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2002 DIGILAW 635 (PAT)

Kashi Nath Singh v. Food Corporation Of India

2002-05-20

AFTAB ALAM

body2002
Judgment 1. Notwithstanding some slight variations in the details of facts, these two cases arise from similar facts and circumstances and involve common legal issues. These two cases were, therefore, heard together and are being disposed of by this common order. 2. The petitioners in each of the two writ petitions were employees (now retired) of the Food Corporation of India. Nishit Kumar Sana, the petitioner in C.W.J.C. No. 4545/2002 held the rank of Assistant Manager (D) and at the time of retirement, he has posted in the office of District Manager, FCI, Muzaffarpur. Kashi Nath Singh, the petitioner in CWJC No. 3829/2002, was in the rank of Assistant Grade-l(D)/Depot Incharge and at the time of retirement he was posted as Depot Incharge, Hajipur. Singh superannuated from service on 31.1.2002 and Saha superannuated on 28.2.2002. A few days before their superannuation both Saha and Singh were hurriedly subjected to disciplinary actions on the charge of causing loss to the Corporation. Against each of them orders were passed for recovery of certain amounts as loss suffered by the Corporation on their account. Against Singh, the order of recovery was passed by the District Manager on 29.1.2002; according to Singh, the order was served upon him on 31.1.2002, i.e. on the date of his superannuation. By this order he was held responsible for causing loss of Rs. 3,33,063.03 paise to the Corporation and the entire amount of the loss was directed to be recovered "from his salary and other payable amount". This was perhaps the only punishment he could be awarded as the order of punishment was passed on the date of his superannuation and in context recovery from other payable amount can only mean deductions from his pension, gratuity and other terminal dues. 3. Against Saha the order of recovery was passed by the Senior Regional Manager on 27.2.2002. According to him, he received this order on the date of his retirement on 28.2.2002. Saha was held responsible for causing loss to the Corporation of foodgrains valued at Rs. 28,84,788.06 paise, but the impugned order gave him the penalty of recovery of Rs. 2,16,236/-. Like Singh, the recovery in his case was directed to be made from his retirement dues "particularly from such dues from which recovery is permissible, to meet the ends of justice." 4. 28,84,788.06 paise, but the impugned order gave him the penalty of recovery of Rs. 2,16,236/-. Like Singh, the recovery in his case was directed to be made from his retirement dues "particularly from such dues from which recovery is permissible, to meet the ends of justice." 4. In September, 1995 Singh was posted as Depot Incharge, Hajipur when railway wagons carrying wheat arrived there from Mailani. In his receipt for the consignment of wheat, Singh showed transit loss @ of 6.14%. This was abnormally high and hence, an investigation was made. In the inspection report Singh was held responsible for the loss of wheat shown by him as transit loss at the abnormally high rate. It is not clear when the report of the investigation was received, but that was presumably in the year 1995 itself. No action was taken on that report and the matter was allowed to rest at that stage. The concerned authorities in the Corporation appear to have woken-up to this matter only a fortnight before Singh was due to retire and on 14.1.2002, he was issued a memorandum asking him to explain, within three days as to why the necessary recovery should not be made from his salary/payable amount. It was further stated in that memorandum that in case no explanation was received from him, it would be presumed that he had nothing to say in the matter and appropriate action would be taken against him. This memorandum was issued by the District Manager at Chapra and it was sent to Singh at Hajipur, where he was posted at that time. He gave his explanation on 25.1.2002 and sent it by courier to the District Manager, Chapra. But from the impugned order it appears that the petitioners explanation did not reach the District Manager till 28.1.2002, the date on which the impugned order was passed and consequently it was noted in the impugned order as follows : "And whereas, 03 (three) days time to submit reply by Shri K.N. Singh, A.G.I (D) has already been elapsed on 17.1.2002, but this reply has not been received by this office till date." 5. In the case of Saha, the manner of holding the proceedings appear to be even more hurried and perfunctory. It is noted above that Saha was due to retire on 28.2.2002. In the case of Saha, the manner of holding the proceedings appear to be even more hurried and perfunctory. It is noted above that Saha was due to retire on 28.2.2002. He was given official intimation regarding his impending retirement by Memos, dated 20.10.2000 (Annexure-3) and 8.11.2000 (Annexure-4). On 16.2.2002 a memo (Annexure-5) was issued to him by the Senior Regional Manager, in which it was stated that for certain periods, the storage losses shown by him were abnormally high and he was, therefore, responsible for causing loss of large quantities of foodgrains during those periods. In this memo the total value of loss suffered by the Corporation due to him was shown as Rs. 21,52,383.84 paise. He was given five days time to submit his representation in respect of the charges contained in the memo. On 21.2.2002 another memorandum (Annexure-5/1) was issued by the Regional Manager containing similar charges against the petitioner. In this memo, the value of loss was shown as Rs. 2,61,010.76 paise and the petitioner was given three days time i.e. till 25.2.2002 for filing his explanation. Yet another memo (Annexure-5/2) was issued on the same date (22.2.2002) containing similar charges. The value of loss was shown as Rs. 3,70,001.76 paise and the petitioner was allowed three days time i.e. upto 25.2.2002 to submit his explanation. Four days later on 25.2.2002 yet another memorandum (Annexure-5/3) was issued on similar charges; the value of loss shown was 1,30,155.70 paise and the petitioner was allowed 24 hours time for submitting his explanation. On the same date another memorandum (Annexure-5/4) was issued with similar charges in which the loss was shown as Rs. 16,236/- and the petitioner was required to submit his show-cause by 26.2.2002. It may be noted here that all these memoranda were issued by the Senior Regional Manager having his office at Patna and were served upon the petitioner at Muzaffarpur and yet the time allowed for filing explanations was no more than five days, three days and one day respectively. Mr. Shivendra Kishore stated that the petitioner Saha went on replying to each of the five memorandum given to him. Mr. Shivendra Kishore stated that the petitioner Saha went on replying to each of the five memorandum given to him. His reply to the last two memoranda, dated 25.2.2002 was submitted at the Muzaffarpur office on 27.2.2002 at 11.30 A.M. and it is, therefore, evident that his reply to the last two memoranda would not have been taken into consideration by the Senior Regional Manager while passing the impugned order which is dated 27.2.2002. 6. It is common ground that both the petitioners were proceeded against in terms of Regulation 60 of the Food Corporation of India (Staff) Regulations, 1971. However, before adverting to Regulation 60, it would be relevant to take a look at the minor penalties enumerated at regulation 54. These are as follows : "(i) Censure; (ii) withholding of his promotion; (iii) recovery from his pay of the whole or part of any pecuniary loss caused by him to the Corporation by negligence or breach of orders; (iv) withholding of increments of pay." Coming now to Regulation 60, it would be useful to reproduce it in full : "60. These are as follows : "(i) Censure; (ii) withholding of his promotion; (iii) recovery from his pay of the whole or part of any pecuniary loss caused by him to the Corporation by negligence or breach of orders; (iv) withholding of increments of pay." Coming now to Regulation 60, it would be useful to reproduce it in full : "60. Procedure for imposing minor penalties : (1) Subject to the provisions of Sub-regulation (3) of Regulation 59, no order imposing on an employee any of the penalties specified in clauses (i) to (iv) of Regulation 54 shall be made except after: (a) informing the employee in writing of the proposal to take action against him and of the imputations of misconduct or misbehaviour on which it is proposed to be taken, and giving him a reasonable opportunity of making such representation as he may wish to make against the proposal; (b) holding an inquiry in the manner laid down in Sub-regulation (3) to (23) of Regulation 58, in every case in which the disciplinary authority is of the opinion that such enquiry is necessary; (c) taking the representation, if any, submitted by the employee under clause (a) and the record of inquiry, if any, held under clause (b) into consideration; (d) recording a finding on each imputation of misconduct or misbehaviour." "(2) Notwithstanding anything contained in clause (b) of Sub-regulation (1), if in a case it is proposed, after considering the representation, if any, made by the employee under clause (1) of the sub-regulation, to withhold increment of pay and such withholding of increments is likely to affect adversely the amount of retirement benefits payable to the employee or to withhold increments of a pay for a period exceeding 3 years or to withhold increments of pay with cumulative effect for any period, an inquiry shall be held in the manner laid down in Sub-regulations (3) of Regulation 58 before making any order imposing on the employee any such penalty." 7. Mr. Tekriwal, learned counsel for the respondent Corporation submitted that the petitioners were awarded the minor penalty of recovery of the whole or part of the pecuniary loss caused to the Corporation following the procedure as provided under Regulation 60 of the Staff Regulations. Mr. Tekriwal, learned counsel for the respondent Corporation submitted that the petitioners were awarded the minor penalty of recovery of the whole or part of the pecuniary loss caused to the Corporation following the procedure as provided under Regulation 60 of the Staff Regulations. Learned counsel further submitted that in terms of Sub-regulation (2) of Regulation 60, an inquiry was required to be held only in case it was proposed to award the punishments as indicated in that sub-regulation. But in this case, the punishment being recovery of the pecuniary loss caused to the Corporation, it was not required to hold a detailed departmental enquiry. 8. To me the submission made by Mr. Tekriwal does not appear to be entirely free from doubt. In terms of Sub-regulation (2) of Regulation 60, a punishment of (i) withholding increment of pay, if such withholding was likely to adversely affect the amount of retirement benefits payable to employee or (ii) withholding increment of pay for a period exceeding three years or (iii) withholding increments of pay with cumulative effect for any period, makes it obligatory upon the competent authority to hold a departmental enquiry into the charges. The punishment of deduction of large sums of money e.g. Rs. 3,33,063.03 paise in case of Singh and Rs. 2,16,236/- in case of Saha appears to be far more severe punishment than those stated in regulation 60(2) and therefore, it would appear quite anomalous that deductions of such large sums from an employees retiral dues may be made as recoveries for the pecuniary loss allegedly caused by the concerned employee without following the provisions of Sub-regulation (2) of Regulation 60. 9. Apart from this Mr. Shivendra Kishore, learned counsel appearing for the petitioner in C.W.J.C. No. 4545/2002 contended that recovery from retiral dues cannot be said to be covered by the penalty enumerated at regulation 54(3). It is seen above that regulation 54(3) provides for recovery of any pecuniary loss caused to the Corporation from the pay of the delinquent. Pay is defined in regulation 2(i) as follows : "Pay" excludes allowances". 10. This definition of pay does not throw any light on the issue raised by Mr. Shivendra Kishore, but regulation 2 itself provides that depending upon the context the word or expression may be assigned a meaning different from the one given in that regulation. Pay is defined in regulation 2(i) as follows : "Pay" excludes allowances". 10. This definition of pay does not throw any light on the issue raised by Mr. Shivendra Kishore, but regulation 2 itself provides that depending upon the context the word or expression may be assigned a meaning different from the one given in that regulation. In the context of regulation 54, therefore, it might be argued that pay would also include retiral dues under certain heads. In this regard one may recall the Supreme Court decision in Nakaras case ( AIR 1983 SC 130 ) in which it was held that pension was payment for the past services rendered by the employee. 11. In this case, however, there is no need to make a conclusive pronouncement on the issue as to whether a full fledged departmental enquiry was required to be held before the competent authority could order deduction of such large amounts from the retiral dues of the petitioners as recovery for the pecuniary loss allegedly suffered by the Corporation and whether the expression pay used in regulation 54(3) includes the terminal dues of the retired employees. This is because the impugned order passed against the two petitioners must be held as bad, illegal and unsustainable for another reason. 12. The procedure envisaged under regulation 60(1) may dispense with a detailed enquiry into the charges. Nevertheless it provides that the delinquent be given a reasonable opportunity of making such representation as he might wish to make against the proposed punishment. Now, it is seen that Singh was allowed five days time to answer the charges which appertained to the year 1995. He gave his explanation, though beyond the period of five days. But the competent authority being in a hurry to pass the final order before the date of his superannuation had no time to consider the explanation given by him and thus for all intent and purposes the order of punishment was passed behind his back and without giving him any opportunity, much less a reasonable opportunity, to show-cause. 13. The other petitioner Saha too was allowed five days time to answer the memorandum dated 16.2.2002, three days time to answer the two memoranda dated 21.2.2002 and 24 hours time to answer the last two memoranda dated 25.2.2002. 13. The other petitioner Saha too was allowed five days time to answer the memorandum dated 16.2.2002, three days time to answer the two memoranda dated 21.2.2002 and 24 hours time to answer the last two memoranda dated 25.2.2002. The time allowed to the two petitioners for giving replies to the respective memoranda served upon them amounted to a travesty of the principles of natural justice and in these two cases the authorities acted in complete breach of the requirement of regulation 60(1). As it happened the reply of Singh to the only memorandum given to him and the replies of Saha to the last two memoranda served upon him could not even be placed before the competent authority before the final orders were passed against them. From the manner in which the authorities proceeded against the two petitioners it is evident that : (i) The petitioners were not given a reasonable opportunity for making representation against the punishment proposed to be awarded to them in connection with the alleged charges. (ii) The concerned authorities had made-up their mind to award the punishments to the petitioners and the issuance of the show-cause memos, was more than a mere formality. 14. For the reasons discussed above the two impugned orders, dated 28/ 29.1.2002 in case of Singh (Annexure-1 in CWJC No. 3829/2002) and dated 27.2.2002 in case of Saha (Annexure-1 to CWJC No. 4545/2002) are hereby quashed. 15. A question now arises whether the matter must now be allowed to rest here or whether it would still remain open to the Corporation to proceed against the petitioners for any deductions from their retiral dues for the recovery of its alleged losses. The answer to that question will depend upon whether or not there are statutory provisions governing the service conditions of the employees of the Corporation analogous to Rule 43(b) of the Bihar Pension Rules or Rule 9 of the Central Civil Services Pension Rules. Mr. Tekriwal, relying upon Section 12A (IV) of the Food Corporation Act, 1964, submitted that those persons who became employees of the Corporation on their services having been transferred by the Central Government and who opted for the benefits of leave, provident fund, retirement and other terminal benefits as admissible to the employees of the Central Government will be governed by the relevant Central Government Rules. He further stated that the two petitioners belonged to that category and therefore, the provisions of Rule 9 of the Central Civil Services Pension Rules will fully apply to them. 16. Mr. Shivendra Kishore appearing for Saha took a contrary view and submitted that no deductions from the retiral dues are permissible under Rules governing the service conditions of the employees of the Corporation. At this stage I am not inclined to make any conclusive pronouncement on the issue and I leave the matter open to the Corporation. If the Corporation feels satisfied that there are sufficient statutory provisions for proceeding against the petitioners for withholding their pension either wholly or in part, it will be open to it to proceed in accordance with law. But in any event it must make up its mind and take a final decision in this regard within three months from the date of receipt/production of a copy of this order in the office of Senior Regional Manager. In case no show-cause notice in this regard is issued to the petitioners within three months from the date of receipt of this order in the office of the Senior Regional Manager, it would be presumed that the Corporation has decided, for any reasons, not to proceed against the petitioners in the matter and then their retiral dues will be paid to them in accordance with law. In case the Corporation decides to initiate a proceeding by giving show-cause notices to the petitioners the proceedings should be concluded within six months from the date of service of the preliminary notice of the show-cause. 17. The retiral dues of the petitioners, under such of the heads which are not covered by Rule 9 of the Central Civil Services Pension Rules, such as provident fund etc. may be paid to them without any further delay. 18. In the result these two writ petitions are allowed subject to the aforesaid observations and directions. 19. In the facts and circumstances of the case, there shall be no order as to costs.