bona fide and in public interest, the mere fact that decision has ultimately proved to be wrong, that itself is not a ground to hold that the decision was mala fide or taken with ulterior motives."
19. In view of the aforesaid judgments, the scope of judicial review in disciplinary matters is in a very narrow compass i.e. whether any malafide is established, whether there have been some procedural laches which result in violation of rules of natural justice or some other rules in force, and whether the punishment is disproportionate to the offences as per the doctrine of proportionality.
20. In the instant case malafide has been pleaded but, as discussed, the theory of conspiracy on pat of the CBI witnesses and the complainant has neither been accepted by the enquiry officer nor by the disciplinary authority. Moreover, we take note of the fact that the applicant has not impleaded Jagroop Meena, Dy. Superintendent of Police and others against whom the conspiracy has been alleged, which was required to be done so as to give them the opportunity to appear and defend themselves. There is no shying away from the fact that malafide is easy to allege but difficult to prove. Honble Patna High Court in the case of C. Murugan versus The Reserve Bank of India & Others vide its decision dated 09.09.2013 in Writ Jurisdiction Case No.4581/2007 held as under:-
Since in the present writ petition, there is no allegation of illegality or irregularity committed in decision taking process, it would be difficult for this Court to interfere with the order of disciplinary authority while exercising power of judicial review. So far as allegation of mala fide is concerned, learned Sr. Counsel for the petitioner has tried to establish on the strength of Annexure '5', '6' and '6(1)', which were issued under the signature of the petitioner, certain allegation was leveled against security guards. On perusal of Annexure '5', '6' and '6(1)', which were issued on 16-06-2003, 20-01-2004 and 08-09-2004, the Court is satisfied that some allegations were leveled against security guards, but on those grounds alone, it would be difficult to conclusively record a finding that departmental proceeding was initiated maliciously. Time without number, it has been noticed that it is very easy to allege mala fide but difficult to prove mala fide. 10 Patna High Court CWJC No.4581 of 2007 (10) dt.09-09-2013 10 / 10 Moreover, in absence of such persons, against whom allegation of mala fide has been alleged, it would not be appropriate for this Court to examine the allegation of mala fide. Moreover, only on the basis of mala fide, the order of punishment may not be interfered with. Only requirement is to see as to whether in the departmental proceeding, allegation against the concerned delinquent was proved or not. Since in the present case, so far as charge no. 1 is concerned, it was conclusively proved, there is no ground for interference with the order of disciplinary authority. So far as order of appellate authority is concerned, from perusal of the same, it is evident that the appellate authority had noticed each and every grounds, which were taken in the memo of appeal and they were dealt with in detail in the order of appeal.
I do not find any defect, either in the order of the disciplinary authority or in the order of appellate authority. The writ petition stands dismissed.
21. The decision in mother of all cases in the matter of E.P. Royappa versus State of Tamilnadu and Another [AIR 1974 (SC) 565] still holds good that the burden of proof to establish malafide is very heavy on the person who alleges it. The allegations of malafide are often made easily but very seriousness of such allegations demand proof of high order of credibility. Honble High Court of Delhi in the case of R.T. Paramhans versus Union of India & Others 2008 (2) SLJ 93 (Delhi) has held as under:-
17. It is also alleged that the petitioner is suffering since 2008 as a result of departmental enquiry against him and will continue to suffer unless the petitioner be exonerated of the penalty of Censure which was imposed upon him.
18. There is no denial that the same process which was adopted by another recruitment Board taken place in Nagpur and the candidates selected by the second Board are currently working in CRPF and no action was taken by the respondents against any member of the second Board for adopting exactly the same process which was done by the petitioner and he was charged with. Therefore, it appears from the material placed on record that the respondents have ignored the findings of the Enquiry Officer wherein it was stated that usually, the normal course of action adopted by the authorities in case of procedural errors in the recruitment process is for sending the same back for rectification by the Board of Officers which was not done in the present case.
22. In view of the above, we can safely infer that conspiracy theory fails and the applicant has not been able to establish any malice in law. This issue is also decided against the applicant.
23. In so far as Issue No.4 is concerned, which pertains to non-supply of CVC advice to the applicant, we find that in the counter reply the respondents have very clearly provided that:
As per CVCs Communication No.99/VGL/66 dated 28th September, 2000, when the CVCs second stage advice is obtained, a copy thereof may be made available to the concerned employee, along with the I.O.s report, to give him an opportunity to make representation against I.Os findings and the CVCs advice, if he desires to do so. Accordingly, the applicant was forwarded a copy of the Inquiry Report along with the CVCs second stage advice for his representation. Thus, the applicant has been given sufficient opportunity to make representation on the I.O.s findings and the CVCs second stage advice. Hence, there is no question of violation of any rules or prescribed procedure. In the impugned order, the disciplinary authority also takes a note of this and provides as under:-
7. AND WHEREAS on careful consideration of the report of the inquiry officer and other records of the case in the light of submissions made by Shri Balani in his observations on report of the inquiry, together with the advice of the Commission, the President has decided to accept the findings of the Inquiry Officer and the advice of the Commission.
24. It emerges clearly from the above that the CVC advice has been duly provided at both stages to the applicant and his reply has been taken into account. We do not feel that any prejudice has been created against the applicant on this count. We further note that no infringement of the rules of natural justice is evident in the conduct of the departmental enquiry. This has to be understood in the background of the fact that the applicant was caught red handed while accepting illegal gratification and since then has been criminally prosecuted and departmentally proceeded against. We also take a note of the dilatory tactics adopted by the applicant to stall the proceedings as recorded by the enquiry officer within the enquiry report. The scope of judicial review of an order in a departmental proceeding having been already gone through earlier in this order we acutely conscious of the fact that this Tribunal is not to re-appreciate the evidence as recorded in the enquiry report nor is it to sit in judgment over the order of the disciplinary authority. The scope of the enquiry being confined to see all the issues, as detailed earlier, namely whether any malafide is established, whether there have been some procedural laches which result in violation of rules of natural justice or some other rules in force, and whether the punishment is disproportionate to the offences as per the doctrine of proportionality. We find that none of these points are getting proved. We deem it appropriate to record that the ground of punishment being disproportionate to the gravity of offence has neither been pleaded by the applicant nor discussed.
25. In view of the above discussion, the instant Original Application is dismissed being devoid of merit. There shall be no order as to costs.
(Dr. Birendra Kumar Sinha) (Dr. K.B. Suresh)
Member (A) Member (J)
/naresh/