Perezhilan v. Cement Corporation Of India Ltd — 1996 DIGILAW 259 (KER)

JUDGMENT 1. The petitioner was a Sales Officer in the first respondent Corporation, a public sector undertaking fully owned by the Government of India. Ext. P-1 Articles of charge and imputations of misconduct was served on the petitioner. The main charges against the petitioner were: (1) that be has been selling cement on credit to private parties (2) that he had allowed additional credit to some of the parties without collecting outstanding dues from them, (3) that credit sales were not backed up by bank guarantee and in one case credit was much above the limits of bank guarantee and (4) that he continued to make sales on credit ignoring the instructions of the Regional Manager. 2. The petitioner submitted Ext. P-2 explanation and thereafter an enquiry was followed. The third respondent who is the Director (Projects) agreed with the findings of the enquiring authority that all charges against the petitioner had been proved. Consequently by Ext. P-3 order the punishment of dismissal was imposed. Along with the Ext. P-3 order of dismissal Ext. P-4 enquiry report was also served on the petitioner. Against Ext. P-3 the petitioner filed Ext. P-5 memorandum of appeal to the second respondent who is the Chairman and Managing Director of the Corporation. According to the petitioner, though number of substantial grounds were detailed in appeal, the same was disposed of by a laconic order, Ext. P-6by which Ext. P-3 order was confirmed. Exts. P-3, P-4- and P-6 are under challenge before this court. 3. The counsel for the petitioner submitted that the enquiry is vitiated by substantial irregularities that the petitioner was not given sufficient opportunity to peruse the records, that the enquiry officer directed the petitioner to submit his written arguments within 24 hours, that the petitioner was not given copies of documents and that the enquiry was conducted at Delhi and not at Cochin or Calicut which caused great difficulty to the petitioner to participate. The counsel for the petitioner pressed into service the argument that non supply of copy of the enquiry report is fatal to the order of punishment passed by the third respondent. It was also contended that the third respondent, being not the appointing authority is not competent to pass the order of punishment. Lastly it was argued that Ext. The counsel for the petitioner pressed into service the argument that non supply of copy of the enquiry report is fatal to the order of punishment passed by the third respondent. It was also contended that the third respondent, being not the appointing authority is not competent to pass the order of punishment. Lastly it was argued that Ext. P-6 appellate order is a highly laconic order and there is no consideration of any of the aspects/ grounds raised in Ext. P-5 appeal petition and therefore Ext. P-6 is liable to be interfered by this court. 4. In support of the argument that non supply of the copy of the enquiry report vitiates the whole proceedings, the counsel for the petitioner cited the ruling reported in Union of India v. Mohd. Ramzan Khan AIR 1991 SC 471 . In the above ruling it was held that supply of a copy of the enquiry report along with recommendations in the matter of proposed punishment to be inflicted would be within the rules of natural justice and the delinquent would therefore be entitled to the supply of a copy thereof. It was further emphasised in the above judgment that 42nd amendment had not brought about any change in this position. The same question came up before the Constitution Bench of the Supreme Court in the ruling reported in Managing Director B.C.LL. v. The Karunakar AIR 1994 SC 1074 . The dictum laid down by the Supreme Court in Mohd. Ramzan Khan's case AIR 1991 SC 471 . was affirmed and approved by the Constitution Bench. But the above declaration of law was held to be operative only from 20th November 1990, the date on which the judgment in Mohd. Ramzan Khan's case AIR 1991 SC 471 . was pronounced by the Supreme Court. The following observations of the Supreme Court in AIR 1994 SC 1074 is relevant in this respect: " ..... the law was in an unsettled condition till at least 20th November 1990 on which day the Mohd. Ramzin Khan's case was decided. Since the said decision made the law expressly prospective in operation, the law laid down there will apply only to those orders of punishment which are passed by the disciplinary authority after 20th November 1990. This is so, notwithstanding the ultimate relief which was granted there which, as pointed out earlier, was per incuriam. Ramzin Khan's case was decided. Since the said decision made the law expressly prospective in operation, the law laid down there will apply only to those orders of punishment which are passed by the disciplinary authority after 20th November 1990. This is so, notwithstanding the ultimate relief which was granted there which, as pointed out earlier, was per incuriam. No order of punishment passed before that date would be challengeable on the ground that there was a failure to furnish the inquiry report to the delinquent employee. The proceedings pending in courts/tribunals in respect of orders of punishment passed prior to 20th November 1990 will have to be decided according to the law that prevailed prior to the said date and not according to the Jaw laid down in Mohd. Ramzan Khan's case.'' The counsel for the respondents pointed out that the date of Ext. P-3 order is 26th February 1990 and therefore the declaration of law by the Supreme Court in Mohd. Ramzan Khan's case AIR 1991 SC 471 as affirmed subsequently by the Constitution Bench cannot have any application. By going the dates of Ext. P-3 order and the date of the judgment of the Supreme Court it is quite clear that the pronouncement of the Supreme Court on this point cannot be taken advantage of by the petitioner. Therefore I have to hold that the non supply of the copy of the enquiry report cannot have any adverse impact on the legality of the disciplinary proceedings. 4. The next point urged by the counsel for the petitioner is that the order of punishment was passed not by the appointing authority but by another authority who is the third respondent in the Original Petition. In this connection it is pertinent to point out that the petitioner was appointed by the Director (Finance) and now Ext. P-3 order was passed by the Director (Projects). According to the learned counsel for the respondents the third respondent is no way inferior to his original appointing authority. They hold the same position and status and therefore there is no illegality in the order passed by the third respondent who is competent to pass such orders. P-3 order was passed by the Director (Projects). According to the learned counsel for the respondents the third respondent is no way inferior to his original appointing authority. They hold the same position and status and therefore there is no illegality in the order passed by the third respondent who is competent to pass such orders. Even otherwise there is no doubt that employees of the company like the first respondent are not civil servants and as such they can neither claim the protection of Art.311(1) of the Constitution of India nor the extension of that guarantee on parity. An employee of the company cannot therefore claim that he cannot be dismissed or removed by an authority subordinate to that by which he was appointed. Therefore the argument of the petitioner on the above count has only to be rejected. 5. The argument of the counsel for the petitioner that Ext. P-6 is highly laconic and therefore is liable to be set aside by this court needs consideration at the hands of this court. Apriori the above argument seems to be rather substantial till the counsel for the respondents brought to my notice the decision of the constitution Bench of the Supreme Court reported in S. N. Mukherjee v. Union of India 1990 (4) SCC 594 . In the above decision the Supreme Court was considering whether reasons should be stated while disposing of court martial proceedings under the Army Act. The Supreme Court has stated that the recording of reasons by an administrative authority serves a salutary purpose, viz., it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. The requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It was also emphasised by the Supreme Court that it is not required that the reasons should be as elaborate as in the decision of a court of law. 6. It was also emphasised by the Supreme Court that it is not required that the reasons should be as elaborate as in the decision of a court of law. 6. Thereafter the Supreme Court proceeded to consider whether the appellate or revisional authority, if it affirms an original order, need give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge. The Supreme Court was of the view that while confirming the findings and sentence of a court martial, it must be held that the confirming authority is not required to record reasons. When even in a case involving sentences to be imposed in a court martial proceedings, the Supreme Court is of opinion that no separate reasons need be stated while confirming an order of punishment, needless to say that such a requirement cannot be insisted in the case of a disciplinary proceeding initiated by a company against its employees. Therefore in view of the clear pronouncement by the Supreme Court, I am of opinion that Ext. P-6 is not vitiated by the fact that no separate reasons have been stated in rejecting, Ext. P-5 appeal. 7. The counsel for the respondents also brought to my notice a recent ruling of the Supreme Court reported in State Bank of Patiala v. S. K. Sharma 1990 (3) SCC 364 , wherein the principle of natural justice and the impact of its violation in the sphere of administrative law have been discussed and decided. The Supreme Court was of opinion that an order passed imposing a punishment on an employee consequent upon a disciplinary/departmental enquiry in violation of the rules, regulations, statutory provisions governing such enquiries should not be set aside automatically. The Court should enquire whether the provision violated is of substantive nature or whether it is procedural in character. A substantive provision has normally to be complied with and the theory of substantial compliance or the test of prejudice would not be applicable in such a case. The violation of procedural provision stands on an entirely different footing. The procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent employee. A substantive provision has normally to be complied with and the theory of substantial compliance or the test of prejudice would not be applicable in such a case. The violation of procedural provision stands on an entirely different footing. The procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent employee. The violation of those provisions like not giving an opportunity to peruse the records, to examine the witnesses, etc., are only procedural and the violation of the above provisions is not mandatory but only directory, the violation of which may not be fatal to the result of the enquiry. More over, the Supreme Court also emphasised the fact that the employee who complained against the violation of principles of natural justice should also prove that real prejudice has caused to him on account of the violation of the principles of natural justice regarding the procedural provisions. In this case the petitioner has not substantiated his case that the actions of the respondent in not supplying copies of the document, or examination of the witnesses in Delhi, etc., has prejudiced him. Therefore I do not find any illegality in the enquiry proceedings initiated against the petitioner by the respondent which resulted in Ext. P-3 order of dismissal. In view of the stand taken by me that Ext. P-6 order is in substantial compliance with the principles of natural justice, I do not find any justification to interfere with Ext. P-6 order also. In the result the Original Petition is dismissed.