Research › Search › Judgment

Gauhati High Court · body

2015 DIGILAW 922 (GAU)

Prafulla Chandra Panda v. Union of India

2015-07-28

HRISHIKESH ROY

body2015
JUDGEMENT : 1. Heard Mr. A. Bhattacharyya, the learned counsel appearing for the petitioner. The respondent North Eastern Regional Agricultural Marketing Corporation Ltd. (in short ‘the NERAMAC’) and its officials are represented by Advocate Mr. N. Borah. The Union of India is a formal party and on behalf of the respondent No.1, the learned Central Govt. counsel Mr. M. Phukan appears. 2. The petitioner has recently retired from the NERAMAC and this matter pertains to disciplinary proceeding drawn up against him while he served as the Senior Zonal Manager. The NERAMAC is in the commercial field of procurement and marketing of horticulture products, collected from the North Eastern Region. 3. Here the disciplinary proceeding was initiated with the charge memo dated 30.8.2005 (Annedxure-1), where it was alleged that the petitioner extended cash advance to four parties amounting to Rs.11,48,570/- and because no security was obtained when the advance was given, Rs.4,12,205/- of the advanced amount could not be recovered and thus wrongful loss was caused to the NERAMAC. It was thus alleged that the delinquent failed to maintain absolute integrity, devotion to duty and indulged in conduct unbecoming of public servant, violating Sub-Clause (i), (ii) & (iii) of Rule 4 of the NERAMAC Employees Conduct, Discipline and Appeal Rules, 1985 (hereinafter referred to as ‘the NERAMAC Rules’). 4. The statement of imputation in support of the charge memo was furnished in the enclosed annexure and the same being relevant is extracted herein below for ready perusal:- “Whereas Sri Prafulla Chandra Panda while posted and functioning as Zonal Manager, Assam and Minipur, NERAMAC Ltd., Guwahati during the period 1999-2001 failed to maintain absolute integrity and utmost devotion to duty and acted in a manner unbecoming of a public servant in the context of the following facts and circumstances. 1. It is alleged that Shri P.C. Panda was posted and functioning as Zonal Manager, in charge of Assam and Minipur in the NERAMAC Ltd., Guwahati during the period 1999-2001 and as the then Zonal Manager, it was his duty, apart from others, to appoint Commission Agent for procurement of Agro-horticultural products and other allied products and marketing thereof for and on behalf of the Corporation and payment of transportation charges provided that the same is economically viable after consultation with the higher authority. 2. 2. It is further alleged that as per established procedure, while giving cash advances to various persons for procurement and marketing of the said products, it was required on the party of Shri P.C. Panda to take care of the financial interest of the Corporation by taking adequate security and ensure that proper agreement is executed by such parties with the Corporation as per the minutes of 49th Meeting of Board of Directors of NERAMAC Ltd., Guwahati. 3. It is alleged that as against the above stipulations, Shri P.C. Panda made advances to the following parties in total violation of the said established procedures and without any agreement with the parties specifying the terms and conditions of supply of Agro-horticultural products and modalities of advances:- 3(i) A cash advance of Rs.4,86,500/- was given to Shri Royal Ahmed resident of Kumarpara, S.C. Bylane, Guwahati by Shri P.C. Panda on four occasion for supply of broom during the period March to May 2001 without taking any security and such, after Shri Royal Ahmed supplied broom worth Rs.4,40,000/- only, NERAMAC could not realize the balance amount of Rs.42,000/- till date due to absence of any security arrangement by Shri Panda at the time of making the advance. 3(ii) Another cash advance of Rs.95,000/- was given to Shri G.K. Das of Guwahati Commerce College Stall, Guwahati by Shri Panda during November and December 2000 for supply of Ginger without any security and after adjusting a sum of Rs.24,539/- towards transport charges against hiring of his vehicle, Shri G.K. Das repaid Rs.8000/- by cash and the balance advanced amount of Rs.62,461/- is still lying outstanding against the said total advance, which could not be recovered by NERAMAC till date as no security whatsoever was obtained at the time of making the advance. 3(iii) Shri Panda extended another cash advance of Rs.2,00,000/- to one Shri R.K. Barman of Md. Tayebullah Road, Dighalipukhuri East, Guwahati during December 2002 for supply of ginger without taking any security and as such, after Shri R.K. Barman supplied ginger worth Rs.1,01,976/- only, NERAMAC could not realize the balance amount of Rs.98,024/- till date due to absence of any security arrangement by Shri Panda at the time of making the advance. Tayebullah Road, Dighalipukhuri East, Guwahati during December 2002 for supply of ginger without taking any security and as such, after Shri R.K. Barman supplied ginger worth Rs.1,01,976/- only, NERAMAC could not realize the balance amount of Rs.98,024/- till date due to absence of any security arrangement by Shri Panda at the time of making the advance. 3(iv) Shri Panda extended another cash advance of Rs.3,67,070/- to one Shri Gunjan Sarma, a commission agent of NERAMAC in April and May 2001 as working capital and also for supply of Agro-horticultural products, without taking any security and though Shri Gunjan Sarma refunded Rs.1,57,350/- only, NERAMAC could not realize the balance advanced amount of Rs.2,09,720/- till date as no security was obtained at the time of making the advance by Shri Panda. Thus, Shri P.C. Panda, the then Zonal Manager of NERAMAC, Guwahati caused a huge loss to the Corporation to the tune of Rs.4,12,205/- in respect of the above four instances which could not be recovered by NERAMAC till date. Therefore, by the above acts of omissions and commissions, Sri Prafulla Chandra Panda contravened the provisions of Rule 4(1)(i), (ii) & (iii) of the NERAMAC Employees Conduct, Discipline and Appeal Rules, 1985.” 5.1. The delinquent gave his reply to the charges on 9.9.2005 (Annexure-2), where he tried to justify the cash advance to the suppliers. The first recipient Royal Ahmed was projected to be a reliable and trusted supplier of broom, mustard oil, garlic, etc. Similarly the 2nd party G.K. Das was projected as a franchisee of NERAMAC whose vehicle was engaged by the Corporation. The 3rd party R.K. Barman was a bulk supplier to NERAMAC and he was expected to generate further business of ginger and broom for the Corporation. The 4th party Gunjan Sarma was a commission agent and he was an existing supplier of various articles including black pepper. Additionally the NERAMAC’s Camp office at Phulbari was running on the accommodation provided by this supplier. Thus the reliability of the recipients and their long association with the organization was the explanation furnished for the cash advance. 5.2. The 4th party Gunjan Sarma was a commission agent and he was an existing supplier of various articles including black pepper. Additionally the NERAMAC’s Camp office at Phulbari was running on the accommodation provided by this supplier. Thus the reliability of the recipients and their long association with the organization was the explanation furnished for the cash advance. 5.2. Moreover as the delinquent was suddenly transferred to Silchar and his successor failed to collect the outstanding dues from the parties and as the sick Corporation had given business targets to be met by the delinquent during the relevant period, the petitioner contended that he bonafide tried to augment the commercial interest of NERAMAC and never acted in violation of the Rule 4 of the NERAMAC Rules. 6. But rejecting the explanation furnished by the delinquent, the disciplinary authority passed the impugned order on 2.12.2005 (Annexure-3), whereby the delinquent was found to have violated the provisions of Rule 4 of the NERAMAC Rules and accordingly the minor penalty of recovery of Rs.3,18,364/- was directed, by invoking Rule 23(d) of the NERAMAC Rules. Since the Appeal and the Review Petition filed by the delinquent were dismissed and the penalty order was upheld, Rs.4050/- P.M. from the delinquent’s salary was ordered to be deducted on 7.2.2008 (Annexure-8). 7. The petitioner submits that the disciplinary authority failed to consider the logical explanation given by the delinquent for the cash advance and accordingly it is argued that penalty was imposed in breach of the procedure, prescribed by Rule 27(1) of the NERAMAC Rules. 8.1. The learned counsel Mr. A. Bhattacharyya contends that NERAMAC is a commercial organization and Senior Managers are expected to achieve the specified business targets to be met and since cash advance was given to existing suppliers to generate better business, the petitioner can’t be said to have acted in derogation of the interest of the NERAMAC. 8.2. Denying that the delinquent’s conduct has led to financial loss, Mr. Bhattacharyya argues that only because the successors failed to take steps to recover the money from the regular suppliers, some balance amount was due and to realize this money, the NERAMAC filed cases in the Civil Courts and accordingly it is argued that the order for recovery from the salary of the petitioner is unjustified, since the petitioner was never charged with misappropriation or defalcation. 9.1. On the other hand, Mr. 9.1. On the other hand, Mr. N. Borah, the learned counsel representing the employer submits that while ordering the recovery, the Executive Director opined that the delinquent failed to give satisfactory explanation for the cash advance and on this basis, the counsel argues that due consideration was made under Rule 27 of the NERAMAC Rules. 9.2. The respondents next contend that NERAMAC does not have any policy of granting cash advance to the suppliers and thus it is argued that the petitioner acted irresponsibly by advancing cash to the four parties which resulted in wrongful loss for NERAMAC to the extent of over Rs.3 lakhs. 10. Under the NERAMAC Rules the minor penalty of recovery can be ordered under Rule 23 and notwithstanding anything specified in this Rule, the disciplinary authority may order for recovery under the summary procedure prescribed by Rule 27, without holding a regular inquiry prescribed by Rule 30. However when the disciplinary authority decides to waive the inquiry, reason for dispensing with inquiry must be recorded under Sub-Rule (ii) of Rule 30. In this case, the impugned penalty was inflicted without any inquiry by taking recourse to the summary procedure under Rule 27 and under this procedure, the disciplinary authority was obliged to carefully assess the defence statement submitted by the delinquent, before imposing any penalty. 11. As earlier noted, the delinquent gave specific replies to each charge in the defence statement and also explained the circumstance under which cash advance was given to the four parties. The lapses of the successors in failing to partially recover the advanced money were also indicated in the reply. The legal steps taken by the organization to recover the outstanding amount was referred by the delinquent. The obligation to meet the business target was cited as the reason for the extra effort made by the delinquent to garner more business for NERAMAC and it was projected that all the steps were bonafide taken to augment the business interest of the commercial organization. But it appears from the impugned order of 2.12.2005 (Annexure-3) that the disciplinary authority failed to appropriately assess the defence statement and what is discernable is non application of mind to the specific explanations. Thus it is a clear case of infringement of the procedure laid down by Rule 27 of the NERAMAC Rules, while imposing penalty under the summary procedure. 12. Thus it is a clear case of infringement of the procedure laid down by Rule 27 of the NERAMAC Rules, while imposing penalty under the summary procedure. 12. In paragraph 14 of the Petition, the petitioner has mentioned the cases filed in the Civil Courts to recover the outstanding from the suppliers and therefore on 9.6.2015 the respondents’ lawyer was directed to obtain information on the status of those cases filed by the NERAMAC. According to instruction received, Mr. N. Borah, the learned counsel informs that the suits were dismissed for default and therefore he submits that the legal option is no more available to NERAMAC. 13. Considering the fact that cash advance was given to trusted suppliers with long association, full recovery was certainly within the realm of possibility. However efforts of the successors could be wanting after the delinquent was transferred to Silchar. Moreover the fact that the suits filed by the NERAMAC were dismissed for default reflects on the organizational apathy. In such circumstances, to make the delinquent exclusively responsible for the unrecovered amount can’t be considered reasonable, particularly when, the delinquent has not been charged with misappropriation or defalcation, for his personal gain. 14. One must also be mindful that NERAMAC is a business undertaking and thus earnest efforts are required to be taken to advance the business interest of the organization and when commercial potentials are noticed, some quick business decisions will have to be taken, particularly when targets are given to the Senior Manager. 15. In their counter affidavit the respondents admit that the practice of sale on credit is prevalent in NERAMAC and thus advance credit can’t be a totally ruled out for the commercial organization. In this case, the delinquent noticed business potential from the suppliers and that is how cash advance were given to those who were closely related to the NERAMAC and in fact most of the advanced amount was accounted for which shows that a bonafide business decision was taken by the Senior Manager to augment the business of the organization. 16. That apart, since organizational lapses are also discernable, the responsibility for non-recovery of the advanced amount can’t be thrust only on the shoulder of the delinquent, as his successors and those who were responsible for pursuing the Court cases are equally responsible for the alleged loss caused to the NERAMAC. 17. 16. That apart, since organizational lapses are also discernable, the responsibility for non-recovery of the advanced amount can’t be thrust only on the shoulder of the delinquent, as his successors and those who were responsible for pursuing the Court cases are equally responsible for the alleged loss caused to the NERAMAC. 17. For the foregoing reasons and discussion, I hold that the penalty inflicted on the petitioner is not consistent with the procedure prescribed by Rule 27 of the NERAMAC Rules. Moreover since a business decision was taken for bonafide reason, there is no justification for ordering recovery from the petitioner’s salary, who has already retired from service. Consequently the impugned order dated 2.12.2005 (Annexure-3) of the Executive Director, NERAMAC and the consequential direction for recovery ordered on 7.2.2008 (Annexure-8) are held to be legally unsustainable and the same are quashed. The Writ Petition is thus allowed without any order of cost.