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2015 DIGILAW 29 (CAL)

Dipak Kumar Das v. Food Corporation of India

2015-01-15

SANJIB BANERJEE

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JUDGMENT : Sanjib Banerjee, J. 1. The petitioner, now a retired employee of the Food Corporation of India, assails a minor penalty imposed on him without availing of the appellate remedy on the ground that the disciplinary proceedings were without jurisdiction and, in any event, the order of punishment is bereft of reasons. 2. A glance at the order impugned dated November 05, 2014 would render it susceptible to summary annulment, but the other ground canvassed by the petitioner has also to be taken note of. 3. Penalties can be imposed for misconduct under the Food Corporation of India (Staff) Regulations, 1971. Regulation 54 provides for two classes of punishment: major and minor penalties. Regulation 58 prescribes the procedure to be adopted in respect of misconduct for which a major penalty is proposed to be imposed. Regulation 59 deals with the steps to be taken by the disciplinary authority, including if the disciplinary authority is the enquiry officer. Regulation 60 provides for the procedure to be adopted in respect of minor penalties. Regulation 60-A recognises that departmental proceedings instituted against a retired employee prior to his retirement would continue unaffected by his retirement. Clause (ii) of such provision mandates that the disciplinary proceedings “should” be completed within a year of the employee’s retirement, “subject to Court Orders, if any.” 4. The petitioner was due to retire on November 30, 2013 and claims that only four days prior thereto the petitioner received a charge-sheet of November 23, 2013 alleging that the petitioner had caused loss to the Food Corporation of India in not taking appropriate steps to guard stocks of food grains at Krishnagar. The petitioner was afforded an opportunity of furnishing a reply. Following the petitioner’s response, the disciplinary authority took up the matter and by an unreasoned order of November 05, 2014, found the petitioner guilty of misconduct and imposed a penalty of Rs. 15 lakh which the disciplinary authority regarded as a “token recovery”. 5. The petitioner first questions the validity of the disciplinary proceedings on the ground that the procedural due process under Regulation 58 was not followed. The petitioner also seeks to suggest that in view of Regulation 60-A (iii), the penalty imposed on the petitioner is impermissible since the petitioner has been paid his gratuity and other sums due upon his retirement and only a sum of about Rs. The petitioner also seeks to suggest that in view of Regulation 60-A (iii), the penalty imposed on the petitioner is impermissible since the petitioner has been paid his gratuity and other sums due upon his retirement and only a sum of about Rs. 4 lakh has been withheld in respect of the leave salary due to the petitioner. 6. There is a clear distinction in the said Regulations as to the procedure that may be adopted in course of disciplinary proceedings for minor penalties and for major penalties. The elaborate procedure under Regulation 58 is almost indispensable in respect of misconduct for which a major penalty is proposed to be imposed. The exceptional case may be upon the categorical admission of the charge by the concerned employee. However, Regulation 60 envisages a summary procedure in case the punishment proposed is a minor penalty. The relevant provisions are set out: “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 inquiry 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 (a) 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-regulation (3) to (23) of Regulation 58 before making any order imposing on the employee any such penalty. (3) The record of the proceedings in such cases shall include: (i) a copy of the intimation to the employee of the proposal to take action against him, (ii) a copy of the statement of imputations of misconduct or misbehaviour delivered to him; (iii) his representation, if any; (iv) the evidence produced during the inquiry; (v) the findings on each imputation of misconduct or misbehaviour; (vi) the orders on the case together with the reasons therefore. 7. “60-A-Procedure for disciplinary proceedings after retirement: (i) Any disciplinary proceeding, if instituted by issue of charge-sheet while the employee was in service, whether before his retirement or during his reemployment, shall, after the retirement of the employee, be continued and concluded by the authority by which it was commenced, in the same manner, as if the employee had continued in service. (ii) Such proceeding after retirement should be completed expeditiously and within twelve months from the date of delivery of charge sheet to the charged official, subject to Court Orders, if any. (ii) Such proceeding after retirement should be completed expeditiously and within twelve months from the date of delivery of charge sheet to the charged official, subject to Court Orders, if any. (iii) During the pendency of the disciplinary proceedings, the disciplinary authority may withhold payment of gratuity for ordering the recovery from gratuity of the whole or part of any pecuniary loss caused to the Corporation, if the employee is found in a disciplinary proceedings or judicial proceedings to have been guilty of offence or misconduct as mentioned in the relevant Sections of the Payment of the Gratuity Act, 1972 (39 of 1972) or to have caused pecuniary loss to the Corporation by misconduct or negligence during his service, including service rendered on deputation or on re-employment after retirement, provided that the provisions of relevant Sections of the Payment of Gratuity Act, 1972 shall be kept in view in the event of delayed payment, in case, the employee is fully exonerated.” 8. It is not as if Regulation 60 provides for summary procedure in every case where a minor penalty is proposed to be imposed. Indeed, if the provision did not make any distinction between the different kinds of minor penalties which could be levied, that would have made it arbitrary. Clause (1) of Regulation 60 envisages four stages in its four sub-clauses. An employee is first required to be charged and the imputations ought to be supplied for eliciting a response. The disciplinary authority is then called upon to decide whether, in view of the reply furnished by the employee, the protracted procedure under Regulation 58 ought to be followed or summary procedure may be resorted to. If the more elaborate procedure is not required to be followed, the next steps are as envisaged in sub-clauses (c) and (d). 9. It is also necessary to appreciate the caveat that appears in Regulation 60 (1) in its opening limb. The reference therein to Regulation 59 (3) of the said Regulations implies that the procedure under Regulation 60 would not have to be followed in a case governed by Regulation 59 (3). Regulation 59 (3) permits the disciplinary authority to impose a minor penalty for perceived misconduct in respect of disciplinary proceedings that had been initiated with the proposal of imposing a major penalty. Regulation 59 (3) permits the disciplinary authority to impose a minor penalty for perceived misconduct in respect of disciplinary proceedings that had been initiated with the proposal of imposing a major penalty. The rationale for making the exception in case of a situation covered by Regulation 59 (3) is that the entire process is not needlessly required to be repeated under Regulation 60 if the disciplinary authority feels that the proposed major penalty for the perceived misconduct should be reduced to a minor penalty. 10. There is a further safeguard in Regulation 60 in its second clause. If, upon the receipt of a reply from the employee, it is proposed to withhold any increment of pay that would adversely affect the retirement benefits payable to the employee, the provision mandates that “an inquiry shall be held” in the manner recognised in Regulation 58 of the said Regulations. 11. There is, thus, a limited window available for summary procedure to be resorted to in respect of certain classes of minor punishments that may be imposed. There appears to be an anomaly in the Regulations in the minor penalty of a monetary fine under Regulation 54 (iii) not indicating a cap; such provision does not make a distinction between a fine of Re 1 and one of Rs. 1 crore. 12. In its ordinary meaning, Regulation 60 does not enjoin a written opinion to be rendered by the disciplinary authority in respect of the matters covered by clause (1) (b) thereof. The provision in its plain sense implies that in certain cases, if the disciplinary authority is satisfied that it is necessary upon receipt of the employee’s response, the more elaborate procedure under Regulation 58 may also be followed even when a minor punishment is proposed to be imposed. Regulation 60 (1) (b) as framed does not imply that any written opinion in such regard has to be rendered, whether to conduct a protracted inquiry or to follow a summary procedure in course of the disciplinary proceedings where a minor penalty is proposed to be imposed. 13. Regulation 60 (1) (b) as framed does not imply that any written opinion in such regard has to be rendered, whether to conduct a protracted inquiry or to follow a summary procedure in course of the disciplinary proceedings where a minor penalty is proposed to be imposed. 13. The issue came up for consideration in the judgment reported at (2001) 1 SCC 165 (Food Corporation of India v. A. Prahalada Rao) where it was observed that the mere denial by the employee of the charges levelled would not imply that the more elaborate procedure under Regulation 58 had to be followed in a case where a minor penalty was proposed against a perceived delinquent. This judgment was noticed in a recent decision of the Supreme Court rendered on May 21, 2014 in Civil Appeal Nos.7201-7208 (Food Corporation of India v. Sarat Chandra Goswami). Such recent decision has been cited on behalf of the petitioner for the view expressed therein at paragraph 10 of the report that once it is recognised that there has to be a formation of an opinion under Regulation 60 (1) (b) of the said Regulations upon the receipt of the employee’s response to the charges levelled against him, such opinion must be in writing. The relevant passage from paragraph 10 of the report may be seen: “Once it is held that there has to be formation of opinion and such an opinion is assailable in a legal forum, we are of the view that the said opinion has to be founded on certain objective criteria. It must reflect some reason. It can neither be capricious or fanciful but demonstrative of application of mind. Therefore, it has to be in writing. …” 14. In view of the Supreme Court judgment in Sarat Chandra Goswami and the failure in this case of the disciplinary authority in recording a written opinion as to whether the protracted procedure under Regulation 58 was warranted, such procedure has to be found to be faulty. As a consequence, the product of such faulty procedure - the order impugned dated November 05, 2014 - has to be set aside on the first ground urged by the petitioner even though it also fails the test in not containing any reasons in support thereof. 15. As a consequence, the product of such faulty procedure - the order impugned dated November 05, 2014 - has to be set aside on the first ground urged by the petitioner even though it also fails the test in not containing any reasons in support thereof. 15. As a consequence of the order of punishment being required to be set aside, the departmental proceedings are set back to the time immediately after the petitioner’s reply to the charge-sheet. The disciplinary authority should now apply its mind and record a written opinion as to whether the protracted procedure under Regulation 58 should be followed in this case or the charges against the petitioner should be decided in a summary manner. The objective reasons in support of the opinion should be reflected, though the opinion need not be communicated to the petitioner. Upon such opinion being formed, the petitioner will be informed and the departmental proceedings will continue thereafter in accordance with law and culminate in a prompt decision to be rendered by the disciplinary authority. 16. In forming the opinion as to whether the procedure should be under Regulation 58 or in a summary manner, the authority will keep in mind the huge penalty imposed of Rs.15 lakh in the order impugned. 17. An issue has been raised on behalf of the petitioner that since the petitioner has now retired for more than a year, the departmental proceedings can no longer be continued in view of Clause (ii) of Regulation 60-A of the said Regulations. Such argument is of no merit. The relevant clause is directory in nature and it is desirable that disciplinary proceedings against a retired employee should be concluded as expeditiously as possible. Further, the relevant provision makes room for orders of Court. 18. The one last question that needs to be addressed is as to whether no penalty other than reduction from the amount due to a retired employee on account of gratuity can be made while inflicting a punishment. The argument has been made on behalf of the petitioner on the basis of Regulation 60-A (iii) of the said Regulations. 19. Merely because one form of punishment has been recognised in the relevant provision does not imply that other possible forms of penalties cannot be imposed on a retired employee against whom misconduct is proven. The argument has been made on behalf of the petitioner on the basis of Regulation 60-A (iii) of the said Regulations. 19. Merely because one form of punishment has been recognised in the relevant provision does not imply that other possible forms of penalties cannot be imposed on a retired employee against whom misconduct is proven. Though many of the penalties usually available for being imposed on employees continuing in office may not be possible to be awarded against a delinquent who has retired from service, it cannot be said, on the basis of Regulation 60-A (iii) of the said Regulations, that if money due to the retired delinquent is available with the employer, a monetary penalty that may be imposed against the delinquent cannot be realised from the money due. In view of the provision of the Payment of Gratuity Act, 1971, it was necessary for a specific provision to be incorporated in the service regulations so that the gratuity due may be withheld during the continuation of the disciplinary proceedings against a retired employee and may be adjusted against any monetary penalty imposed against a delinquent after his retirement. But the effect of the relevant provision is not that no other mode of recovery of any monetary penalty imposed on a retired employee found guilty of misconduct can be possible. 20. W.P. No. 33344 (W) of 2014 is allowed by setting aside the order impugned dated November 5, 2014 and by setting back the disciplinary proceedings to the stage immediately upon the petitioner’s response having been issued to the charge-sheet. The proceedings will now commence immediately with the disciplinary authority forming an opinion in terms of Regulation 60 (1)(b) of the said Regulations, whereupon a notice will be issued to the petitioner as to the future course of the proceedings. The disciplinary proceedings should be completed within a period of six months from date and the petitioner will not be entitled to any further documents or to delay the proceedings on the ground of lack of documents or otherwise seek any adjournment. 21. Nothing in this order will prevent the respondents from dropping the disciplinary proceedings altogether, but if the proceedings are continued and not finished within the time indicated, they will lapse and the petitioner will be under no liability therefor. 22. There will be no order as to costs. 23. 21. Nothing in this order will prevent the respondents from dropping the disciplinary proceedings altogether, but if the proceedings are continued and not finished within the time indicated, they will lapse and the petitioner will be under no liability therefor. 22. There will be no order as to costs. 23. Certified website copies of this order, if applied for, be urgently made available to the parties, subject to compliance with all requisite formalities.