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Wednesday, November 30, 2016

The authorities could not and should not have relied upon said enquiry report as basis in fresh enquiry for holding the appellant guilty of the charge and to award punishment of withholding of pension and gratuity. In the circumstances, we do not find that there was sufficient reason for the respondent authorities to exercise the powers under Rule 43 (b) read with Rule 139 of Bihar Pension Rules as neither there was pecuniary loss to the State, nor the present case is of a grave misconduct on the part of the appellant. 13. For the reasons as discussed above, we are inclined to interfere with the impugned order passed by the High Court. Therefore, the appeal is allowed. The orders dated 24.09.1997 and 17.06.1998, passed by the respondent authorities shall stand quashed. No order as to costs.

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 3829 OF 2011


Bindeshwari Chaudhary                              …  Appellant

                                   Versus

State   of   Bihar   &   Ors.                                              …
Respondents







                               J U D G M E N T

Prafulla C. Pant, J.


      This appeal is directed against judgment and order  dated  20.05.2008,
passed by High Court of Judicature at Patna, whereby Letters  Patent  Appeal
No. 436 of 2000 was disposed of allowing respondent authorities to  withhold
50% of gratuity and 50% of pension, of the appellant.

2.    Brief facts  of  the  case  are  that  appellant  who  was  posted  as
Executive Engineer with Irrigation Department of  State  of  Bihar,  in  the
District of Singhbhum, awarded a contract on 29.08.1989  to  one  M/s.  D.K.
Road Lines, for bed and slope lining of canal in Galudih. In  terms  of  the
contract, the contractor was required to furnish  bank  guarantee,  and  the
same was submitted by him for an  amount  of  Rs.23,61,500/-.  In  order  to
verify the genuineness of the bank guarantee furnished  by  the  contractor,
the appellant sent his Accounts Clerk to Punjab &  Sindh  Bank,  Jamshedpur,
with letter dated 29.08.1989 (Annexure-P1).  In  response  to  said  letter,
appellant received letter dated 01.09.1989  (Annexure-P-3)  from  Shri  T.S.
Gandhok, Branch Manager of the bank,  confirming  the  bank  guarantee.  The
appellant made payment of Rs.15,00,000/- on 02.09.1989 towards  mobilization
advance to the contractor. On 04.09.1989,  Superintending  Engineer,  issued
letter (Annexure P-4), directing the  appellant  not  to  make  mobilization
advance. But, subsequently said authority  allowed  the  appellant  to  make
second  mobilization  advance  to  the  contractor  vide  its  letter  dated
27.10.1989, consequently the appellant released payment of Rs.8,60,000/-  on
31.10.1989 towards second mobilization advance.   After  three  months,  the
Superintending  Engineer,  vide  letter  dated   23.12.1989   (Annexure-P-5)
approved the work done by M/s D.K. Road Lines assessing  the  work  done  at
Rs.42,79,021/-.  On  12.02.1990,  the  appellant  made  further  payment  of
Rs.2.55 lacs.

3.    Meanwhile, when new Manager took over the charge of Jamshedpur  Branch
of Punjab & Sindh  Bank,  issued  letter  dated  13.02.1990  (Annexure-P-7),
asking the appellant to send photocopy of the bank  guarantee  in  question.
And vide letter dated 20.03.1990 (Annexure-P-8)  the  new  Manager  informed
the appellant that no such bank guarantee  has  been  issued  by  the  bank.
Appellant has pleaded that he received said letter  on  10.04.1990,  and  by
then the appellant had released further  payment  of  Rs.7.33  lacs  towards
bill  of  the  contractor.  On  04.05.1990,  bank  cancelled   its   earlier
communication dated 01.09.1989.  The appellant finally released Rs.4.4  lacs
towards current bill of the contractor, whereafter  he  was  transferred  on
11.06.1990  to  Daltanganj.  It  appears  that  C.B.I.  registered  a   case
RC37(A)/91, Patna in  pursuance  to  the  fraudulent/forged  bank  guarantee
furnished by the contractor.


4.        On  04.04.1991,  appellant  was   placed   under   suspension   in
contemplation of departmental proceedings. The  appellant  challenged  order
of suspension in Writ Petition C.W.J.C. No. 2673 of  1991  before  the  High
Court which was disposed of with the observation that  if  charge  sheet  is
not served within three weeks on the appellant, the suspension  order  shall
stand quashed. On 13.06.1991 the respondent authorities served charge  sheet
(dated 02.05.1991) on  the  appellant,  relating  to  payment  of  unsecured
advance of Rs.14.5 lacs to the contractor. The appellant then filed  another
Writ Petition C.W.J.C. No. 4439 of 1991 once again seeking quashing  of  the
suspension order, and the  High  Court  vide  its  order  dated  10.10.1991,
quashed the same. The respondent authorities  vide  order  dated  05.12.1991
(Annexure–P12) revoked the suspension order, and  departmental  enquiry  was
dropped.  Consequently  on  14.01.1992,  the  appellant   joined   his   new
assignment as a Technical Advisor to Water Nigam Circle, Dumka.


5.    After investigation, C.B.I. submitted  charge  sheet  against  accused
T.S. Gandhok, Manager  of  Punjab  &  Sindh  Bank  who  confirmed  the  bank
guarantee,  and  accused  Ramdahin  Singh,  Senior  Accounts  Clerk  of  the
Irrigation Department who received the bank guarantee  from  the  contractor
and verified. The appellant has pleaded  that  he  is  not  accused  in  the
charge sheet, still  on  18.06.1993,  after  the  departmental  enquiry  was
earlier dropped, the respondent authorities awarded punishment  against  the
appellant withholding his three increments with cumulative effect, and  also
‘censured’ for the year 1989-90.  As such, third C.W.J.C. No.  942  of  1994
was filed by the appellant challenging the above order  of  punishment.  The
said writ petition was allowed on 23.03.1995 by the High Court holding  that
withholding  of  three  increments  with  cumulative  effect  is   a   major
punishment, and could not have been awarded  without  resorting  to  regular
departmental enquiry. However punishment of  “Censure’  was  not  interfered
with by the High Court.


6.     On  20th  May,  1995,  the  respondent  authorities  initiated  fresh
departmental  enquiry  against  the  appellant,  and  second  charge   sheet
(Annexure-P13) was served  on  him  relating  to  the  same  allegations  of
release of unsecured advance of Rs. 14.5 lacs to the contractor against  the
order of Superintending Engineer. The appellant  filed  his  objections  and
participated in the enquiry. The enquiry report dated 18.10.1996  (enclosure
with the Annexure P-17) was submitted by the enquiry officer  to  the  State
Government  with  the  finding  that  part  of  the  charge  stood   proved.
Consequently,  show  cause  notice  dated  23.10.1996  was  issued  to   the
appellant to which he responded on  07.01.1997.   Thereafter  the  appellant
stood  retired  on  31.01.1997.  On  24.09.1997,   appellant   was   awarded
punishment of withholding of 100% pension and gratuity.


7.    Finally, the appellant filed fourth Writ Petition C.W.J.C.  No.  11788
of 1997 before the High  Court  challenging  the  order  of  withholding  of
pension and gratuity. During the pendency of  said  writ  petition,  another
show cause notice dated 17.06.1998 (Annexure-P18)  was  issued  against  the
appellant under Rule 43 (b) read with Rule 139 of Bihar  Pension  Rules,  as
to why the pension benefits be not decided at zero.  The  High  Court,  vide
its order dated 04.12.1998, dismissed the writ petition. Aggrieved  by  said
order, Letters Patent Appeal No. 436 of 2000  was  filed  by  the  appellant
which  was  disposed  of  by  the  High  Court  vide  impugned  order  dated
20.05.2008 restricting withholding of gratuity and pension to the extent  of
fifty percent.

8.     Challenging  the  impugned  order,  Shri  Das,  learned  counsel  for
appellant argued that action of the appellant  in releasing the  payment  to
the contractor was bonafide as the bank guarantee submitted by him  was  got
verified from the Branch Manager of  the  Bank,  and  by  the  communication
dated 01.09.1989 (Annexure-P3), the bank confirmed  the  bank  guarantee  in
question.  In  this  connection,  it  is  further  pointed  out  that  after
investigation, it is only Ramdahin Singh, official of  the  department,  and
Shri T.S. Gandhok, the then Branch Manager  of  the  bank,  are  facing  the
trial, and not the appellant. It is further submitted that it is not a  case
where the appellant has caused pecuniary loss  to  the  department,  as  the
payments  made  to  the  contractor  were  either  permissible  mobilization
advances or against the running bills. It is also contended that  after  the
High  Court  quashed  the  punishment  earlier  awarded  by  the  respondent
authorities vide order dated 23.03.1995 passed in C.W.J.C. No. 942 of  1994,
fresh departmental enquiry was not maintainable.  Lastly,  it  is  contended
that from the evidence on record charge  against  the  appellant  cannot  be
said to have been proved.


9.   On  the  other  hand,  Shri  Shivam  Singh,  learned  counsel  for  the
respondent authorities submitted that Rule  43(b)  read  with  Rule  139  of
Bihar Pension Rules empowers the State Government to  withhold  the  pension
and gratuity of the employee, and the respondent authorities  have  done  so
for the sufficient reasons.

10.   We  have  considered  the  submissions  of  learned  counsel  for  the
parties. The first charge sheet was admittedly served on  the  appellant  on
13.06.1991, which was revoked consequent to order dated  10.10.1991,  passed
by the High Court in C.W.J.C. No.  4439  of  1991,  whereby  the  suspension
order issued against the appellant was quashed.  By  the  same  order  dated
05.12.1991 (Annexure P-12) departmental enquiry  was  also  dropped.   Fresh
charge sheet was served on the appellant on 20.05.1995 in the  same  matter.
It is pertinent to mention here  that  when  High  Court  in  earlier  round
quashed the  major  punishment  of  withholding  of  three  increments  with
cumulative effect,  it  did  not  disturb  the  minor  punishment  ‘censure’
awarded against the employee.  However, the  High  Court  did  observe  that
action can be taken in accordance with law.

11.    The  communication  dated  29.08.1989  (Annexure  P-1)  sent  by  the
appellant from the Branch Manager of the Bank, and  reply  dated  01.09.1989
(Annexure P-3) confirming bank guarantee received  from  the  Bank  are  not
disputed.  It is also not disputed that  after  investigation  C.B.I.  found
evidence against  the  then  Branch  Manager,  and  Ramdahin  Singh,  Senior
Accounts Clerk of  the  appellant,  as  the  persons  responsible  with  the
contractor, in the matter.  It is also  nobody’s  case  that  the  appellant
caused pecuniary loss to the exchequer.  In the  light  of  above,  we  find
force in submission of learned counsel of the appellant that  the  appellant
was bonafide in making the payment in question to the contractor, as he  did
make enquiries from the bank concerned before releasing  mobilizing  advance
to the contractor. Copy of letter dated  29.08.1989  (Annexure-P1)  sent  by
the appellant to Manager of Punjab & Sindh Bank is reproduced below:-


                      “OFFICE OF THE EXECUTIVE ENGINEER
                        IRRIGATION DIVISION, GALUDIH

Letter      No.      916/Galudih/                           Dated:29-08-1989


To,

The Manager,
Punjab and Sindh Bank,
Jamshedpur

Subject:    Confirmation of Bank Guarantee No. 20/89  dated  29-08-1989  for
Rs. 23,61,500/-  issued  in  the  name  of  Executive  Engineer,  Irrigation
Division on behalf of M/s. D.K. Road Lines.

Dear Sir,

The above Bank Guarantee has been submitted by M/s. D.K.  Road  Lines  as  a
security performance which has been issued by your Bank.

It is,  therefore,  requested  to  please  confirm  the  issue  through  Sri
Ramdahin Singh, S.A.C of this Division, who is deputed in your bank for  the
purpose. It is also requested to please confirm the issue in future  if  any
guarantee issued in my favour without waiting for any request letter.



                                                           Yours faithfully,



                                                                        Sd/-
                                                          Executive Engineer
                                               IRRIGATION DIVISION, GALUDIH”


In response to above, letter dated 01.09.1989 (Annexure-P3) appears to  have
been received by the appellant from the  bank.  The  said  letter  reads  as
under:-

“PUNJAB AND SINDH BANK
JAMSHEDPUR

            Dated: 01-09-1989

To,
The Executive Engineer,
Irrigation Division,
Galudih

Sir,

Ref: Your letter No.916/Galudih dated 29-08-1989.

In response to your letter mentioned above, we hereby confirm having  issued
bank guarantee No. 20/89 dated 29-08-1989 for Rs. 23,61,500/- and  B.G.  No.
21/89 dated 31-08-1989 for Rs. 23,61,500/- in your favour on behalf of  M/s.
D.K. Roadlines.

This is for your information please.



                                                     For PUNJAB & SINDH BANK

                                                          Sd/- T.S. Gandhok,
                                                        Manager, Jamshedpur”


12.   The Enquiry Report dated 18.10.1996 (enclosure to Annexure  P-17),  in
its para 8, shows that though it is mentioned that charge is proved  against
the appellant in the enquiry, but the finding is based  on  earlier  enquiry
report.  The earlier enquiry report was in question in C.W.J.C. No.  942  of
1994 in which punishment of withholding of three increments with  cumulative
effect was quashed.  The authorities could not and should  not  have  relied
upon said  enquiry  report  as  basis  in  fresh  enquiry  for  holding  the
appellant guilty of the charge and to award  punishment  of  withholding  of
pension and gratuity.  In the circumstances, we do not find that  there  was
sufficient reason for the respondent  authorities  to  exercise  the  powers
under Rule 43 (b) read with Rule 139  of  Bihar  Pension  Rules  as  neither
there was pecuniary loss to the State, nor the present case is  of  a  grave
misconduct on the part of the appellant.

13.   For the reasons as discussed above, we are inclined to interfere  with
the impugned order passed by  the  High  Court.  Therefore,  the  appeal  is
allowed.  The  orders  dated  24.09.1997  and  17.06.1998,  passed  by   the
respondent authorities shall stand quashed. No order as to costs.

                                                           ……………………………....J.
                                                            [J. Chelameswar]







                                                           ………………………..……..J.

                                                          [Prafulla C. Pant]

New Delhi;

November 29, 2016.



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