THE HONOURABLE MR v. The Board of Directors

2.The Chairman and Managing Director, Tamil Nadu Small Industries Development Corporation Limited, Paul Wells Road, Kathipara Junction, Madras-600016.3.The Board of Directors, Tamil Nadu Small Industries Development Corporation Limited, Paul Wells Road, Kathipara Junction, Madras-600016.... Respondents W.P.No.12550 of 1994:R.Jayabharathi... Petitioner Vs.1.The Manager-Legal, Tamil Nadu Small Industries Development Corporation Ltd., Paul Wells Road, Kathipara Junction, Madras-600016.2.The Chairman and Managing Director, Tamil Nadu Small Industries Development Corporation Limited, Paul Wells Road, Kathipara Junction, Madras-600016.3.The Board of Directors, Tamil Nadu Small Industries Development Corporation Limited, Paul Wells Road, Kathipara Junction, Madras-600016.... Respondents * * *W.A.No.1462 of 1998 has been preferred under Clause 15 of theLetters Patent as against the order of the learned single Judge dated22.9.1998 made in W.P.No.3565 of 1990. Writ Petition praying to issuea writ of Certiorarified Mandamus calling for the records relating tothe proceedings of the first respondent dated 3.7.89 made inRef.No.36610/C-2/88 as confirmed by the appellate Authority and https://hcservices.ecourts.gov.in/hcservices/ communicated by the Second respondent in his proceedings dated8.11.89 made in Ref.No.36993/EC-2/89 set aside the same and directthem to reinstate the petitioner with all attendant benefit. W.A.No.277 of 1999 has been preferred under Clause 15 of theLetters Patent as against the order of the learned single Judge dated8.1.1999 made in W.P.No.3263 of 1990. Writ Petition praying to issuea writ of Certiorarified mandamus calling for records of therespondents culminated in proceedings Ref.No.36610/EC/2/88 dated3.7.89 and the resolution of the Board in 109th meeting held on22.9.89 communicated by memo Ref.No.36428/EC-2/89 dated 8.11.89 andquash the same and direct the respondents to treat the petitioner tohave remained in service from 3.7.89 and pay all attenuating benefitsaccrued in the service.W.P.No.2265 of 1993 has been filed under Article 226 of theConstitution, praying to issue a Writ of Certiorarified Mandamuscalling for the records of the respondents culminated in proceedingsRef.No.36610/EC-2/88, dated 3.7.1989 and the Resolution of the Boardin 109th meeting held on 22.9.1989 communicated byMemo.Ref.No.36428/EC-2/89, dated 8.11.1989 and quash the same anddirect the respondents to treat the petitioner to have remained inservice from 23.7.1989 and pay all attenuating benefits accrued inthe service. W.P.No.4409 of 1994 has been filed under Article 226 of theConstitution, praying to issue a Writ of Certiorarified Mandamus, tocall for the records of the respondents culminated in proceedingsRef.No.36610/EC-2/89, dated 3.7.1989 and the resolution of the Boardin 109th meeting held on 22.9.1989 communicated by MemoRef.No.37217/EC-2/89, dated 8.11.1989 and quash the same and directthe respondents to treat the petitioner to have remained in servicefrom 23.7.1989 and pay all attenuating benefits accrued in service.W.P.No.12550 of 1994 has been filed under Article 226 of theConstitution, praying to issue a Writ of Certiorarified Mandamus, tocall for the records of the respondents culminated in ProceedingsRef.No.36610/EC-2/88, dated 3.7.1989 and the resolution of the Boardin 109th Meeting held on 22.9.1989, communicated byMemo.Ref.No.36428/EC-2/89, dated 8.11.1989 and quash the same anddirect the respondents to treat the petitioner to have remained inservice from 6.1.1989 and pay all attenuating benefits accrued in theservice.* * *For appellants inW.A.Nos.1462/1998 &: Mr.S.Ramasamy, AAG277/1999 and for : for Mr.R.RameshR.1 to R.3 inW.P.No.4409 of 1994 https://hcservices.ecourts.gov.in/hcservices/ For petitioners inW.P.Nos.2265, 4409 &12550/1994: Mr.M.S.GovindarajanFor respondent inW.A.No.1462/1998: Mr.S.ElamuruganFor respondent inW.A.No.277/1998: Mr.V.SankaranarayananFor respondents inW.P.Nos.2265 & 12550/1994: Mr.P.Rajagopal* * *COMMON JUDGMENTELIPE DHARMA RAO, J.Since all these matters are inextricably interconnected witheach other, they are heard in common and are being disposed of bythis common judgment.2. For the sake of convenience and easy reference, the writpetitioners and the respondents in the writ appeals are referred toas the writ petitioners/delinquent employees and the appellants inthe writ appeals and the respondents in the writ petitions arereferred to as the respondents/department.3. On a perusal of the entire materials placed on record, itis seen that for some alleged misconducts, charges were framedagainst the writ petitioners by the Department and after conductingan enquiry, all the writ petitioners were found guilty of therespective charges framed against them and by the impugned orders,they all are dismissed from service. Challenging such dismissalorders, the employees have filed writ petitions before this Court. 4. In the two writ petitions filed by T.Sivanandan andM.Jagadeesan, the respondents in the writ appeals, orders have beenpassed by two learned single Judges of this Court, ordering theirreinstatement with all incidental benefits. Aggrieved by the saidorders passed by the learned single Judges, the Department has comeforward to prefer the writ appeals. When the writ appeals were takenup for consideration, since it has been brought to the notice of theDivision Bench that three other writ petitions, pertaining to thesame facts are also pending on the file of this Court, W.P.Nos.2265,4409 and 12550 of 1994 are ordered to be tagged along with the WritAppeals No.1462 of 1998 and 277 of 1999 so as to dispose them of https://hcservices.ecourts.gov.in/hcservices/ together. Accordingly, all these matters are clubbed together forcommon disposal.5. The main attack to the impugned orders of dismissal by thedelinquent officials is that on completion of the enquiry and beforeinflicting the major punishment, they were not issued with any show-cause notice (second show-cause notice) by the officials so as torepresent their grievance regarding the proposed punishment. Thelearned single Judges have affirmed the contention raised on the partof two of the employees, who are the respondents in the above WritAppeal Nos.1462 of 1998 and 277 of 1999 and held that non-issuance ofthe second show-cause notice has vitiated the enquiry proceedings.In arriving at such a conclusion, the learned single Judges haveplaced reliance on Rule 6.17 of the SIDCO service Rules, which readsas follows:"Before imposing any of the penalties, the competentauthority shall give a reasonable opportunity to theemployee concerned to show cause against suchimposition."6. It is to be mentioned here that the above provision i.e.Rule 6.17 of the SIDCO Service Rules, seems to have itsorigin/genesis from Article 311(2) as it stood earlier, contemplatingissuance of second show-cause notice. But, the 42nd Amendment of theConstitution, which came into effect on and from 3.1.1977, hasdeleted the second stage of the inquiry, which would commence withthe service of a notice proposing one of the punishments mentioned inArt.311(1) of the Constitution. It seems, consequent upon the 42ndAmendment of the Constitution, the above quoted Rule 6.17 of theSIDCO Rules has also been amended by the Resolution No.131 of the 64thBoard Meeting dated 11.3.1980 and the new Rule 6.17 has been broughtinto operation which reads as follows:"After the enquiry or personal hearing are completed andafter the authority competent to impose the penalty hasarrived at a provisional conclusion in regard to thepenalty to be imposed on the basis of the evidence adducedduring the enquiry, it shall make an order imposing suchpenalty and it shall not be necessary to give the personcharged any opportunity of making representation on thepenalty proposed to be imposed."7. Therefore, on the part of the respondents/Department, ithas been strenuously argued that when the Rules themselves do notprovide any such second show-cause notice to be issued to thedelinquent officials, it is rather strange on the part of thedelinquent officers to putforth such an argument. https://hcservices.ecourts.gov.in/hcservices/

8. However, to substantiate their arguments, on the part ofthe writ petitioners/employees a three Judge Bench judgment of theHonourable Apex Court in UNION OF INDIA AND OTHERS vs. MOHD.RAMZANKHAN [AIR 1991 SC 471] has been pressed into service. In the saidjudgment, the Honourable Apex Court has held as follows:"Deletion of the second opportunity from the scheme ofArt.311(2) of the Constitution has nothing to do withproviding of a copy of the report to the delinquent in thematter of making his representation. Even though thesecond stage of the inquiry in Art.311(2) has beenabolished by amendment, the delinquent is still entitledto represent against the conclusion of the Inquiry Officerholding that the charges or some of the charges areestablished and holding the delinquent guilty of suchcharges. For doing away with the effect of the enquiryreport or to meet the recommendations of the InquiryOfficer in the matter of imposition of punishment,furnishing a copy of the report becomes necessary and tohave the proceeding completed by using some materialbehind the back of the delinquent is a position notcountenanced by fair procedure. While bylaw applicationof natural justice could be totally ruled out ortruncated, nothing has been done by the 42nd amendmentwhich could be taken as keeping natural justice out of theproceedings and the applicability of the rules of naturaljustice to such an inquiry is not affected by the 42ndamendment. Therefore supply of a copy of the inquiryreport along with recommendations, if any, in the matterof proposed punishment to be inflicted would be within therules of natural justice and the delinquent would,therefore, be entitled to the supply of a copy thereof.The Forty-Second Amendment has not brought about anychange in this position."9. Placing reliance on the above judgment of the HonourableApex Court, it has been argued on the part of the writpetitioners/employees that even though the second stage of theinquiry in Art.311(2) has been abolished by amendment, the delinquentis still entitled to represent against the conclusion of the InquiryOfficer and therefore, the Department ought to have given anopportunity for the delinquent to represent against the conclusion ofthe Inquiry Officer and since the said procedure has not beenfollowed, the impugned orders passed by the respondents/Departmentmust be set aside.10. We are not convinced at the above argument advanced on thepart of the writ petitioners/employees. In all these cases, the https://hcservices.ecourts.gov.in/hcservices/ impugned orders of dismissal were slapped on the delinquent officialson 8.11.1989. As has already been adverted to supra, Rule 6.17 ofthe Service Rules was amended by the Resolution No.131 of 64th BoardMeeting, dated 11.3.1980, keeping pace with the 42nd Amendment of theConstitution, which came into effect on and from 3.1.1977, thustaking away the second stage of enquiry. The amended Rule 6.17 hasbeen in operation from 11.3.1980, which does not provide any suchprovision to issue second show-cause notice to the delinquentofficer. But, heavy reliance has been placed on the part of thedelinquent officials on judgment of the Honourable Apex Court inMohd.Ramzan Khan case (referred supra), which was rendered by theHonourable Apex Court 20.11.1990.11. In a subsequent judgment in P.D.AGRAWAL vs. STATE BANK OFINDIA AND OTHERS [(2006) 8 SCC 776], the Honourable Apex Court hasclarified the position in the following manner:"The decision in Mohd.Ramzan Khan case, (1991) 1 SCC 588was rendered on 20.11.1990 wherein while holding that adelinquent officer could not be called upon to make arepresentation on the quantum of punishment withoutfurnishing a copy of the enquiry report,the decision wasexpressly given a prospective effect. It was,therefore,not at all necessary for the disciplinary authority, inview the law as it then stood, to furnish a copy of theenquiry report to the appellant."12. This judgment of the Honourable Apex Court squarelyapplies to the cases on hand. As has already been mentioned supra,in all these matters, the walking papers were served on the writpetitioners/employees on 8.11.1989 and the judgment of the HonourableApex Court in Mohd.Ramzan Khan case has been rendered in 20.11.1990,as has been clarified by the Honourable Apex Court in P.D.Agrawalcase, the delinquent officers in the cases on hand cannot cling onthe findings of the Honourable Apex Court in Mohd.Ramzan case, whichis only prospective in nature i.e. from 20.11.1990 onwards.Therefore, this argument advanced on the part of the writpetitioners/employees fails.13. It has been consistently maintained on the part of theDepartment that in the domestic enquiry all the employees haveaccepted their guilt and since being the case of misappropriation ofpublic money, the Department was left with no choice but to pass theorders of dismissal on the delinquent employees.14. A perusal of the enquiry reports would justify thecontention of the Department that the delinquent officers in allthese matters have accepted their guilt for one reason or other.From the materials placed on record, we are able to see that the https://hcservices.ecourts.gov.in/hcservices/ alleged misappropriated amounts have been repaid by the delinquentofficers and submitted themselves for the enquiry, thus bringing downthe misappropriation to one of temporary misappropriation. It hasbeen strongly submitted on the part of the delinquent employees thatsince they were given false hopes at the higher end that if theyremit back the alleged misappropriated amount and admit their guilt,they would be let off from the further ordeal, all of them, in onevoice, have accepted their alleged guilt. It has further beensubmitted on the part of the writ petitioners/employees that thoughat the first instance the Enquiry Officer, by his order dated2.2.1989, has furnished the report that they are not responsible forthe alleged lapses, subsequently, at the direction of the newChairman and Managing Director F.Z.Vaz, who replaced the earlierChairman and Managing Director Mr.J.R.Ramanathan, who are inloggerheads with each other, the very same Enquiry Officer hasfurnished another report dated 6.2.1989 holding all the chargesproved against the delinquent officials.15. Though this contention of the delinquent officials isexpectedly denied by the Department as imaginary, a scrutiny of theentire materials placed on record would speak otherwise, fortifyingthe contention raised on the part of the delinquent officials. 16. It is seen that the Board in its 106th meeting held on26.12.1988 accepted the reimbursement effected on the part of thedelinquent officials and revoked their suspension, further directingto dispose of the charge memos. issued to them. The Department,which is burdened to prove the charges levelled against thedelinquent officials, has not adduced any oral or documentaryevidence in the enquiry conducted by the Enquiry Officer, whereby alegal presumption would arise that only to help the delinquentofficials, who have already paid back the alleged amounts, theDepartment, taking a lenient view, has not pursued the enquiryproceedings. Had the Department is serious in pursuing the enquiryproceedings, it should have marked the documents before the EnquiryOfficer to bring home the guilt of the delinquent officials. But, ithas not been done. Even in his report, the Enquiry Officer hasplaced much reliance only on the admissions made by the delinquentofficials and nothing else, since there is no other material madeavailable on record by the Department against the charge-sheetedemployees. Therefore, we got every reason to believe the contentionraised on the part of the delinquent officials that the change of theChairman and Managing Director has changed their fate, throwing themout of their service.17. It is to be pointed out that the submission of thedelinquent officials that but for the alleged charges, they haverendered unblemished services has not at all been refuted by therespondents/Department. https://hcservices.ecourts.gov.in/hcservices/

18. The other legal aspect we want to discuss is that asagainst the harsh punishment of plucking away the livelihood of thedelinquent officers by the Department, they have preferred appeals tothe appellate authority/the Board as provided under Rule 6.25 of theService Rules, which is extracted hereunder for better understanding:"6.25:(A) In the case of an appeal against an order imposing anyof the penalties specified in rule 6.15 the appellateauthority, shall consider whether the penalty imposed isadequate, inadequate or severe and pass orders (i)confirming, enhancing, reducing or setting aside thepenalty or (ii) remitting the case to the authority whichimposed the penalty with such direction as it may deem fitin the circumstances of the case.(B) It shall be open to the Appellate Authority to callfor the records in respect of any disciplinary proceedingand review any order made under these rules and pass suchorders as it may deem fit in the circumstances of thecase."19. Thus, this Rule confers wide powers on the appellateauthority to cure the error or defect committed by the penaltyimposing authority, by assessing whether the penalty imposed isadequate, inadequate or severe and pass orders accordingly. UnderRule 6.25(B), the appellate authority has been vested with the powerto call for the records in respect of any disciplinary proceeding andreview any order made under the rules and pass such orders as it maydeem fit in the circumstances of the case. The powers thus conferredon the appellate authority seem to be similar to that of the powersconferred on the Labour Courts, Tribunal and National Tribunals underSection 11A of the Industrial Disputes Act and therefore, theAppellate Authority must act in a judicious way and see that adequatepunishment is imposed on a delinquent officer, if he is of theopinion that the finding of the Enquiry Officer holding thedelinquent guilty of the charges and the subsequent punishmentimposed by the punishing authority is adequate or reasonable or inother case that he is of the opinion that the Enquiry Officer and thepunishment imposing authority have erred in their conclusions, he canvery well call for the records and review any order made under theRules. When this Rule 6.25 has been inducted with such an piousobject, in the case on hand, the appellate Authority, withoutoffering any reason for his concurring with the decision arrived atby the Managing Director/the punishment imposing authority, hassimply confirmed the order of dismissal passed against all thedelinquent officers. No reasons, much less appreciable ones havebeen offered on the part of the appellate authority. https://hcservices.ecourts.gov.in/hcservices/

20. At this juncture, we feel it apt to quote a judgment ofthe Honourable Apex Court in MATHURA PRASAD vs. UNION OF INDIA[(2007) 1 SCC 437], wherein considering the entire case law on thesubject of judicial review, the Apex Court has categorically and inno uncertain terms has ruled:"When an employee, by reason of an alleged act ofmisconduct, is sought to be deprived of his livelihood,the procedures laid down under the sub-rules are requiredto be strictly followed...."21. Further in UNION OF INDIA vs. JAI PRAKASH SINGH [(2007) 10SCC 712], wherein the Honourable Apex Court has held:"Reasons introduce clarity in an order. On plainestconsideration of justice, the High Court ought to have setforth its reasons, howsoever brief, in its orderindicative of an application of its mind, all the morewhen its order is amenable to further avenue of challenge.The absence of reasons has rendered the High Court'sjudgment not sustainable. Reasons are live links betweenthe mind of the decision-taker to the controversy inquestion and the decision or conclusion arrived at.Reasons substitute subjectively by objectivity. Theemphasis on recording reasons is that if the decisionreveals the 'inscrutable face of the sphinx', it can, byits silence, render it virtually impossible for the courtsto perform their appellate function or exercise the powerof judicial review in adjudging the validity of thedecision. Right to reason is an indispensable part of asound judicial system, reasons at least sufficient toindicate an application of mind to the matter beforecourt. Another rationale is that the affected party canknow why the decision has gone against him. One of thesalutary requirements of natural justice is spelling outreasons for the order made, in other words, a speakingout. The 'inscrutable face of a sphinx' is ordinarilyincongruous with a judicial or quasi-judicialperformance."22. In the cases on hand, as has been adverted to supra, theappellate authority, who is expected to act in a judicious manner,has not offered any reason for his concurring with the harsh anddisproportionate punishment imposed on the delinquents by theManaging Director. On the part of the learned counsel appearing forthe delinquent officials a judgment delivered by one of us (ElipeDharma Rao, J), as a single Judge, under the similar circumstanceswherein the appellate authority has not considered as to whether thepenalty imposed is adequate, inadequate or severe, as required under https://hcservices.ecourts.gov.in/hcservices/ Rule 6.25A of the Tamil Nadu Small Industries Development CorporationLimited Service Rules, in N.VANAJA vs. THE BOARD OF DIRECTORS OFTAMIL NADU SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD, CHENNAI[2006 (4) CTC 52] has also been pressed into service, which wasfollowed by another learned single Judge of this Court in ERONIMUSvs. THE S.P., RAMANATHAPURAM [2008 (2) TLNJ 677 (CIVIL)].23. At this juncture, a pathetic situation has to be pointedout. In all these cases, the harsh and disproportionate punishmentof dismissal from service has been imposed by the Managing Director,which has been confirmed by the Board of Directors, headed by thesame Managing Director as its Chairman. Therefore, it is but naturalthat the person who has inflicted the punishment as a punishmentimposing authority, cannot bare the brunt by reversing the same whileacting as the appellate authority.24. The materials on record would speak volumes that the thenincoming Chairman and Managing Director, for his own reasons, hasdestined to punish these writ petitioners/delinquents, even thoughhis predecessor-in-office seems to have promised otherwise to thedelinquent officers. But for such promise and assurance by theerstwhile Chairman and Managing Director, the delinquent officers maynot have remitted the alleged amounts and pleaded guilty for thecharges framed by the Department, wherein, unusually, no oral ordocumentary evidence has been let in on the part of the Department.When, except the alleged charges, no other allegations were ever madeand proved against the delinquent officials, had the appellateauthority acted in the manner required of him under Rule 6.25, byacting in a judicious manner, he would not have approved such ashocking and disproportionate punishment imposed on the delinquentofficials. We make it clear that we are not holding that repaymentof the alleged misappropriated amounts by the delinquent officerswould itself absolve them of the charges. But, what we want toinsist is that in the peculiar facts and circumstances of the case,the punishment imposing authority must have imposed minor penaltieson the delinquent employees, so as to deter them from indulging insuch activities in future and the appellate authority must have actedin a judicious manner to cure the defect or error committed by theenquiry officer and the punishment imposing authority. 25. For all the above reasons and discussions, we have nohesitation to hold that the punishment of dismissal imposed on allthe delinquent officials is shocking the conscious of this Courtsince being much disproportionate to the charges alleged against them.26. In UNION OF INDIA & ANOTHER vs. S.S.AHLUWALIA [2007 (6)SUPREME 521], the Honourable Apex Court has held as follows: https://hcservices.ecourts.gov.in/hcservices/ "The Court can interfere with the punishment only if itfinds the same to be shockingly disproportionate to thecharges found to be proved, in which case the matter isto be remitted to the disciplinary authority forreconsideration of the punishment. In an appropriatecase, however, in order to avoid delay the court canitself impose lesser penalty ...."27. Even though such wide powers are conferred on this Courtto interfere with the punishment, we do not want to enter into theshoes of the punishment imposing authority and we feel it suffice todirect the punishment imposing authority to impose minor penalties onthe delinquent officials as provided under Rule 6.15(a), reassessingthe liability of each of the employee and proportionate to the same.The respondents/Department is directed to reinstate all thedelinquent employees, except any of the employee who has attainedthe age of superannuation, within eight weeks from the date ofreceipt of a copy of this order and confer on them all the monetaryand service benefits as if they are in continuous service, subject ofcourse to the minor penalty to be imposed on them under Rule 6.15(a).After such reinstatement, the respondents should impose the minorpenalties on the delinquent officers as provided under Rule 6.15(a).In case of delinquent employees who have by now attained the age ofsuperannuation, the Department is directed to treat them also ascontinued in service and retired in the ordinary course afterattaining the age of superannuation and settle their terminalbenefits, subject of course to the minor penalty to be imposed onthem under Rule 6.15(a). The entire exercise, including imposing ofpunishment and settlement of benefits, shall be completed withintwelve weeks from the date of receipt of a copy of this order by therespondents/Department.With such direction, all these matters stand disposed of. Nocosts. Consequently, C.M.P.Nos.15917 of 1998 and 2954 of 1999 areclosed. Sd/-Asst.Registrar/true copy/ Sub Asst.RegistrarRao https://hcservices.ecourts.gov.in/hcservices/ To1.The Manager Legal, Tamil Nadu Small Industries Development Corporation Ltd., 60 Greams Road, Chennai-600006.2.The Chairman and Managing Director Tamilnadu Small Industries Development Corporation Ltd., 60, Greams Road, Chennai-600006.3.The Manager-Legal, Tamil Nadu Small Industries Development Corporation Ltd., Paul Wells Road, Kathipara Junction, Madras-600 016.4. The Chairman and managing Director, Tamil Nadu Small Industries Development Corporation Limited, Paul Wells Road, Kathipara Junction, Madras-16.+5 cc to M/s.Srinath Sridevan, Advocate, SR.No.43816 to 43820+1 cc to Mr.S.Elamurugan, Advocate, SR.No.43261+1 cc to Mr.Sivam Sivanandraj, Advocate, SR.No.43357Common judgment in W.A.Nos.1462/1998, 277/1999 and W.P.Nos.2265, 4409 & 12550/1994GV {CO}TP/6.10.2009.