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2011 DIGILAW 741 (CAL)

Durgapada Roy v. Coal India Limited

2011-05-20

ANIRUDDHA BOSE

body2011
JUDGMENT ANIRUDDHA BOSE, J. 1. THE writ petitioner in this proceeding challenges, in substance, legality of a disciplinary proceeding initiated against him on 31 March 2008 by issuing memorandum of charges. The petitioner also seeks release of his retiral benefits including leave encashment, gratuity and other dues which under normal circumstances he would have been entitled to on superannuation. Such benefits appear to have been withheld because of pendency of the said proceeding. 31 March 2008 was the date on which the petitioner was to retire from his service in Coal India Limited (CIL). At that point of time he was working as the Chief General Manager (Personnel) of the said company. It has been pleaded in the petition that at about 12.35 p.m. on that date the petitioner was served with a memorandum bearing reference no. CIL/VIG/05245/VD-69(CVC)/1934. This memorandum was in the nature of a charge sheet and he was directed to submit within ten days from the receipt of the memorandum the written statement of his defence. 2. THE memorandum contains seven articles of charge. Allegations against the writ petitioner is that he, in collusion with certain other officers of the CIL, had arranged certain work order to be issued in favour of a firm, M/s. Institute of Educational and Psychological Management, Calcutta, for undertaking the job of conducting written examination and allied matters pertaining to selection of departmental candidates from non-executive to executive cadre in different disciplines within the organisation. The first four articles of charges relate to allegations of manipulation in selection process and award of the contract to the said firm. Articles V and VI of the memorandum of charges relate to allegations of showing favour to them in terms of release of payment subsequent to their engagement. Article VII contains complain of corrupt practices undertaken by the said firm in the matter of setting of question papers in conducting the examination and favouring certain examinees with approval of the petitioner. For the purpose of the present proceeding, Articles V and VI of the memorandum of charges are of relevance. These articles provide:- "Articles - V Whereas, it is alleged that in furtherance of above Shir D.P. Roy in his official capacity as General Manager (Personnel). For the purpose of the present proceeding, Articles V and VI of the memorandum of charges are of relevance. These articles provide:- "Articles - V Whereas, it is alleged that in furtherance of above Shir D.P. Roy in his official capacity as General Manager (Personnel). CIL issued a defective work order to M/s. IEPM, Kolkata vide No. CIL/C5A(i)/50254/07/06/2534-2078 dated 09.04.2007 with vested interest and intent to favour the party in as much as that the clause of part payment, not exceeding 30% after completion of each stage of work as detailed in 3 stages in the TCR approved by the Chairman, CIL was not incorporated in the work order to accord undue favour to the party and which was subsequently en-cashed in favour of the party by certifying full payment of part bills instead of part payment (30% of the bill) as detailed in imputation of charge against Article V at Annexure-II. The aforesaid acts of commission and omission on the part of Shri. D. P. Roy, the then GM (P), CIL now CGM (P), CIL, besides being tantamount to non-fulfillment of duties and obligations as contained under Clauses 4.1(i), 4.1(iii), 4.1(iv), 4.3 and 4.6 of Coal India Executives' Conduct Discipline and Appeal Rules 1978 (amended upto April 2000), also amount to misconduct in terms of Clause 5.0(1), 5.0(5), 5.0(6), 5.0(17), and 5.0(26) of the said Rules. ARTICLE VI Whereas, it is alleged that in furtherance of above, Shri. D.P. Roy in his official capacity as General Manager (Personnel), CIL and as a part of a nexus, allowed submitting of bills of first two stages by the party for amounts Rs.1,71,108/- and Rs.2,19,496/- respectively which was got certified by Shri. D.P. Roy through Shri Rajpal Yadav, PM (R) for full payment instead of part payment of 30% against each bill amounting to Rs.51,332/- and Rs.65,848/- respectively and thereafter he himself certified the said bills for full payment and thereby accorded undue financial gain to the party with vested interest as detailed in imputation of charge against Article-VI at Annexure-II. The aforesaid acts of commission and omission on the part of Shri. D.P. Roy, the then GM (P), CIL now CGM (P), CIL, besides being tantamount to non-fulfillment of duties and obligations as contained under Clauses 4.1(i), 4.1(iii), 4.1(iv), 4.2, 4.6 of Coal India Executives' Conduct Discipline and Appeal Rules 1978 (amended upto April 2000), amount to misconduct in terms of Clause 5.0(1), 5.0(5), 5.0(17), 5.0(21) and 5.0(26) of the said Rules." It has been alleged in the memorandum of charges that the acts of commission and omission complained against the petitioner tantamount to non- fulfillment of duties and obligations contained in various clauses in the Coal India Executive's Conduct Discipline and Appeal Rules 1978 (the Rules) and constitute misconduct. Clauses 5.0(1), 5.0(5), 5.0(6), 5.0(9), 5.0(17), 5.0(21) and 5.0(26) of the said Rules have been specified in the memorandum of charges in terms of which charges of misconduct against the petitioner has been brought. 3. THE petitioner responded to the said memorandum on 11 April 2008 requesting the disciplinary authority, being the Chairman-cum-Manager Director of the organisation to withdraw the memorandum of charges and also for release of payment of gratuity and other dues. In this communication of 11 April 2011, the petitioner objected to continuation of the disciplinary proceeding on the ground that such proceeding ought not to continue as no order of dismissal could be passed after retirement of the petitioner. Such contention of the petitioner was based on the reasoning that there was no charge against him of causing any pecuniary loss to the employer. This communication was followed by a detailed defence statement, in which charges levelled against the petitioner was denied. 4. BEFORE me, arguments have been advanced on behalf of the petitioner by Mr. Bandopadhyay, learned Senior Counsel and he has emphasised that in the case of the writ petitioner, disciplinary proceeding could not continue as there was no charge against him of causing any pecuniary loss to the employer. He has relied on two authorities in support of this submission. The first one is a decision of the Supreme Court in the case of Jaswant Singh Gill Vs. Bharat Coking Coal Ltd. and Ors. reported in (2007) 1 SCC 663 . The other authority is a decision of a Division Bench of this Court in the case of Kamal Kr. Majumder Vs. Union of India and Ors. reported in 2008(1) CHN 951 . Bharat Coking Coal Ltd. and Ors. reported in (2007) 1 SCC 663 . The other authority is a decision of a Division Bench of this Court in the case of Kamal Kr. Majumder Vs. Union of India and Ors. reported in 2008(1) CHN 951 . Cil has contested this writ petition by filing affidavit. Their case is that under Clause 34.2 of the said Rules, it is permissible for the Company to continue disciplinary proceeding if initiated prior to superannuation of the concerned employee. Further case of Cil is that because of clearance of certain bills in violation of the prescribed norms, particulars of which have been disclosed in Articles V and VI of the memorandum of charges, the Company had suffered financial loss. This has been pleaded in paragraph 7 of the said affidavit and the relevant part of that paragraph which deals with this aspect of the matter states:- "That in furtherance to the above charge, at Article-VI, Annexure-I and Annexure-II of the said Memorandum, the petitioner has been charged of allegedly causing undue financial gain to the said party inasmuch as that- The party submitted 1st bill of Rs.1,71,108/- dated 11.08.2007. According to the actual payment terms as recommended by the tender committee and approved the Chairman, Cil as aforesaid, 30% of the bill amount i.e., Rs.51,332/- only was allowed to be passed for payment. But, on the strength of such defective work order as aforesaid issued by the petitioner and subsequent processing of the said bill by his immediate subordinate officer i.e. Shri Rajpal Yadav, Personnel Manager and by certifying the bill for payment by Shri D.P. Roy (Petitioner), undue financial gain was extended to the party since the party was paid full amount of Rs.1,71,108/- instead of 30% of the billed amount i.e. Rs.51,332/-. Thus, an excess payment of Rs.1,19,776/- was unduly paid to the party, causing a resultant financial loss to the company. Subsequently, the said party i.e. M/s. IEPM submitted 2nd bill dated 8.10.2007 for an amount of Rs.2,19,496/-. According to the actual payment terms as recommended by the tender committee and approved the Chairman, Cil, 30% of the billed amount i.e. Rs.65,848/- was payable. Subsequently, the said party i.e. M/s. IEPM submitted 2nd bill dated 8.10.2007 for an amount of Rs.2,19,496/-. According to the actual payment terms as recommended by the tender committee and approved the Chairman, Cil, 30% of the billed amount i.e. Rs.65,848/- was payable. But, on the strength of such defective work order as aforesaid issued by the petitioner and subsequent processing of the said bill by his immediate subordinate officer e.g. Shri Rajpal Yadav, Personnel Manager and by certifying the bill for payment by Shri D.P. Roy (Petitioner), undue financial gain was extended to the party since the party was paid in full amount of Rs.2,19,496/- instead of 30% of the billed amount i.e. Rs.65,848/-. Thus, an excess payment of Rs.1,53,648/- was unduly paid to the party, causing a resultant financial loss to the company. Thus, in all the company was put causing a resultant financial loss of Rs.2,73,424/- by the acts as alleged at Article-VI of the charge read with Article-V of the charge levelled against the petitioner as per the memorandum of disciplinary proceeding as aforesaid." 5. IN course of hearing it has been submitted on behalf of the petitioner that allegations made against him are without any basis and the said firm was appointed with the approval of the Chairman-cum-Managing Director of the organisation upon compliance of due procedure. But in this proceeding, I do not think I ought to get into that part of the controversy as the petitioner has come at a stage when the disciplinary proceeding had just started and he had given reply to the memorandum of charges. If I find that the disciplinary proceeding can continue as per law, then the petitioner would have to answer these charges by participating in the proceeding. I shall confine my examination in this writ petition on the question as to whether the proceeding against the writ petitioner can continue or not after his retirement. Secondly, the legality of withholding retiral benefit would also have to be addressed to. 6. THE said Rules provide for continuation of disciplinary proceeding against an employee after his retirement if the proceeding commences before retirement of the concerned employee. Secondly, the legality of withholding retiral benefit would also have to be addressed to. 6. THE said Rules provide for continuation of disciplinary proceeding against an employee after his retirement if the proceeding commences before retirement of the concerned employee. Clause 34.2 of the said Rule provides:- "34.2 Disciplinary proceeding, if instituted while the employee was in service whether before his retirement or during his re-employment shall, after the final retirement of the employee, be deemed to be proceeding and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service." In the case of the petitioner, there is no specific order of his reemployment after his retirement. His retirement on the date on which he was to superannuate under normal circumstances has not been disputed by the respondents. In paragraph 15 of the affidavit-in-opposition, it has been stated that the petitioner retired from service on attaining the age of superannuation on 31 March 2008. In this paragraph, it has been inter alia stated:- "In this connection, it is stated that as per extent rule of Coal India Limited, the petitioner retired from service on attaining the age of superannuation on 31 March, 2008 as is common for the employees of CIL and as such there is neither the question of extension of service nor a question of allowing the petitioner to superannuate by any special order by the respondent. Such averment has been made by the petitioner in a manner to camouflage the provision of the company. Save as aforesaid and save what appears from records, all other allegations are denied and disputed." 7. SPECIFIC stand of the respondents in this matter thus is that the disciplinary proceeding could continue by the deeming provision comprised in the said clause (i.e. Clause 34.2). This is the main submission of Mr. Mukhopadhyay, learned Senior Counsel appearing for the respondents. 8. I shall examine first the question as to whether any case has been made out on behalf of the respondents in the charge sheet that there is any allegation against the petitioner for causing any pecuniary loss to the employer on account of his alleged misconduct or not. If the answer to this question is affirmative, then the writ petition ought to fail straightway. If the answer to this question is affirmative, then the writ petition ought to fail straightway. On behalf of the respondents, allegation of pecuniary loss is sought to be justified on the basis of Articles V and VI of the memorandum of charges. The former charge relates to issue of defective work order by not incorporating a clause relating to part payment not exceeding 30% after completing each stage of work by the agency. It has been alleged that the Chairman had approved such arrangement of payment on completion of work in three stages, but this Clause was omitted from the work order. The next charge is that the said agency had submitted bills pertaining to work at first two stages for Rs. 1,71,108/- and Rs.2,19,496/- respectively and these bills were certified for full payment instead of 30% of the amount claimed. It has been specified in the memorandum of charges that the petitioner had got these bills certified for full payment through another officer. Proceeding has been initiated against the other officer also. 9. IN the memorandum of charges there is no specific allegation of causing any pecuniary loss to the employer. Allegation is of favouring an agency in the process of selection and clearance of bills raised by such agency. The allegation of financial loss to the company has been introduced in the affidavit in opposition. The basis of such allegation is that such full payment caused financial loss to the company. The respondent's contention is that since the agency at that point of time was entitled to 30% of the total bill value, full payment caused to them loss of Rs2,73,424/-. Such loss appears to have been computed as the differential between their alleged entitlement at that stage computed at the rate of 30% of the bill value and the amount actually paid to them, being the total amount claimed. 10. I am of the opinion that the respondent cannot be permitted to take this stand at this stage of the proceeding. Causing pecuniary loss to the employer is a specific wrong or offence in service jurisprudence and if allegation is made against an employee on that count, then such a charge ought to be specifically spelt out in the memorandum of charges. Causing pecuniary loss to the employer is a specific wrong or offence in service jurisprudence and if allegation is made against an employee on that count, then such a charge ought to be specifically spelt out in the memorandum of charges. Showing favour to a private agency which may lead to their financial gain can constitute misconduct as per service rules of an organization but showing such favour cannot automatically lead to an inference that financial loss has been caused to the employer because of such undue favour being shown to a firm in course of their commercial dealing with the employer. The nature of the charges brought against the petitioner do not automatically lead to the conclusion that the employer has suffered any financial loss. While testing the scope of a memorandum of charges, I will have to confine my examination to the Articles of charges as framed. The employer cannot be permitted to explain shortcoming in the memorandum of charges by way of affidavit after such defect or shortcoming is pointed out in a proceeding and quashing of the disciplinary proceeding is sought for on the basis of such shortcoming. Such a course would be impermissible in view of the ratio of the judgement of the Supreme Court in the case of Mohinder Singh Gill Vs. Chief Election Commissioner ( AIR 1978 SC 851 ). Moreover, this is not a case where the memorandum of charges was hurriedly prepared. As it appears from the affidavit of the respondents, multiple agencies were consulted before the memorandum of charges was issued. The Central Vigilance Commission had examined the complaint and advised initiation of major penalty proceeding against the petitioner. The Central Bureau of Investigation had registered a preliminary enquiry case against the petitioner, though in his reply affidavit the petitioner has stated that he has no knowledge of such enquiry and no regular case has been registered against him. The vigilance organization of the CIL themselves had examined the matter earlier and then the case was referred to the disciplinary authority and the views of the disciplinary authority along with the report of the vigilance department was forwarded to the Central Vigilance Commission. The advice of the Commission came thereafter. The Chairman of CIL, being the disciplinary authority thereafter again considered the matter and approved the proposal for issue of charge sheet. The advice of the Commission came thereafter. The Chairman of CIL, being the disciplinary authority thereafter again considered the matter and approved the proposal for issue of charge sheet. In spite of such multi-layered multi-agency enquiry, the charge sheet did not contain any allegation of causing financial loss to the employer, being CIL in this case. It is also the case of the petitioner that the Central Vigilance Commission had also advised quashing of the promotion process, in respect of which the said firm was engaged, but the said promotion process was given effect to. This has been pleaded in paragraph 6 of the affidavit-in-reply filed on behalf of the petitioner. 11. NOW in the absence of any charge of causing financial loss, can the disciplinary proceeding continue against the writ petitioner? The respondents' case is that in view of specific provision of Clause 34.2 of the said Rules, the proceeding could continue. In my opinion, though it has not been specified in the said Rule that a disciplinary proceeding against a retired employee could continue after his retirement only if there are charges of causing pecuniary loss to the company, continuing the proceeding against the writ petitioner would be a futile exercise in the facts of the present case. Power of the disciplinary authority to impose penalty in a departmental proceeding would be confined to the penalties stipulated in the service regulation of the concerned organisation. In this case, the service regulations stipulates major penalties in the form of reduction to a lower grade or post or stage in a time scale, compulsory retirement, removal from service and dismissal of an employee. Minor penalties include censure, withholding of increment, withholding of promotion and recovery from pay any financial loss caused to the company by negligence or breach of orders or trust. There is dispute as to whether recovery can be made from gratuity on this ground as on behalf of the petitioner it has been submitted that Rule 27.1(i)(d) of the said Rules, which provides for such recovery has been amended and what has been stipulated after amendment is that recovery from pay would only be permissible in such a situation. A copy of the office memorandum dated 23 November 2005 has been annexed to the writ petition and marked "P3" in this regard. A copy of the office memorandum dated 23 November 2005 has been annexed to the writ petition and marked "P3" in this regard. But I do not think it is necessary to examine as to whether gratuity is recoverable or not because I have already come to a finding in this case that there is no charge of causing any pecuniary loss to the company by the writ petitioner. 12. SINCE the petitioner has retired, none of the penalties specified in the service regulation would be capable of being imposed against him as the employer employee relation has ceased to exist between the writ petitioner and the CIL before conclusion of the proceeding. The object of holding a disciplinary proceeding is to impose penalty on a delinquent employee in relation to his service if he is found guilty of committing any misconduct. This very Rule (Clause 34.2) was examined by the Supreme Court in the case of Jaswant Singh Gill (supra) and it was held, dealing with the question of recovery from gratuity of a retired employee :- "The provisions of the Act, therefore, must prevail over the Rules. Rule 27 of the Rules provides for recovery from gratuity only to the extent of loss caused to the Company by negligence or breach or orders or trust. Penalties, however, must be imposed so long an employee remains in service. Even if a disciplinary proceeding was initiated prior to the attaining of the age of superannuation, in the event the employee retires from service, the question of imposing a major penalty by removal or dismissal from service would not arise. Rule 34.2 no doubt provides for continuation of a disciplinary proceeding despite retirement of employee if the same was initiated before his retirement but the same would not mean that although he was permitted to retire and his service had not been extended for the said purpose, a major penalty in terms of Rule 27 can be imposed." Dealing with a similar question, in relation to All India Services (Discipline and Appeal) Rules, 1969, a Division Bench of this Court in the case of Kamal Kr. Majumder (supra) took the same view. In these circumstances, in my opinion, there can be no ground or basis in continuing with the proceeding against the writ petitioner. Majumder (supra) took the same view. In these circumstances, in my opinion, there can be no ground or basis in continuing with the proceeding against the writ petitioner. Such enquiry would be a futile exercise, and such enquiry, if permitted to continue, would constitute unreasonable and arbitrary action on the part of the respondents. 13. AS I am of the opinion that the proceeding against the petitioner ought not to continue, I am not entering into the controversy as to whether it was permissible on the part of Coal India Limited to withhold gratuity of the petitioner. I quash the impugned proceeding against the writ petitioner initiated by the memorandum dated 31 march 2008 bearing no. CIL/VIG/05245/VD- 69(CVC)/1934, a copy of which has been made Annexure "P1" to the writ petition. The writ petitioner shall be entitled to all retiral benefits as per law. 14. THE writ petition is allowed in the above terms. There shall however be no order as to costs. 15. URGENT Photostat certified copy of this judgment be supplied to the learned Advocates for the parties with necessary formalities as expeditiously as possible.