C.V. THOMAS v. KERALA STATE ELECTRICITY BOARD

T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - -O.P.NOs.12562/1997-C & 30476/2002-C - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 18th day of August, 2007JUDGMENTThe petitioner is the same in both the writ petitions. O.P.No.12562/1997 concerns the challenge against the disciplinary proceedingsculminating in Ext.P10 order. O.P.No.30476/2002 relates to the claim forpayment of pensionary benefits like gratuity and other amounts in the payscale of Senior Superintendent.2. The petitioner was working as Asst. Store Keeper in Angamalyand while so, he was transferred to Palai as per order dated 29.5.1984 of thethird respondent. He was relieved on the forenoon of 1.6.1984 as per orderdated 1.6.1984 of the Executive Engineer, Transmission Stores Division,Angamaly with a direction to join at Palai immediately. Therefore, he wasrelieved and then joined at Palai. After he was relieved, the ExecutiveEngineer and Asst. Executive Engineer, Transmission Store Division,Angamaly had assumed charge of all the materials kept in the Store atAngamaly which were in the custody of the petitioner prior to his transferfrom that centre. Later, he was called back and was asked to verify thematerials at Angamaly pursuant to which, the said process was undertaken OP 12562/97 & 30476/02-2-between 18.6.1984 to 4.8.1984. After that, he returned to Palai. He wasissued with Ext.P1 memo of charges dated 10.7.1985. The two chargeswere: (i) failed to hand over charge of the transmission stores at Angamalypromptly and properly; and (ii) misappropriated materials of the ElectricityBoard valuing to Rs.1,93,630.39 as detailed in the statement attached. Thiswas replied by the petitioner as per Ext.P2. The enquiry was conducted bythe Law Officer of the Board in the cadre of District Judge. Ext.P3 is thereport of the enquiry wherein he was exonerated of the charges. This reportis dated 1.4.1987. Three years later, he was issued a show cause noticedated 17.3.1990 by the disciplinary authority, who has chosen to differ withthe findings of the enquiry officer and entered a finding that the petitioner isguilty of the charges levelled against him. The penalties of reversion to thepost of Junior Assistant for a period of three years and recovery of anamount of Rs.1,93,630.39 fixed as liability on account of themisappropriation of materials, were proposed. The petitioner submitted areply as per Ext.P5. In the reply, the petitioner apart from denying hisliability, pointed out that when the disciplinary authority has chosen todiffer from the findings of the enquiry officer, that can only be based on theanalysis of the materials on record of the enquiry and the show cause noticedoes not disclose real appreciation of the evidence on record. It was also OP 12562/97 & 30476/02-3-pointed out that the reasons for disagreeing with the findings of the enquiryofficer are not disclosed in the show cause notice with reference to the oraland documentary evidence. Again four years later, by Ext.P6 a fresh showcause notice was issued with the only difference that the amount of liabilityhas come down to Rs.73,083/-. This apparently is after deducting the valueof materials found excess, viz., Rs.45,585/-. Ext.P7 is the reply submittedby the petitioner. Finally, by Ext.P8, the disciplinary authority imposedthe punishment of reversion to the post of Junior Assistant for a period ofthree years and fixation of liability to the tune of Rs.73,083/-. He filedappeal against the same before the Chairman evidenced by Ext.P9. The saidappeal was rejected as per Ext.P10. The punishment of reversion wasconfirmed but the liability was refixed to Rs.40,076.75.The petitioner ischallenging the orders imposing penalty and the order passed in appeal.3. The Board has filed a counter affidavit explaining thecircumstances under which the punishment was imposed.4. Heard learned counsel for the petitioner and learned StandingCounsel for the Board. Learned counsel for the petitioner submitted thatthis is a case where the enquiry officer has exonerated the petitioner of thetwo charges on cogent materials. The enquiry officer has clearly enteredfindings on three aspects, going by the report Ext.P3, that after the OP 12562/97 & 30476/02-4-petitioner relinquished his charge pursuant to the transfer to the new officeat Palai, the materials which were in his custody were issued in thepresence of either Assistant Engineer or Assistant Executive Engineer orChief Store-keeper in accordance with the directions of PW.1 (ExecutiveEngineer). Learned counsel also submitted that there is a clear finding inExt.P3 to show that after he was relieved on 1.6.1984, without providinghim with an opportunity to effect proper handing over of the materials in hiscustody, it was the duty of PW.1 or his subordinate officers to take aninventory of the materials in the custody of the delinquent officer beforemaking any kind of issue from those materials under any circumstance. Onthe other hand, during the absence of the delinquent officer, they had issuedmany materials which were handled by the delinquent officer, prior to18.6.1984. There is also a clear finding that since the inventory ofmaterials was not prepared as on 1.6.1984, the interference with thosematerials by P.W.1 and subordinate officers who issued those materials inthe absence of the delinquent officer has deprived the Board of its right toproceed against the delinquent officer for the alleged shortage of materials.Therefore, it is a clear case where the petitioner cannot be found fault withthe misappropriation alleged. It was further argued that before issuance ofExt.P4, he was not issued any notice giving an opportunity to object or a OP 12562/97 & 30476/02-5-hearing on the issue as to the acceptability of Ext.P3 report. In fact, thereport itself was forwarded along with Ext.P4 only. It is thereforecontended that when the disciplinary authority has chosen to differ from thefinding of the enquiry officer, before proposing the penalty, he should haveheard the petitioner on the tentative reasons as to why the disciplinaryauthority is disagreeing with the findings of the enquiry officer. No suchtentative reasons have been communicated to him with opportunity toobject. Reliance is placed by the learned counsel for the petitioner upon thedecision of a Constitution Bench of the Supreme Court in Punjab NationalBank and others v. Kunj Behari Misra ((1998) 7 SCC 84) which wasfollowed in Yoginath D. Bagde v. State of Maharashtra and another((1999) 7 SCC 739). It was also pointed out that the appellate authority hasalso not correctly appreciated the legal and factual aspects. It was furtherpointed out that at any rate, in the show cause notice issued, there is no clearfinding as to his liability in the sense about the shortage of materials whilethey were in his own legal custody and in the absence of the same, it iscontended that he cannot be made liable for the misappropriation, if any.5. Therefore, the issue has to be considered in the light of the wellknown principles of natural justice. Here is a case where the enquiry officer OP 12562/97 & 30476/02-6-clearly found that the charges have not been proved. But without anythingmore, the disciplinary authority sought to dissent himself from the findingsof the enquiry officer and proposed the penalties as per the show causenotice. The evidence or other materials which prompted him to differ fromthe findings of the enquiry report have not been stated in Ext.P4. Apartfrom that, before choosing to differ from the findings of the enquiry officer,the petitioner was not issued any notice conveying the tentative conclusionsof the disciplinary authority. This aspect is covered by the decision of theApex Court in ((1998) 7 SCC 84. Their Lordships considered the questionas to whether the principles of natural justice require a further hearing evenin spite of absence of a particular provision in the regulation governing thematter. After referring to the regulation that was considered therein, it washeld in paragraph 19 as follows:“The result of the aforesaid discussion would be that the principles ofnatural justice have to be read into Regulation 7(2). As a resultthereof, whenever the disciplinary authority disagrees with theenquiry authority on any article of charge, then before it records itsown findings on such charge, it must record its tentative reasons forsuch disagreement and give to the delinquent officer an opportunityto represent before it records its findings. The report of the enquiryofficer containing its findings will have to be conveyed and thedelinquent officer will have an opportunity to persuade thedisciplinary authority to accept the favourable conclusion of theenquiry officer. The principles of natural justice, as we have alreadyobserved, require the authority which has to take a final decision andcan impose a penalty, to give an opportunity to the officer charged of OP 12562/97 & 30476/02-7-misconduct to file a representation before the disciplinary authorityrecords its findings on the charges framed against the officer.”This decision was followed in the subsequent decision, i.e. (1999) 7 SCC739. The legal position was examined in the light of the provisions ofArticle 311 of the Constitution of India and also in the light of the wellaccepted principles of natural justice and their Lordships held in paragraph31 that the method adopted by the disciplinary authority is not correct. Theprinciple was explained in the following terms:“In view of the above, a delinquent employee has the right ofhearing not only during the enquiry proceedings conducted by theenquiry officer into the charges levelled against him but also at thestage at which those findings are considered by the disciplinaryauthority and the latter, namely, the disciplinary authority forms atentative opinion that it does not agree with the findings recorded bythe enquiry officer. If the findings recorded by the enquiry officerare in favour of the delinquent and it has been held that the chargesare not proved, it is all the more necessary to give an opportunity ofhearing to the delinquent employee before reversing those findings.The formation of opinion should be tentative and not final. It is atthis stage that the delinquent employee should be given anopportunity of hearing after he is informed of the reasons on thebasis of which the disciplinary authority has proposed to disagreewith the findings of the enquiry officer. This is in consonance withthe requirement of Article 311(2) of the Constituiton as it providesthat a person shall not be dismissed or removed or reduced in rankexcept after an enquiry in which he has been informed of thecharges against hi and given a reasonable opportunity of beingheard in respect of those charges. So long as a final decision is nottaken in the matter, the enquiry shall be deemed to be pending.Mere submission of findings to the disciplinary authority does notbring about the closure of the enquiry proceedings. The enquiryproceedings would come to an end only when the findings have OP 12562/97 & 30476/02-8-been considered by the disciplinary authority and the charges areeither held to be not proved or found to be proved and in that eventpunishment is inflicted upon the delinquent. That being so, the“right to be heard” would be available to the delinquent up to thefinal stage. This right being a constitutional right of the employeecannot be taken away by any legislative enactment or service ruleincluding rules made under Article 309 of the Constitution.”6. Judged in the light of the above principles, the action taken hereinby the disciplinary authority is clearly vitiated. It is a a well acceptedprinciple of natural justice that no one shall be condemned unheard. In thiscase, he was exonerated of the charges by the enquiry officer. Thepetitioner was well in his rights to assume that no further liability couldhave been cast upon him. The disciplinary authority before choosing toissue Ext.P4, did not issue any notice giving opportunity to the petitioner toobject to the proposals on the non-acceptability of the enquiry report andalso about the tentative conclusions arrived at by him to differ from thefindings of the enquiry officer. This is a gross irregularity which vitiates theentire proceedings. As the petitioner was entitled to be given anopportunity at that stage, the show cause notice proposing punishmentevidenced by Ext.P4 does not stand scrutiny in the eye of law. A reading ofExt.P4 will also show that it is not a case where the disciplinary authorityhas chosen to differ from the findings based on cogent materials. It isadmitted even in the show cause notice that he was relieved consequent on OP 12562/97 & 30476/02-9-his transfer on 1.6.1984 on which date the inventory was not taken. Thefinding rendered is that he did not raise any complaint previously regardingthe issue of materials made prior to 18.6.1984 and he had jointly signed therequisition with his successor. In fact, that is not the crucial aspect thatshould have been weighed with the disciplinary authority. Any way, thematter need not be examined on the merits in detail in the light of the viewI propose to take, as regards the violation of the principles of natural justiceas evident from the proceedings.7. The reasons stated in Exts.P8 and P10 are therefore without anylegal authority and they are vitiated by non-observance of the principles ofnatural justice. When the orders suffer from the wise of arbitrariness andviolation of principles of natural justice, the consequent action is liable tobe set aside on that score. Since the petitioner has already retired fromservice on 31.5.2001, there is no scope for directing a remand of the matterfor a reconsideration by the disciplinary authority also.8. One more aspect is evident from the proceedings which may havean adverse impact on the same. In this case the enquiry report is dated1.4.1987. Ext.P4 has been issued only on 17.3.1990, nearly three yearsthereafter. The modified show cause notice was issued only by Ext.P6dated 1.8.1994, still four years after the earlier one was issued. Therefore, OP 12562/97 & 30476/02-10-there is long delay in finalising the disciplinary proceedings which also is anaspect which should be considered in the light of the view taken by thiscourt and the Apex Court in various decisions. Reference in this connectionwill be of advantage to the decision of the Supreme Court in P.V.Mahadevan v. MD T.N. Housing Board (2005 (6) SCC 636) wherein itwas held that “the protracted disciplinary enquiry against a governmentemployee should, therefore, be avoided not only in the interests of thegovernment employee but in the public interest and also in the interests ofinspiring confidence in the mind of government employee.”9. Therefore, O.P.No.12562/1997 is allowed. Exts.P8 and P10 andall consequential orders issued therein are quashed. It is declared that thedisciplinary proceedings taken against the petitioner are illegal and thepunishment imposed on him consequently, are invalid.10. In O.P.No.30476/2002 the petitioner is seeking a direction tocompel the respondents to fix the petitioner's pension, gratuity and otherbenefits in the pay scale of Senior Superintendent. It is averred that eventhough the punishment was imposed by the disciplinary authority, that toowas kept in abeyance during the pendency of the appeal and inO.P.No.12562/1997 there is an interim order in force throughout staying the OP 12562/97 & 30476/02-11-proceedings. Meanwhile, he retired from service on 31.5.2001. Therespondents have filed a statement wherein they have produced Annexure I,whereby on 7.11.2002 the Board has released an amount of Rs.3,06,069/-towards the DCRG, Commutation and arrears of pension, to the petitioner.Learned counsel for the petitioner points out that Exts.P6 and P7 will showthat an amount of Rs.1,79,341.75 has been withheld from the DCRGtowards liability in view of the pendency of the orders of punishment issuedagainst him and obviously due to the pendency of O.P.No.12562/1997.Since the disciplinary proceedings have been quashed, the petitioner isentitled to be disbursed the said withheld amount. Learned counsel for thepetitioner also points out that the retirement benefits already sanctioned tohim, were only in the reverted cadre and not in the cadre of SeniorSuperintendent (NC) and therefore it will have to be worked out again. 11. Therefore, O.P.No.30476/2002 is disposed of directing therespondents to recompute the retirement benefits including pension, gratuityand other benefits in the cadre of Senior Superintendent (NC) and also todisburse the benefits due to him along with the withheld amount ofRs.1,79,341.35. The respondents are also directed to pass appropriate OP 12562/97 & 30476/02-12-orders and disburse the amount legally due to him, within a period of twomonths from the date of receipt of a copy of this judgment.The original petitions are disposed of in the above terms. No costs. (T.R. Ramachandran Nair, Judge.)kav/ OP 12562/97 & 30476/02-13- T.R. Ramachandran Nair, J.- - - - - - - - - - - - - - - - - - - - - -O.P. Nos 12562/1997 and 30476/2002- - - - - - - - - - - - - - - - - - - - - -JUDGMENT18th August, 2007.