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2019 DIGILAW 241 (GUJ)

Y. v. Shah VS State of Gujarat

2019-03-18

A.S.SUPEHIA

body2019
ORDER : A.S. Supehia, J. 1. The present writ petition has been filed challenging the order dated 30.08.2001 inflicting the punishment of fine of Rs. 3,75,000/- on the petitioner under Section 40(A)(2) of the GIDC (Staff) Regulations, 1963 and also the order dated 31.08.2004 rejecting his appeal of the petitioner. 2. The petitioner was served with a charge-sheet on 15.04.1997 inter alia alleging that due to his negligence in constructing Block No. 8, which resulted into its collapse and because of collapse of the said block, financial loss was caused to the Gujarat Industrial Development Corporation ('the Corporation' for short). There were two charges levelled against the petitioner in this regard, wherein the charge No. 2 pertains to lack of attention pertaining to his work by the petitioner as an Executive Engineer and thereby, he was negligent in his duty. After holding a departmental inquiry, the Inquiry Officer vide its report dated 14.08.2000, proved the charges against the petitioner. 3. At the outset, learned advocate Mr. Pranav G. Desai appearing for the petitioner has submitted that the petitioner has retired from service on 31.08.2000 on attaining the age of superannuation, and the impugned order is passed after the superannuation of the petitioner recovering fine from the retirement benefits which is illegal. He has invited the attention of this Court to the communication dated 11.08.1997, wherein the petitioner has specifically made a grievance against the appointment of Inquiry Officer Shri K.B. Bhagat since he was the approving authority of the design of Block No. 8, which ultimately had collapsed. 3.1. Learned advocate Mr. Desai for the petitioner has further submitted mat the petitioner had requested vide letters dated 30.09.1997 as well as 09.06.1998 to the disciplinary proceedings as well as to the Inquiry Officer to provide necessary documents on which the reliance was placed, however, the same was not provided till the departmental inquiry as well as the inquiry proceedings were over, which also indicates bias on behalf of the Inquiry Officer. He as submitted that non-supply of such copies to the petitioner has caused great prejudice since he was unable to put forth his defence in an effective manner as all the measurements and designs as well as the material which were used in the construction were mentioned therein. 3.2. In support of his submissions, learned advocate Mr. He as submitted that non-supply of such copies to the petitioner has caused great prejudice since he was unable to put forth his defence in an effective manner as all the measurements and designs as well as the material which were used in the construction were mentioned therein. 3.2. In support of his submissions, learned advocate Mr. Desai has placed reliance on the judgment of the Apex Court in the case of Union of India & Ors. v. Ram Lakhan Sharma, AIR 2018 SC 4860 . He has also submitted that in various judgments the Apex Court has held that the documents on which the reliance is placed, if are not supplied to the delinquent, then the inquiry proceedings are vitiated. Thus, he has submitted that the impugned orders are required to be set aside. 4. Learned advocate Mr. Uday Joshi appearing for the respondent has submitted that the appointment of Shri K.B. Bhagat as an Inquiry Officer has not resulted to any bias since the findings of the Inquiry Officer as well as the inquiry report reveal that Block No. 8 had collapsed because of the faulty material which was used by the petitioner and not because of the faulty design. He has further submitted that the documents as demanded by the petitioner were supplied to him. However, by placing reliance on the affidavit filed by the respondents, more particularly the averments made in Paragraph No. 11, he has submitted that the documents which were demanded by the petitioner were offered for inspection, however, the same were not supplied to him due to bulky record. Thus, he has submitted that the fine imposed by the respondent authorities on the petitioner cannot be set aside as the same is imposed as per the regulations of the Corporation. In support of his submissions, learned advocate Mr. Joshi has placed reliance on the judgment of the Apex Court in the case of State Bank of India & Ors. v. Narendra Kumar Pandey (2013) 2 SCC 740 : ( AIR 2013 SC 904 ). Thus, he has submitted that the impugned orders are not required to be quashed and set aside. Thus, it is submitted by the learned advocate for the respondents that the documents were only given for inspection and it was not feasible to supply the copies and hence, the departmental inquiry could not have been vitiated on this ground. 5. Thus, he has submitted that the impugned orders are not required to be quashed and set aside. Thus, it is submitted by the learned advocate for the respondents that the documents were only given for inspection and it was not feasible to supply the copies and hence, the departmental inquiry could not have been vitiated on this ground. 5. No further submissions are advanced by learned advocates appearing for the respective parties. 6. The established facts from the writ petition are that the petitioner had retired on superannuation on 31.08.2000 and the impugned order has been passed on 30.08.2001 inflicting a fine of Rs. 3,75,000/- by forfeiting the gratuity and leave encashment amount of the petitioner. On being asked to the learned advocate for the respondents, under which provision the aforesaid order is passed, the learned advocate for the respondents has placed reliance on Regulation 40 of the GIDC Staff Regulations, 1963, which reads as under: "[40. Penalties (a) The following penalties may be for good and sufficient reasons be imposed on an employee, namely: [Minor penalties] (1) Censure (2) Fine (3) (xxxx) (4) withholding of increment or promotion (5) Recovery from pay of the whole or part of any pecuniary loss caused to the Corporation by negligence, or breach of orders, [Major penalties] (6) Reduction in rank including reduction to a lower post or time scale or to a lower stage in a time scale, (7) Compulsory retirement, (8) Removal from service not disqualifying for future employment, (9) Dismissal from service which shall ordinarily be a disqualification for future employment. Provided mat the following shall not amount to a penalty within the meaning of this regulation: (i) withholding of increment of an employee for failure to pass departmental examination in accordance with the conditions of service applicable to him. (ii) stoppage of the employee at the efficiency bar in the time scale of pay on the ground of his unfitness to cross the bar. (iii) non-promotion of an employee, after considering his case to a post or grade to which he is eligible on administrative ground unconnected with his conduct. (iv) Reversion of an employee, who is officiating in a higher service grade or post to a lower service grade or post on the grounds that after trials he is considered to be unsuitable for such higher service, grade or post on administrative ground not connected with his conduct. (iv) Reversion of an employee, who is officiating in a higher service grade or post to a lower service grade or post on the grounds that after trials he is considered to be unsuitable for such higher service, grade or post on administrative ground not connected with his conduct. (v) (a) Termination of the service of an employee appointed on probation during or at the end of the period of probation in accordance with the terms of his appointment or the regulations governing such probation. (b) [Subject to the provisions of these regulations the Managing Director may impose any of the penalties specified [in sub-regulation (a)] on any employee.]" 7. A close scrutiny of the aforesaid penalties would reveal that there is no provision provided for imposing recovery or inflicting the fine from the retiral benefits of the petitioner. The impugned order specifically states thus: "I feel that except for releasing 100% of the GIDC's contribution to PF account of Shri Shah, the other terminal benefits, viz., gratuity and leave encashment be totally forfeited. Shri Shah has been allowed to retire from the services of GIDC w.e.f. 31.08.2000 on attaining the age of superannuation. Keeping the above reasoning in min, I have quantified the fine to be recovered from Shri Shah. Accordingly, I inflict the punishment of fine of Rs. 3,75,000/- (Rupees Three lakhs seventy five thousand only) to Shri Y.V. Shah in terms of section 40(A)(2) of GIDC Staff Regulations 1963" 8. At this stage, it would be apposite to refer to the judgment of the Apex Court in the case of State of Jharkhand & Ors. v. Jitendra Kumar Srivastava & Anr., AIR 2013 SC 3383 , wherein it has been observed thus: "14. Article 300 A of the Constitution of India reads as under: "300-A Persons not to be deprived of property save by authority of law. -No person shall be deprived of his property save by authority of law." Once we proceed on that premise, the answer to the question posed by us in the beginning of this judgment becomes too obvious. A person cannot be deprived of this pension without the authority of law, which is the Constitutional mandate enshrined in Article 300-A of the Constitution. A person cannot be deprived of this pension without the authority of law, which is the Constitutional mandate enshrined in Article 300-A of the Constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced. 15. It hardly needs to be emphasized that the executive instructions are not having statutory character and, therefore, cannot be termed as "law" within the meaning of aforesaid Article 300-A. On the basis of such a circular, which is not having force of law, the appellant cannot withhold even a part of pension or gratuity. As we noticed above, so far as statutory rules are concerned, there is no provision for withholding pension or gratuity in the given situation. Had there been any such provision in these rules, the position would have been different." Thus, as per the law enunciated by the Apex Court, the respondents cannot deprive pension without due process of law even part of pension and/or gratuity cannot be withheld in absence of statutory provision. 9. Thus, in the present case, though the penalties specify the fine can be imposed on the employees, the same do not provide that such penalty can be imposed, by withholding/recovering or forfeiting the amount from the gratuity or leave encashment or the terminal benefits of an employee. The rules do not contemplate any forfeiture of retirement benefits. Thus, in absence of any provision authorizing the respondents from forfeiting the retirement benefits from an employee, the impugned order deserves to be set aside. 10. It is also not in dispute that the Inquiry Officer Mr. K.B. Bhagat was associated with the drawing/design of the quarters which have ultimately collapsed. Thus, in absence of any provision authorizing the respondents from forfeiting the retirement benefits from an employee, the impugned order deserves to be set aside. 10. It is also not in dispute that the Inquiry Officer Mr. K.B. Bhagat was associated with the drawing/design of the quarters which have ultimately collapsed. The petitioner on the very first occasion, when he was appointed as an Inquiry Officer vide communication dated 11.08.1997 has stated such: "As one of the important points of my defence is pertaining to some omissions and/or lacuna and/or defect in the design of this work, as per the above drawing and as the design as reflected in the above noted drawing is approved by Shri Bhagat Saheb after due scrutiny, he is also associated with this work and therefore, with all respects to Shri Bhagat Saheb, I submit that as he is associated with this work and also has some bias against me as stated above, it will not be possible for him to remain impartial, neutral and free from bias. xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx xxxxx Under the above circumstances, I am therefore to request your Honour to kindly appoint another D.E.O. who is not associated with this case(work) either directly or indirectly and therefore can deal with this case without any bias." 11. The Apex Court in the case of Ram Lakhan Sharma ( AIR 2018 SC 4860 ) (supra) while endorsing the view taken by the Division Bench of the Madras High Court has observed as thus: "30. A Division Bench of the Madhya Pradesh High Court speaking through Justice R.V. Raveendran, CJ (as he then was) had occasion to consider the question of vitiation of the inquiry when the Inquiry Officer starts himself acting as prosecutor in Union of India and Ors. v. Mohd. Naseem Siddiqui, ILR (2004) MP 821. In the above case the Court considered Rule 9(9)(c) of the Railway Servants (Discipline & Appeal) Rules, 1968. The Division Bench while elaborating fundamental principles of natural justice enumerated the seven well recognised facets in paragraph 7 of the judgment which is to the following effect: "7. One of the fundamental principles of natural justice is that no man shall be a judge in his own cause. The Division Bench while elaborating fundamental principles of natural justice enumerated the seven well recognised facets in paragraph 7 of the judgment which is to the following effect: "7. One of the fundamental principles of natural justice is that no man shall be a judge in his own cause. This principle consists of seven well recognised facets: (i) The adjudicator shall be impartial and free from bias, (ii) The adjudicator shall not be the prosecutor, (iii) The complainant shall not be an adjudicator, (iv) A witness cannot be the Adjudicator, (v) The Adjudicator must not import his personal knowledge of the facts of the case while inquiring into charges, (vi) The Adjudicator shall not decide on the dictates of his Superiors or others (vii) The Adjudicator shall decide the issue with reference to material on record and not reference to extraneous material or on extraneous considerations. If any one of these fundamental rules is breached, the inquiry will be vitiated." 31. The Division Bench further held that where the Inquiry Officer acts as Presenting Officer, bias can be presumed. In paragraph 9 is as follows: "9. A domestic inquiry must be held by an unbiased person who is unconnected with the incident so that he can be impartial and objective in deciding the subject matters of inquiry. He should have an open mind till the inquiry is completed and should neither act with bias nor give an impression of bias. Where the Inquiry Officer acts as the Presenting Officer, bias can be presumed. At all events, clearly gives an impression of bias. An Inquiry Officer is in position of a Judge or Adjudicator. The Presenting Officer is in the position of a Prosecutor. If the Inquiry Officer acts as a Presenting Officer, then it would amount to Judge acting as the prosecutor. When the Inquiry Officer conducts the examination-in-chief of the prosecution witnesses and leads them through the facts so as to present the case of the disciplinary authority against the employee or cross-examines the delinquent employee or his witnesses to establish the case of the employer/disciplinary authority evidently, the Inquiry Officer cannot be said to have an open mind. The very fact that he presents the case of the employer and supports the case of the employer is sufficient to hold that the Inquiry Officer does not have an open mind." 32. The very fact that he presents the case of the employer and supports the case of the employer is sufficient to hold that the Inquiry Officer does not have an open mind." 32. The Division Bench after elaborately considering the issue summarised the principles in paragraph 16 which is to the following effect: "16. We may summarise the principles thus: (i) The Inquiry Officer, who is in the position of a Judge shall not act as a Presenting Officer, who is in the position of a prosecutor. (ii) It is not necessary for the Disciplinary Authority to appoint a Presenting Officer in each and every inquiry. Non-appointment of a Presenting Officer, by itself will not vitiate the inquiry. (iii) The Inquiry Officer, with a view to arrive at the truth or to obtain clarifications, can put questions to the prosecution witnesses as also the defence witnesses. In the absence of a Presenting Officer, if the Inquiry Officer puts any questions to the prosecution witnesses to elicit the facts, he should thereafter permit the delinquent employee to cross-examine such witnesses on those clarifications. (iv) If the Inquiry Officer conducts a regular examination-in-chief by leading the prosecution witnesses through the prosecution case, or puts leading questions to the departmental witnesses pregnant with answers, or cross-examines the defence witnesses or puts suggestive questions to establish the prosecution case employee, the Inquiry Officer acts as prosecutor thereby vitiating the inquiry. (v) As absence of a Presenting Officer by itself will not vitiate the inquiry and it is recognised that the Inquiry Officer can put questions to any or all witnesses to elicit the truth, the question whether an Inquiry Officer acted as a Presenting Officer, will have to be decided with reference to the manner in which the evidence is let in and recorded in the inquiry. Whether an Inquiry Officer has merely acted only as an Inquiry Officer or has also acted as a Presenting Officer depends on the facts of each case. To avoid any allegations of bias and running the risk of inquiry being declared as illegal and vitiated, the present trend appears to be to invariably appoint Presenting Officers, except in simple cases. Be that as it may." 12. The observations made by the division bench of the Madras High Court as incorporated in the aforesaid judgment specifically elaborate that the adjudicator shall be impartial and free from bias. Be that as it may." 12. The observations made by the division bench of the Madras High Court as incorporated in the aforesaid judgment specifically elaborate that the adjudicator shall be impartial and free from bias. It is further observed in Paragraph No. 9 by the Division Bench that a domestic inquiry must be held by an unbiased person who is unconnected with the incident so that he can be impartial and objective in deciding the subject-matters of inquiry. He should have an open mind till the inquiry is completed and should neither act with bias nor give an impression of bias. Thus, even there is an apprehension of likelihood of bias, the Inquiry Officer, who acts as quasi-judicial authority has to recuse himself from the proceedings. 13. In the present case, unquestionably, the Inquiry Officer was connected with the design of the block which had collapsed and in fact, he was the approving authority. Before the Inquiry Officer and during the inquiry proceedings also, the petitioner had specifically contended that the block had collapsed because of the faulty design and not by the material used in the construction. The Inquiry Officer has placed reliance on various documents and has concluded that due to defective material used by the petitioner, the block had collapsed and not because of faulty design. The issue of faulty design of the block was also a subject matter in the departmental proceedings. Thus, the Inquiry Officer, who was the approving authority of the design, has ultimately held that the building had not collapsed because of such faulty design, but because of the material used by the petitioner. Hence, it can be safely presumed that the Inquiry Officer was very well connected with such finding wherein it was held that the building had not collapsed because of faulty design. Hence, it can be safely presumed that there was all possibility of bias in the departmental proceedings. 14. As regards the contentions raised by the learned advocate for the petitioner mat the documents on which the reliance is placed being at Serial Nos. 4, 22, 23, 31, 32, 36 as well as the list of evidence as mentioned by one Shri M.S. Jalundhawala at Serial Nos. 12, 15, 17, 18, K.B.M. at Serial No. 16 and G.E.R.I. at Serial Nos. 13, 14 were not supplied. 4, 22, 23, 31, 32, 36 as well as the list of evidence as mentioned by one Shri M.S. Jalundhawala at Serial Nos. 12, 15, 17, 18, K.B.M. at Serial No. 16 and G.E.R.I. at Serial Nos. 13, 14 were not supplied. The Apex Court in the case of State Bank of India & Ors. v. D.C. Aggarwal & Anr., AIR 1993 SC 1197 has held that even if the document is a privileged document, the same should be supplied to the delinquent and non-supplying of such document would vitiate the departmental inquiry and would be against the procedural fairness. 15. Similarly, the Apex Court in the case of Committee of Management, Kisan Degree College v. Shambhu Saran Pandey & Ors., (1995) 1 SCC 404 : (1995 AIR SCW 43) has held thus: "Postponement of the opportunity to inspect the documents to the time of final hearing was obviously an erroneous procedure. In the first instance, the delinquent should be given the opportunity for inspection and thereafter the enquiry should be conducted and men the delinquent should be heard at the time of conclusion of the enquiry." In the present case, the aforesaid documents were not supplied to the petitioner on the ground that since the documents were not feasible to supply and unquestionably, the aforesaid documents, upon which the reliance is placed by the Inquiry Officer to prove the charges against the petitioner, were required to be supplied to the petitioner. 16. Reliance is placed by learned advocate for the respondents on the judgment of the Apex Court in the case of Narendra Kumar Pandey ( AIR 2013 SC 904 ) (supra) will not come to the rescue since the same deals with the list to be annexed with the charge sheet and the Apex Court has observed thus: "20. We are of the view that the High Court has committed an error in holding that the charge-sheet should have mentioned about the details of the documents and the names of the witnesses which the Bank proposed to examine and a list to that effect should have been appended to the charge sheet. We may point out that the charge-sheet need not contain the details of the documents or the names of the witnesses proposed to be examined to prove the charges or a list to that effect unless there is a specific provision to that effect. We may point out that the charge-sheet need not contain the details of the documents or the names of the witnesses proposed to be examined to prove the charges or a list to that effect unless there is a specific provision to that effect. Charge-sheet, in other words, is not expected to be a record of evidence. Fair procedure does not mean giving of copies of the documents or list of witnesses along with the charge-sheet. Of course, statement of allegations has to accompany the charge-sheet, when required by the Service Rules." 17. A perusal of the inquiry report reveals that the petitioner had also raised the issue before the Inquiry Officer to supply the documents. It is specifically mentioned by him that the aforesaid documents are needed by him for putting forth an effective defence, but it appears that some of the documents, upon which reliance was placed, are not even allowed to be inspected. Under the circumstances, the impugned departmental inquiry, which was held against the petitioner suffers from procedural unfairness, and is required to be quashed and set aside. In fact, such an approach would substantiate the argument of the petitioner that the Inquiry Officer was biased against him as he was connected with the design and had approved it. 18. It is reported by the learned advocate for the petitioner that the petitioner is suffering from cancer and hence, in this view of the matter, it would not be feasible to ask the disciplinary authority to conduct the inquiry afresh. 19. Under the circumstances, the impugned order dated 30.08.2001 and communication dated 31.08.2004 are hereby quashed and set aside. The respondents are directed to release the amount of Rs. 3,75,000/-, which was withheld from his terminal benefits. Necessary orders shall be passed within a period of one month granting gratuity and leave encashment. If the amount is not paid within the time specified by this Court, then the same shall further carry 12% rate of interest for the delayed period. The petition stands allowed accordingly. Rule is made absolute to the aforesaid extent.