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CASE NO.: Writ Petition (civil)  150 of 1997

PETITIONER: NOIDA Entrepreneurs Assn

RESPONDENT: NOIDA & Ors.

DATE OF JUDGMENT: 15/01/2007

BENCH: Dr. ARIJIT PASAYAT,C.K. THAKKER & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T With

W.P.(C)  NO. 529 OF 1998

Dr. ARIJIT PASAYAT, J.

The present order will dispose of one of the issues  relating to decision of the Uttar Pradesh Government not to  take disciplinary action against Smt. Neera Yadav-respondent  No.7. A brief reference to certain earlier events and orders  passed by this Court would be necessary.   On consideration of complaints received during the  period 1994-96 the State Government decided to enquire into  the allegations.  These allegations related to irregularities in  allotments and conversions of land in New Okhla Industrial  Development Authority (in short ’NOIDA’).  Explanation was  asked by Principal Secretary (Heavy Industries) of the  Government of U.P.  from Smt. Neera Yadav.  On 2.2.1995 the  then Chief Minister of U.P. observed that there was no need for   any action in the matter. In November, 1995, a Memorandum  was submitted by NOIDA Entrepreneurs Association- the  petitioner in the present writ petition, requesting for enquiry  by the Central Bureau of Investigation (in short the ’CBI’)  regarding the alleged irregularities in allotments and  conversions in NOIDA.  It appears at different stages Smt.  Neera Yadav submitted her explanations. On 13.12.1996 a  letter was written by the then Director CBI Sri Joginder Singh  regarding information received from sources pertaining to  alleged irregularities in the matter of allotments, conversions  and regularization of plots in NOIDA.   Taking into account the  said letter the State Government constituted a Commission  (hereinafter referred to as Justice Murtaza Hussain  Commission).  A report was submitted by the said Commission  on 9.12.1997.  In the report various details were given.  On the  basis of the report, the then Chief Secretary recommended   departmental action in respect of specific findings against  Smt. Neera Yadav and  also an enquiry by the Vigilance  department in matters relating to which the Commission had  not given any clear finding.  The then Chairman of Board of  Revenue Mr. A.P. Singh was recommended to be the enquiry  officer.  The then Chief Minister concurred with the findings of  the then Chief Secretary. In the meantime, the writ petition  had been filed before this Court. By order dated 6.1.1998 this  Court directed the State Government to indicate its stand on

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affidavit in respect of the conclusions of Justice Murtaza  Hussain Commission.  On 9.1.1998 the then Chief Minister of  the State approved the findings of the then Chief Secretary  recorded on 27.12.1997 and specifically in relation to the  suggestions for departmental action in accordance with the  rules.  On that very date the State of Uttar Pradesh filed an  affidavit before this Court wherein it was stated that keeping  in view the gravity of the irregularities committed, it has  decided to start departmental proceedings against Smt. Neera  Yadav.  It was also stated in the affidavit that regarding those  charges about which the Commission had expressed its  inability to give specific recommendations for want of further  investigation, the State Government had decided to get the  matter inquired into by the Vigilance department of the State.   Taking note of all these aspects, this Court by order dated  20.1.1998 directed that the matter should be investigated by  the CBI and if such investigation discloses the commission of  criminal offence the person/persons found responsible should  be prosecuted in a Criminal court.  It was specifically noted  that the State Government was proposing to initiate  departmental proceeding against Smt. Neera Yadav.  On  18.12.1998 the State Government of Uttar Pradesh filed an  affidavit before this Court stating that the enquiry by the  Vigilance department which was initiated in respect of those  aspects about which Commission had expressed its inability to  give specific recommendation was being dropped on account of  the fact that the CBI was enquiring into the matter. Prior to  that on 26.5.1998 charge sheet had been issued to Smt. Neera  Yadav and an enquiry officer was appointed.  Three charges  framed were as follows: "1.     Allotment and conversion of residential  plots in her favour and also in favour of her  two daughters. 2.      Allotment/conversion of residential plots  in favour of Anand Kumar/Subash Kumar  within three months of their appointment as  carpenter and junior clerk. 3       Allotment/conversion of the residential  plot to Rajeev Kumar Dy. CEO and increase in  area."

On 25.2.1999 Smt. Neera Yadav filed a representation  stating that in view of the criminal investigation, departmental  proceedings should not proceed.  On 1.5.1999 the State of  U.P. filed an affidavit before this Court indicating that  disciplinary action had been initiated against Smt. Neera  Yadav and charge sheet had been issued on her on 26.5.1998.   It was also stated therein that Smt. Neera Yadav had  requested that since the matter was being inquired into by the  CBI, departmental inquiry should be dropped.  The State  Government obtained the opinion of its Law department which  found that the departmental inquiry was validly initiated, and  further plea to keep the proceeding in abeyance was taking  note of by referring to para 1.8 of the Vigilance Manual.  On  8.7.1999 the Principal Secretary (Law) of the State took a  stand that parallel inquiry should be avoided and that any  action should be taken after completion of the CBI inquiry, on  the basis of its report. On 22.7.1999 the then Chief Minister  noted that when the CBI investigation was in progress, parallel  administrative enquiry was not necessary. On 5.8.1999 the  Government of Uttar Pradesh passed an order keeping the  disciplinary proceedings in abeyance. On 19.1.2001 this Court  passed the order directing the State of Uttar Pradesh to file an  affidavit about present position in relation to departmental  enquiry. In compliance of the said order, on 8.11.2001 the

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State of Uttar Pradesh filed an affidavit stating that it has kept  the disciplinary proceeding in abeyance till the CBI enquiry is  over.  On 28.3.2002 CBI submitted its report in sealed cover.   This Court directed the State of U.P. to file an affidavit in  respect of action taken against the officers and directed that  the affidavit should also indicate the stage of disciplinary  proceedings against Smt. Neera Yadav.   Thereafter starts a new twist to the whole matter.  On  13.6.2002 the Legal Remembrancer of the State opined that it  would not be appropriate to accord sanction for prosecution or  initiate departmental proceeding for any irregularity. On  24.6.2002 the Advocate General concurred with the said  opinion.   On 28.6.2002 the Government of U.P. decided not to  take departmental action/initiate prosecution in relation to  the recommendations in the report of the CBI.  The State of  U.P. on 17.9.2002 filed an affidavit before this Court stating  that there was no justification for initiating departmental  enquiry as "after detailed consideration of the report of the CBI  no justification was found for initiating departmental enquiry",    since the departmental enquiry recommended by Justice  Murtaza Hussain’s Commission was based only on those  points.  In the light of said facts the allegations were not  legally tenable and the Government has decided to close the  pending departmental enquiry.  On 11.1.2005 this Court in  relation to certain issues passed the following order: "Having regard to the nature of the  proceedings it would be appropriate to appoint  a Commission to go into the various questions  raised in these matters including the issue as  to why the departmental action has been  dropped against several respondents as  pointed out by the Amicus Curiae in his report  filed on 14.12.2004.  Mr. K.T.Thomas, retired  judge of this Court is appointed as the sole  member of the Commission."

 The Commission framed several issues and noted that  the State Government should not have dropped disciplinary  proceeding against Smt. Neera Yadav in the light of adverse  findings against her in the report of the Judicial Commission  as well as on the report of the CBI. The State of U.P. was  asked to clarify as to under what circumstances the decision  to drop the departmental proceeding was taken.  The entire  records relating to the decisions at different stages have been  brought on record and a synopsis has also been filed referring  to various letters/observations/findings at different points of  time. The order dated 16th September, 2002 is the one the  legality of which is questioned.  The entire order needs to be  quoted. The same reads as follows: "By the notification no. 86/N/96, dated 25  January 97 one man inquiry commission was  constituted. The Commission inquired into the  irregularities committed by Smt. Neera Yadav,  lAS (1971), during her posting as Chief  Executive Officer, Noida in allotment of plots  and properties. On the basis of the report submitted by  Hon’ble Mr. Justice Murtaza Husain Inquiry  Commission it was decided to initiate  departmental inquiry against Smt. Neera  Yadav and by the order of Appointment Section  -5 No. 930(l)/Two-5-98-22(29)/74 dated  26.5.1998 charge sheet was issued against  Smt. Neera Yadav.

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Smt. Neera Yadav vide her applications dated  16.9.98, 25.2.99 and 3.5.99 requested for  cancellation of departmental inquiry being  initiated against her, on which after due  consideration the departmental inquiry  initiated against Smt. Neera Yadav was stayed  vide Govt. Order No.4209/Two-599- 35(136)/97 dated 5 Aug., 1999 till finalization  of inquiry by the CBI against Smt. Neera  Yadav. Because in the case under consideration the  report of the CBI was received on 28.3.2002  along with the recommendation, after  examination of which State Govt. did not find  it necessary to take any action on the point of  departmental inquiry against Smt. Neera  Yadav. It is worth mentioning that the points on  which Departmental Inquiry was initiated  against Smt. Neera Yadav on the basis of the  report of Hon’ble Mr. Murtaza Husain, on the  same point after due consideration of the CBI  inquiry report it was found that the  departmental inquiry was not required  Therefore, in view of the above it was decided  by the Govt. that the departmental inquiry  pending against Smt. Neera Yadav may be  dropped. Therefore, His Excellency, the Governor, grants  permission to drop the pending departmental  inquiry against Smt. Neera Yadav, lAS (1971)."

The basis as culled down from the order is as follows: "It is worth mentioning that the points on  which Departmental Inquiry was initiated  against Smt. Neera Yadav on the basis of the  report of Hon’ble Mr. Murtaza Husain, on the  same point after due consideration of the CBI  inquiry report it was found that the  departmental inquiry was not required  Therefore, in view of the above it was decided  by the Govt. that the departmental inquiry  pending against Smt. Neera Yadav may be  dropped." Learned Amicus Curiae has submitted that conclusions  are not based on any rationality. Departmental proceedings  and criminal proceedings stand on different footings.  There is  no rationality in the decision and it cannot be said to be  reasonable by any standard. Per contra, learned counsel for the State of U.P.  submitted that taking into account the totality of  circumstances, the order was passed and there is nothing  illicit in it.  Mr. K.T.S. Tulsi, learned counsel appearing for  Smt. Neera Yadav submitted that the order does not suffer  from any infirmity and in any event if it is conceded for the  sake of argument that there was any infirmity, this Court can  direct the proceedings to take off from the stage as it stood on  5.8.1999 when the Govt. of Uttar Pradesh had passed order  for keeping the departmental proceeding in abeyance. This is  in fact a re-iteration of the stand taken by the State  Government.  We are not only baffled but also perplexed at  such a stand being taken by the State. This prima facie shows  that the State Government is interested to protect Smt. Neera  Yadav at any cost.  A bare perusal of the order which has been quoted in its

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totality goes to show that the same is not based on any  rational foundation. The conceptual difference between a  departmental enquiry and criminal proceedings has not been  kept in view.  Even orders passed by the executive have to be  tested on the touchstone of reasonableness. (See: Tata Cellular  v. Union of India (1994(6) SCC 651), and Teri Oat Estates (P.)  Ltd. v. U.T. Chandigarh and Ors. (2004 (2) SCC 130).  The  conceptual difference between departmental proceedings and  criminal proceedings have been highlighted by this Court in  several cases.  Reference may be made to Kendriya Vidyalaya  Sangathan and Others v. T. Srinivas (2004(7) SCC 442),  Hindustan Petroleum Corporation Ltd. and Others  v. Sarvesh  Berry (2005(10) SCC 471) and Uttaranchal Road Transport  Corpn. v. Mansaram Nainwal (2006(6) SCC 366).

The purpose of departmental enquiry and of prosecution  is two different and distinct aspects. The criminal prosecution  is launched for an offence for violation of a duty the offender  owes to the society, or for breach of which law has provided  that the offender shall make satisfaction to the public. So  crime is an act of commission in violation of law or of omission  of public duty. The departmental enquiry is to maintain  discipline in the service and efficiency of public service. It  would, therefore, be expedient that the disciplinary  proceedings are conducted and completed as expeditiously as  possible. It is not, therefore, desirable to lay down any  guidelines as inflexible rules in which the departmental  proceedings may or may not be stayed pending trial in  criminal case against the delinquent officer. Each case  requires to be considered in the backdrop of its own facts and  circumstances. There would be no bar to proceed  simultaneously with departmental enquiry and trial of a  criminal case unless the charge in the criminal trial is of grave  nature involving complicated questions of fact and law.  Offence generally implies infringement of public duty, as  distinguished from mere private rights punishable under  criminal law. When trial for criminal offence is conducted it  should be in accordance with proof of the offence as per the  evidence defined under the provisions of the Indian Evidence  Act 1872 (in short the ’Evidence Act’). Converse is the case of  departmental enquiry. The enquiry in a departmental  proceedings relates to conduct or breach of duty of the  delinquent officer to punish him for his misconduct defined  under the relevant statutory rules or law. That the strict  standard of proof or applicability of the Evidence Act stands  excluded is a settled legal position. Under these  circumstances, what is required to be seen is whether the  department enquiry would seriously prejudice the delinquent  in his defence at the trial in a criminal case. It is always a  question of fact to be considered in each case depending on its  own facts and circumstances.   

A three-judge Bench of this Court in Depot Manager, A.P.  State Road Transport Corporation v. Mohd. Yousuf Miya and  Ors.  (1997 (2) SCC 699) analysed the legal position in great  detail on the above lines.

       The aforesaid position was also noted in State of  Rajasthan v. B.K. Meena and Ors. (1996 (6) SCC 417).

There can be no straight jacket formula as to in which  case the departmental proceedings are to be stayed. There  may be cases where the trial of the case gets prolonged by the  dilatory method adopted by delinquent official.  He cannot be  permitted to, on one hand, prolong criminal case and at the

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same time contend that the departmental proceedings should  be stayed on the ground that the criminal case is pending.

       In Capt. M. Paul Anthony v. Bharat Gold Mines Ltd.  (1999 (3) SCC 679), this Court indicated some of the fact  situations which would govern the question whether  departmental proceedings should be kept in abeyance during  pendency of a criminal case. In paragraph 22 conclusions  which are deducible from various decisions were summarised.   They are as follows: (i) Departmental proceedings and proceedings in a  criminal case can proceed simultaneously as there is no  bar in their being conducted simultaneously, though  separately.  (ii) If the departmental proceedings and the criminal case  are based on identical and similar set of facts and the  charge in the criminal case against the delinquent  employee is of a grave nature which involves complicated  questions of law and fact, it would be desirable to stay  the departmental proceedings till the conclusion of the  criminal case.  (iii) Whether the nature of a charge in a criminal case is  grave and whether complicated questions of fact and law  are involved in that case, will depend upon the nature of  offence, the nature of the case launched against the  employee on the basis of evidence and material collected  against him during investigation or as reflected in the  charge-sheet.  (iv) The factors mentioned at (ii) and (iii) above cannot be  considered in isolation to stay the departmental  proceedings but due regard has to be given to the fact  that the departmental proceedings cannot be unduly  delayed.  (v) If the criminal case does not proceed or its disposal is  being unduly delayed, the departmental proceedings,  even if they were stayed on account of the pendency of  the criminal case, can be resumed and proceeded with so  as to conclude them at an early date, so that if the  employee is found not guilty his honour may be  vindicated and in case he is found guilty, the  administration may get rid of him at the earliest.   The position in law relating to acquittal in a criminal  case, its effect on departmental proceedings and re-  instatement in service has been dealt with by this Court in  Union of India and Anr. v. Bihari Lal Sidhana (1997 (4) SCC  385). It was held in paragraph 5 as follows: 5. It is true that the respondent was acquitted  by the criminal court but acquittal does not  automatically give him the right to be re-  instated into the service. It would still be open  to the competent authority to take decision  whether the delinquent government servant  can be taken into service or disciplinary action  should be taken under the Central Civil  Services (Classification, Control and Appeal)  Rules or under the Temporary Service Rules.  Admittedly, the respondent had been working  as a temporary government servant before he  was kept under suspension. The termination  order indicated the factum that he, by then,  was under suspension. It is only a way of  describing him as being under suspension  when the order came to be passed but that  does not constitute any stigma. Mere acquittal  of government employee does not

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automatically entitle the government servant  to reinstatement. As stated earlier, it would be  open to the appropriate competent authority to  take a decision whether the enquiry into the  conduct is required to be done before directing  reinstatement or appropriate action should be  taken as per law, if otherwise, available. Since  the respondent is only a temporary  government servant, the power being available  under Rule 5(1) of the Rules, it is always open  to the competent authority to invoke the said  power and terminate the services of the  employee instead of conducting the enquiry or  to continue in service a government servant  accused of defalcation of public money. Re-  instatement would be a charter for him to  indulge with impunity in misappropriation of  public money."

The standard of proof required in departmental  proceedings is not the same as required to prove a criminal  charge and even if there is an acquittal in the criminal  proceedings the same does not bar departmental proceedings.   That being so, the order of the State Government deciding not  to continue the departmental proceedings is clearly untenable  and is quashed.  The departmental proceedings shall continue.   Mr. K.T.S. Tulsi, learned counsel for Smt. Neera Yadav  stated that an appropriate motion shall be made before the  departmental authorities to keep the proceedings in abeyance  till conclusions of the criminal proceedings. If such prayer is  made, the same shall be considered in the light of the  principles set out by this Court in Hindustan Petroleum Ltd.’s  case (supra) and Uttaranchal Road Transport Corpn.’s case  (supra).  It is ordered accordingly.