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CASE NO.: Appeal (civil)  3071 of 2004

PETITIONER: M/s. Maharashtra State Seeds Corpn. Ltd

RESPONDENT: Haridas & Anr

DATE OF JUDGMENT: 24/02/2006

BENCH: S.B.Sinha & Dalveer Bhandari

JUDGMENT: J U D G M E N T

S.B. Sinha,  J.

       The appellant herein is a company incorporated and registered under  the Companies Act, 1956.  It deals in production and supply of seeds to the  farmers.  The respondent herein was appointed as an Assistant Field Officer.   While he was working at Nanded, misconducts committed by him came to  the notice of his superior officer.  A preliminary enquiry was conducted  thereabout whereafter a charge sheet was issued to him.  A disciplinary  proceeding was thereafter initiated against him.   

                The Enquiry Officer held:  

"(1) It is proved that Shri H.D. Jadhao AFO has  violated the instructions of D.M. Nanded for  distribution of F/seeds on credit to the eligible seed  growers of Deglur and Mukhed He is also  responsible for non recovery of outstanding  amount of Rs. 19,938.50 from the seed growers  towards cost of F/seeds, Inspection fees &  Application fees etc. out of this amont Shri  Gorthekar is responsible for non deposition of Rs.  2675/- as per his undertaking & hence Shri Jadhao  stands responsible for non recovery of net amount  of Rs. 17,263.59.  

For the amount of Rs. 2437/- towards shortage of  F/seed Shri Jadhao as well as Shri Gorthekar  stands responsible.  

(2) Shri Jadhao cannot be held responsible totally  for late submission of record since the persons  involved in distribution of F/seeds etc. was  absconding & hence some time was required to  collect the information from the seed growers.   Also the charge of non recovery of outstanding  amount of Rs. 35,190/- from the seed growers in  absence of the record cannot be proved.  

(3) It cannot be proved that the amount paid to Shri  Jadhao by the seed growers or their representatives  has not deposited by him.  However, it is  concluded that the entire mesh has been created on  account of negligence on the part of Shri Jadhao.

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(4) It is proved beyond doubt that an amount of Rs.  26104/- collected from the seed growers have been  misappropriated by Shri Jadhao.  

(5) Since the 22 bags of Hy. Cotton DCH-32 have  been traced out the charge of misappropriation of  this stock by Shri Jadhao cannot be proved.  

(6) It is also concluded that Shri Jadhao proceeded  on leave without prior permission of the superior  from time to time.  Similarly he has not attended  the weekly meetings called by D.M. without  satisfactory reasons.  As a result he was not aware  about the instructions given by the D.M. from time  to time."

       The Enquiry Officer, in his report, thus, found him guilty of  commission of the following misconducts :  (1) He violated the instructions  issued by the District Magistrate, Nanded. (2) He misappropriated a huge  amount of the Corporation. (3) He remained on leave without prior approval  of leave and failed to attend the meetings.      It is not in dispute that the Enquiry Officer recommended  punishment of the Respondent for commission of the said misconducts in the  following terms:  

"(1) An amount of Rs. 17,263.50 should be  recovered from Shri Jadhao is suitable instalments  along with interest.  

(2) It is also proposed to recover interest on an  amount of Rs. 26,104/- for the period from 18.6.91  to 17.9.91.  

(3) 50% cost of shortages in foundation seed i.e.  Rs. 1219/- should also be recovered from Shri  Jadhao.  

(4) Two increments should be barred permanently.

(5) Warning letter may be issued to Shri Jadhao to  be punctual in attending corporation’s work in  future not to leave H.Q. without prior permission  of the superior and follow all the instructions  scrupulously henceforth failing which stern action  will be taken against him.  

(6) It is further proposed that an amount of Rs.  2675/- as well as Rs. 1218/- towards 50% costs of  shortages in foundation seeds should be recovered  from Shri Gorthekar."

       The Managing Director of the appellant company on or about  27.1.1994 issued a show cause notice as to why two increments of pay from  his salary should not be directed to be with held permanently.  The 1st  respondent filed his show cause thereto.  However, another second show  cause notice in supercession of the earlier notice, was issued on 21.3.1994  by the Managing Director of the appellant company on the ground that the  charges which were proved against the 1st respondent being serious in nature  and having regard to the gravity thereof, why the punishments specified  therein should not be imposed, stating :  

"(4) - After scrutinising the documents again I  have come to the conclusion that the punishment

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of freezing two increments is very mild.   Therefore, I am cancelling previous Notice No.  Mahabeej/Admn.,94/10893 dated 2.2.94 and I  have decided that Shri Hariprasad Drupadrao  Jadhav, Asst. Area Officer is a person not worth  keeping in the service.  And therefore, the  undersigned has imposed dismissal from service  on him.  Similarly, due to your misappropriation  the Corporation has a loss of Rs. 15234/- which is  proposed to be recovered from you.  The  Corporation has reserved its right to recover the  said amount from you through civil suit.  Also the  Corporation has reserved its right to file criminal  case against you for the misappropriation of  Corporation funds.  

(5) - Shri Hariprasad Drupadrao Jadhav is given an  opportunity through this memorandum to formally  submit his reply to the proposal of disciplinary  action to be taken against him.   However, such  formal reply can be made based on the evidence  submitted by him during the departmental enquiry.   Any formal reply against the proposed disciplinary  action desired by him should be in writing which  can be considered by the undersigned.  The formal  reply should reach the undersigned within fifteen  days from receipt of this memorandum."

       The respondent filed his show cause in furtherance of the said notice.    Upon consideration of the said show cause the services of the 1st respondent  was terminated by an order dated 27.9.1994.  He questioned the legality of  the said order by filing a writ petition before the Aurangabad Bench of the  Bombay High Court, which was marked as WP No. 1343/95.           The High Court in the impugned judgment noticed that he committed  the following misconduct:  

"(i) The petitioner distributed seeds on credit to  those who were not eligible. (ii) The amount collected from seed growers  towards cost of foundation seed names, whereas  the same was deposited late i.e. 17.9.1989.  

(iii) The petitioner prepared false documents for  despatching of 21 bags and had misappropriated  22 bags of DCH 32 cotton seed.  

(iv) The petitioner remained absent for weekly  meeting.  

(v) The petitioner was negligent in writing  foundation seed delivery register in time, whereas  shortages amounting to Rs. 2437/- were noticed."

       By reason of the impugned judgment although the High Court held  that the disciplinary proceedings had been held in accordance with law,  interfered with the quantum of punishment directing his reinstatement with  continuity in service and full back wages opined that ’withholding of two  increments of pay permanently’ should be imposed on him.   The Division  Bench of the High Court assigned the following reasons in support of its  order:  

(i)     Two show cause notices, on the quantum of punishment could not  have been issued; (ii)     The Managing Director of the appellant company should have

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followed the rules and procedure laid down in the manual of  Departmental Enquiries and in relation thereto relied on Rule 42 of  the said manual which is as under:  

"No order imposing on an employee  any of the penalties shall be passed by  the competent authority without the  charge or charges being  communicated to him in writing and  without his having been given  reasonable opportunity of defending  himself against such charges or  charges and/or showing cause against  the action proposed to be taken  against him.  Procedure laid down in  manual of Departmental Enquiries of  Govt. of Maharashtra will be referred  and the same shall be made  applicable."

       It was observed that if the Disciplinary Authority intended to differ  with the Enquiry Officer, it was incumbent upon him to assign specific  reasons therefore and the Disciplinary Authority could not thus change his  mind and to take different views at different times.    

It was held:  

"It has come on record that amount of defalcation  of Rs. 17,263.50 was to be recovered from the  petitioner by way of punishment.  It has also come  on record that, in the meantime, respondents did  file civil suit for recovery of the said amount from  the petitioner.  The matter was amicably settled  between the parties and the respondents, thereafter,  and, to that extent, the matter was compromised  between the parties, out of the court.  Taking into  consideration all the circumstances appearing in  this case, in their sequence, it appears that, the  punishment of withholding two increments of pay,  permanently, as proposed in the show cause notice  (Exh E), is just and proper.  Therefore, we are of  the opinion that, such punishment, which was  proposed by the enquiry officer, of withholding  two increments of pay, permanently, should be  accepted and confirmed."

       Mr. Uday Kumar Sagar, learned counsel appearing on behalf of the  appellant in assailing the judgment of the High Court submitted that the  High Court was not justified in setting aside the second show cause notice  on the ground that the same was not provided for under the rules although no  embargo in this behalf was to be found.  In any event, it was urged, the High  Court was not correct in directing back wages without appreciating the  totality of the facts and circumstances of the case.  

       Mr. Uday B. Dube, learned counsel appearing on behalf of the  respondent, on the other hand, contended that the issuance of second show  cause was illegal.   The learned counsel further submitted that the Enquiry  Officer committed an error in holding the respondent guilty of the charge of  defalcation.  It was furthermore brought to our notice that pursuant to the  interim order of this Court dated 6.5.2004, 1/4th of the salary had already  been paid to the 1st respondent and, thus, the same may not be directed to be  recovered.

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       The High Court in its impugned judgment opined that the correctness  of the report could not be doubted.   Having held so, as noticed hereinbefore,  it proceeded to interfere with the quantum of punishment on the premise that  the second show cause notice was illegal.  

       It has not been shown to us, despite repeated query made in this behalf  as to whether under the statutory rules, the Enquiry Officer was empowered  to make any recommendation to the Disciplinary Authority as regard  quantum of punishment to be imposed upon a delinquent employee.   The  High Court has noticed that the disciplinary proceedings are governed by the  Manual of Departmental Enquiries.  However, no provision therein has been  pointed out to show that the Enquiry Officer was statutorily or otherwise  empowered to make recommendations as regards quantum of punishment.   Reference to Rule 42 of the said manual by the High court was wholly  irrelevant as indisputably the procedures laid down therein for holding  departmental enquiry had been complied with.  It is not the case of the 1st    respondent either before the High Court or before us that no charge was  framed and communicated to him and he has not been given an opportunity  to show cause against the action proposed to be taken against him.  He  admittedly participated in the departmental enquiry.  It is also not his case  that in the said departmental proceedings principles of natural justice had not  been complied with.

       The charges levelled against the 1st respondent were serious in nature.   He has been found guilty of grave misconduct including defalcation of huge  amount, preparation of false documents as also misappropriation of 22 bags  of DCH 32 cotton seeds.  It has also been proved that he has violated  instructions for distribution of seeds apart from remaining absent from work.           It is not a case, with respect to the High Court, where the disciplinary  authority had differed with the findings of the Enquiry Officer.  The question  of differing with the findings of the Enquiry Officer by the disciplinary  authority would arise only when the delinquent officer is exonerated either  wholly or in part of the charges levelled against him whereas the disciplinary  authority forms a different opinion.  Most of the charges have been found  proved and the Disciplinary Authority to that extent did not differ with the  report of the Enquiry Officer.  So far as the quantum of punishment  proposed by the Enquiry Officer is concerned, if in terms of the rules, he had  no authority to do so, the Managing Director was entitled to apply his own  mind and could come to a conclusion as regard the quantum of punishment  which should be imposed on the delinquent officer.  He in that view of the  matter was not obligated to assign any far less sufficient and cogent reason  as it was not the requirement of law.  In any view of the matter, from the  second notice dated 22.3.1994 issued by the Managing Director of the  Corporation it is evident that sufficient and cogent reasons have been  assigned therein.  

       A departmental proceeding stricto sensu is not a judicial proceeding.

       There is nothing in the rules to show that the disciplinary authority  cannot consider the materials on record with a view to form an independent  opinion as regard quantum of punishment to be imposed upon the delinquent  employee.  He might have committed a mistake in issuing the first show  cause notice but by reason thereof he cannot be held to be wholly precluded  from issuing the second show cause notice as thereby he intended to rectify  the mistake committed by him.   

       In Indian Council of Agricultural Research and Another v. T.K.  Suryanarayan and Others [(1997) 6 SCC 766] a promotion granted by a  mistake in ignorance of the service rules was held to be capable of being  rectified stating:

"\005Incorrect promotion either given erroneously  by the Department by misreading the said Service

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Rules or such promotion given pursuant to judicial  orders contrary to Service Rules cannot be a  ground to claim erroneous promotion by  perpetrating infringement of statutory service  rules. In a court of law, employees cannot be  permitted to contend that the Service Rules made  effective on 1-10-1975 should not be adhered to  because in some cases erroneous promotions had  been given\005"

       In Poothundu Plantations Pvt. Ltd. v. Agricultural Income Tax  Officer, Chittoor, Kerala State and others [(1996) 9 SCC 499], it was stated:

"4. There can be no doubt that only an apparent  error of fact or law can be rectified by an officer. If  the mistake of law has to be established by  construing the words of a section to find its proper  meaning, then such an error cannot normally be a  rectifiable error under Section 36. If two views are  possible, then obviously the error will not be an  error apparent from the record."

       As the Enquiry Officer had no jurisdiction to recommend any  punishment to be imposed on the respondent by the disciplinary authority,  he although acted thereupon at the first instance, could have corrected his  mistake as the same was apparent on the face of the record.  He, therefore,  did not commit any illegality in issuing the second show cause notice as  Enquiry Officer had no jurisdiction in that behalf.  See M.Ahammedkutty  Haji V. Tahsildar, Kozhikode, Kerala & Ors. [(2005) 3 SCC 351].  Mistake  furthermore, may either be of law or fact.  By reason of mistake on the part  of the Enquiry Officer, the respondent could not have been inflicted with a  minor penalty although he deserved a major penalty.  If in law the quantum  of punishment to be imposed upon a delinquent officer is within the  exclusive domain of the disciplinary authority, unless otherwise delegated to  any other authority, he alone could exercise the said jurisdiction and  determine the same having regard the nature and guilty of the misconduct on  the part of the delinquent officer as the Enquiry Officer or any other  authority had no jurisdiction in relation thereto. The matter might have been  different if prior to the imposition of penalty of dismissal from service  against the 1st respondent, no opportunity of hearing had been given to him.   Admittedly the second show cause notice was issued to him and he showed  cause.  It is also not contended that the order passed by the disciplinary  authority suffers from the vice of non-application of mind.  The principles of  natural justice admittedly have been complied with.  

       The High Court proceeded on the basis that in absence of the specific  provision the second show cause notice was impermissible.  It failed to  consider that there was no statutory interdict in this behalf.  An  administrative order can be recalled.  A mistake can be rectified.  The  Managing Director of the Corporation as a disciplinary authority, it has not  been shown to us, lacked inherent jurisdiction in relation thereto.   

       The 1st respondent held an office of trust.  He  distributed seeds to the  farmers.  He collected a huge amount from them.  He not only defalcated a  huge amount but also misappropriated some bags of seeds.  It was in the  aforementioned situation improper for the High Court to interfere with the  quantum of punishment.  It is now well settled that in a matter of  disciplinary proceedings the High Court exercises a limited power.  [See  Govt. of A.P. & Ors. V. Mohad. Nasrullah Khan [ JT 2006 (2) SC 82], L. K.  Verma V. H.M.T. Ltd. & Anr. [JT 2006 (2) SC 99],  Karnataka Bank Ltd. V.  A.L. Mohan Rao [(2006) 1 SCC 63] and Hombe Gowda Educational Trust  & Anr. V. Sate of Karnataka & Ors. [(2006) 1 SCC 430].         The grounds for judicial review are limited. In Damoh Panna Sagar

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Rural Regional Bank & anr. V. Munna Lal Jain [(2005) 10 SCC 84]  this  Court held that when the High Court intends to interfere with the quantum of  punishment  on the ground that the same is shockingly disproportionate, it  must record reasons for coming to such a conclusion.   

       For the reasons aforementioned, the impugned judgment cannot be  sustained which is set aside accordingly.  The Appeal is allowed. However,  any amount paid to the 1st respondent pursuant to the order of this  Court  may not be recovered.  

       In the facts and circumstances of the case, there shall be no order as to  costs.