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Wednesday, May 28, 2014

Service matter - Regulations 60(1)(b) - dismissed from service at preliminary enquiry stage - with out forming opinion whether to conduct regular inquiry or not - not valid- challanged - High court held that the disciplinary authority, the Chairman-cum-Managing Director, had not formed any opinion either to hold a regular inquiry or not as contemplated under Regulation 58 for imposing the major penalty and, accordingly, he quashed the order of punishment as well as the show cause notice.- Apex court held that 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. It may be on the file and may not be required to be communicated to the employee but when it is subject to assail and, eventually, subject to judicial review, the competent authority of the Corporation is required to satisfy the Court that the opinion was formed on certain parameters indicating that there was no necessity to hold an enquiry. Thus, the High Court has correctly understood the principle stated in A. Prabhakar Rao (supra) and we do not find any fault with the same.= Food Corporation of India & Ors. |.. Appellant(s) | Versus |Sarat Chandra Goswami |.. Respondent(s) = 2014(May.Part) http://judis.nic.in/supremecourt/filename=41543

  Service matter - Regulations 60(1)(b) - dismissed from service at preliminary enquiry stage - with out forming opinion whether to conduct regular inquiry or not - not valid-  challanged - High court held that the  disciplinary authority, the Chairman-cum-Managing  Director,  had  not  formed  any opinion either to hold a regular inquiry or not as contemplated  under  Regulation 58 for imposing the  major  penalty  and,    accordingly,  he quashed the order of punishment as well as the show cause notice.- Apex court held that 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.  It may be on the file and may not be required to be  communicated to the employee but when it is  subject  to  assail  and,  eventually, subject to judicial review, the competent authority of the  Corporation is required to satisfy the  Court  that  the  opinion  was formed on certain parameters indicating that there was no necessity to  hold an enquiry. Thus, the High Court has  correctly  understood  the principle stated in A. Prabhakar Rao (supra) and we do  not  find  any fault with the same.=

during  the  period
     15.7.99 to 21.1.02 while the respondent was working at North Lakhimpur
     Region, FCI in Assam had not faithfully carried out his  duties  as  a
     consequence of which the Corporation suffered financial  loss.   After
     the preliminary inquiry, a show cause notice was issued calling for  a
     representation and eventually the punishment for recovery of a sum  of
     rupees five lakhs and censure was passed against the respondent.

      2.    The aforesaid order of punishment constrained the respondent  to
      approach the High Court in Writ Petition No.16812(w) of 2006.   Before
      the writ court the singular contention that was highlighted  was  that
      the disciplinary authority had not complied with  Regulation  60(1)(b)
      of the Regulations and, therefore, the whole proceeding was  vitiated.
      
The learned Single Judge appreciating the facts and adverting  to  the
      submissions raised at the Bar  came  to  hold  that  the  disciplinary
      authority, the Chairman-cum-Managing  Director,  had  not  formed  any
      opinion either to hold a regular inquiry or not as contemplated  under
      Regulation 58 for imposing the  major  penalty  and,  accordingly,  he
      quashed the order of punishment as well as the show cause notice.=


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.  
It may be on the file and may not be required to be
      communicated to the employee but when it is  subject  to  assail  and,
      eventually, subject to judicial review, the competent authority of the
      Corporation is required to satisfy the  Court  that  the  opinion  was
      formed on certain parameters indicating that there was no necessity to
      hold an enquiry.  
Thus, the High Court has  correctly  understood  the
      principle stated in A. Prabhakar Rao (supra) and we do  not  find  any
      fault with the same.

      11.   In the result, we do not perceive any merit in these appeals and
      the same stand dismissed with no order as to costs.

2014(May.Part) http://judis.nic.in/supremecourt/filename=41543
DIPAK MISRA, N.V. RAMANA

                     IN THE  SUPREME COURT OF INDIA


                      CIVIL  APPELLATE  JURISDICTION


                    CIVIL  APPEAL NOs. 7201-7202 OF 2008




      |Food Corporation of India & Ors.                 |..    Appellant(s)        |




                          Versus


      |Sarat Chandra Goswami                            |..    Respondent(s)       |










                               J U D G M E N T




      Dipak Misra,




            The respondent while holding the post of  District  Manager  in
     the Food Corporation of  India  (for  short  the  FCI)  was  proceeded
     against in a disciplinary proceedings as contemplated under Regulation
     60 of the Food Corporation of India  (Staff)  Regulations,  1971  (for
     brevity “the Regulations”)  on  the  ground  that  during  the  period
     15.7.99 to 21.1.02 while the respondent was working at North Lakhimpur
     Region, FCI in Assam had not faithfully carried out his  duties  as  a
     consequence of which the Corporation suffered financial  loss.   After
     the preliminary inquiry, a show cause notice was issued calling for  a
     representation and eventually the punishment for recovery of a sum  of
     rupees five lakhs and censure was passed against the respondent.

      2.    The aforesaid order of punishment constrained the respondent  to
      approach the High Court in Writ Petition No.16812(w) of 2006.   Before
      the writ court the singular contention that was highlighted  was  that
      the disciplinary authority had not complied with  Regulation  60(1)(b)
      of the Regulations and, therefore, the whole proceeding was  vitiated.
      The learned Single Judge appreciating the facts and adverting  to  the
      submissions raised at the Bar  came  to  hold  that  the  disciplinary
      authority, the Chairman-cum-Managing  Director,  had  not  formed  any
      opinion either to hold a regular inquiry or not as contemplated  under
      Regulation 58 for imposing the  major  penalty  and,  accordingly,  he
      quashed the order of punishment as well as the show cause notice.


     3.     Being dissatisfied, the Corporation preferred F.M.A.No.1187  of
     2007 and the Division Bench placing reliance on the decision  of  this
     Court in Food Corporation of India, Hyderabad & Ors. v.  A.  Prahalada
     Rao & Anr.[1] concurred with the view expressed by the learned  Single
     Judge and consequently  dismissed the appeal.


     4.     We have heard Mr. Dharmedra Kumar Sinha learned counsel for the
     appellants and Mr. Soumitra  G.  Chaudhuri  learned  counsel  for  the
     respondent.

      5.     The  controversy,  as  it   seems   to   us,   centres   around
      interpretation of Regulation 60 and hence, we think it appropriate  to
      reproduce the said Regulation.  It reads as follows:
                 "(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  imputation  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 the 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  employees  or  to
           withhold  increments of a pay for a period exceeding 3 years  or
           to withhold increment of pay  with  cumulative  effect  for  any
           period,m 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.”


     6.     The interpretation of the said Regulation engaged the attention
     of this Court  in  A.  Prahalada  Rao  (supra).   A  two-Judge  Bench,
     adverting  to  the  anatomy  of  the  Regulation   and   taking   into
     consideration the submissions advanced with regard to the abuse of the
     Regulation, came to hold as follows:
           " In our  view,  on  the  basis  of  the  allegation  that  Food
           Corporation of India is misusing its  power  of  imposing  minor
           penalties, the Regulation cannot be interpreted contrary to  its
           language.   Regulation  60(1)(b)   mandates   the   disciplinary
           authority to form its opinion whether it is  necessary  to  hold
           inquiry in a particular  case or not.  But that would  not  mean
           that in all cases where an employee disputes  his  liability,  a
           full-fledged inquiry should  be  held.   Otherwise,  the  entire
           purpose of incorporating summary procedure  for  imposing  minor
           penalties would be frustrated.  If the  discretion  given  under
           Regulation 60(1)(b) is misused or is exercised in  an  arbitrary
           manner it is open to the employee to challenge the  same  before
           the appropriate forum.  It is for the disciplinary authority  to
           decide whether  regular  departmental  enquiry  as  contemplated
           under  Regulation  58  for  imposing  major  penalty  should  be
           followed  of  not.   This  discretion  cannot  be  curtailed  by
           interpretation,  which  is  contrary  to  the   language   used.
           Further, Regulation 60(2) itself provides that in a case  if  it
           is proposed to withhold increments of pay and  such  withholding
           of increments is  likely  to  affect  adversely  the  amount  of
           retirement benefits payable to an employee  and  in  such  other
           case as mentioned therein, the disciplinary authority shall hold
           inquiry in the manner laid down in Regulation 58  before  making
           any order imposing any such penalty."


     7.     It is submitted by Mr,  Chatterjee  that  the  High  Court  has
     erroneously understood the ratio and ruled that an opinion has  to  be
     formed in writing.  It is his further submission that when the reasons
     are manifest from the preliminary inquiry and from the show  cause  it
     was erroneous on the part of  the  High  Court  to  emphasise  on  the
     formation of opinion.


     8.     Per contra, Mr. Chaudhary heavily relied on the authority in A.
     Prabhakar Rao (supra) and urged that  the  discretion  vested  in  the
     disciplinary authority under the Regulations casts an obligation on it
     to form an opinion and formation of such opinion has to be in writing.


     9.     On a perusal of the order passed by the learned  Single  Judge,
     we find that he  has  taken  note  of  the  fact  that  there  was  no
     expression or formation of opinion.  He has further recorded that  the
     learned counsel for  the  Corporation  had  conceded  that  there  was
     nothing to show that the Chairman-cum-Managing Director who  had  made
     the final order had recorded any opinion in writing before making  the
     final order to the effect there was no need to hold a regular inquiry.
      From the principle stated by this Court in A. Prahalada Rao’s case it
     is quite limpid that though in all cases where the employees  disputes
     his liability, a full-fledged enquiry is not expected to  be  held  as
     that would frustrate the purpose of interpreting the summary procedure
     for imposing minor penalties, yet the discretion conferred  under  the
     Regulation 1960 (1)(b), if exercised in a arbitrary manner, it is open
     to the employee to challenge the same before  the  appropriate  forum.
     The Court had further opined that  the  Regulation  60(1)(b)  mandates
     the disciplinary authority to form its opinion whether it is necessary
     to hold an inquiry in a particular case or not.

      10.   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.  It may be on the file and may not be required to be
      communicated to the employee but when it is  subject  to  assail  and,
      eventually, subject to judicial review, the competent authority of the
      Corporation is required to satisfy the  Court  that  the  opinion  was
      formed on certain parameters indicating that there was no necessity to
      hold an enquiry.  Thus, the High Court has  correctly  understood  the
      principle stated in A. Prabhakar Rao (supra) and we do  not  find  any
      fault with the same.

      11.   In the result, we do not perceive any merit in these appeals and
      the same stand dismissed with no order as to costs.


                                                      ....................J.
                                                               [DIPAK MISRA]



                                                       ...................J.
                                                               [N.V. RAMANA]


      NEW DELHI,
      MAY 21, 2014.























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[1]    (2001) 1 SCC 165

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