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CASE NO.: Appeal (civil)  5595 of 2002

PETITIONER: Indian Drugs & Pharmaceuticals Ltd. & Anr.

RESPONDENT: R.K. Shewaramani

DATE OF JUDGMENT: 03/08/2005

BENCH: ARIJIT PASAYAT & H. K. SEMA

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.

       Legality of the judgment rendered by a Division Bench  of the Delhi High Court is questioned by the appellants.   High Court held that the termination of services of  respondent by order dated 8.1.1991 was illegal.  

       The basic facts in a nutshell are as under:

       The respondent-employee was at the relevant point of  time working as a medical representative of appellant No.1- company which undisputedly is "State" within the meaning  of Article 12 of the Constitution of India, 1950 (in short  the ’Constitution’). He was transferred from Delhi to Eluru  in the State of Andhra Pradesh by order dated 17.6.1989.  Alleging that the respondent-employee had not joined the  transferred post a charge sheet was issued on 27.9.1989.  There was another set of charges and the charge sheet was  issued on 12.12.1989. While these two charges were pending  consideration in departmental proceedings, action in terms  of Rule 30A of the Industrial Drugs and Pharmaceutical Ltd.  Conduct Discipline and Appeal Rules, 1978 (in short the  ’Rules’) was taken. A show-cause notice was issued requiring  the respondent to show cause as to why his services shall  not be terminated on account of unauthorized absence from  duty exceeding 30 days. Rule 30(A) was introduced by way of  an amendment w.e.f. 30th March, 1990 on the basis of a  decision taken by the Board of Directors on 24.4.1990. On  receipt of the show cause notice the respondent-employee  took the stand that he had already been charge sheeted and  enquiry was going on and, therefore, the employer cannot be  permitted to turn around and by-pass the enquiry and take  action on the basis of alleged amended Rule 30(A). Company  has realized that it cannot prove the charges in the enquiry  and, therefore, the enquiry was being by-passed. He wanted a  copy of the approval of the Board of Directors for amending  the Rule 30(A) as done on 30.3.1990. The order of  termination was passed keeping in view the unauthorized  absence and unsatisfactory reply to the show cause notice.  The Screening Committee after assessing the materials on  record came to the conclusion that the services of the  respondent were to be terminated with immediate effect under  Rule 30(A).   

       The order of termination was questioned by filing a

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writ petition before the Delhi High Court. Validity of  amended Rule 30(A) was challenged in addition to taking the  stand that the authorities have found it inconvenient to  establish the earlier charges and, therefore, have by-passed  them and taken resort to amended Rule 30(A) with mala fide  intents. Present appellants rebutted the stand and supported  the action impugned in the order.  

       The High Court allowed the writ petition primarily on  two grounds; firstly it was noted that there was no material  to show that in the last show-cause notice it was indicated  that the earlier departmental proceedings were dropped and  secondly, in the notice it was not indicated that the same  was in terms of the amended Rule 30(A) of the Rules and was  not in continuation of the earlier charge sheets. Even after  service of the last show-cause notice, the respondent had  been served minutes of charge sheets dated 27.9.1989 and  12.12.1989 of the proceedings held on 30.7.1990. He was also  asked to attend enquiry on certain dates. The High Court,  therefore, held that the impugned order cannot be said to  have been passed bona fide. Rule 30(A) of the Rules had no  application as the two departmental proceedings were already  pending and those related to periods prior to coming into  effect of Rule 30(A) which cannot be said to have any  retrospective effect. Accordingly, the writ petition was  allowed and the order of termination was set aside. Liberty  was however given to the employer for proceedings further  with the departmental proceedings against the respondent.

       In support of the appeal, learned counsel submitted  that the approach of the High Court is clearly erroneous.  There is no requirement in law that when a fresh enquiry is  commenced, the earlier proceedings should be given a go by.  Further, factually also it is not correct as held by the  High Court that the show cause notice was not in terms of  Rule 30(A). In any event, the respondent himself knew that  the action had been taken under Rule 30(A). There was no  mala fide involved as erroneously observed by the High  Court.

       In response, learned counsel for the respondent- employee submitted that because of trade union activities  the respondent was made a victim. When two proceedings were  already in progress, there was no necessity to take resort  to Rule 30(A) and that too in a hurried manner without  proper opportunity being granted to the respondent to place  his side of the case. Therefore, the High Court was  justified in interfering with the order of termination.  

       Rule 30(A) reads as follows:

"30(A) Notwithstanding anything contained to  the contrary in any other rules, the services  of any employee shall be terminated by the  Company if:-

(a)     his post is abolished; (b)     he is declared on medical ground to be  unfit for service in the Company, or (c)     he remains on unauthorized absence for  thirty days or more.

Explanation:

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1.      In a case of (a) & (b) above, the  services shall be terminated after  giving three months’ notice to a  permanent employee and one months’  notice to a temporary employee or pay in  lieu thereof in both the cases; 2.      In the case of (c) above, services of  any employee shall be terminated if he  fails to explain his conduct  satisfactorily within 15 days from the  date of receipt of the Show Cause Notice  by him.  The Management shall be  empowered to take a decision without  resorting to further enquiries. 3.(a)The decision in case of (c) above would  be taken only with the prior approval of  a Screening Committee of 2  Directors/Executive Director to be  constituted for this purpose by the  Chairman & Managing Director. (b)     The reasons for the decision would be  recorded in writing.

       These rules are made effective with  effect from 30th March, 1990."

       At this juncture, it is to be noted that the validity  of a Rule similar to Rule 30(A) was considered by this Court  in Pyare Lal Sharma v. Managing Director and Ors. (1989(3)  SCC 448). In that case after having held that the concerned  rule was intra-vires, on the facts of the case it was held  the amended rule could not operate retrospectively and could  operate only from the date of amendment and, therefore, on  the facts of that case it was held that for a period prior  to the introduction of the amended provision, action cannot  be taken. In the instant case, the period of absence to  which reference has been made by the appellants clearly  related to a period subsequent to the date of introduction  of the amended provision. That being so, the High Court has  rightly not led any stress on that plea though urged by  respondent-employee before the High Court.  

       That brings us to the crucial question as to whether  the High Court’s view is sustainable on the facts of the  case.  

       There is no requirement in law that for continuing with  fresh proceedings the charge sheet issued must indicate that  the previous proceedings pending have been given a go by.  The employer is free to proceed in as many as departmental  proceedings as it considers desirable. Even in a  hypothetical case in two of the departmental proceedings the  finding is in favour of the delinquent employee, yet in  another departmental proceeding finding adverse to the  delinquent officer can be recorded. Merely because the two  proceedings were pending, that did not in any way stand on  the way of the employer to initiate another departmental  proceeding and that too on the basis of an amended provision  which came into effect after initiation of the previous  departmental proceeding. The High Court’s view therefore is  clearly unsustainable. The High Court had also observed that  in the show cause notice there was no reference to Rule  30(A). This is not factually correct. As the records reveal  clear reference was made to IDPL Corporate Office letter  No.IDP/7/32/Estt/90 dated 24.9.1990. This related to the

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amendment of Rule 30(A). Additionally, the respondent- employee was not taken to surprise and no prejudice was  caused to him by not mentioning of Rule 30(A) specifically.  On the other hand, from his reply dated 22.6.1990 it is  clearly revealed that he knew that the proceeding was in  terms of the amended Rule 30(A). His specific stand as is  revealed from reply to the show-cause notice is that the  company having become realized that it will not be in a  position to establish the allegations forming foundation of  the two departmental proceedings, has resorted to Rule  30(A).  That being so, the High Court was not justified in  drawing an adverse inference by concluding that non mention  of Rule 30(A) specifically in the show cause notice vitiate  the proceedings. There is no dispute that factors necessary  to bring in application of Rule 30(A) existed.  The High  Court was also not justified in coming to the conclusion  that the action of the authorities in initiating the  proceedings in terms of Rule 30(A) is not bona fide.  

       Looked at from any angle, the High Court’s order is  indefensible and is set aside. The appeal succeeds but  without any order as to costs.