Food Corporation of India v. S. Nayagam & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDated :15..4..2008Coram:The Honourable Mr.Justice P.K. MISRAandThe Honourable Mr.Justice K.CHANDRUW.A. No. 980 of 2007 1.Food Corporation of IndiaRep. by its Managing DirectorHeadquartersNew Delhi2. The Executive Officer (South)(formerly known as Zonal Manager (South))Food Corporation of IndiaZonal Office3 Haddows RoadChennai3.The General Manager (Tamil Nadu)(formerly known as Senior Regional Manager)Food Corporation of IndiaRegional Office124 Greams RoadChennai... Appellantsvs. 1.S. Nayagam2.P. Vijay Amaldoss... RespondentsCause title Acceptedwide order of Courtdoth 16.07.07 inM.P.No.1/07.Appeal filed under Clause 15 of the Letters Patent against theorder of the learned single Judge dated 27.6.2006 made in W.P. No.35688 of 2002 W.P. No.35688/02 petition presented under Article 226of the Constitution of India to issue a writ of certiorarifiedmandamus calling for the records of the respondent relating to theorder of the first respondent in proceedings No.A&R/5(29)/2002/765dated 19.08.2002 and the order of the second respondent inproceedings No.Vig.5(16)/2001, dated 07.12.2001 and quash the sameand consequently direct the Respondents to retain the Petitioner as https://hcservices.ecourts.gov.in/hcservices/ Assistant Grade-I(General) on par with his junior with all monetaryand attendant benefits.For Appellant: Mr. P.D. AudikesavaluFor Respondent 1 : Mr. Kandavadivel DoraisamiJUDGMENTK. CHANDRU, J.Heard the arguments of Mr. P.D. Audikesavalu, learned counselrepresenting the appellants and Mr. Kandavadivel Doraisami, learnedcounsel appearing for the first respondent and have perused therecords.2.This writ appeal is directed against the order of thelearned Judge dated 27.6.2006 made in W.P. No. 35688 of 2002.Before the learned Judge, the first respondent filed the writpetition seeking to set aside the first appellant's order dated19.8.2002 confirming the second appellant's order dated 07.12.2001and for a consequential direction to the appellants to retain him asan Assistant Grade I (General) on par with his juniors.3.The first respondent was employed as an Assistant Grade IIin the District Office at Cuddalore under the Food Corporation ofIndia. He also claimed that he was the leader of the Trade Union ofSC/ST Employees working in the Corporation. On 21.02.2000, he wasgiven a charge-memo in terms of the FCI (Staff) Regulations. Theseven charges relate to non-maintenance of accounts for the purchaseand issuance of printing and stationery articles for the years 1997-98, 1998-99 and in June 1999, he purchased stationery worth ofRs.1,00,517/- as against the budgetary allotment of Rs.80,000/- forthe year 1999-2000. He also was charged for the misappropriation andembezzlement of FCI funds towards the purchase of printing andstationery materials and he also claimed over time wages every monthfrom April 1996 to January 1997 and he tampered the house-keepingindents submitted by various sections and FST depots in CuddaloreDistrict. He disobeyed the posting order shifting him from house-keeping section of District Office to the Administrative branch. Hewas also charged that he made false allegations against the thenDistrict Manager (second respondent) for having produced falseCommunity Certificate and that he had not paid Income-Tax properly.4.It is the stand of the first respondent that the charge-memowas issued at the instigation of the second respondent as he waspersonally piqued over the conduct of the first respondent. Inthat view of the matter, the first respondent made the present secondrespondent as a fourth respondent to the main writ petition in hisindividual capacity. The first respondent denied the charges which https://hcservices.ecourts.gov.in/hcservices/ lead to the appointment of an Enquiry Officer. In the saiddepartmental enquiry, the second respondent was examined on the sideof the appellant and the first respondent, apart from himself,examined four witnesses. Ten Exhibits were marked on the side of theappellant and four Exhibits were marked on the side of the firstrespondent. 5.The Enquiry Officer, by his report dated 22.01.2001, foundthat except charges 2 and 4, the other five charges were proved.After furnishing a copy of the report and getting his representation,the third appellant, being the disciplinary authority, agreed withthe conclusions reached by the Enquiry Officer. Since the losscaused to the FCI was to the tune of Rs. 35,274.15, by an order dated29.02.2001, a penalty of recovery of Rs. 15,000/- was imposed on thefirst respondent and the same was to be given effect to in 15instalments. The said penalty was also given effect to and the firstrespondent did not prefer any appeal against the said penalty. 6.The Executive Director, Vigilance and the Chief VigilanceOfficer of the FCI Headquarters reviewed all the vigilance casesduring their visit to Chennai during July / August 2001 and duringthat period, it was decided to review the aforesaid penalty inexercise of the power conferred in terms of Regulation 74(4) of theFCI Staff Regulations, 1971. In exercise of that power, it wasfound that the recovery of loss of Rs.15,000/- made against the firstrespondent was considered inadequate considering the gravity of thecharges proved against him. 7.In the light of the above, a show cause notice dated21.9.2001 was issued by the second appellant asking him to show causeas to why the recovery should not be enhanced besides imposition ofany other penalty contemplated under Regulation 54. The firstrespondent submitted his explanation dated 12.10.2001. The secondappellant, by an order dated 07.12.2001, after considering theexplanation held that the first respondent should be reverted to thepost of Assistant Grade III (General) and also to be debarred forpromotion for a period of five years starting from the year 2002. Hewas also fixed at the minimum time scale of pay in the post ofAssistant Grade III. But, however, his seniority was fixed in thetop of the seniority list of that grade and it was also directed thatduring the punishment period, he will draw annual increments but thepenalty ordered will not be cancelled. It was stated that afterundergoing the penalty, his case will be considered for promotion. 8.The first respondent filed writ petition being W.P. 25314 of2000. However, the same was dismissed by directing him to prefer anappeal to the first appellant. Accordingly, the first respondentpreferred an appeal and the said appeal was rejected by the firstappellant by an order dated 19.8.2002. It was this order,confirming the earlier order of punishment, which was under challenge https://hcservices.ecourts.gov.in/hcservices/ before the learned single Judge. 9.The learned single Judge, after hearing both sides, came tothe conclusion that the order enhancing the punishment on the suomotu revision is not permissible since already a punishment ofpenalty of Rs.15,000/- was imposed on the first respondent. Reliancewas placed on the judgment of the Supreme Court in Union of India andanother vs. S.C. Parashar [2006 (3) SCC 167]. Reliance wasplaced on paragraph 12 of the said judgment wherein imposition ofseveral penalties both major and minor was considered to be illegal.Consequently, the learned Senior Judge set aside the enhanced penaltyand restored the original penalty.10.Mr. P.V. Audikesavalu, learned counsel appearing for theappellants submitted that Regulation No. 54 does not bar imposing anyof the penalties mentioned therein and so far as withholding ofpromotion and reduction to a lower stage in the time scale of pay areconcerned, they are only minor penalties whereas reduction to a lowertime scale of pay or post which will also ordinarily bar thepromotion of the employees, have been considered as a major penalty.The case relied on by the first respondent on S.C. Parashar's case(cited supra) has no relevance to the case on hand. The learnedcounsel for the appellants also submitted that there was nothingwrong in the appellate authority invoking the suo motu revisionalpower provided under Regulation 74 and the same reads as follows:74. Review:(1)** (notwithstanding anything contained in theseregulations, the Board may, at any time either on itsown motion or otherwise, call for the records of anyinquiry and review any order made under theseregulations), and (a)confirm, modify or set aside the order; or(b)confirm, reduce, enhance or set aside the penaltyimposed by the order, or impose any penalty where nopenalty has been imposed; or (c)Remit the case to the authority which made theorder or to any other authority directing suchauthority to make such further inquiry as it mayconsider proper in the circumstances of the case; or(d)pass such other orders as it may deem fit;*Provided that no order imposing or enhancing anypenalty shall be made by the reviewing authority unlessthe employee concerned has been given a reasonableopportunity of making a representation against the https://hcservices.ecourts.gov.in/hcservices/ penalty proposed and where it is proposed to impose anyof the penalties specified in clauses (v) to (ix) ofRegulation 54 or to enhance the penalty imposed by theorder sought to be viewed to any of the penaltiesspecified in those clauses; no such penalty shall beimposed except after an inquiry in the manner laid downin Regulation 58."It was stated that by the introduction of Regulation 74(4) theappellate authorities have also been delegated with the powers of suomotu revision.11.The learned counsel for the appellants relied upon thejudgment of the Supreme Court in Union of India v. P.D.Yadav [(2002)1 SCC 405] wherein the learned Judge held that the respondent thereinvisited double punishment may not be correct. In that judgment, itwas held that a penalty of conviction in a Court Martial andthereafter forfeiture of pension if made, will not amount to doublejeopardy. However, this decision does not help the case of theappellants.12.Reliance was placed on the decision of the Supreme Courtreported in State of Haryana v. Balwant Singh [(2003) 3 SCC 362]wherein a question arose as to whether an employee being punishedtwice will attract the bar under Article 20(2) of the Constitution.The Supreme Court, after referring to P.D.Yadav's case (cited supra),held that punishment of a major penalty followed by recovery ofamount of the loss being determined by a subsequent order of theTribunal, will not amount to double jeopardy.13.In Union of India v. G. Veerasamy [(2003) 10 SCC 251], theSupreme Court held that the Railway Establishment Code empowered thedisciplinary authority to impose the punishment of reduction to lowertime scale of pay and also to fix the pay. In that case, the orderof the Tribunal holding the same as a double jeopardy was set asideand in paragraph 6, the Supreme Court held as follows:Para 6:"The language of clause (vi) of sub-rule (1) of Rule 6of the Rules, in our opinion, is clear. After reductionto the lower time scale the disciplinary authority hasto fix the pay in terms of Rule 1322 of theEstablishment Code. The Establishment Code clearlyempowers the disciplinary authority to allow to drawany pay not exceeding the maximum of the lower post ortime scale. We are unable to accept the reasoning ofthe Tribunal that it amounts to double punishmentinasmuch as unless pay is fixed after reduction he maybe entitled only to draw pay on the lowest of the timescale." https://hcservices.ecourts.gov.in/hcservices/

14.It must be noted that in Commissioner of Rural Developmentv. A.S. Jagannathan, [(1999) 2 SCC 313], the Supreme Court set asidethe order of the Tribunal in having interfered with a punishment onthe ground that imposition of stoppage of increment, recovery of payas well as treating the period of suspension without pay would amountto three punishments. The following passage found in paragraph 5will make the position clear:Para 5:"The Tribunal clearly had no jurisdiction to interferewith the punishment imposed by the disciplinaryauthority under the order of 4-6-1991. The Tribunal haspurported to pass the order on the ground that threepunishments cannot be imposed for the same charge. Now,the Tamil Nadu Civil Services (Classification, Controland Appeal) Rules prescribe various penalties that maybe imposed under Rule 8. One of the penalties underRule 8 is of withholding of increments. Another penaltywhich can be imposed under Rule 8(v)(a) is recoveryfrom pay of the whole or part of any pecuniary losscaused to the State Government by negligence or breachof orders. Under the Tamil Nadu Pension Rules, Rule 9(1)(b), such pecuniary loss can also be recovered fromthe pension of the employee if the pecuniary loss iscaused by negligence or grave misconduct while inservice and the employee has been found guilty of suchmisconduct or negligence. In the present case, thedisciplinary authority has clearly found that therewere serious charges against the respondent which wereestablished against him in a disciplinary enquiry whichwas properly conducted. The disciplinary authority hasrightly observed that looking to the serious nature ofthe charges proved, a minor punishment of only stoppageof two increments without cumulative effect has beenimposed on the respondent by taking a lenient viewsince he is about to retire. The order for recovery ofthe loss caused on account of the respondent’snegligence and misconduct is also permissible under theTamil Nadu Civil Services (Classification, Control andAppeal) Rules as also under the Tamil Nadu PensionRules, the former permitting recovery from pay and thelatter permitting recovery from pensionary benefitsafter retirement. The Tribunal is wrong in holding thatif an order is passed for recovery of the amount lostfrom the employee, no punishment can be imposed on him.The disciplinary authority, in the present case, wasentitled to impose the punishment of stoppage of twoincrements without cumulative effect. At the time ofpassing the final order, the disciplinary authority wasalso entitled to pass order relating to the suspensionperiod pending enquiry. It has directed that the period https://hcservices.ecourts.gov.in/hcservices/ during which the respondent was under suspension betreated as service period but without pay. The ordermust be read as a whole. In the present case, thedisciplinary authority has awarded punishment and givendirections looking to the nature of the charges proved.The Tribunal was not entitled to interfere with thepunishment so accorded."15.The learned counsel also brought to notice of this Court thejudgment of the Punjab and Haryana High Court rendered by a singleJudge reported in 2001 (34) Lab. I.C. 3574 (P&H) relating to DarshanSingh Sidhu v. Food Corporation of India and another. In thatcase, more or less a similar situation relating to the very same FCIcame to be considered. The following passages found in the lastfour paragraphs of the said judgment may be usefully extracted below:"In Depot Manager, APSRT Corporation v. N. Ramulu(1997) II SCC 319 it was held that it is true thatreimbursement of the loss caused to Appellant A.P.State Road Transport Corporation has been shown to be apenalty under Regulation 8(v) of the Regulations. Butthe penalty for the act of negligence was removal fromservice. The explanation to Regulation 8, however,enumerates various penalties which are not to betreated as penalties and one of them is as clause (5)thereof says: "the penalty of recovery from pay of thewhole or part of any pecuniary loss caused to theCorporation by an employee's negligence or breach oforders may be imposed in addition to any other penaltywhich may be inflicted in respect of the same act ofnegligence or breach of orders." This clause clearlysays that the penalty for recovering loss caused to themanagement under Regulation 1(v) shall not preclude themanagement from imposing any other penalty. The HighCourt was, therefore, wrong in thinking that this was acase of double jeopardy. The order passed by thelearned single Judge was eminently just and fair andthe Division Bench of the High Court should not haveinterfered with that order." "In this case also the imposition of the recovery ofone year basic pay cannot be viewed as penalty as therecovery was foisted upon him for the loss caused toFCI by his misconduct. For misconduct attributed tohim punishment of stoppage of three increments withoutcumulative effect was imposed upon him.""In State of U.P. v. Girija Dayal Srivastava (1988)3 Serv LR 359 it was held that two punishments can be https://hcservices.ecourts.gov.in/hcservices/ awarded i.e. one for the loss caused and the second forthe misconduct." "In this case, the punishment of stoppage of threeincrements without cumulative effect has to be viewedas penalty for the misconduct attributed to him.Recovery from his pay in lieu of the pecuniary losscaused to the Corporation by him cannot be viewed aspenalty as he caused loss to the Corporation and theCorporation sought to compensate itself by imposingupon him this recovery. It is not double jeopardy asthere was no vexation of him twice over for the samemisconduct."16.In the light of the above, the order of the learned Judgeplacing reliance upon S.C. Parashar's case, to set aside thepunishment order is not justified. Further, the finding of theJudge that the appellants cannot enhance the penalty in terms ofRegulation 74 is also contrary to Regulation 74(4). The finding ofthe learned Judge that the appellate authority has confirmed theorder of the earlier punishment by order dated 19.8.2002 is amisreading of the said order and what was confirmed by the appellateorder is the order passed while exercising revisional power by thefirst appellate authority. In the present case, the appellateauthority, viz., the second appellant, who had by the exercise ofpower under Regulation 74(4) of the FCI (Staff) Regulations,exercised suo motu power as such a power has been delegated to him bythe amendment made w.e.f. 10.7.1997. It is on his revision, thepunishment was enhanced by an order dated 07.12.2001. It was onlythat order which was appealed against by the first respondent and thesame was confirmed the appellate authority, viz., the firstappellant. 17.In the present case, with reference to the findings thatfive out of seven charges were proved by the enquiry officer andconsequently, the penalty issued vide order dated 29.3.2001, werenever put to challenge either before any statutory authority orbefore this Court or before the learned single Judge. Even thoughan attempt was made by the first respondent that he was preventedfrom filing an appeal due to persuasion by his superior that if hepays the penalty, he will be rewarded with promotion and, therefore,he had paid the amount and he was given promotion from AssistantGrade II to Assistant Grade I, the same cannot be accepted. Insofaras the petitioner had accepted the penalty issued by order dated29.3.2001 and also paid the penalty amount, it will clearly show thatthe charges against him have been proved. The charges are clearlyserious misconducts which can even be visited with the major penaltyof dismissal also. The attempt of mala fide levelled against thesecond respondent by the first respondent was neither substantiatedbefore the learned single Judge nor before us. https://hcservices.ecourts.gov.in/hcservices/

18.In view of the above, there is no serious attempt made bythe learned counsel for the first respondent to go into the nature ofevidence as well as the finding rendered in the departmental enquiry.Therefore, the learned Judge had granted the relief only on atechnical ground and also placing reliance upon S.C.Parashar's case.19.We do not find any legal prohibition in the FCI (Staff)Regulations that a person cannot be visited with more than onepenalty. It is our opinion that if an employee can be dismissed oncharges of serious misconduct, then any penalty less than dismissaleither individually or in combination can also be imposed on him.In this context, we are in full agreement with the views expressed bythe learned single Judge of the Punjab and Haryana High Courtrendered in Dharshan Singh Sidhu's case (cited supra). Evenotherwise, in the present case, the penalty was only debarment ofpromotion for a period of five years and reversion. The recovery wasdue to the loss caused to the appellant Corporation and, therefore,the learned single Judge was wrong in setting aside the punishmentimposed on the first respondent by suo motu revisional powerexercised by the appellate authority. 20.In the light of the above, the writ appeal will standallowed and the order of the learned Judge in W.P. No. 35688 of 2001dated 27.6.2006 will stand set aside. The penalty imposed videorder dated 07.12.2001 confirmed by the first appellant by orderdated 19.8.2002 will stand restored. However, there will be noorder as to costs.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.griTo1.The Managing DirectorFood Corporation of IndiaHeadquarter, New Delhi.2.The Executive Officer (South)(formerly known as Zonal Manager (South)Food Corporation of IndiaZonal Office3 Haddows Road https://hcservices.ecourts.gov.in/hcservices/ Chennai.3.The General Manager (Tamil Nadu)(formerly known as Senior Regional Manager)Food Corporation of IndiaRegional Office124 Greams RoadChennai.+ 1 CC to Mr. P.D.Audikesavalu Advocate SR NO.21160+ 1 CC to Mr. Muthumanidoraisami Advocate SR NO.21745 Pre-Delivery Judgment in W.A. No. 980 of 2007JRG(CO)JJM(30/04/08)