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Sunday, August 31, 2014

Section 138 of the NI Act - territorial jurisdiction- where cheques were drawn - cheques were drawn on Axis Bank, Bangalore and presented at Standard Chartered Bank, Bangalore - Statutory notice issued at New Delhi - High court held infavour of complainant - Apex court held that It is in these circumstances that we allow the Appeal, as Courts at Gurgaon do not possess territorial jurisdiction to entertain the present proceedings under Section 138 of the NI Act solely because, on the instructions of the Respondent, a legal notice of demand has emanated from that city. The Complaint be returned to the Complainant/Respondent for refilling in the appropriate Court at Bangalore, Karnataka. As mentioned in Dashrath Rupsingh, if the Complaint is re-filed in the appropriate Court in Bangalore within 30 days, it shall be deemed to have been filed within limitation.= CRIMINAL APPEAL NO. 1771 OF 2014 [Arising out of SLP(Crl.)No. 7653 of 2013] SHIVGIRI ASSOCIATES & ORS. …..Appellants Vs. METSO MINERAL (INDIA) PVT.LTD. …..Respondent = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41832

Section  138  of  the  NI  Act - territorial jurisdiction- where cheques were drawn - cheques were drawn on Axis Bank, Bangalore and presented at Standard Chartered Bank, Bangalore - Statutory notice issued at New Delhi - High court held infavour of complainant - Apex court held that It is in these circumstances that we allow the Appeal,  as  Courts  at Gurgaon do not possess territorial jurisdiction  to  entertain  the  present proceedings under  Section  138  of  the  NI  Act  solely  because,  on  the instructions of the Respondent, a legal notice of demand has  emanated  from that city.  The Complaint be  returned  to  the  Complainant/Respondent  for
refilling in the appropriate Court at Bangalore, Karnataka.    As  mentioned in Dashrath Rupsingh, if the Complaint is re-filed in the appropriate  Court in Bangalore within 30 days, it shall be deemed to have  been  filed  within limitation.=
In the case in hand, the  dishonoured  cheques  were  drawn  on  the
Appellant’s  Bank,  namely,  Axis   Bank,   Bangalore.    Subsequently,   on
presentation of the cheques for encashment by  the  Respondent  through  its
Bankers, namely, Standard Chartered Bank, Bangalore, they were  dishonoured.
   It is interesting to note, even though it may not  be  relevant  for  the
present considerations, that the Respondent has filed a  suit  for  recovery
of money in New Delhi, repeatedly  reiterating  that  the  cause  of  action
arose solely and squarely in New Delhi.=

  It is in these circumstances that we allow the Appeal,  as  Courts  at
Gurgaon do not possess territorial jurisdiction  to  entertain  the  present
proceedings under  Section  138  of  the  NI  Act  solely  because,  on  the
instructions of the Respondent, a legal notice of demand has  emanated  from
that city.  The Complaint be  returned  to  the  Complainant/Respondent  for
refilling in the appropriate Court at Bangalore, Karnataka.    As  mentioned
in Dashrath Rupsingh, if the Complaint is re-filed in the appropriate  Court
in Bangalore within 30 days, it shall be deemed to have  been  filed  within
limitation.

2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41832

                                                                REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO. 1771  OF 2014
                 [Arising out of SLP(Crl.)No. 7653 of 2013]


SHIVGIRI ASSOCIATES & ORS.                   …..Appellants

      Vs.

METSO MINERAL  (INDIA) PVT.LTD.                  …..Respondent




                               J U D G M E N T

VIKRAMAJIT SEN, J.


1     Leave granted.
2     This Appeal assails the Order of the learned Single Judge of the  High
Court of Punjab & Haryana holding that since the notice as  contemplated  in
Section 138 of the Negotiable Instruments Act,  1881  (for  short,  ‘the  NI
Act’), had  been  dispatched  from  Gurgaon,  Haryana  and  additionally,  a
response thereto was dispatched  to  and  received  at  Gurgaon,  Courts  at
Gurgaon possessed jurisdiction to entertain and decide  the  Complaint.   In
the impugned Judgment, several precedents have been mentioned and  decisions
of this Court, namely, K. Bhaskaran v. Sankaran Vaidhyan Balan (1999) 7  SCC
510 and Harman Electronics  Private  Limited  v.  National  Panasonic  India
Private Limited (2009) 1 SCC 720 have  been  analysed  and  discussed.    We
need not dilate on this issue beyond  mentioning  and  applying  the  recent
decision  dated  01.08.2014  in  Criminal  Appeal  No.2287  of  2009  titled
Dashrath  Rupsingh  Rathod  v.  State  of  Maharasthra.    In  view  of  the
deliberations in Dashrath Rupsingh, the  Appeal  is  allowed.     It  is  no
longer arguable that the  issuance  of  the  notice  has  relevance  to  the
question of criminal territorial jurisdiction under Section 138  of  the  NI
Act.    In the case in hand, the  dishonoured  cheques  were  drawn  on  the
Appellant’s  Bank,  namely,  Axis   Bank,   Bangalore.    Subsequently,   on
presentation of the cheques for encashment by  the  Respondent  through  its
Bankers, namely, Standard Chartered Bank, Bangalore, they were  dishonoured.
   It is interesting to note, even though it may not  be  relevant  for  the
present considerations, that the Respondent has filed a  suit  for  recovery
of money in New Delhi, repeatedly  reiterating  that  the  cause  of  action
arose solely and squarely in New Delhi.
3     It appears that the learned Judicial Magistrate, First Class  (Special
Court), District Gurgaon,  Haryana,  on  14.6.2010  issued  Summons  to  the
Appellant.   The Appellant thereupon approached the High Court of  Punjab  &
Haryana at Chandigarh, which passed  the  impugned  order.    On  23.9.2013,
this Court issued notice and also ordered that proceedings before the  Trial
Court shall remain stayed.   It is evident, therefore, that evidence,  post-
summoning, has not been recorded.
4     It is in these circumstances that we allow the Appeal,  as  Courts  at
Gurgaon do not possess territorial jurisdiction  to  entertain  the  present
proceedings under  Section  138  of  the  NI  Act  solely  because,  on  the
instructions of the Respondent, a legal notice of demand has  emanated  from
that city.  The Complaint be  returned  to  the  Complainant/Respondent  for
refilling in the appropriate Court at Bangalore, Karnataka.    As  mentioned
in Dashrath Rupsingh, if the Complaint is re-filed in the appropriate  Court
in Bangalore within 30 days, it shall be deemed to have  been  filed  within
limitation.  The interim orders stand recalled, accordingly.
5     The parties shall bear their respective costs.



.......................................................J.
                                  [T.S. THAKUR]



.......................................................J.
                                  [VIKRAMAJIT SEN]
New Delhi;
August 20, 2014.
-----------------------


3


Service matter - Payment of interest on delayed payment - Apex court held that It is needless to mention that the respondents have erroneously withheld payment of gratuity amount for which the appellants herein are entitled in law for payment of penal amount on the delayed payment of gratuity under the provisions of the Payment of Gratuity Act, 1972. Having regard to the facts and circumstances of the case, we do not propose to do that in the case in hand. For the reasons stated above, we award interest at the rate of 9% on the delayed payment of pension and gratuity amount from the date of entitlement till the date of the actual payment. If this amount is not paid within six weeks from the date of receipt of a copy of this order, the same shall carry interest at the rate of 18% per annum from the date of amount falls due to the deceased employee. With the above directions, this appeal is allowed. =CIVIL APPEAL NO. 7113 OF 2014 (Arising out of SLP (C) No. 25015 of 2011) D.D. TEWARI(D) THR. LRS. ……APPELLANTS VERSUS UTTAR HARYANA BIJLI VITRAN NIGAM LTD. & ORS. …RESPONDENTS = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41799

    Service matter - Payment of interest on delayed payment - Apex court held that It is needless to mention that the respondents have  erroneously withheld payment of gratuity amount for  which  the  appellants  herein  are entitled in law for payment of  penal  amount  on  the  delayed  payment  of gratuity under the provisions of the Payment of Gratuity Act,  1972.  Having
regard to the facts and circumstances of the case, we do not propose  to  do that in the case in hand. For the reasons stated above, we award interest at the rate of 9%  on the delayed payment  of  pension  and  gratuity  amount  from  the  date  of entitlement till the date of the actual payment.   If  this  amount  is  not paid within six weeks from the date of receipt of a copy of this order,  the same shall carry interest at the rate of 18% per  annum  from  the  date  of amount falls due to the deceased employee.  With the above directions,  this appeal is allowed. =

 learned  single  Judge  passed  in
C.W.P. No. 1048 of 2010 wherein he was not awarded interest for the  delayed
payment of pension  and  gratuity  amount,  for  which      he  was  legally
entitled to.  Therefore, the  appellant approached this Court for  grant  of
interest on the delayed payment on  the  retiral  benefits  of  pension  and
gratuity payable to him by the respondents.=

    It is an undisputed fact that the appellant retired from  service  on
attaining the age of superannuation on  31.10.2006  and  the  order  of  the
learned single Judge after adverting to the relevant  facts  and  the  legal
position has given  a  direction  to  the  employer-respondent  to  pay  the
erroneously withheld pensionary benefits and  the  gratuity  amount  to  the
legal representatives of the deceased  employee  without  awarding  interest
for which the appellant is legally entitled,  therefore, this Court  has  to
exercise its appellate jurisdiction as there is a miscarriage of justice  in
denying  the interest to be paid or payable by the employer  from  the  date
of the entitlement of the deceased employee till the date of payment as  per
the aforesaid legal principle laid  down  by  this  Court  in  the  judgment
referred to supra. We have to award interest at the rate  of  9%  per  annum
both on the amount of pension due and the gratuity amount which  are  to  be
paid by the respondent.

5.          It is needless to mention that the respondents have  erroneously
withheld payment of gratuity amount for  which  the  appellants  herein  are
entitled in law for payment of  penal  amount  on  the  delayed  payment  of
gratuity under the provisions of the Payment of Gratuity Act,  1972.  Having
regard to the facts and circumstances of the case, we do not propose  to  do
that in the case in hand.

6.     For the reasons stated above, we award interest at the rate of 9%  on
the delayed payment  of  pension  and  gratuity  amount  from  the  date  of
entitlement till the date of the actual payment.   If  this  amount  is  not
paid within six weeks from the date of receipt of a copy of this order,  the
same shall carry interest at the rate of 18% per  annum  from  the  date  of
amount falls due to the deceased employee.  With the above directions,  this
appeal is allowed.

2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41799

                                                        NON-REPORTABLE



              IN THE SUPREME COURT OF INDIA                         CIVIL
                           APPELLATE JURISDICTION

         CIVIL APPEAL NO. 7113   OF 2014                       (Arising out
                        of SLP (C) No. 25015 of 2011)



 D.D. TEWARI(D) THR. LRS.                    ……APPELLANTS



                                   VERSUS



 UTTAR HARYANA BIJLI VITRAN NIGAM LTD. & ORS. …RESPONDENTS



    J U D G M E N T



V.GOPALA GOWDA, J.

            Leave granted.

2.      Heard learned counsel on  behalf  of  the  parties.   The  appellant
(since deceased) is aggrieved by the impugned order dated 14.03.2011  passed
by the High Court of   Punjab  and Haryana at Chandigarh  in  LPA  No.  1818
of 2010 in affirming the judgment of the  learned  single  Judge  passed  in
C.W.P. No. 1048 of 2010 wherein he was not awarded interest for the  delayed
payment of pension  and  gratuity  amount,  for  which      he  was  legally
entitled to.  Therefore, the  appellant approached this Court for  grant  of
interest on the delayed payment on  the  retiral  benefits  of  pension  and
gratuity payable to him by the respondents.

3.       The appellant was appointed to the post of Line  Superintendent  on
30.08.1968 with the Uttar Haryana Bijli Vitran  Nigam  Ltd.    In  the  year
1990, he was promoted to the post of Junior Engineer-I. During his  service,
the appellant remained in charge of number  of  transformers  after  getting
issued them from the stores and deposited a number of  damaged  transformers
in the stores.  While depositing the damaged  transformers  in  the  stores,
some shortage in transformers oil and breakages  of  the  parts  of  damaged
transformers were erroneously debited to the account of  the  appellant  and
later on it was held that for  the  shortages  and  breakages  there  is  no
negligence  on  the  part  of  the  appellant.   On  attaining  the  age  of
superannuation,  he  retired  from  service  on  31.10.2006.   The   retiral
benefits of the appellant were withheld by the respondents  on  the  alleged
ground  that  some  amount  was  due  to  the  employer.  The   disciplinary
proceedings were not pending against  the  appellant  on  the  date  of  his
retirement. Therefore, the appellant approached the High Court  seeking  for
issuance of a direction to the respondents regarding payment of pension  and
release of the gratuity amount which are retiral benefits with  an  interest
at the rate of 18% on the delayed payments.  The learned  single  Judge  has
allowed the Writ Petition vide order dated 25.08.2010, after  setting  aside
the action of the respondents in withholding  the  amount  of  gratuity  and
directing the respondents to release the withheld amount of gratuity  within
three months without awarding interest as claimed  by  the  appellant.   The
High Court has adverted to the judgments of this Court particularly, in  the
case of State of Kerala & Ors. Vs.  M.  Padmanabhan  Nair[1],  wherein  this
Court reiterated its earlier view holding that the pension and gratuity  are
no longer any bounty to be distributed by the Government  to  its  employees
on their retirement, but, have become, under the decisions  of  this  Court,
valuable rights and property in  their  hands  and  any  culpable  delay  in
settlement and disbursement thereof  must  be  dealt  with  the  penalty  of
payment of interest at the current market rate till actual  payment  to  the
employees.  The said legal principle laid down by  this  Court  still  holds
good in so far as awarding the interest  on  the  delayed  payments  to  the
appellant is concerned.  This aspect of the matter was adverted  to  in  the
judgment of the learned single Judge without assigning any  reason  for  not
awarding the interest as  claimed  by  the  appellant.   That  is  why  that
portion of the judgment of the learned single Judge was aggrieved of by  the
appellant and he had filed L.P.A. before Division Bench of the  High  Court.
The Division Bench of the High Court has passed a  cryptic  order  which  is
impugned in this appeal.  It has adverted to  the  fact  that  there  is  no
order passed by the learned single Judge  with  regard  to  the  payment  of
interest and the appellant has not raised any plea  which  was  rejected  by
him, therefore, the Division Bench did not find fault with the  judgment  of
the learned single Judge in the appeal and the  Letters  Patent  Appeal  was
dismissed.  The correctness of the order is under challenge in  this  appeal
before this Court urging various legal grounds.

4.     It is an undisputed fact that the appellant retired from  service  on
attaining the age of superannuation on  31.10.2006  and  the  order  of  the
learned single Judge after adverting to the relevant  facts  and  the  legal
position has given  a  direction  to  the  employer-respondent  to  pay  the
erroneously withheld pensionary benefits and  the  gratuity  amount  to  the
legal representatives of the deceased  employee  without  awarding  interest
for which the appellant is legally entitled,  therefore, this Court  has  to
exercise its appellate jurisdiction as there is a miscarriage of justice  in
denying  the interest to be paid or payable by the employer  from  the  date
of the entitlement of the deceased employee till the date of payment as  per
the aforesaid legal principle laid  down  by  this  Court  in  the  judgment
referred to supra. We have to award interest at the rate  of  9%  per  annum
both on the amount of pension due and the gratuity amount which  are  to  be
paid by the respondent.

5.          It is needless to mention that the respondents have  erroneously
withheld payment of gratuity amount for  which  the  appellants  herein  are
entitled in law for payment of  penal  amount  on  the  delayed  payment  of
gratuity under the provisions of the Payment of Gratuity Act,  1972.  Having
regard to the facts and circumstances of the case, we do not propose  to  do
that in the case in hand.

6.     For the reasons stated above, we award interest at the rate of 9%  on
the delayed payment  of  pension  and  gratuity  amount  from  the  date  of
entitlement till the date of the actual payment.   If  this  amount  is  not
paid within six weeks from the date of receipt of a copy of this order,  the
same shall carry interest at the rate of 18% per  annum  from  the  date  of
amount falls due to the deceased employee.  With the above directions,  this
appeal is allowed.

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





……………………………………………………J.       [V. GOPALA GOWDA]

New Delhi,                                                    August 1,
2014









-----------------------
[1]

      [2] (1985) 1 SCC 429


Service matter - whether the notification invited applications to fill up the vacant posts of 1 Attender and 3 Peons and to reserve one vacancy of Peon for members belonging to SC/ST against the rules of Kerala Co-operative Societies Rules (in short, “the Rules”) - challenged - writs were allowed the Notification and selection process were not issued in accordance with Circulars issued by the Registrar of Co-operative Societies and quashed the aforesaid Notification, selection and appointment of the selected candidates directing the Bank to conduct a fresh selection within six months in the manner directed after inviting applications in accordance with the Circular. Till then, the selected candidates were permitted to work on daily wage basis subject to the condition that their initial appointment of such continuance will not confer on them any preference for appointment. - DB dismissed the appeals - Apex court held that Considering aforesaid provisions of Section 69, we do not find any force in the contention of the appellants regarding availability of alternate remedy by way of filing an Arbitration case under section 69 of the Act since in our opinion dispute between the writ petitioners and the Bank does not come within the provisions of this Section. We are also of the view that the Bank has failed to conduct written examination and interview as per the then existing guidelines issued by the Registrar of Co-operative Societies. Indisputably, the respondent writ petitioners moved the High Court challenging the circulars immediately after the notification and prior to the conduct of examination. In view of the aforesaid, we concur with the decision of the High Court and do not find any merit whatsoever, in both the appeals, which are accordingly dismissed with no order as to costs.= CIVIL APPEAL NO.7839 OF 2014 (Arising out of Special Leave Petition (Civil) No.9794 of 2013) Akalakunnam Village Service Co-op. Bank Ltd. and another ………Appellants Versus Binu N. and others ……..Respondents = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41831

Service matter - whether the notification invited applications to fill up the vacant posts of 1 Attender  and 3 Peons and to reserve one vacancy of Peon for members belonging  to  SC/ST against the rules of Kerala Co-operative Societies Rules (in  short,  “the  Rules”) - challenged - writs were allowed the  Notification  and  selection process  were  not  issued  in  accordance  with  Circulars  issued  by  the Registrar of Co-operative Societies and quashed the aforesaid  Notification, selection and appointment of the selected candidates directing the  Bank  to
conduct a fresh selection within six months in  the  manner  directed  after inviting applications in accordance  with  the  Circular.   Till  then,  the selected candidates were permitted to work on daily wage  basis  subject  to the condition that their initial appointment of such  continuance  will  not confer on them any preference for appointment. - DB dismissed the appeals - Apex court held that  Considering aforesaid provisions of Section 69, we  do  not  find  any force  in  the  contention  of  the  appellants  regarding  availability  of alternate remedy by way of filing an Arbitration case under  section  69  of the Act since in our opinion dispute between the writ  petitioners  and  the Bank does not come within the provisions of this Section.   We are  also  of
the view that the  Bank  has  failed  to  conduct  written  examination  and interview as per the then existing guidelines issued by the Registrar of Co-operative Societies.  Indisputably, the respondent  writ  petitioners  moved the High Court challenging the circulars immediately after the  notification and prior to the conduct of examination. In view of the aforesaid, we concur with  the  decision  of  the  High Court and do not find any merit whatsoever, in both the appeals,  which  are accordingly dismissed with no order as to costs.=

The Akalakunnam Village Service Co-op  Bank  Ltd.  (for  the  sake  of
brevity hereinafter  referred  to  as  “the  Bank”)  by  Notification  dated
6.6.2009 invited applications to fill up the vacant posts of 1 Attender  and
3 Peons and to reserve one vacancy of Peon for members belonging  to  SC/ST.
The last date stipulated  for  submission  of  applications  was  22.6.2009.
Pursuant to this,  among  others,  respondent  nos.1  to  3,  who  are  writ
petitioner nos.1 to 3 applied and a written test was held on  15.7.2009  and
an interview was also conducted in the afternoon of that day.=
After hearing parties on either side, the learned Single Judge of  the
High Court came to  the  conclusion  that  the  Notification  and  selection
process  were  not  issued  in  accordance  with  Circulars  issued  by  the
Registrar of Co-operative Societies and quashed the aforesaid  Notification,
selection and appointment of the selected candidates directing the  Bank  to
conduct a fresh selection within six months in  the  manner  directed  after
inviting applications in accordance  with  the  Circular.   Till  then,  the
selected candidates were permitted to work on daily wage  basis  subject  to
the condition that their initial appointment of such  continuance  will  not
confer on them any preference for appointment.=
Considering the rival contentions in detail and  concerned  provisions
of the Act and Kerala Co-operative Societies Rules, the  Division  Bench  of
the High Court did not find any merit in  the  writ  appeals  and  dismissed
both the writ appeals  preferred  by  the  appellants  herein.   Hence,  the
present appeals by special leave.=

We do not find any reason to interfere with the findings of  the  High
Court.   Rule 182(5)  of   the  Rules   stipulates   that   “In  respect  of
societies and posts not covered by section 80(3)(A) and Section 80B  of  the
Act, the appointments shall be made by the Committee  after  conducting  the
written examination and interview  as  per  the  guidelines  issued  by  the
Registrar”.   The circulars issued by the Government and  Registrar  of  the
Co-operative Societies  have statutory force and specifically stipulate  the
procedure for conducting the selection to the post of sub staff.

 “69.  Disputes  to  be  decided  by  Co-operative  Arbitration   Court   and
Registrar.—
(1)  Notwithstanding anything contained in any law for  the  time  being  in
force, if a dispute arises,—
 (a) among members, past members and persons claiming through members,  past
members and deceased members; or
 (b) between a member, past member or person claiming through  a  member,  a
past member or deceased  member  and  the  society,  its  committee  or  any
officer, agent or employee of the society; or
(c) between the  society  or  its  committee  and  any  past  committee  any
officer, agent or employee or any past officer, past agent or past  employee
or the nominee, heirs or legal  representatives  of  any  deceased  officer,
deceased agent or deceased employee of the society; or
(d) between the society and any other society; or
(e) between a society and the members of a society affiliated to it; or
(f) between the society and a person, other than a member  of  the  society,
who has been granted a loan by the society or with whom the society  has  or
had business transactions or any person claiming through such a person; or
(g) between the society and a surety of a member, past member, deceased
member or employee or a person, other than a member, who has been granted  a
loan by the society, whether such a surety is or is  not  a  member  of  the
society; or
(h) between the society and a creditor of the society,  such  dispute  shall
be referred to the Co-operative Arbitration Court constituted under  section
70A in the case of non-monetary disputes and to the Registrar, in  the  case
of monetary disputes; and the Arbitration Court or  the  Registrar,  as  the
case may be,  shall  decide  such  dispute  and  no  other  court  or  other
authority  shall  have  jurisdiction  to  entertain  any   suit   or   other
proceedings in respect of such dispute.

(2) For the purposes of sub-section (1), the following shall also be  deemed
to be disputes, namely:—
(a) a claim by the society for any debt or demand due to it  from  a  member
or the nominee,  heirs  or  legal  representatives  of  a  deceased  member,
whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor, where the society  has

recovered from the surety any amount in respect of any debt  or  demand  due
to it from the  principal  debtor,  as  a  result  of  the  default  of  the
principal debtor, whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the  election  of  the  Board  of
Management or any officer of the society;
Explanation:—A dispute arising at any stage of an election  commencing  from
the convening of the general body meeting for the election, shall be  deemed
to be a dispute arising in connection with the election;
(d) any dispute arising  in  connection  with  employment  of  officers  and
servants of the different classes of societies specified in sub-section  (1)
of section 80, including their promotion and inter se seniority.
(3) No dispute arising in connection with  the  election  of  the  Board  of
Management or an officer of the society shall  be  entertained  by  the  Co-
operative Arbitration Court unless it is referred to  it  within  one  month
from the date of the election."


13.   Considering aforesaid provisions of Section 69, we  do  not  find  any
force  in  the  contention  of  the  appellants  regarding  availability  of
alternate remedy by way of filing an Arbitration case under  section  69  of
the Act since in our opinion dispute between the writ  petitioners  and  the
Bank does not come within the provisions of this Section.   We are  also  of
the view that the  Bank  has  failed  to  conduct  written  examination  and
interview as per the then existing guidelines issued by the Registrar of Co-
operative Societies.  Indisputably, the respondent  writ  petitioners  moved
the High Court challenging the circulars immediately after the  notification
and prior to the conduct of examination.



14.   In view of the aforesaid, we concur with  the  decision  of  the  High
Court and do not find any merit whatsoever, in both the appeals,  which  are
accordingly dismissed with no order as to costs.

2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41831

                                                              REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.7839 OF 2014
       (Arising out of Special Leave Petition (Civil) No.9794 of 2013)

Akalakunnam Village Service Co-op. Bank Ltd.
and another                             ………Appellants

                                   Versus

Binu N.  and others                          ……..Respondents
                                    WITH

                        CIVIL APPEAL NO.7840 OF 2014
      (Arising out of Special Leave Petition (Civil) No.10809 of 2013)

Kishore and others                           ………Appellants

                                   Versus

Binu N.  and others                          ……..Respondents



                               J U D G M E N T

M.Y. EQBAL, J.

      Leave granted.

2.    These two appeals are directed against the judgment  and  order  dated
12.2.2013 passed by the  High  Court  of  Kerala  dismissing  the  two  writ
appeals preferred by the appellants herein challenging the judgment  of  the
Single Judge whereby the writ petition filed by Respondent Nos.1  to  3  was
allowed quashing Notification inviting applications for appointment  to  the
post of Attender/Peon and the appointments made pursuant thereto.
3.    The facts of the case lie in a narrow compass.
4.    The Akalakunnam Village Service Co-op  Bank  Ltd.  (for  the  sake  of
brevity hereinafter  referred  to  as  “the  Bank”)  by  Notification  dated
6.6.2009 invited applications to fill up the vacant posts of 1 Attender  and
3 Peons and to reserve one vacancy of Peon for members belonging  to  SC/ST.
The last date stipulated  for  submission  of  applications  was  22.6.2009.
Pursuant to this,  among  others,  respondent  nos.1  to  3,  who  are  writ
petitioner nos.1 to 3 applied and a written test was held on  15.7.2009  and
an interview was also conducted in the afternoon of that day.



5.    In the meanwhile, respondents 1  to  3  (hereinafter  referred  to  as
“writ  petitioners”)  filed  writ   petition   challenging   the   aforesaid
Notification on the ground that notification does not confirm to the  Kerala
Co-operative Societies Rules (in  short,  “the  Rules”)  and  the  circulars
issued under Rule 182(5) thereof.   They also alleged in the  writ  petition
that steps are afoot to appoint four persons, namely, Kishore,  Jomon  K.J.,
Archana Binoy and Abhilash, who are appellants herein in appeal arising  out
of SLP(C) No.10809 of 2013 and respondent nos.6 to 9 in appeal  arising  out
of SLP(C) No.9794 of 2013 [for the sake of  brevity,  they  are  hereinafter
referred  to  as  “selected  candidates”].   The  Bank  and   the   selected
candidates filed counter affidavit and contested the matter.



6.    After hearing parties on either side, the learned Single Judge of  the
High Court came to  the  conclusion  that  the  Notification  and  selection
process  were  not  issued  in  accordance  with  Circulars  issued  by  the
Registrar of Co-operative Societies and quashed the aforesaid  Notification,
selection and appointment of the selected candidates directing the  Bank  to
conduct a fresh selection within six months in  the  manner  directed  after
inviting applications in accordance  with  the  Circular.   Till  then,  the
selected candidates were permitted to work on daily wage  basis  subject  to
the condition that their initial appointment of such  continuance  will  not
confer on them any preference for appointment.



7.    The judgment of the  learned  Single  Judge  of  the  High  Court  was
challenged by the Bank  as  well  as  selected  candidates  by  way  of  two
separate writ appeals, challenging  maintainability  of  the  writ  petition
against the appellant Co-operative Society. Appellants  contended  that  the
writ petitioners have effective alternative remedy under section 69  of  the
Kerala Co-operative Societies Act  (in  short,  “the  Act”).   They  further
contended that since the writ  petitioners  participated  in  the  selection
process, they cannot turn round and take the contention that  the  selection
process itself is bad.  It has been  further  contended  on  behalf  of  the
appellants that the directions in the circular are not mandatory in  nature,
but are only guidelines and unless the  writ  petitioners  prove  prejudice,
the High Court should not interfere with the selection process.



8.    It has been contended on behalf of the writ petitioners  that  a  writ
would lie against a Co-operative Society when the duty owned by it is  of  a
public nature or when there is infringement of any statutory rules by a  co-
operative society.  Their contention  is  that  under  Rule  182(5)  of  the
Kerala Co-operative Societies Rules, in respect of societies and  posts  not
covered by Section 80(3)(A) and Section 80B of  the  Act,  the  appointments
shall be made by the committee after conducting the written examination  and
interview as per the guideline issued by the Registrar.  The Government  and
the Registrar have issued Exts.  P3  to  P6  guidelines  under  Rule  182(5)
regarding  the  conduct  of  examination  and  interview  to  the  post   of
Attender/Peon.  Ext. P1 Notification  issued  by  the  Bank  is  clearly  in
violation of the guidelines issued as per  the  circulars  relied  upon  and
there being statutory violation,  the  writ  petition  would  certainly  lie
against the Bank.  It  has  also  been  submitted  on  behalf  of  the  writ
petitioners that the written test must have been  conducted  by  an  outside
agency,  whereas,  in  the  present  case,  the  committee  authorized   the
President to find out a suitable person to conduct the written  test.   With
regard  to  alternative  remedy,  it  has  been  contended  that  the   writ
petitioners do not have any alternative remedy available insofar as  Section
69 is not applicable to them.  It has been further contended  by  them  that
the writ petition was filed even before the conduct of the written test  and
immediately after publication of the Notification.



9.    Considering the rival contentions in detail and  concerned  provisions
of the Act and Kerala Co-operative Societies Rules, the  Division  Bench  of
the High Court did not find any merit in  the  writ  appeals  and  dismissed
both the writ appeals  preferred  by  the  appellants  herein.   Hence,  the
present appeals by special leave.



10.   We have heard learned counsel for  the  parties  appearing  on  either
side and have gone through the impugned order passed by the  Division  Bench
of the High Court.



11.   We do not find any reason to interfere with the findings of  the  High
Court.   Rule 182(5)  of   the  Rules   stipulates   that   “In  respect  of
societies and posts not covered by section 80(3)(A) and Section 80B  of  the
Act, the appointments shall be made by the Committee  after  conducting  the
written examination and interview  as  per  the  guidelines  issued  by  the
Registrar”.   The circulars issued by the Government and  Registrar  of  the
Co-operative Societies  have statutory force and specifically stipulate  the
procedure for conducting the selection to the post of sub staff.



12.   We would also like to  quote  Section  69  of  the  Act  hereunder  to
analyze contention of alternate remedy:

“69.  Disputes  to  be  decided  by  Co-operative  Arbitration   Court   and
Registrar.—
(1)  Notwithstanding anything contained in any law for  the  time  being  in
force, if a dispute arises,—
 (a) among members, past members and persons claiming through members,  past
members and deceased members; or
 (b) between a member, past member or person claiming through  a  member,  a
past member or deceased  member  and  the  society,  its  committee  or  any
officer, agent or employee of the society; or
(c) between the  society  or  its  committee  and  any  past  committee  any
officer, agent or employee or any past officer, past agent or past  employee
or the nominee, heirs or legal  representatives  of  any  deceased  officer,
deceased agent or deceased employee of the society; or
(d) between the society and any other society; or
(e) between a society and the members of a society affiliated to it; or
(f) between the society and a person, other than a member  of  the  society,
who has been granted a loan by the society or with whom the society  has  or
had business transactions or any person claiming through such a person; or
(g) between the society and a surety of a member, past member, deceased
member or employee or a person, other than a member, who has been granted  a
loan by the society, whether such a surety is or is  not  a  member  of  the
society; or
(h) between the society and a creditor of the society,  such  dispute  shall
be referred to the Co-operative Arbitration Court constituted under  section
70A in the case of non-monetary disputes and to the Registrar, in  the  case
of monetary disputes; and the Arbitration Court or  the  Registrar,  as  the
case may be,  shall  decide  such  dispute  and  no  other  court  or  other
authority  shall  have  jurisdiction  to  entertain  any   suit   or   other
proceedings in respect of such dispute.

(2) For the purposes of sub-section (1), the following shall also be  deemed
to be disputes, namely:—
(a) a claim by the society for any debt or demand due to it  from  a  member
or the nominee,  heirs  or  legal  representatives  of  a  deceased  member,
whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor, where the society  has

recovered from the surety any amount in respect of any debt  or  demand  due
to it from the  principal  debtor,  as  a  result  of  the  default  of  the
principal debtor, whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the  election  of  the  Board  of
Management or any officer of the society;
Explanation:—A dispute arising at any stage of an election  commencing  from
the convening of the general body meeting for the election, shall be  deemed
to be a dispute arising in connection with the election;
(d) any dispute arising  in  connection  with  employment  of  officers  and
servants of the different classes of societies specified in sub-section  (1)
of section 80, including their promotion and inter se seniority.
(3) No dispute arising in connection with  the  election  of  the  Board  of
Management or an officer of the society shall  be  entertained  by  the  Co-
operative Arbitration Court unless it is referred to  it  within  one  month
from the date of the election."


13.   Considering aforesaid provisions of Section 69, we  do  not  find  any
force  in  the  contention  of  the  appellants  regarding  availability  of
alternate remedy by way of filing an Arbitration case under  section  69  of
the Act since in our opinion dispute between the writ  petitioners  and  the
Bank does not come within the provisions of this Section.   We are  also  of
the view that the  Bank  has  failed  to  conduct  written  examination  and
interview as per the then existing guidelines issued by the Registrar of Co-
operative Societies.  Indisputably, the respondent  writ  petitioners  moved
the High Court challenging the circulars immediately after the  notification
and prior to the conduct of examination.



14.   In view of the aforesaid, we concur with  the  decision  of  the  High
Court and do not find any merit whatsoever, in both the appeals,  which  are
accordingly dismissed with no order as to costs.  Consequently, the  interim
order of stay granted by this Court stands vacated.



                                                              …………………………….J.
                                  (Ranjan Gogoi)




                                                              …………………………….J.
                                  (M.Y. Eqbal)
New Delhi,
August 20, 2014.


Thursday, August 14, 2014

Departmental enquiry - charges proved and upheld from bottom to top - But D.B. modified the punishment - Apex court held that the DB traveled beyond it's jurisdiction and set aside the order and held that However, the Division Bench chose to tinker with the quantum of punishment imposed by the disciplinary authority. Though it upheld the punishment of recovery of loss, the punishment of reduction in pay scale has been set aside and substituted by the punishment of withholding of one increment with cumulative effect for a period of one year as per Regulation 39(1)(b) of the L.I.C. of India (Staff) Regulations, 1960. We are of the opinion that the High Court transgressed its limits of judicial review by itself assuming the role of sitting as departmental appellate authority, which is not permissible in law. =CIVIL APPEAL NO. 7717 OF 2014 (arising out of Special Leave Petition (Civil) No. 39113 of 2013) |THE LIFE INSURANCE CORPORATION | | |OF INDIA & OTHERS |.....APPELLANT(S) | |VERSUS | | |S. VASANTHI |.....RESPONDENT(S) = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41829

  Departmental enquiry - charges proved and upheld from bottom to top - But D.B. modified the punishment - Apex court held that the DB traveled beyond it's jurisdiction and set aside the order and held that However, the Division Bench chose to tinker with the quantum  of  punishment
imposed by the disciplinary authority.  Though it upheld the  punishment  of recovery of loss, the punishment of reduction in  pay  scale  has  been  set aside and substituted by the punishment  of  withholding  of  one  increment with cumulative effect for a period of one year as per  Regulation  39(1)(b) of the L.I.C. of  India  (Staff)  Regulations,  1960.  We are of the opinion  that  the  High  Court  transgressed  its  limits  of judicial review by itself assuming  the  role  of  sitting  as  departmental appellate authority,  which  is  not  permissible  in  law.  =

Division  Bench  of  the  High  Court  has
modified the punishment imposed by the disciplinary authority  of  appellant
No.1, i.e. Life Insurance Corporation of India (hereinafter referred  to  as
the 'LIC') on the respondent employee in a departmental enquiry.=
    Interestingly, the Division Bench has  concurred  with
the learned Single Judge regarding the guilt of the respondent in  tampering
of records, which is clear from the following:
“61.  On a careful consideration of respective contentions and  in  view  of
the detailed discussions and for the reasons  mentioned  aforesaid,  in  the
instant case, we hold that the conclusions arrived  at  by  the  authorities
concerned are based on evidence and on available materials  on  record.   In
fact, the Enquiry Officer has submitted a  Report  dated  23.12.1997,  inter
alia,  holding  that  the  Appellant  is  clearly  guilty  of   deliberately
tampering with  the  premium  position  as  detailed  in  the  Report.   The
Divisional Manager (Disciplinary Authority) of L.I.C. of  India  has  passed
the final order on 30.12.1998 by imposing the punishment of (i) Recovery  of
loss to the Corporation of Rs.16,001.90 and (ii) Reduction in Basic  Pay  to
the lowest time scale (i.e.) Rs.1950/-.  The Appellate  Authority  also,  on
28.10.1999, has confirmed the order  of  the  Disciplinary  Authority  dated
30.12.1998.   Even  to  the  Memorial  dated  09.02.2000  submitted  by  the
Appellant/Petitioner,  addressed  to  the  1st  Respondent/Chairman  of  the
L.I.C.  of  India,  Mumbai,  an  order  of  rejection  has  been  passed  on
25.09.2000 finding no merit in the Memorial warranting no interference  with
the penalties of 'reduction in basic pay to minimum of scale' and  'recovery
of financial loss of Rs.16,001.90'.  As such, we are in  complete  agreement
in regard to the conclusions arrived at by the  authorities  concerned  that
the charges levelled against the Appellant/Petitioner have been proved.”

However, the Division Bench chose to tinker with the quantum  of  punishment
imposed by the disciplinary authority.  Though it upheld the  punishment  of
recovery of loss, the punishment of reduction in  pay  scale  has  been  set
aside and substituted by the punishment  of  withholding  of  one  increment
with cumulative effect for a period of one year as per  Regulation  39(1)(b)
of the L.I.C. of  India  (Staff)  Regulations,  1960.  =

 We are of the opinion  that  the  High  Court  transgressed  its  limits  of
judicial review by itself assuming  the  role  of  sitting  as  departmental
appellate authority,  which  is  not  permissible  in  law.  
The  principles
discussed above have been summed up and      summarised as  follows  in  the
case of Lucknow Kshetriya Gramin Bank (Now Allahabad, Uttar  Pradesh  Gramin
Bank) & Anr. v. Rajendra Singh, (2013) 12 SCC 372 :
a)    When charge(s) of misconduct is proved in an enquiry, the  quantum  of
punishment to be imposed in a particular case is essentially the  domain  of
the departmental authorities.
b)    The courts cannot assume the function  of  disciplinary/  departmental
authorities and to decide the quantum of punishment and  nature  of  penalty
to be awarded, as this function is exclusively within  the  jurisdiction  of
the competent authority.
c)    Limited judicial review is available to interfere with the  punishment
imposed by the disciplinary authority, only in cases where such  penalty  is
found to be shocking to the conscience of the court.
d)    Even in such a case when the punishment is  set  aside  as  shockingly
disproportionate to the nature of  charges  framed  against  the  delinquent
employee, the appropriate course of action is to remit the  matter  back  to
the disciplinary authority or the  appellate  authority  with  direction  to
pass appropriate order of penalty.  The court by itself  cannot  mandate  as
to what should be the penalty in such a case.
e)    The only exception to the principle stated in para  (d)  above,  would
be in those cases where the co-delinquent is awarded  lesser  punishment  by
the  disciplinary  authoirty  even  when  the  charges  of  misconduct  were
identical or the co-delinquent was foisted with more serious charges.   This
would be on the doctrine of equaltiy when it  is  found  that  the  employee
concerned and the co-delinquent are equally placed.  However, there  has  to
be a complete parity between the two, not  only  in  respect  of  nature  of
charge but subsequent conduct as well after the service of  charge-sheet  in
the two  cases.   If  the  co-delinquent  accepts  the  charges,  indicating
remorse  with  unqualified  apology,  lesser  punishment  to  him  would  be
justifiable.

13)   Learned counsel for the respondent had  no  answer  to  the  aforesaid
position in law and could not justify  the  stance  of  the  High  Court  in
modifying  the  punishment  in  the  manner  indicated  above.  
Therefore,
sidetracking the central issue, he made a vain attempt  to  argue  that  the
charges against the respondent could not be held to be  proved  as  per  the
records.
 Obviously, that is not  even the issue before  us.  
As  mentioned
above,  there  are  consistent  findings,  not  only  of  the   departmental
authorities, but even the Single Judge as also the  Division  Bench  of  the
High  Court  to  the  effect  that  charges  against  the  respondent  stood
established in the departmental enquiry.  Thus, it is  not  permissible  for
the counsel for the respondent even to argue such a  proposition,  that  too
when the respondent did not challenge the  judgment  rendered  by  the  High
Court.

14)   As a result,  the  instant  appeal  is  allowed.   That  part  of  the
directions contained in para 62 of the impugned judgment which modifies  the
penalty are hereby set aside and the penalty  imposed  by  the  disciplinary
authority is hereby restored. There  shall,  however,  be  no  order  as  to
costs.

2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41829

J. CHELAMESWAR, A.K. SIKRI
                                                     NON - REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 7717 OF 2014
      (arising out of Special Leave Petition (Civil) No. 39113 of 2013)


|THE LIFE INSURANCE CORPORATION           |                               |
|OF INDIA & OTHERS                        |.....APPELLANT(S)              |
|VERSUS                                   |                               |
|S. VASANTHI                              |.....RESPONDENT(S)             |


                               J U D G M E N T

A.K. SIKRI, J.
                 Leave granted.

This appeal is preferred against the final judgment  and  order  dated  June
26, 2013 in Writ Appeal No. 1279  of  2010  passed  by  the  High  Court  of
Judicature at Madras whereby the  Division  Bench  of  the  High  Court  has
modified the punishment imposed by the disciplinary authority  of  appellant
No.1, i.e. Life Insurance Corporation of India (hereinafter referred  to  as
the 'LIC') on the respondent employee in a departmental enquiry.

Insofar as facts are concerned, it is sufficient  to  note  that  a  charge-
sheet was served upon the respondent with the allegations of tampering  with
the premium position and other records pertaining to 17 insurance  policies,
which resulted in settlement  of  surrender  value  payments,  though  these
policies had not acquired surrender value.  It was alleged  in  the  charge-
sheet that by this act of the respondent, pecuniary loss was caused  to  the
LIC.  These charges stood proved in the enquiry held against the  respondent
by the Enquiry Officer vide Report dated December 23, 1997.   Based  on  the
said Report, the disciplinary authority  issued  show-cause  notice  to  the
respondent proposing the following punishment:
(i)   Recovery of loss to the Corporation of Rs.16,001.90, and

(ii)  Reduction in Basic Pay to the lowest time scale (i.e.) Rs.1950/-.

The respondent submitted her reply to the  said  show-cause  notice.   After
going through the same, the Divisional Manager, as  disciplinary  authority,
passed orders dated December 30, 1998 accepting the findings of the  Enquiry
Officer and imposing the punishment as proposed in  the  show-cause  notice.
Appeal of  the  respondent  preferred  thereagainst  was  dismissed  by  the
appellate authority.  The respondent filed a Memorial  before  the  Chairman
of the LIC, which was also rejeged vide orders dated September 25, 2000.
At this stage, the respondent  took  recourse  to  judicial  proceedings  by
filing the writ petition in the High Court of  Judicature  at  Madras.  This
writ petition was dismissed by the learned Single Judge of the  High  Court,
who not only held that a proper enquiry was  conducted  in  consonance  with
the principles of natural justice as well as the extant rules, but even  the
punishment imposed by the disciplinary authority was  justified  and  upheld
the same.  Being aggrieved, the respondent preferred writ appeal, which  has
been decided by the Division Bench of the High Court vide impugned  judgment
dated June 26, 2013.  Interestingly, the Division Bench has  concurred  with
the learned Single Judge regarding the guilt of the respondent in  tampering
of records, which is clear from the following:
“61.  On a careful consideration of respective contentions and  in  view  of
the detailed discussions and for the reasons  mentioned  aforesaid,  in  the
instant case, we hold that the conclusions arrived  at  by  the  authorities
concerned are based on evidence and on available materials  on  record.   In
fact, the Enquiry Officer has submitted a  Report  dated  23.12.1997,  inter
alia,  holding  that  the  Appellant  is  clearly  guilty  of   deliberately
tampering with  the  premium  position  as  detailed  in  the  Report.   The
Divisional Manager (Disciplinary Authority) of L.I.C. of  India  has  passed
the final order on 30.12.1998 by imposing the punishment of (i) Recovery  of
loss to the Corporation of Rs.16,001.90 and (ii) Reduction in Basic  Pay  to
the lowest time scale (i.e.) Rs.1950/-.  The Appellate  Authority  also,  on
28.10.1999, has confirmed the order  of  the  Disciplinary  Authority  dated
30.12.1998.   Even  to  the  Memorial  dated  09.02.2000  submitted  by  the
Appellant/Petitioner,  addressed  to  the  1st  Respondent/Chairman  of  the
L.I.C.  of  India,  Mumbai,  an  order  of  rejection  has  been  passed  on
25.09.2000 finding no merit in the Memorial warranting no interference  with
the penalties of 'reduction in basic pay to minimum of scale' and  'recovery
of financial loss of Rs.16,001.90'.  As such, we are in  complete  agreement
in regard to the conclusions arrived at by the  authorities  concerned  that
the charges levelled against the Appellant/Petitioner have been proved.”

However, the Division Bench chose to tinker with the quantum  of  punishment
imposed by the disciplinary authority.  Though it upheld the  punishment  of
recovery of loss, the punishment of reduction in  pay  scale  has  been  set
aside and substituted by the punishment  of  withholding  of  one  increment
with cumulative effect for a period of one year as per  Regulation  39(1)(b)
of the L.I.C. of  India  (Staff)  Regulations,  1960.   Discussion  on  this
aspect can be found in paragraph  No.62  of  the  impugned  judgment,  which
reads as under:
“62.  Bearing in mind an important fact that  awarding  of  punishment  must
suit the offence and offender and also that the said punishment  should  not
be either vindictive or unduly harsh, we are of the considered view that  in
the present case, for the proved charges  against  the  Appellant/Petitioner
(Delinquent Employee), the imposition of penalty viz., recovery of  loss  to
the L.I.C. of India to an extent of  Rs.16,001.90  in  terms  of  Regulation
39(1)(c) of L.I.C. of India (Staff) Regulations,  1960  is  just  valid  and
proper one.  However, to  secure  the  ends  of  Justice,  inasmuch  as  the
imposition of 'punishment of reduction in basic pay to the lowest scale  pay
(i.e.)  Rs.1950/-'  imposed  on  the  Appellant/Petitioner   in   terms   of
Regulation 39(1)(d) of the L.I.C. of India (Staff) Regulations, 1960, is  on
the higher side, accordingly, we set aside the same and instead we impose  a
penalty of withholding of one increment with cumulative effect for a  period
of one year as per Regulation  39(1)(b)  of  the  L.I.C.  of  India  (Staff)
Regulations, 1960, by restoring her to the original position at the time  of
order of  punishment  dated  30.12.1998.   However,  we  hereby  direct  the
Respondents that the period of service put up  by  the  Appellant/Petitioner
in the lowest time scale of pay viz., Rs.1950/- be  treated  as  service  in
the original post held by her prior to the award of the penalty, subject  to
the condition that the Appellant/Petitioner shall not  be  entitled  to  any
difference of salary for and during the period of reduction  to  the  lowest
time scale of pay.  Consequently, the order passed  by  the  Learned  Single
Judge dated 26.04.2010,. in dismissing the Writ Petition, is  set  aside  by
this Court for the reasons assigned in this Appeal.”

The respondent has not filed any appeal thereby accepting  the  judgment  of
the Division Bench.  However, the appellants are aggrieved by  the  decision
of the Division Bench in  modifying  the  punishment,  as  mentioned  above.
Therefore, in the instant appeal, we have heard the learned counsel for  the
parties on this limited aspect as that is the  only  scope  of  the  present
appeal.

It was argued by the learned counsel for the  appellants  that  it  was  not
open to the High Court to modify the penalty of reduction in  pay  scale  to
the lowest scale of pay, that too without giving any reasons, what  to  talk
of justifiable  reasons.   His  submission  was  that  the  High  Court,  in
exercise of judicial review, had  very  limited  jurisdiction  to  interfere
with the quantum of punishment imposed by the  disciplinary  authority.   It
could be only in those  cases  where  penalty  is  found  to  be  shockingly
disproportionate to the gravity of charge.  He also submitted  that  it  was
not within the domain of the High Court to impose a particular  penalty  and
thereby assume to itself the role of disciplinary  authority.   The  leanred
counsel submitted  that  the  aforesaid  approach  of  the  High  Court  was
directly in conflict with the judgment of this Court in Om  Kumar  v.  Union
of India, (2001) 2 SCC 386, wherein this Court has held  that  the  question
of the quantum of punishment in disciplinary matters is  primarily  for  the
disciplinary authority  and  the  jurisdiction  of  the  High  Courts  under
Article 226 of  the  Constitution  or  of  the  Admnistrative  Tribunals  is
limited and is confined to the applicability of one or other  of  the  well-
known principles  known  as  'Wednesbury  principles'.   This  Court,  while
analyzing the said principles, also observed that in case if the Court  felt
that the quantum of punishment was disproportionate, then it  should  remand
the matter back to the  disciplinary  authority  instead  of  modifying  the
punishment on its own.  Relevant passage  from  the  judgment  is  extracted
below:
“71.  Thus, from the above principles and decided cases,  it  must  be  held
that  where  an  administrative   decision   relating   to   punishment   in
disciplinary cases is questioned as “arbitrary” under Article 14, the  court
is confined to Wednesbury principles as  a  secondary  reviewing  authority.
The court will not  apply  proportionality  as  a  primary  reviewing  court
because no  issue  of  fundamental  freedoms  nor  of  discrimination  under
Article 14 applies in such a context.  The court while reviewing  punishment
and if it is satisfied that  Wednesbury  principles  are  violated,  it  has
normally to remit the matter to the administrator for a  fresh  decision  as
to the quantum of punishment.  Only in rare cases where there has been  long
delay in the time taken by the disciplinary  proceedings  and  in  the  time
taken in  the  courts,  and  such  extreme  or  rare  cases  can  the  court
substitute its own view as to the quantum of punishment.”

We find sufficient force in the aforesaid submission of the learned  counsel
for the appellants.

      We have already reproduced paras 61 and 62 of  the  impugned  judgment
of the High Court.  After detailed discussion  of  the  various  contentions
advanced by the respondent here (appellant before the High Court), the  High
Court repelled all those contentions and in para 61 summed up  the  position
by holding that the respondent herein was very much guilty  of  deliberately
tampering with the premium position as detailed in the report.  So much  so,
it expressed its 'complete agreement' in regard to the  conclusions  arrived
at by the authorities  concerned  that  the  charges  levelled  against  the
respondent had been proved.  As noticed above, charges pertain to  tampering
with the premium position and  other  records  pertaining  to  17  insurance
policies.  It had resulted in pecuniary loss to the LIC as well.  Charge  of
tampering with the record is a very  serious  charge  and  it  adds  to  the
gravity when it is coupled with financial implications.   Even  for  such  a
severe charge, the disciplinary  authority  had  inflicted  the  penalty  of
reduction in basic pay to the lowest time scale.  The  High  Court  has  not
even stated as to how this penalty was bad in law and simply labelled it  to
be “harsh”  that  too  with  no  reasons.   While  intermeddling  with  this
penalty, the only epithet used is “to secure the ends of justice”.   In  the
absence of any exercise undertaken by the High Court that how  it  perceived
such a penalty to be “harsh”, there was no  reason  to  interfere  with  the
same.  Even otherwise,  we  do  not  find  such  a  penalty  at  all  to  be
shockingly  disproportionate  having  regard  to  the  very  serious  charge
levelled against the respondent.

The scope and power of judicial review of the courts while dealing with  the
validity of quantum of punishment imposed by the disciplinary  authority  is
now well settled. In the case of Deputy  Commissioner,  KVS  &  Ors.  v.  J.
Hussain, (2013) 10 SCC 106, the law on this  subject,  is  recapitulated  in
the following manner:
“6.  When the charge proved, as happened in the instance case,   it  is  the
disciplinary authority with whom lies the discretion to decide  as  to  what
kind of punishment is to be imposed.  Of course, this discretion has  to  be
examined objectively keeping in mind the nature and gravity of charge.   The
Disciplinary Authority is to decide a particular penalty  specified  in  the
relevant  Rules.   Host  of  factors  go  into  the  decision  making  while
exercising such a discretion  which  include,  apart  from  the  nature  and
gravity of misconduct, past  conduct,  nature  of  duties  assigned  to  the
delinquent, responsibility of duties assigned to  the  delinquent,  previous
penalty, if any, and the discipline required to be maintained in  department
or establishment where he works, as well as  extenuating  circumstances,  if
any exist.  The order of the Appellate Authority while having a  re-look  of
the case would, obviously, examine as to whether the punishment  imposed  by
the  Disciplinary  Authority  is  reasonable  or  not.   If  the   Appellate
Authority is of the opinion that the case warrants lesser  penalty,  it  can
reduce the penalty so imposed by the Disciplinary Authority.  Such  a  power
which vests with the Appellate Authority departmentally  is  ordinarily  not
available to the Court or a Tribunal.  The Court while undertaking  judicial
review of the matter is not  supposed  to  substitute  its  own  opinion  on
reappraisal of facts.(See: Union Territory  of  Dadra  &  Nagar  Haveli  vs.
Gulabhia M.Lad (2010) 5 SCC 775)  In exercise of power of  judicial  review,
however, the Court can interfere with the  punishment  imposed  when  it  is
found to be totally irrational or is outrageous in defiance of logic.   This
limited  scope  of  judicial  review  is  permissible  and  interference  is
available only when punishment is  shockingly  disproportionate,  suggesting
lack of good faith.  Otherwise, merely because in the opinion of  the  Court
lesser punishment would have been more appropriate, cannot be  a  ground  to
interfere with the discretion of the departmental authorities.

7.    When the punishment is found to be  outrageously  disproportionate  to
the nature of charge, principle of proportionality comes into play.  It  is,
however, to be borne in mind that this principle would be  attracted,  which
is in tune with doctrine of Wednesbury Rule of reasonableness, only when  in
the  facts  and  circumstances  of  the  case,   penalty   imposed   is   so
disproportionate to the nature of charge that it shocks  the  conscience  of
the  Court  and  the  Court  is  forced  to  believe  that  it  is   totally
unreasonable  and  arbitrary.   This  principle   of   proportionality   was
propounded by Lord Diplock in Council of Civil Service Unions  vs.  Minister
for Civil Service in the following words:

“Judicial review has I think  developed  to  a  stage  today  when,  without
reiterating any analysis of the steps by  which  the  development  has  come
about, one can conveniently classify under three heads  of  the  grounds  on
which administrative action is subject to control by  judicial  review.  The
first ground I would call “illegality”, the second “irrationality”  and  the
third “procedural impropriety”. This is not to say that further  development
on a case by case basis may not in course of time  add  further  grounds.  I
have in mind particularly  the  possible  adoption  in  the  future  of  the
principle of proportionality.”

8.    Imprimatur to the aforesaid principle was accorded by  this  Court  as
well, in Ranjit Thakur vs. Union of India (1987) 4 SCC  611.   Speaking  for
the Court, Justice Venkatachaliah (as he then  was)  emphasizing  that  “all
powers have legal limits” invokes the aforesaid doctrine  in  the  following
words:

“The question of  the  choice  and  quantum  of  punishment  is  within  the
jurisdiction and discretion of the court-martial. But the  sentence  has  to
suit the offence and the offender. It should not  be  vindictive  or  unduly
harsh. It should not be so disproportionate to the offence as to  shock  the
conscience and  amount  in  itself  to  conclusive  evidence  of  bias.  The
doctrine of proportionality as part  of  the  concept  of  judicial  review,
would ensure  that  even  on  an  aspect  which  is,  otherwise  within  the
exclusive province of the court-martial, if the decision of the  court  even
as to sentence is an outrageous defiance of logic, then the  sentence  would
not be immune from correction. Irrationality and perversity  are  recognized
grounds of judicial review.”

We are of the opinion  that  the  High  Court  transgressed  its  limits  of
judicial review by itself assuming  the  role  of  sitting  as  departmental
appellate authority,  which  is  not  permissible  in  law.  The  principles
discussed above have been summed up and      summarised as  follows  in  the
case of Lucknow Kshetriya Gramin Bank (Now Allahabad, Uttar  Pradesh  Gramin
Bank) & Anr. v. Rajendra Singh, (2013) 12 SCC 372 :
a)    When charge(s) of misconduct is proved in an enquiry, the  quantum  of
punishment to be imposed in a particular case is essentially the  domain  of
the departmental authorities.
b)    The courts cannot assume the function  of  disciplinary/  departmental
authorities and to decide the quantum of punishment and  nature  of  penalty
to be awarded, as this function is exclusively within  the  jurisdiction  of
the competent authority.
c)    Limited judicial review is available to interfere with the  punishment
imposed by the disciplinary authority, only in cases where such  penalty  is
found to be shocking to the conscience of the court.
d)    Even in such a case when the punishment is  set  aside  as  shockingly
disproportionate to the nature of  charges  framed  against  the  delinquent
employee, the appropriate course of action is to remit the  matter  back  to
the disciplinary authority or the  appellate  authority  with  direction  to
pass appropriate order of penalty.  The court by itself  cannot  mandate  as
to what should be the penalty in such a case.
e)    The only exception to the principle stated in para  (d)  above,  would
be in those cases where the co-delinquent is awarded  lesser  punishment  by
the  disciplinary  authoirty  even  when  the  charges  of  misconduct  were
identical or the co-delinquent was foisted with more serious charges.   This
would be on the doctrine of equaltiy when it  is  found  that  the  employee
concerned and the co-delinquent are equally placed.  However, there  has  to
be a complete parity between the two, not  only  in  respect  of  nature  of
charge but subsequent conduct as well after the service of  charge-sheet  in
the two  cases.   If  the  co-delinquent  accepts  the  charges,  indicating
remorse  with  unqualified  apology,  lesser  punishment  to  him  would  be
justifiable.

13)   Learned counsel for the respondent had  no  answer  to  the  aforesaid
position in law and could not justify  the  stance  of  the  High  Court  in
modifying  the  punishment  in  the  manner  indicated  above.    Therefore,
sidetracking the central issue, he made a vain attempt  to  argue  that  the
charges against the respondent could not be held to be  proved  as  per  the
records.  Obviously, that is not  even the issue before  us.   As  mentioned
above,  there  are  consistent  findings,  not  only  of  the   departmental
authorities, but even the Single Judge as also the  Division  Bench  of  the
High  Court  to  the  effect  that  charges  against  the  respondent  stood
established in the departmental enquiry.  Thus, it is  not  permissible  for
the counsel for the respondent even to argue such a  proposition,  that  too
when the respondent did not challenge the  judgment  rendered  by  the  High
Court.

14)   As a result,  the  instant  appeal  is  allowed.   That  part  of  the
directions contained in para 62 of the impugned judgment which modifies  the
penalty are hereby set aside and the penalty  imposed  by  the  disciplinary
authority is hereby restored. There  shall,  however,  be  no  order  as  to
costs.
|                                  |                                  |
|                                  |..................................|
|                                  |...........J.                     |
|                                  |(J. CHELAMESWAR)                  |
|                                  |                                  |
|                                  |                                  |
|New Delhi;                        |..................................|
|August 14, 2014.                  |...........J.                     |
|                                  |(A.K. SIKRI)                      |

Service Matter - Higher post salary when entitled for - whether the appellant is entitled to salary of high post where in he had worked for few years as in charge with specific terms - Apex court held that The order dated 28th February, 2001, by which the appellant was allowed to discharge duties in the post of Assistant Manager had made it clear that the appellant would not be entitled to claim any benefit therefrom including higher salary and further that he would continue to draw his salary in the post of Assistant Labour Welfare Officer. If the above was an express term of the order allowing him to discharge duties in the higher post, it is difficult to see as to how the said condition can be overlooked or ignored and dismissed the appeal =CIVIL APPEAL NO.7692 OF 2014 (Arising out of SLP (C) No. 5396 OF 2013) A. FRANCIS ... APPELLANT (S) VERSUS THE MANAGEMENT OF METROPOLITAN ... RESPONDENT (S) TRANSPORT CORPORATION LTD., TAMIL NADU = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41827

  Service Matter - Higher post salary when entitled for - whether the appellant is entitled to salary of high post where in he had worked for few years as in charge with specific terms - Apex court held that The order dated 28th  February,  2001,  by  which  the  appellant  was allowed to discharge duties in the post of Assistant  Manager  had  made  it clear that the  appellant  would  not  be  entitled  to  claim  any  benefit therefrom including higher salary and further  that  he  would  continue  to draw his salary in the post of Assistant Labour  Welfare  Officer.   If  the
above was an express term of the order allowing him to discharge  duties  in the higher post, it is difficult to see as to how the said condition can  be overlooked or ignored and dismissed the appeal =

in  the  present
appeal is the entitlement of the   appellant – A.   Francis  to
salary in the higher post of Assistant Manager wherein he  had  worked  from
28th February, 2001 till 31st May, 2005.=
   

 The order dated 28th  February,  2001,  by  which  the  appellant  was
allowed to discharge duties in the post of Assistant  Manager  had  made  it
clear that the  appellant  would  not  be  entitled  to  claim  any  benefit
therefrom including higher salary and further  that  he  would  continue  to
draw his salary in the post of Assistant Labour  Welfare  Officer.   If  the
above was an express term of the order allowing him to discharge  duties  in
the higher post, it is difficult to see as to how the said condition can  be
overlooked or ignored.  The decision of this  Court  in  Secretary-cum-Chief
Engineer,  Chandigarh   (supra)  was  rendered  in  a  situation  where  the
incumbent was promoted on ad hoc basis to the higher  post.   The  aforesaid
decision  is  also  distinguishable  inasmuch  as  there  was  no   specific
condition in the promotion order  which  debarred  the  incumbent  from  the
salary of the  higher  post.   Such  a  condition  was  incorporated  in  an
undertaking taken from the employee which was  held  by  this  Court  to  be
contrary to public policy.

9.    For the aforesaid reasons, we do not find any merit  in  this  appeal.
Consequently, the same is dismissed and  the  order  dated  29th  September,
2011 passed in Writ Appeal No.1181 of 2010 by the High Court  of  Judicature
at Madras is affirmed.            

2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41827

RANJAN GOGOI, M.Y. EQBAL
         NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL  NO.7692 OF 2014
                  (Arising out of SLP (C) No. 5396 OF 2013)


A. FRANCIS                                   ...    APPELLANT (S)

                                   VERSUS

THE MANAGEMENT OF METROPOLITAN          ...  RESPONDENT (S)
TRANSPORT CORPORATION LTD.,
TAMIL NADU



                               J U D G M E N T

RANJAN GOGOI, J.

1.    Delay condoned.

2.     Leave granted.

3.    In view of the limited  notice  issued  by  this  Court  on       24th
January, 2013, the only issue that has to be decided        in  the  present
appeal is the entitlement of the                appellant – A.   Francis  to
salary in the higher post of Assistant Manager wherein he  had  worked  from
28th February, 2001 till 31st May, 2005.

4.    The appellant was initially appointed as a clerk  in  the  Tamil  Nadu
State Transport Department whereafter he was  transferred  and  absorbed  in
the  newly  formed  Pallavan  Transport   Corporation,   which   Corporation
subsequently came to be known  as  the  Metropolitan  Transport  Corporation
Ltd., Chennai.  He was promoted to the post  of  ‘Section  Officer’  in  the
year 1991.  As a large number of  posts  of  Assistant  Manager  were  lying
vacant in the Corporation, by Order dated 28th February, 2001 the  appellant
was  posted  as  Assistant  Manager  In-charge  (Public   Relations).    The
aforesaid  order  made  it  clear  that  the  same  will  not   confer   any
preferential right  for  regular  promotion  and  that  the  appellant  will
continue to draw his grade pay in his present cadre  i.e.  Assistant  Labour
Welfare Officer.  Well after he had retired from service  with  effect  from
31st May, 2005, the appellant moved a Writ Petition before  the  High  Court
of Judicature at Madras claiming, inter alia, the relief  of  higher  salary
of the post of Assistant Manager.  The aforesaid Writ Petition  was  allowed
by order dated 4th December,  2009.   Aggrieved,  the  Corporation  filed  a
Letters Patent Appeal before the High Court.  The direction of  the  learned
Single Judge for payment of salary of the higher  post  for  the  period  in
question having been reversed in the Letters Patent  Appeal,  the  appellant
is before this Court.

5.    We have heard Ms. C.K. Sucharita, learned counsel  appearing  for  the
appellant and  Mr.  Subramonium  Prasad,  learned  AAG,  appearing  for  the
respondent.  We have carefully considered the orders passed by  the  learned
Single Judge as well as the appellate Bench of the High Court.

6.    Ms. C.K. Sucharita, learned counsel for the appellant  has  vehemently
contended that having discharged duties in the post  of  Assistant  Manager,
the appellant is entitled to the pay and emoluments  of  that  office  which
had been granted to him by the learned Single Judge.  Relying on a  decision
of this Court  in  Secretary-cum-Chief  Engineer,  Chandigarh  vs.  Hari  Om
Sharma & Ors.[1], learned counsel has contended that the Division  Bench  of
the High Court was plainly wrong in reversing the direction of  the  learned
Single Judge.  In fact, learned counsel would urge that  the  ratio  of  the
decision of this Court in Secretary-cum-Chief Engineer,  Chandigarh  (supra)
is a complete answer to the issues arising in the present proceeding.

7.    On the other hand, Mr. Subramonium Prasad, learned AAG, appearing  for
the respondent has placed before the Court the  terms  of  the  order  dated
28th February 2001 by which the appellant was allowed  to  discharge  duties
in the post of Assistant Manager.  It  is  pointed  out  that  there  was  a
specific condition stipulated in the order dated 28th  February,  2001  with
regard to salary and emoluments, namely, that the appellant  would  continue
to draw the  salary  in  the  lower  cadre  i.e.  Assistant  Labour  Welfare
Officer.  The claim made with regard  to  salary  of  the  higher  post  is,
therefore, not tenable in law.  Learned counsel  has  tried  to  distinguish
the decision of  this  Court  in  Secretary-cum-Chief  Engineer,  Chandigarh
(supra) by contending that the same must be understood  in  the  context  of
the facts of the case.

8.    The order dated 28th  February,  2001,  by  which  the  appellant  was
allowed to discharge duties in the post of Assistant  Manager  had  made  it
clear that the  appellant  would  not  be  entitled  to  claim  any  benefit
therefrom including higher salary and further  that  he  would  continue  to
draw his salary in the post of Assistant Labour  Welfare  Officer.   If  the
above was an express term of the order allowing him to discharge  duties  in
the higher post, it is difficult to see as to how the said condition can  be
overlooked or ignored.  The decision of this  Court  in  Secretary-cum-Chief
Engineer,  Chandigarh   (supra)  was  rendered  in  a  situation  where  the
incumbent was promoted on ad hoc basis to the higher  post.   The  aforesaid
decision  is  also  distinguishable  inasmuch  as  there  was  no   specific
condition in the promotion order  which  debarred  the  incumbent  from  the
salary of the  higher  post.   Such  a  condition  was  incorporated  in  an
undertaking taken from the employee which was  held  by  this  Court  to  be
contrary to public policy.

9.    For the aforesaid reasons, we do not find any merit  in  this  appeal.
Consequently, the same is dismissed and  the  order  dated  29th  September,
2011 passed in Writ Appeal No.1181 of 2010 by the High Court  of  Judicature
at Madras is affirmed.


                        …....…………………………J.
                                                  [RANJAN GOGOI]




                                                          .……....………………………J.
                                                   [M. Y. EQBAL]


NEW DELHI,
AUGUST 13, 2014.

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[1]    (1998) 5 SCC 87

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