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2019 DIGILAW 907 (KER)

Secretary,Labour And Employment Government Of India v. Cherian Kurian S/o. Late Kurian

2019-11-05

ASHOK MENON, V.CHITAMBARESH

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JUDGMENT : Ashok Menon, J. OP (CAT) No.524/2012 is filed by one Cherian Kurian, who was the Asst. Regional Director of Employees' State Insurance Corporation ('ESI Corporation', for short), Bangalore, is the applicant in OA No.538/2011 on the file of the Central Administrative Tribunal ('Tribunal' for short), Ernakulam Bench. OP(CAT) No.3686/2011 is filed by the Secretary, Labour and Employment, Government of India and others, who were the respondents in aforesaid OA No.538/2011. Both the petitions arise from the same Order. 2. It was alleged that, Cherian Kurian while working as Asst. Regional Director of ESI Corporation, Bangalore intentionally and with mala fide intention reduced the amount of contribution dues from Rs.1,47,581/-to Rs.7,145/-in respect of M./s.Laxmi Boilers (South) Pvt. Ltd. by ignoring the interest of the ESI Corporation exhibiting lack of integrity and devotion to duty, consequent to which Annexure-A2 charge was framed against him for his alleged conduct unbecoming of an employee of the ESI Corporation, violating Rule 3(1) of Central Civil Services (Conduct) Rules, 1964 read with Regulation 23 of the ESIC (Staff and Condition of Service) Regulations, 1959. 3. Disciplinary proceedings were initiated against him and the enquiry authority vide report dated 17.9.2003 exonerated him from all the charges. However, the disciplinary authority disagreed with the report of the enquiry authority and a disagreement memo was issued to the applicant on 31.3.2005. After granting him opportunity to file objections and hearing him, a punishment of censure was imposed on him on 25.6.2005. The statutory appeal filed by him was dismissed on 15.5.2008 and thereafter, a revision filed by him too was not entertained. 4. The applicant claims that he was discharging quasi-judicial function under Section 45A of the Employees' State Insurance Act, 1948 ('Act' for short). The orders passed by him concerning M/s.Laxmi Boilers were after consultation with and approval of his superior, the then Regional Director. Hence the order imposing penalty is assailed. 5. The applicant further states that though he was entitled to be promoted as Deputy Director w.e.f. 6.10.1997, he was promoted only on 29.3.2007 and was superseded by many other juniors to him in service, from 1997 onwards, for the sole reason that disciplinary proceedings were pending against him. According to the applicant, the disciplinary proceedings were procrastinated without justifiable reasons. The DPC (Departmental Promotion Committee) which met on 4.1.1997 did not consider him for promotion 6. According to the applicant, the disciplinary proceedings were procrastinated without justifiable reasons. The DPC (Departmental Promotion Committee) which met on 4.1.1997 did not consider him for promotion 6. The facts in the matter dealt with by the applicant resulting in punitive action against him, in brief are thus: Based on a report of inspection in respect of M/s. Laxmi Boilers (South) Pvt. Ltd., notice was issued to the employer on 28.4.1994 claiming a sum of Rs.1,47,581/-on omitted wages for the period 10/89 to 3/92 giving the employer an opportunity of being heard, if he so desired, on 18.5.1994. However, the employer did not turn up and the branch submitted the case file with noting on 19.5.1994 for passing orders under Section 45A of the Act. After obtaining approval from the Regional Director final order was also passed on 27.5.1994 by the applicant exercising his functions as a quasi-judicial authority. It was after the issuance of the order on 27.5.1994 that the employer allegedly made a request on 3.6.1994 for hearing as he could not appear on 18.5.1994 due to some unavoidable circumstances. The applicant thereafter made a fresh proposal on 14.6.1994 to the Regional Director for approval, in which he has stated that the employer's representative one Raveendran had met him on 19.5.1994 and requested for a fresh hearing, but, inadvertently that request was overlooked and final orders passed on 27.5.1994, and hence, the final order may be cancelled and the employer be heard again. That request of the applicant was approved by the Regional Director on 14.6.1994 and consequently the employer was allegedly re-heard on 15.6.1994. Thereafter, a revised order was passed reducing the amount payable by the employer from Rs.1,47,581/-to Rs.7,145/-which too was approved by the Regional Director. 7. In his challenge the applicant raised contentions before the Tribunal to the effect that the censure which was imposed upon him was based on insufficient material and that there was an unreasonable delay in completing the disciplinary proceedings. That apart, copy of the enquiry report was also not given to him in time which is in violation of Article 311 (2) of the Constitution of India, in consequence to which, his promotion was delayed. 8. That apart, copy of the enquiry report was also not given to him in time which is in violation of Article 311 (2) of the Constitution of India, in consequence to which, his promotion was delayed. 8. It is further pointed out that the disciplinary authority went beyond the scope of the charge sheet framed as two new points were raised in the disagreement memo which were never considered in the memo of charges or in the statement of imputation. The punishment was imposed after eight years consequent to the submission of the charge sheet. 9. Vide Ext.P1 order, the Tribunal upheld the findings of the disciplinary authority finding the applicant guilty and imposing penalty. But thereafter, the Tribunal found that the applicant was wrongly denied timely promotion and hence gave directions to promote him retrospectively, and to implement the order within a stipulated time. 10. We will first consider whether it is within the jurisdiction of this Court to question the act of the disciplinary authority in a departmental enquiry. What was precisely the duty of the applicant in performing his duty, needs consideration. In Employees State Insurance Corporation v. Santhakumar [ 2007(1) KLT 133 (SC)], it was held by the Hon'ble Supreme Court that section 45A of the ESI Act provides for determination of contributions in certain cases. The Corporation has got the power to make assessment and determine the amount to be recovered. This is made in the nature of a best judgment assessment as is known in taxing statutes. 11. In Andhra Pradesh Handloom Weavers Co-operative Society Limited, Narayanaguda, Hyderabad v. Employees' State Insurance Corporation, Hyderabad [1988 LAB.I.C.481], it was held that under section 45A of the ESI Act, it is absolutely necessary for the corporation to pass a reasoned order giving the method of computation of the best judgment assessment. The power to levy assessment on the basis of best judgment is not an arbitrary power. In other words, the assessment must be based on some relevant material. It is not a power that can be exercised under the sweet-will and the pleasure of the concerned authorities. 12. The main argument of the applicant is that being a quasi-judicial authority, no disciplinary action can be taken for the matters decided by him. It was urged that insofar as the applicant was exercising quasi-judicial functions, he should not be subjected to disciplinary action. 12. The main argument of the applicant is that being a quasi-judicial authority, no disciplinary action can be taken for the matters decided by him. It was urged that insofar as the applicant was exercising quasi-judicial functions, he should not be subjected to disciplinary action. The order may be wrong. In such a case, the remedy will be to take up the matter further in appeal or revision. We have to consider whether the applicant acting as a quasi-judicial authority enjoys immunity from judicial proceedings with respect to the matters decided by him exercising such authority. 13. In S.Govinda Menon v. The Union of India and Another [AIR 1957 SC 1274], it was contended before the Hon'ble Supreme Court that disciplinary proceedings could not be taken against the appellant therein for acts and omissions with regard to his work as Commissioner under the Madras Hindu Religious and Charitable Endowments Act, 1951. It was urged that since the orders made by him were quasi- judicial in nature, they could be challenged only as provided for under the Act. Rejecting this contention, it was held that it is open to the Government to take disciplinary proceedings against the appellant in respect of his acts or omissions which cast a reflection upon his reputation for integrity or good faith or devotion to duty as a member of the Service. And under such circumstances there is no reason why disciplinary proceedings should not be taken against him. 14. The Hon'ble Supreme Court in Union of India v. A.N.Saxena (1992) 3 SCC 124 ] has held thus : "In our view, an argument that no disciplinary action can be taken in regard to actions taken or purported to be done in the course of judicial or quasi- judicial proceedings is not correct. It is true that when an officer is performing judicial or quasi- judicial functions disciplinary proceedings regarding any of his actions in the course of such proceeding should be taken only after great caution and a close scrutiny of his actions and only if the circumstances so warrant.” It was further observed thus: “Where the actions of such an officer indicate culpability, namely a desire to oblige himself or unduly favour one of the parties or an improper motive there is no reason why discipl inary action should not be taken.” 15. Relying on the decision in Govinda Menon (supra) and other various English decisions and decisions of the Hon'ble Supreme Court, a Three Member Bench of the Hon'ble Supreme Court has in Union of India and Others v. K.K.Dhawan [ 1993 (2) SCC 56 ] held as thus: "28. Certainly, therefore, the officer who exercises judicial or quasi-judicial powers acts negligently or recklessly or in order to confer undue favour on a person is not acting as a Judge. Accordingly, the contention of the respondent has to be rejected. It is important to bear in mind that in the present case, we are not concerned with the correctness or legality of the decision of the respondent but the conduct of the respondent in discharge of his duties as an officer. The legality of the orders with reference to the nine assessments may be questioned in appeal or revision under the Act. But we have no doubt in our mind that the Government is not precluded from taking the disciplinary action for violation of the Conduct Rules. Thus, we conclude that the disciplinary action can be taken in the following cases : (i) Where the officer had acted in a manner as would reflect on his reputation for integrity good faith or devotion to duty; (ii) if there is prima facie material to show recklessness or misconduct in the discharge of his duty; (iii) if he has acted in a manner which is unbecoming of a government servant; (iv) if he had acted negligently or that he omitted the prescribed conditions which are essential for the exercise of the statutory powers; (v) if he had acted in order to unduly favour a party; (vi) if he had been actuated by corrupt motive however, small the bribe may be because Lord Coke said long ago "though the bribe may be small, yet the fault is great.” 16. The Disciplinary Authority on receiving the report of the Enquiry Officer may or may not agree with the findings recorded by the latter. In case of disagreement, the Disciplinary Authority has to record the reasons for disagreement and then to record its own findings if the evidence available on record be sufficient for such exercise or else to remit the case to the Enquiry Officer for further enquiry and report. It is settled law that strict rules of evidence are not applicable to departmental enquiry proceedings. It is settled law that strict rules of evidence are not applicable to departmental enquiry proceedings. The Court exercising the jurisdiction of judicial review would not interfere with the findings of fact arrived at in the departmental enquiry proceedings excepting in a case of mala fides or perversity. So long as there is some evidence to support the conclusion arrived at by the departmental authority, the same has to be sustained. [See Bank of India and another v. Degala Suryanarayana [ (1999) 5 SCC 762 ; State of Rajasthan v. MC Saxena [ (1998) 3 SCC 385 ]. It is settled legal position that if there is some legal evidence on which the findings can be based, then adequacy or even reliability of that evidence is not a matter for canvassing before the High Court in a writ petition under Article 226 of the Constitution. The findings of the Inquiry Officer are only his opinion on the materials, that such findings are not binding authority and, therefore, that authority can come to its own conclusion, of course bearing in mind the views expressed by the Inquiry Officer. But it is not necessary that the Disciplinary Authority should "discuss materials in detail and contest the conclusions of the Inquiry Officer". [See High Court of Judicature at Bombay v. Shashikant S.Patiland Another[ 2000(1) SCC 416 ]. 17. The applicant had urged before us that he was not served with a copy of the enquiry report and therefore, the disciplinary enquiry is vitiated for that reason alone. The fact that he answered in detail to the disagreement notice served on him indicates that he has sufficient knowledge about the enquiry report. In Uttarakhand Transport Corporation (Earlier known as UPSRTC) and Others v. Sukhveer Singh [ (2018) 1 SCC 231 ], it was held that mere non-supply of enquiry report does not warrant automatic reinstatement of delinquent employee. It is incumbent upon the delinquent employee to plead and prove that he suffered serious prejudice due to non-supply of enquiry report. In the instant case, the applicant has satisfied that there is no prejudice caused to him by the belated supply of enquiry report. 18. It is incumbent upon the delinquent employee to plead and prove that he suffered serious prejudice due to non-supply of enquiry report. In the instant case, the applicant has satisfied that there is no prejudice caused to him by the belated supply of enquiry report. 18. The learned counsel appearing for the applicant has relied on the decision in Zunjarrao Bhikaji Nagarkar v. Union of India and Others [ AIR 1999 SC 2881 ] to argue for the proposition that mere mistake of law or wrong interpretation of law cannot be the basis for initiating proceedings against a quasi-judicial authority. He also relies upon the decision in Punjab National Bank and Others v. Kunj Behari Misra [ AIR 1998 SC 2713 ] to substantiate his argument that when the disciplinary authority proposes to differ from the enquiry authority's report in favour of delinquent, he must give an opportunity of hearing to the delinquent before recording his conclusions. 19. On going through a catena of decisions on this subject, it has to be held that in the instant case, even though the applicant was acting as a quasi-judicial authority, his actions spoke louder than words regarding the manner in which he had reopened the case and reviewed his earlier order. No where in the proceedings, could it be seen that there was any representation by the employer or his representative and that he had failed to note therein. It is true that the superior officer had consented to his action. But that alone will not exonerate him from his liability to perform his functions in a transparent manner, and does not appear to be prejudicial or biased. 20. We do not think it is possible for the High Court under Article 226 of the Constitution to go into the merits of the decision taken by the disciplinary authority. Prima facie, there does not appear to be any mistake in the decision taken by the disciplinary authority overruling the findings of the enquiry officer discharging the applicant of all the charges levelled against him. 21. The courts can only interfere with the act of the executive authority if it is shown that the authority has contravened the law to establish that proposition. Whenever it is alleged that the local authorities have contravened the law, courts must not substitute themselves for that authority because the High Court is not a court of appeal. 21. The courts can only interfere with the act of the executive authority if it is shown that the authority has contravened the law to establish that proposition. Whenever it is alleged that the local authorities have contravened the law, courts must not substitute themselves for that authority because the High Court is not a court of appeal. There is nothing in this case to show that the disciplinary authority had in making the decision failed to take into account factors that ought to have been taken into account or took into account the factors which ought not have been taken into account. There is also no indication that the decision taken by the authority regarding penalty was so unreasonable that no reasonable authority would even consider imposing. The argument of the learned counsel appearing for the applicant regarding the availability of Wednesbury Principles in his favour is not acceptable to us because this is not a case which would qualify to come within the scope of the principles of Wednesbury test so as to overrule the decision taken by the disciplinary authority. The penalty imposed is not so unreasonable as to call for interference by this Court. We find that the penalty imposed is commensurate with the gravity of the misconduct alleged against the applicant. The Tribunal was therefore justified in not interfering with the findings of the disciplinary authority and the punishment of censure imposed upon the delinquent. 22. The next point that needs consideration is the challenge by the applicant regarding the denial of promotion on time to him. This contention was accepted by the Tribunal in his favour for the reason that there was unreasonable delay and that the sealed cover procedure was not rightly applied. 23. In fact, the applicant had challenged the act of granting ad hoc promotions to his juniors by filing OA No.376/1997 before the CAT, Bangalore, and had also got a favourable order. But that was set aside by the High Court of Karnataka in WP No.190/1999 at Ext.P3. Only in cases where there is no statutory penalty including that of censure is imposed that the delinquent is given a notional promotion from the day he would have been promoted as determined by the DPC. But that was set aside by the High Court of Karnataka in WP No.190/1999 at Ext.P3. Only in cases where there is no statutory penalty including that of censure is imposed that the delinquent is given a notional promotion from the day he would have been promoted as determined by the DPC. There is no doubt that when an employee is completely exonerated and is not visited with the penalty even of censure indicating thereby that he was not blameworthy in the least, he should not be deprived of any benefit including the salary of the promotional post. But in the instant case, the applicant was not exonerated altogether. It is already observed by us that the action taken by the disciplinary authority in imposing the punishment of censure is not to be interfered with. An officer cannot be rewarded by promotion as a matter of course even if the penalty is other than that of reduction in rank because an employee has no right to promotion. He has only a right to be considered for promotion. The promotion to a post and more so, to a selection post, depends upon several circumstances. To qualify for promotion, the least that is expected of an employee is to have an unblemished record. That is the minimum expected to ensure a clean and efficient administration and to protect the public interests. An employee found guilty of a misconduct cannot be placed on par with the other employees and his case has to be treated differently. (See Union of India v. K.V. Jankiraman [ AIR 1991 SC 2010 ]). 24. In State of M.P. and Another v. I.A.Qureshi [ (1998) 9 SCC 261 ], it was held that from the circulars it would be evident that the sealed cover containing the recommendations of the DPC has to be opened only in those cases where the delinquent officer has been fully exonerated by the departmental enquiry and in cases where the delinquent officer has been punished in the departmental proceedings, the sealed cover is not to be opened and the delinquent officer cannot be granted promotion on the basis of the recommendation of the DPC which is kept in the sealed cover. It is also observed in the aforesaid decision that censure is one of the minor penalties that can be imposed on a government servant. It is also observed in the aforesaid decision that censure is one of the minor penalties that can be imposed on a government servant. It cannot, therefore, be said that the penalty of censure was imposed on the applicant in a departmental proceedings was not a penalty as contemplated in the circular dated 2.5.1990. Once it is held that a minor penalty has been imposed on the applicant in the departmental proceedings, the directions given in the said circular would be applicable and the sealed cover containing recommendations of the DPC could not be opened and the recommendations of the DPC could not be given effect because the applicant has not been fully exonerated and a minor penalty has been imposed. The applicant can therefore be considered for promotion on prospective basis from a date after the conclusion of the departmental proceedings and not from a date before that. The argument of the learned counsel appearing for the appellant is that the disciplinary proceedings was unreasonably protracted and that there was delay in conclusion of the proceedings and therefore he is entitled to promotion from a previous date also is not acceptable to us for the reason that the applicant himself had contributed to the delay in the proceedings by challenging the proceedings at every stage. We are therefore, not in agreement with the finding of the Tribunal regarding granting of promotion to the applicant at an earlier date as recommended. In the result, the OP(CAT) No.524/2012 is dismissed and OP(CAT) No.3686/2011 is allowed.