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2. Briefly put, the applicant was departmentally tried on the allegations that he was not authorised to invest the surplus funds of DSCFDCL in scheme like PMS without guaranteeing a pre-determined return, and inasmuch as, he had made a fluctuating investment for long term (one year) for a yield of 16.25% per annum, whereas the State Bank of India had initially offered a rate of 15.5% per annum for any period, and the fluctuating investment resulted into lesser yield, he had committed gross misconduct by exhibiting lack of devotion to duty and by acting in a manner unbecoming of a member of the Service and prejudicial to the interest of DSCFDCL thereby contravening rule 3(1) of the All India Services (Conduct) Rules, 1968.

7. We have heard the learned counsel representing the parties and with their assistance examined the records of the case. Before we may evaluate, comment upon and determine the issues involved in the case in the light of submissions made by the learned counsel representing the parties, it would be appropriate to refer to rule 3 of the All India Services (Conduct) Rules, 1968. The same reads as follows:

3. General  (1) Every member of the service shall at all times maintain absolute integrity and devotion to duty and shall do nothing which is unbecoming of a member of the service. It would be interesting to note that even though in the article of charge accompanying memorandum dated 23.8.1999 it has been mentioned that the applicant committed gross misconduct, failed to maintain devotion to duty and acted prejudicially to the interest of DSCFDCL with an ulterior motive, the finding that came to be ultimately recorded by the disciplinary authority was only that he had exceeded his delegated power of making deposits for periods less than a year, and further that he did not carry the offer made by SBI to its logical conclusion by exhaustively examining the same on merits after seeking clarification from SBI, as was necessary, and, therefore, ignored the higher rate of interest offered by SBI. The disciplinary authority in its order dated 22.8.2006 after giving backdrop of the case, concluded as follows:
12. AND WHEREAS the President, after going through the case record, findings of the Inquiring Authority, the representation of the said Sh.G.P.sewalia, the advice of Central Vigilance Commission and Union Public Service Commission and all other relevant factors, material to the case observed that the investment for a period of one year and above, in terms of guidelines issued by the Reserve Bank of India, was termed as a medium/long term investment. The investment of the Delhi Scheduled Castes Financial and Development Corporation Ltd.s funds to the tune of Rs.16.25 crores in the Portfolio Management Scheme of Syndicate Bank for a period of one year, which was as per the Reserve Bank of Indias guidelines termed as a medium/long term investment, was outside the delegated powers of the Chairman and the Managing Director of the Corporation, who was empowered to make short term deposits only. Sh.G.P.Sewalia thus clearly exceeded his delegated powers. Further the offer made by Syndicate Bank of a yield of 16.25% per annum was only an indicative rate, subject to speculative vagaries of the capital market. The final return of the investment was at the rate of 14% PER ANNUM ONLY. THE State Bank of India, on the other hand, offered a 16% per annum, which would have yielded 18.5% simple rate of interest. The Charged Officer, however, did not carry the offer made by the State Bank of India to its logical conclusion by exhaustively examining the same on merits after seeking such clarification from State Bank of India, as were necessary. Sh.G.P.Sewalia, therefore, ignored the higher rate of interest offered by State Bank of India which could have been beneficial. However, since Sh. Sewalia ordered the investment to be made in the public sector bank, no ulterior motive could be attributed to his said action. In view of the finding as recorded above, the applicant, as mentioned above, was visited with the penalty of reduction of pay by three stages for a period of one year without cumulative effect. It is pertinent to note that no finding of misconduct, failing to maintain absolute devotion to duty with ulterior motive, as was the charge, has been returned by the enquiry officer. The disciplinary authority has not observed that the allegations that stood proved against the applicant would be misconduct or failing to maintain absolute devotion to duty. Assuming that the said finding has to be read or presumed simply on proof of the allegation subject matter of charge, the pertinent question that would arise is as to whether the said allegation would constitute misconduct or failing to maintain absolute devotion to duty. There cannot be any exhaustive definition of misconduct. However, the same as defined in Blacks Law Dictionary, Sixth Edition at page 999 would mean, thus:
(iv) Did not keep Government informed of the actual picture and extent of the disturbances;
(v) Showed complete inaptitude, lack of foresight, lack of firmness and capacity to take quick and firm decision and were, thus largely responsible for complete break down of Law and Order in Nowgong town as well as the rural areas of Nowgong District.

Thus you proved yourself completely unfit to hold any responsible position. While commenting upon the charges as framed against the respondent, it was observed that the same related to his efficiency as an officer, and besides negligence the charges referred to lack of qualities of leadership, foresight, firmness and indecisiveness, but competence for the post, capability to hold the same, efficiency requisite for a post, ability to discharge functions attached to the post, are things different from some act or omission of the holder of the post which may be styled as misconduct so as to incur the penalty under rules. It is relevant to mention that the Honble Supreme Court was dealing with rule 4 of the Discipline and Appeal Rules which were to be understood in the context of All India Services (Conduct) Rules, 1954. Rule 3 of the Rules of 1954 required maintenance of, at all times, absolute integrity and devotion to duty. It was held that lack of integrity, if proved, would undoubtedly entail penalty, and failure to come up to the highest expectations of an officer holding a responsible post or lack of aptitude or qualities of leadership would not constitute as failure to maintain devotion to duty, and that the expression devotion to duty, had been used as something opposed to indifference to duty or easy-going or light-hearted approach to duty. An act or omission which runs counter to the expected code of conduct was also held to constitute misconduct. In a recent decision in the matter of Inspector Prem Chand v Government of NCT of Delhi & Others [(2007) 4 SCC 566], after discussing the case law it has been held that error of judgment or negligence simpliciter would not be misconduct.