F.Ismail Pillai Annavi v. Micro, Small and Medium Enterprises (E.II.2) Department

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 30.09.2011CORAM:THE HONOURABLE MR. JUSTICE K.N.BASHAW.P.No.24210 of 2010& M.P.Nos.2 and 3 of 2010F.Ismail Pillai Annavi.. PetitionerVs.1.The Additional Chief Secretary to Government, Micro, Small and Medium Enterprises (E.II.2) Department, Fort St.George, Chennai 600 009.2.The Industries Commissioner and Director of Industries and Commerce, Chepauk, Chennai-5... RespondentsPRAYER: Writ petition filed under Article 226 of the Constitutionof India to issue a Writ of Certiorarified Mandamus calling for therecords relating to G.O(2D) No.17, Micro Small and MediumEnterprises, (E.II.2) Department dated 18.03.2010 issued by theAdditional Chief Secretary to Government, Micro, Small and MediumEnterprises, (E.II.2) Department, Chennai, the first respondentherein, in confirming the proceedings of the IndustriesCommissioner and Director of Industries and Commerce, Chepauk,Chennai-5, the second respondent herein, made inRc.No.21433/EG4/2005 dated 29.10.2008, quash the same and directthe respondents herein to disburse the service benefits which hasbeen withheld by the respondents on account of the above penaltynamely (a) Sanction of annual increments (b) Denial of promotion tothe post of Assistant Director of Industries and Commerce(Industrial Cooperatives) on par with Junior (c) Seniority and allother benefits attached to the post and consequently disburse allthe arrears accrued thereon within a stipulated time. For Petitioner : Mr.K.RajkumarFor Respondents :Mr.P.S.Sivashanmugasundaram, Additional Government PleaderO R D E RThe petitioner has come forward with this petition seeking forthe relief of quashing the G.O(2D) No.17, Micro Small and MediumEnterprises, (E.II.2) Department dated 18.03.2010 issued by theAdditional Chief Secretary to Government, Micro, Small and MediumEnterprises, (E.II.2) Department, Chennai, the first respondent https://hcservices.ecourts.gov.in/hcservices/ herein, in confirming the proceedings of the IndustriesCommissioner and Director of Industries and Commerce, Chepauk,Chennai-5, the second respondent herein, made in Rc.No.21433/EG4/2005 dated 29.10.2008 and directing the respondents herein todisburse the service benefits which has been withheld by therespondents on account of the above penalty namely (a) Sanction ofannual increments (b) Denial of promotion to the post of AssistantDirector of Industries and Commerce (Industrial Cooperatives) onpar with Junior (c) Seniority and all other benefits attached tothe post and consequently to disburse all the arrears accruedthereon within a stipulated time. 2. The case of the petitioner is that the petitioner joinedthe service as Industrial Cooperative Officer in the IndustriesDepartment on 13.09.1993 and he is due for his retirement on31.05.2012. The petitioner was issued with a charge memo dated18.07.2005 under Rule 17(b) of Tamil Nadu Civil Services(Discipline and Appeal) Rules. As per the charge memo, thefollowing allegations were levelled against the petitioner: (i) making certain payments without voucher(ii) not getting administrative approval(iii) paying rent without agreement and (iv) non-maintenance of production register etc. The petitioner, as per his representation dated 08.09.2005, soughtfor the relief of furnishing 14 documents, in order to enable himto submit his explanation. However, the respondents denied 5 vitaldocuments of Stock Register, Wages Register etc. Without furnishingthe documents required by the petitioner, an Enquiry Officer wasappointed on 07.02.2006. 3. In the enquiry, the Enquiry Officer has straight awayquestioned the petitioner alone. Thereafter, the Enquiry Officeraccepted all the documents presented by the department, but nowitnesses have been examined to prove the documents nor anopportunity was given to cross examine the witnesses. Ultimately,the Enquiry Officer has held that except charges 5, 8 and 9, allthe other charges are held to have been proved against thepetitioner. The Enquiry Report was furnished to the petitioner on11.03.2008 and the petitioner has sent a further representation tothe findings of the Enquiry Officer on 01.04.2008. 4. The Disciplinary Authority, namely, the second respondentherein without considering the said explanation offered by thepetitioner, by simply accepting the Enquiry Report and without evendiscussing the contention raised by the petitioner in the furtherrepresentation, passed an order of awarding punishment of stoppageof increment without cumulative effect for a period of three yearsand also ordering recovery of a sum of Rs.62,811.45. Beingaggrieved against the said order, the petitioner preferred anappeal to the Government on 05.01.2009 by raising variouscontentions and the Government sought for an opinion from the TNPSCon the appeal preferred by the petitioner. The TNPSC offered itsopinion on 28.01.2010 and the said opinion of the TNPSC was not https://hcservices.ecourts.gov.in/hcservices/ furnished to the petitioner and further, no opportunity was givento the petitioner on the adverse report given against him.However, the Government, in violation of the principles of naturaljustice, passed the impugned order in G.O.(2D).No.17, Micro, Smalland Medium Enterprises (E.II.2) Department dated 18.03.2010,modifying the penalty as stoppage of two increments withoutcumulative effect and sustained the recovery of Rs.62,811.45.Along with the final order, the opinion of the TNPSC was suppliedsubsequently. As a result of the above said penalty, the promotiondue to the petitioner to the post of Assistant Director ofIndustries and Commerce (Industrial Co-operatives) for the year2010-2011 was denied. Being aggrieved against the said order, thepetitioner has been constrained to approach this Court with theabove said prayer. 5.Mr.K.Rajkumar, learned counsel appearing for the petitionermainly contended that the impugned order was passed in violation ofthe principles of natural justice, as the petitioner was not givensufficient and adequate opportunity to put forward his case andmore particularly, the documents required by the petitioner werenot served and even the adverse opinion given by the TNPSC was alsonot furnished to the petitioner before passing the award ofpunishment. It is further contended that even in respect ofholding that the charges have been proved against the petitioner,there is absolutely no evidence and no witnesses have been examinedon the side of the department to substantiate the allegationslevelled against him. It is also contended by the learned counselfor the petitioner that it is stated in the counter that there isno necessity for examination of any witness and it is thediscretion of the Enquiry Officer to go ahead with the enquirywithout examining any witness. Therefore, it is contended that thenon-examination of the witnesses and marking the documents alone isfatal to the enquiry and the whole enquiry is vitiated. The learnedcounsel for the petitioner in support of his contentions placedreliance on the following decisions:(i) Roop Singh Negi v. Punjab National Bank and Othersreported in (2009) 2 SCC 570(ii) L.I.C. of India and Another v. Ram Pal Singh Bisenreported in (2010) 3 MLJ 1370 (SC)It is submitted that this Court has also taken a similar view inW.P.No.16851/2010 by the order 22.08.2011. 6. The learned counsel for the petitioner submitted that non-communication of the TNPSC opinion before passing the final orderand communicating the same along with the final order is fatal andthe punishment is liable to be set aside. To substantiate suchcontention, the learned counsel for the petitioner placed relianceon the following decisions:(i) Unreported order of this Court dated 15.07.1976 inW.P.No.6580 of 1973 https://hcservices.ecourts.gov.in/hcservices/ (ii) State Bank of India and Others v. D.C.Aggarwal andAnother reported in (1993) 1 SCC 13(iii)S.N.Narula v. Union of India and Others reported in(2011) 4 SCC 5917. It is also pointed out by the learned counsel for thepetitioner that there is an inordinate and unexplained delay ininitiating disciplinary proceedings, as the alleged incident is ofthe year 1996, whereas the charge memo was issued only in the year2005 and as such, there is a delay of 9 years in initiatingdisciplinary proceedings which is fatal to the enquiry. In supportof such contention, the learned counsel for the petitioner placedreliance on the following decisions:(i) P.V.Mahadevan v. MD, T.N. Housing Board, reported in(2005) 6 SCC 636(ii)Ranjeet Singh v. State of Haryana & Others reportedin 2008 (3) CTC 788. Per contra, Mr.P.S.Sivashanmugasundaram, learned AdditionalGovernment Pleader submitted that there is no infirmity orillegality in passing the impugned order by the respondents. It iscontended that the enquiry was conducted as per the procedurecontemplated, by affording reasonable opportunity to thepetitioner. It is further contended that documents required havebeen supplied to the petitioner and if it is the grievance of thepetitioner that certain documents have not been furnished, nothingprevented the petitioner to peruse those documents and as a matterof fact, the petitioner has also perused those documents. It isalso contended that in respect of the main charge, the petitionerhas not submitted any explanation and only in respect of othercharges, the petitioner has submitted his explanation and that tooduring the enquiry only. It is also pointed out that thepetitioner was already awarded six punishments. 9. This Court carefully considered the rival contentions putforward by either side and thoroughly perused the entire materialsavailable on record including the impugned order. 10. At the outset, it is to be stated that this is a case ofno evidence, as admittedly, during the enquiry the department hasnot chosen to examine any witness and on the other hand, it is theclaim of the Enquiry Officer as per the counter to the effect thatit is his discretion to examine or not to examine any witness. Iam afraid that such a procedure is unknown in the service mattersmore particularly in respect of disciplinary proceedings. At thisjuncture, it is relevant to refer to the decision of this Courtdated 22.08.2011 in W.P.No.16851/2010, wherein this Court hasreferred to the decision of the Hon'ble Apex Court as hereunder: https://hcservices.ecourts.gov.in/hcservices/ “21. In Roop Singh Negi v. Punjab National Bank andOthers reported in (2009) 2 SCC 570, the Hon'ble ApexCourt held as hereunder:“14.Indisputably, a Departmental proceeding is aquasi-judicial function. The charges levelled performs aquasi-judicial function. The charges levelled againstthe delinquent officer must be found to have beenproved. The Enquiry Officer has a duty to arrive at afinding upon taking into consideration the materialsbrought on record by the parties. The purportedevidence collected during investigation by theInvestigating Officer against all the Accused by itselfcould not be treated to be evidence in the Disciplinaryproceeding. No witness was examined to prove the saiddocuments. The management witnesses merely tendered thedocuments and did not prove the contents thereof.Reliance, inter alia, was placed by the Enquiry Officeron the F.I.R which could not have been treated asevidence. We have noticed herein before that the onlybasis evidence whereupon reliance has been placed by theEnquiry Officer was the purported confession made by theAppellant before the police. According to theappellant, he was forced to sign on the said confession,as he was tortured in the police station. Appellantbeing an employee of the bank, the said confessionshould have been proved. Some evidence should have beenbrought on record to show that he had indulged instealing the Bank draft book. Admittedly, there was nodirect evidence. Even there was no indirect evidence.The tenor of the report demonstrates that the EnquiryOfficer had made up his mind to find him guilty asotherwise he would not have proceeded on the basis thatthe offence was committed in such a manner that noevidence was left.”22. The Hon'ble Apex Court further held in the saiddecision as hereunder:“A decision must be arrived at on some evidence,which is legally admissible. The provisions of theEvidence Act may not be applicable in a Departmentalproceeding but the principles of Natural Justice are.As the report of the Enquiry Officer was based on merelyipse dixit as also surmises and conjectures, the samecould not have been sustained. The inferences drawn bythe Enquiry Officer apparently were not supported by anyevidence. Suspicion, as is well known, however high maybe, can under no circumstances be held to be asubstitute for legal proof.”23. The Hon'ble Apex Court in the said decision alsoreferred to and relied on its earlier decisions in Unionof India v. H.S.Goel reported in 1964 (1) LLJ 38 (SC),Moni Shankar v. Union of India and Another reported in2008 (3) SCC 484 and Narinder Mohan Arya v. United India https://hcservices.ecourts.gov.in/hcservices/ Insurance Co. Ltd., reported in 2006 (4) SCC 173.24. This Court in M.Marimuthu v. General Manager(D&PB), SBI reported in 2010 (5) MLJ 925 held asfollows:“In the absence of examination of the authors ofaccusations against the delinquent, the statementsexhibited during the course of enquiry before theenquiry officer is of no evidentiary value. In a disciplinary proceeding like a civil matter,the Department should come out with all evidence toestablish that there is preponderance of probability tonail the erring employee on the charges levelled againsthim.”25. The principles laid down by the Hon'ble ApexCourt and this Court in the decisions cited supra aresquarely applicable to the facts of the instant case asin this case also the disciplinary authority placedreliance on the sole piece of material, viz., the reportsent by the Director of Government Examination withoutexamining its author and as such, by no stretch ofimagination, it could be considered to be a legalevidence to prove the charge levelled against thedelinquent. Therefore, this Court has no hesitation tohold that this is a classic case of no evidenceavailable on record to prove the charge levelled againstthe petitioner and the disciplinary authority has simplyoverlooked the legal requirement and basic principle forestablishing a charge by adopting the procedure known tolaw and arriving at the conclusion on the basis of legalevidence.“The principle laid down by the Hon'ble Apex Court in the decisioncited supra is squarely applicable to the facts of the instantcase, as it is already pointed out that the department has notexamined any witness to substantiate the allegations or the chargesframed against the petitioner. Therefore, the impugned order isliable to be set aside on this sole ground.11. Now coming to the other contention to the effect that thepetitioner has not been served with the required documents, it isto be stated that the petitioner has sought for 14 documents, buthe has been furnished with only 9 documents and his grievance isthat certain vital documents namely Stock Register, Wages Registeretc., were not served. However, it is pointed out by the learnedAdditional Government Pleader that the disciplinary authority hasalso placed reliance on the opinion/views obtained from the TNPSCand the said opinion was admittedly not furnished to the petitionerbefore passing the impugned order of awarding punishment. At thisjuncture, it is relevant to refer to the latest decision of theHon'ble Apex Court in S.N.Narula v. Union of India and Others https://hcservices.ecourts.gov.in/hcservices/ reported in (2011) 4 SCC 591, wherein the Hon'ble Apex Court hasheld as hereunder:“6. We heard the learned counsel for the appellantand the learned counsel for the respondent. It issubmitted by the counsel for the appellant that thereport of the Union Public Service Commission was notcommunicated to the appellant before the final order waspassed. Therefore, the appellant was unable to make aneffective representation before the disciplinaryauthority as regards the punishment imposed.7. We find that the stand taken by the CentralAdministrative Tribunal was correct and the High Courtwas not justified in interfering with the order.Therefore, we set aside the judgment of the DivisionBench of the High Court and direct that the disciplinaryproceedings against the appellant be finally disposed ofin accordance with the direction given by the Tribunalin para 6 of the order. The appellant may submit arepresentation within two weeks to the disciplinaryauthority and we make it clear that the matter shall befinally disposed of by the disciplinary authority withina period of 3 months thereafter.”12. In yet another earlier decision in State Bank of India andOthers v. D.C.Aggarwal and Another reported in (1993) 1 SCC 13, theHon'ble Apex Court has held as hereunder:“The disciplinary authority, while imposingpunishment, major or minor, cannot act on material whichis neither supplied nor shown to the delinquent.Imposition of punishment on an employee, on materialwhich is not only not supplied but not disclosed to him,cannot be countenanced. Procedural fairness is as muchessence of right and liberty as the substantive lawitself.The order of the disciplinary authority in thiscase is vitiated not because of mechanical exercise ofpower or for non-supply of the inquiry report but forrelying and acting on material which was not onlyirrelevant but could not have been looked into. Purposeof supplying document is to contest its veracity or giveexplanation. Effect of non-supply of the report ofInquiry Officer before imposition of punishment need notbe gone into nor it is necessary to consider validity ofRule 50(5) of the S.B.I. Supervisory Staff (Service)Rules. But non-supply of CVC recommendation which wasprepared behind the back of respondent without hisparticipation, and one does not know on what materialwhich was not only sent to the disciplinary authoritybut was examined and relied on, was certainly violativeof procedural safeguard and contrary to fair and justinquiry. The submission that CVC recommendations are https://hcservices.ecourts.gov.in/hcservices/ confidential, copy of which could not be supplied,cannot be accepted. Taking action against an employeeon confidential document which is the foundation oforder exhibits complete misapprehension about theprocedure that is required to be followed by thedisciplinary authority. Once the disciplinary authorityfound that the action of the respondent did not causeany harm to the Bank nor the respondent gained out ofit, the order had been rightly quashed by the High Courtfor procedural error.”The principles laid down by this Court and the Hon'ble Apex Courtin the decisions cited supra are squarely applicable to the factsof the instant case as in this case also, admittedly, the adverseremarks offered by the TNPSC was not served on the petitionerbefore passing the order of awarding punishment and as such, thisCourt has no hesitation to hold that the impugned order is liableto be set aside on this ground also. 13. Now coming to the last ground namely inordinate andunexplained delay in initiating disciplinary proceedings, it is tobe stated that the alleged transactions said to have taken place asearly as in the year 1996 and the charge memo was issued only inthe year 2005 and as such, there is a delay of 9 years and there isabsolutely no explanation from the respondents for such aninordinate delay. At this juncture, it is relevant to refer thedecision of the Hon'ble Apex Court in P.V.Mahadevan V. M.D., TamilNadu Housing Board reported in 2005 (4) CTC 403, wherein theHon'ble Apex Court has held that the inordinate and unexplaineddelay in conducting the departmental proceedings pursuant to theissue of charge memo would vitiate the departmental proceedings andthe relevant portions of the said decision are better to beincorporated as here under : "4.In the first case State of Madhya Pradesh v.Bani Singh and another, 1990 Supp. SCC 738, an O.A. wasfiled by the officer concerned against initiation ofdepartmental enquiry proceedings and issue of charge sheeton April 22, 1987 in respect of certain incidents thathappened in 1975-76 when the said officer was posted asCommandant 14th Battalion, SAF Gwalior. The Tribunalquashed the charge memo and the departmental enquiry onthe ground of inordinate delay of over 12 years in theinitiation of the departmental proceedings with referenceto an incident that took place in 1975-76.The Appeal against the said order was filed in thisCourt on the ground that the Tribunal should not havequashed the proceedings merely on the ground of delay andlaches and should have allowed the enquiry to go on todecide the matter on merits.5. ....6.In the second case State of A.P. v. https://hcservices.ecourts.gov.in/hcservices/ N.Radhakishnan, 1998 (4) SCC 154, the respondent wasappointed as Assistant Director of Town Planning in theyear 1976. A report dated 7.11.1987 was sent by theDirector General, Anti-Corruption Bureau, Andhra Pradesh,Hyderabad to the Secretary to the Government, Housing,Municipal Administration and Urban Development Department,Andhra Pradesh, Hyderabad, about the irregularities indeviations and unauthorised constructions in multi storiedcomplexes in the twin cities of Hyderabad and Secunderabadin collusion with municipal authorities. On the basis ofthe report, the State issued two memos both dated12.12.1987 in respect of three officials including therespondent Radhakishnan, the then Assistant City Planner.In this case, till 31.07.1995, the articles of charges hadnot been served on the respondent.7.The Tribunal, however, held that the memo dated31.7.1995 related to incidents that happened ten years ormore prior to the date of the memo and that there wasabsolutely no explanation by the Government for thisinordinate delay in framing the charges and conducting theenquiry against the respondent and that there was nojustification on the part of the State now conducting theenquiry against the respondent in respect of the incidentsat this late stage.This Court, in para 19 has observed as follows:"It is not possible to lay down andpredetermined principles applicable to all cases andin all situations where there is delay in concludingthe disciplinary proceedings. Whether on that groundthe disciplinary proceedings are to be terminatedeach case has to be examined on the facts andcircumstances in that case. The essence of thematter is that the Court has to take intoconsideration all the relevant factors and to balanceand weigh them to determine if it is in the interestof clean and honest administration that thedisciplinary proceedings should be allowed toterminate after delay particularly when the delay isabnormal and there is no explanation for the delay.The delinquent employee has a right that disciplinaryproceedings against him are concluded expeditiouslyand he is not made to undergo mental agony and alsomonetary loss when these are unnecessarily prolongedwithout any fault on his part in delaying theproceedings. In considering whether the delay hasvitiated the disciplinary proceedings, the court hasto consider the nature of charge, its complexity andon what account the delay has occurred. If the delayis unexplained prejudice to the delinquent employeeis writ large on the face of it. It could also beseen as to how much the disciplinary authority is https://hcservices.ecourts.gov.in/hcservices/ serious in pursuing the charges against its employee.It is the basic principle of administrative justicethat an officer entrusted with a particular job hasto perform his duties honestly, efficiently and inaccordance with the rules. If he deviates from thispath he is to suffer a penalty prescribed. Normally,disciplinary proceedings should be allowed to taketheir course as per relevant rules but then delaydefeats justice. Delay causes prejudice to thecharged officer unless it can be shown that he is notblamed for the delay or when there is properexplanation for the delay in conducting thedisciplinary proceedings. Ultimately, the Court isto balance these two diverse considerations.8.This Court held that there was hardly anyexplanation worth consideration as to why the delayoccurred. In the circumstances, this Court held that theTribunal was justified in quashing the charge memo dated31.7.1995 and directing the State to promote therespondent as per recommendation of the DPC ignoring memosdated 27.10.1995 and 1.6.1996. Accordingly, the appealfiled by the State of Andhra Pradesh was dismissed."The Hon'ble Apex Court in the said decision further observed atparagraph 10 as follows :"10.The very same ground has been specifically raisedin this appeal before this Court wherein it is stated thatthe delay of more than 10 years in initiating thedisciplinary proceedings by issuance of charge memo wouldrender the departmental proceedings vitiated and that inthe absence of any explanation for the inordinate delay ininitiating such proceedings of issuance of charge memowould justify the prayer for quashing the proceedings asmade in the writ petition."The Hon'ble Apex Court ultimately held in the decision cited supraas here under: (para 15)"15. We, therefore, have no hesitation to quash thecharge memo issued against the appellant. The appeal isallowed. The appellant will be entitled to all theretiral benefits in accordance with law. The retiralbenefits shall be disbursed within three months from thisdate. No costs."14. The Division Bench of this Court also quashed the chargememo on the ground of inordinate and unexplained delay of issuingcharge memo in A.Obaidhullah Vs. The State of Tamil Nadu,represented by the Secretary to Government, Home Department,Secretariat, Chennai-9 and another (2005 (5) CTC 380) by followingthe Apex Court’s decision (Mahadevan’s case). Another DivisionBench of this Court in D.Amaladoss Vs. The State of Tamil Nadu,represented by the Secretary to Government, Home Department (Courts https://hcservices.ecourts.gov.in/hcservices/ I.A.), Fort St. George, Chennai-600 009 and another (2006 (5) CTC141), quashed the charge memo on the ground of delay as well asconduct of parties. In yet another Division Bench decision of thisCourt in Union of India represented by the Secretary to Governmentof Pondicherry, Revenue Department, Pondicherry and another, etc.,(2005(1) CTC 566) the charge memo was set aside on the ground ofinordinate and unexplained delay in issuing the charge memo. 15. In a similar matter, a learned Single Judge of this Courtby placing reliance on the decision of the Division Bench of thiscourt in A.Obaidhullah Vs. The State of Tamil Nadu, represented bythe Secretary to Government, Home Department, Secretariat, Chennai-9 and another (2005 (5) CTC 380) has held that the charge memo isliable to be quashed on the ground of inordinate and unexplaineddelay.16. The principles laid down by the Hon'ble Apex Court andthis court in the decisions cited supra, are squarely applicable tothe facts of the instant case as in this case also, there is atotal delay of 9 years in initiating disciplinary proceedings andin awarding the punishment as stated above. 17. In view of the aforesaid reasons, this Court is of theconsidered view that the impugned order is unsustainable in law.Accordingly, this Court is constrained to set aside the G.O(2D)No.17, Micro Small and Medium Enterprises, (E.II.2) Departmentdated 18.03.2010 issued by the Additional Chief Secretary toGovernment, Micro, Small and Medium Enterprises, (E.II.2)Department, Chennai, the first respondent herein, in confirming theproceedings of the Industries Commissioner and Director ofIndustries and Commerce, Chepauk, Chennai-5, the second respondentherein, made in Rc.No.21433/EG 4/2005 dated 29.10.2008.Consequently, the petitioner is entitled to get all attendantbenefits including promotion, if he is otherwise eligible for suchpromotion from the year 2010-11. It is made clear that the abovesaid exercise shall be completed within a period of four (4) weeksfrom the date of receipt of a copy of this order. 18. With the above direction, the writ petition is allowed.No costs. Consequently, connected miscellaneous petitions areclosed.Sd/-Deputy Registrar/true copy/Sub Asst. Registrar.jvm https://hcservices.ecourts.gov.in/hcservices/ To1.The Additional Chief Secretary to Government, Micro, Small and Medium Enterprises (E.II.2) Department, Fort St.George, Chennai 600 009.2.The Industries Commissioner and Director of Industries and Commerce, Chepauk, Chennai-51 cc To Mr.K.Rajkumar, Advocate Sr 61486W.P.No.24210 of 2010jrg[co]gp/13.10