P. S. v. Menon VS Malabar Cements Ltd. — 1997 DIGILAW 415 (KER)

Judgment :- K.S. Radhakrishnan, J. The question that has come up for consideration in these cases is as to whether Government have got power to direct Managing Director of a Government Company to place some of their officers under suspension for the purpose of investigation of criminal cases registered under the Prevention of Corruption Act. 2. Petitioners were holding the post of Manager (Personnel & administration) and Welfare Officer respectively in Malabar Cements Ltd. a Company wholly owned by State Government. Various complaints were received by the Government against the petitioners with regard to appointments of Mazdoors in the Malabar Cements Ltd. A preliminary enquiry was conducted by Deputy Superintendent of Police, Vigilance Department, Palghat. After considering evidence, both oral and documentary he came to the conclusion, petitioners had committed various malpractices in-the matter of appointment of 28 Mazdoors in Malabar Cements Ltd. Report was submitted to the Superintendent of Police, Vigilance Department, Northern Range, Kozhikode with recommendation. He concurred with the report and opined that there is prima facie evidence of involvement of petitioners in the matter of irregular appointments and that they have abused their official position and committed criminal misconduct in effecting appointments. Eventhough petitioner in O.P. 9109/97 was the head of Personnel and Administration Department and also the custodian of the entire records relating to the selection of Mazdoors, he failed to produce the used and unused question/answer papers before the Enquiry Officer. 3. Under the above mentioned circumstances the Superintendent of Police, Vigilance also endorsed the views of the Enquiry Officer and recommended to register case under S.13(1) read with 13(2) of Prevention of Corruption Act 1988 and section 204 read with 34IPC against accused persons. 4. After obtaining necessary sanction Crime No. 3/96 was registered in Vigilance Police Station, Palakkad on 5.9.96 against petitioners and former Managing Director of Malabar Cements Ltd; Additional Director General of Police, Vigilance Department later wrote to the Government vide letter dated 19.11.1996 requested the Government to place petitioners under suspension with immediate effect for smooth conduct of investigation. In the meantime, then Managing Director of the Company Sri. Mohanthy was also placed under suspension by Government vide letter dated 21.5.1997 since he was involved in three other cases registered by Vigilance Police Station, Alappuzha under the provisions of Prevention of Corruption Act 1988. In the meantime, then Managing Director of the Company Sri. Mohanthy was also placed under suspension by Government vide letter dated 21.5.1997 since he was involved in three other cases registered by Vigilance Police Station, Alappuzha under the provisions of Prevention of Corruption Act 1988. That was in connection with purchase of magnesium metals and vitaminD3 from two foreign firms while he was Managing Director of Kerala State Drugs & Pharmaceuticals Ltd. 5. The Government then wrote a letter dated 26.5.1997 to the Managing Director of Malabar Cements Ltd. to place petitioners under suspension with immediate effect for smooth conduct of investigation of criminal case No. Cr. 3/96/PKD. Managing Director of Malabar Cements therefore issued order dated 27.5.97 placing petitioners under suspension. Evidently the said order was issued by the Company on the basis of direction issued by the Government. 6. The principal contention raised by the counsel for petitioners was that the Managing Director of the Company has no jurisdiction to place petitioners under suspension on the basis of the Government directions. It was contended that the officers of the Company are governed by their own service regulations. Regulation 15(a) empowers the management of the company to place an employee charged with misconduct of a grave and serious nature under suspension. The power has to be exercised by Managing Director of the Company untrammelled by the directions of the Government. It is their case. Managing Director of the Company never exercised any powers under the staff regulations to place petitioners under suspension. Even the management can exercise the power only if petitioners are charged with misconduct of grave and serious nature. It was contended, in the order of suspension petitioners have not been charged with any misconduct of serious and grave nature. In my view, according to petitioners, respondent have no jurisdiction to place them under suspension without following the procedure laid down in the staff regulation. 7. A counter affidavit has been filed on behalf of the respondents followed by a reply affidavit by the petitioner in O.P. 9131 of 1997. When the matter came up for hearing I called for the entire files which led to the issuance of Government directions and also the order passed by the Company to place petitioners under suspension. 7. A counter affidavit has been filed on behalf of the respondents followed by a reply affidavit by the petitioner in O.P. 9131 of 1997. When the matter came up for hearing I called for the entire files which led to the issuance of Government directions and also the order passed by the Company to place petitioners under suspension. I have also perused the preliminary report of Deputy Superintendent of Police Vigilance and the opinion expressed by the Superior Officer and the Vigilance Director thereon. 8. Before examining the validity or otherwise of the Government directions dated 26.5.1997 we shall examine the reasons which prompted the Government to issue a direction to the Company to place petitioners under suspension. Government received large number of complaints from various quarters including the representations from the various trade unions with regard to the irregularities committed by the petitioners in the matter of appointment of 28 Mazdoors in the service of the company. Government then vide letter dated 3.7.95 directed the Director of Vigilance Investigation to conduct a preliminary enquiry into the allegations raised with regard to the appointments effected in the Company. After conducting preliminary enquiry Deputy Superintendent of Police, Vigilance recommended suspension of petitioners so as to complete the investigation. The same was endorsed by the Superintendent of Police, Vigilance Department, Northern Range as well as the Director General of Police, Vigilance Investigation. The Enquiry Officer collected various materials which prima facie revealed the irregularities committed while the selection was conducted. The person who alleged to have valued the answer papers was also questioned by the Vigilance Department. The materials gathered by respondents prima facie indicated the involvement of the petitioners in the irregular appointment of Mazdoors. It is after conducting a detailed enquiry a crime case registered against petitioners under S.13(1) read with 13(2) of the Prevention of Corruption Act. 9. It is under the abovementioned circumstances the Government issued direction dated 26.5.1997. The question to be decided is as to whether Government have got jurisdiction to issue such a direction to the Company. 10. Malabar Cements is a Company wholly owned by the State Government registered under the Companies Act, 1956. It cannot be disputed that since the Malabar Cements is Government Company, the employees of the Company would come within the purview of Prevention of Corruption Act. 10. Malabar Cements is a Company wholly owned by the State Government registered under the Companies Act, 1956. It cannot be disputed that since the Malabar Cements is Government Company, the employees of the Company would come within the purview of Prevention of Corruption Act. The expression 'public servant' has been given a very wide connotation under S.2(c) of the Prevention of Corruption Act The relevant portion is extracted below: 'public servant' means - (iii) any person in the service or pay of the Corporation established by or under a Central, Provincial or State Act, or an authority or a body owned or controlled or aided by the Government or a Government company as defined in S.617 of the Companies Act, 1956". Since admittedly Malabar Cements is a Company coming within the meaning of S.617 of the Companies Act petitioners would come within the meaning of S.2(c)(iii) of the Prevention of Corruption Act. As public servants they are discharging public duties. Every act of public servant should be treated with public interest. The doctrine of full-faith and credit applied to the acts done by the public servants and the presumptive evidence of regularity attached to the acts done or performed is apposite in discharge of his public duties to achieve public purpose. 11. Prevention of Corruption Act, 1988 was enacted by the Parliament so as to make more effective provisions for the prevention of bribery and corruption. The object of the Act was to eradicate corruption from various levels either in Government service or in services under the Corporation or Government Companies. As held by the Supreme Court in State of Madhya Pradesh v. M. V. Narasimhan (1975) 2 SCC 377) Act being a social legislation, its provisions should be liberally construed so as to advance the object of the Act. The State has got an obligation to its people in discharge of sovereign and Government functions through public servants. Therefore, when an officer of a company who is a public servant is prima facie found to be involved in an offence under the Prevention of Corruption Act, it is always open to the State Government to conduct a proper investigation. 12. In order to conduct a proper investigation, Government can direct its Vigilance Department to take up the investigation. Therefore, when an officer of a company who is a public servant is prima facie found to be involved in an offence under the Prevention of Corruption Act, it is always open to the State Government to conduct a proper investigation. 12. In order to conduct a proper investigation, Government can direct its Vigilance Department to take up the investigation. As per directions of the Government Vigilance Department had conducted investigation against persons like petitioners who are public servants coming within the meaning of S.2(c)(iii) of the Prevention of Corruption Act. Enquiry conducted by the Government led to the registration of criminal case against them under the Prevention of Corruption Act. The directions issued by the Government is to be judged in the light of the above mentioned circumstances. The power to issue a direction by State Government to keep petitioners under suspension, who were public servants of wholly Government owned company cannot be disputed. It is not disputed the Company is wholly owned by the State Government. Petitioners are also public servants within the meaning of S.2(c)(iii) of the Act. Consequently, I do not find any illegality in the directions of the Government. 13. The next question to be considered is whether the Managing Director of the Company is obliged to keep petitioners under suspension on the basis of Government directions. The company is fully owned by the State Government. State has got power to keep their public servants under suspension. I am of the view de hors the service regulations Government have got power to direct the Managing Director to place petitioners under suspension for conducting a smooth investigation with regard to the crime case registered under the Prevention of Corruption Act. It is also pertinent to note that the request made by Government was also considered by the Chairman and Managing Director of the Company and on that basis petitioners were kept under suspension. The contention of the counsel for petitioners that the second respondent was acting on the dictation of the Government cannot be sustained. I am of the view there is no question of acting under any dictation. The Managing Director was not acting under the service regulations. Managing Director placed the petitioners under suspension, since they are public servants coming within the meaning of S.2(c)(iii) of the Prevention of Corruption Act and so as to complete the vigilance investigation. I am of the view there is no question of acting under any dictation. The Managing Director was not acting under the service regulations. Managing Director placed the petitioners under suspension, since they are public servants coming within the meaning of S.2(c)(iii) of the Prevention of Corruption Act and so as to complete the vigilance investigation. Therefore, I am of the view that the contention of counsel for petitioners that the Managing Director was acting under dictation of the Government cannot be sustained. Under such circumstances I am of the view that petitioners are not entitled to any reliefs prayed for in this writ petitions. 14. counsel for petitioner also attained the stand that investigation is already over and files are in the Vigilance Department and therefore, it is not necessary to keep petitioners under suspension. The files made available to me also disclose that many of the materials which were sought for by the investigation officer were not made available to the Enquiry Officer. It is the case of the Department that without keeping petitioners under suspension it would not be possible to effectively complete the investigation. In view of such circumstance I am of the view that respondents have got jurisdiction to place petitioners under suspension so as to complete the investigation. Writ petitions lack merits and they are dismissed.