Brij Kishore Singh vs State of U.P. and Others

Devendra Kumar Arora, J.—Heard Sri Sandeep Dixit, learned counsel for the petitioner, learned Standing Counsel as well as Sri Shireesh Kumar, learned counsel appearing for opposite parties no. 2 to 5.

By means of present writ petition, the petitioner has prayed for quashing of the order dated 6th November, 2009, issued on 09.11.2009 (Annexure No. 7) by which disciplinary proceedings with respect to loss of Rs. 7,57,106.73 caused to the Federation, have been initiated against him and Sri Ram Charan, Senior Manager (Accounts) has been appointed as Inquiry Officer. Petitioner has further sought for quashing of orders dated 6.4.2011 and 13.4.2011 and 13.4.2011, issued on 09.11.2009 (Annexures No. 22, 23 & 24) by which he has been awarded punishment of recovery of Rs. 8,07,873.73 from his retiral dues as well as from his movable and immovable properties alongwith an adverse entry. Petitioner has also sought quashing of the order dated 13.4.2011 (Annexure No. 23) by which representation moved by him in compliance of order dated 16.9.2010, passed in Writ Petition No. 6547 (SS) of 2010 (Brij Kishore Singh vs. State of U.P. & others) has been disposed of on merit by the Managing Director (Opposite Party No. 3).

Petitioner has further prayed for a writ in the nature of mandamus commanding the opposite parties not to proceed in pursuance of impugned orders dated 6th April, 2011, 13th April, 2011 and 13th April, 2011 (Annexures No. 22, 23 & 24) and make payment of his all post retiral dues i.e. gratuity, leave encashment, arrears of salary w.e.f. 1.1.1996 to November, 1999 on account of revision of the scale of pay, balance pay from 01.4.2000 to 30.11.2000, arrears of salary of 6th Pay Commission w.e.f. 1.1.2006 and security alongwith 18% interest. Petitioner has further prayed for a writ in the nature of mandamus commanding the opposite parties to promote him from the date juniors to him have been promoted on the post of District Manager alongwith all consequential benefits.

Facts of the case, as emerged out from pleadings of the writ petition, are that the U.P. Cooperative Federation Limited, Lucknow (hereinafter referred to as ''P.C.F.'') is an apex society as per the provisions of u/s 2(a)(4)(3) of the U.P. Cooperative Societies Act, 1965 (hereinafter referred to as ''Act''). Under the provisions of Section 31-A of the Act, it has been provided that for every apex society there shall be a Managing Director, instead of a Secretary, who shall be a government servant not below the rank of the Class-I Officer, nominated by the State Government and his services shall be deemed to be on deputation with the Society and the Managing Director shall be a Chief Executive Officer of the apex society. The State Government has been vested with the authority to control the employees of the Cooperative Societies u/s 122 of the Act. The State Government framed the Service Regulations known as the U.P. Cooperative Employees Service Regulations, 1975 which are applicable in the petitioner''s case. Petitioner was appointed on the post of Field Officer or equivalent post i.e. the Superintendent on 3.8.1979 on the recommendations of the U.P. Cooperative Institutional Service Board, Lucknow (hereinafter refereed to as ''Board''. After two years, petitioner''s post was upgraded and w.e.f. 19th September, 1981 the petitioner worked on the post of Deputy Manager in the P.C.F. which is a class III post under Rule 3(1)(C) of the U.P. Pradeshiya Cooperative Federation Employees Service Regulations, 1980, have been framed with the approval of the Board and the same is identical to the U.P. Cooperative Employees Service Regulations, 1975. The petitioner attained the age of superannuation on 31.8.2009 and retired from service on attaining the age of 60 years, while working on the post of Deputy Manager in the pay-scale of Rs. 6500-10,500.

As per pleadings of the writ petition, during service period no adverse entry was ever issued to the petitioner except the order dated 11.4.2000 by which petitioner was placed under suspension against which he approached this Court by filing Writ Petition No. 4735 (SS) of 2000. Due to non-completion of the inquiry proceedings, this Court passed an order dated 29.8.2000 thereby reinstating the petitioner in service w.e.f. 1.12.2000. On completion of inquiry, the order of punishment was passed on 29th November, 2000 by which recovery of an amount of Rs. 72,797/- was ordered apart from withholding an increment of the petitioner. The petitioner preferred appeal against the said order under the Rules and the Appellate Authority stayed the recovery vide order dated 6.12.2000. When in spite of the stay order passed by the Appellate Authority, recovery was made from the petitioner, the petitioner took shelter of this Court by filing Writ Petition No. 394 (SS) of 2001 and this Court vide interim order dated 25.1.2001 (Annexure No. 2) stayed the recovery proceedings. The said writ petition is still pending. After the interim order having been passed on 25th January, 2001, petitioner was granted promotion on the post of Deputy Manager vide order dated 4.3.2002 (Annexure No. 3) and while working as District Manager, Hardoi, petitioner was also issued appreciation letter (Annexure No. 4) by the Managing Director. Before retirement, petitioner was also issued No Objection Certificate (Annexure No. 5) by the office of P.C.F. At Hardoi. After retirement, petitioner was paid the amount of Provident Fund only and the following other dues have not been paid to him so far:

Gratuity

Earned Leave

Arrears of salary w.e.f. 1.1.1996 to November, 1999 on account of the revision of the scale of pay

The balance pay from 1st April, 2000 to 30th November, 2000

Security.

The petitioner made a representation for payment of his retiral dues on 17.8.2009 and further in the month of September, 2009. However, instead of making payment of his dues, the Managing Director instituted departmental proceedings against the petitioner on 6.11.2009 (Annexure No. 7) and one Sri Ram Charan, Senior Manager (Accounts) was appointed as Inquiry Officer.

Submission of learned counsel for the petitioner is that the order dated 6.11.2009 regarding initiation of departmental proceedings against the petitioner is wholly without jurisdiction in view of the fact that the petitioner has already retired from service on 31st August, 2009 and there is no provision under the U.P. Cooperative Societies Employees Service Regulations, 1975 or under U.P. Cooperative Federation Service Rules, 1980 to institute the departmental inquiry after attaining the age of superannuation. Further, there is no provision with regard to the employees of the Cooperative Societies analogous to the Rule 351-A of the Civil Service Regulations. As per provisions of Regulation 85 of the 1975 Regulations, a disciplinary inquiry can be instituted only against the employees and the petitioner who ceases to be the employee of the cooperative society after having been retired on 31st August, 2009, no disciplinary proceeding can be instituted against the petitioner. Petitioner was issued chargesheet on 26.2.2010 to which he submitted his reply on 10.3.2010. Thereafter petitioner submitted an application on 16th March, 2010 (Annexure No. 12) for payment of the post retiral dues. It is only after moving the said application, the petitioner was called for personal hearing on 5.4.2010 and the petitioner appeared in the personal hearing and made his submissions before the Inquiry Officer. The petitioner filed Writ Petition No. 6547 (SS) of 2010, challenging the order dated 6.11.2009, issued by the Managing Director. The said writ petition was finally disposed of vide judgment & order dated 16.9.2010 (Annexure No. 16) with a direction to the petitioner that he will make afresh representation to the opposite party no. 3 who shall consider and decide the same in accordance with law by passing speaking and reasoned order within a period of one month from the date of production of the said order and the decision so taken be also communicated to the petitioner. The petitioner in compliance of the said order submitted afresh representation before the opposite party no. 3 on 23rd September, 2010 (Annexure No. 17) raising all his grievance. However, instead of deciding the petitioner''s representation, the opposite parties proceeded with the inquiry and issued show cause notice to the petitioner on 27.12.2010 alongwith the inquiry report dated 13.8.2010 (Annexure No. 19 & 20). The petitioner submitted his reply to the show cause notice on 12.1.2011 (Annexure No. 21). Petitioner was surprised to receive the order dated 6.4.2011, passed by the Managing Director by which petitioner was awarded punishment of recovery of Rs. 8,07,637.73 from the retiral benefits and movable and immovable properties of the petitioner alongwith an adverse entry. Petitioner was also served another order dated 13.4.2011 passed by the Managing Director by which petitioner''s representation dated 23.9.2010 was rejected and the contents with regard to recovery and punishment order has been reiterated. On 18.4.2011 petitioner received another order dated 13.4.2011 passed by the General Manager (Establishment) with regard to recovery of amount of Rs. 8.80,671.13 from the outstanding dues of the petitioner.

The petitioner having no other alternative and efficacious remedy has approached this Court challenging the orders dated 6th November, 2009, 6.4.2011, 13.4.2011 and 13.4.2011 issued on 09.11.2009 (Annexures No. 7, 22, 23 & 24), inter alia on the ground that the entire disciplinary proceedings initiated against him after his retirement were without jurisdiction as there is no provision under the Service Rules to initiate the disciplinary proceeding against a retired employee.

Learned counsel for the petitioner in support of his submissions placed reliance upon a decision of Hon''ble Apex Court reported in C.L. Verma Vs. State of M.P. and another, , Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and Others, and Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and Others, .

Opposite Parties No. 2 to 4 filed their counter affidavit opposing the writ petition stating therein that the U.P. Cooperative Federation framed its own Service Rules known as U.P. Pradeshiya Cooperative Federation Employees Service Rules, 1980 and the services of the employees of the Federation are governed by the aforesaid Rules 1980. Earlier, the services of the employees of the Federation were being governed by U.P. Pradeshiya Cooperative Federation Employees Service Rules, 1956. As the inquiry proceedings against the petitioner could not be completed within the time prescribed by this Court, the petitioner was reinstated in service but the departmental proceedings initiated against the petitioner continued and reached to its logical end by passing final order dated 29.11.2000. From perusal of counter affidavit, it also reveals that after retirement of the petitioner it came to the knowledge of the Federation that the petitioner had committed financial irregularities during his posting as District Manager at Hardoi and, as such, the departmental enquiry proceedings were initiated against the petitioner vide order dated 6.11.2009. After conclusion of inquiry, the final order with respect to payment of post retiral benefits has been passed by the Federation on 13.4.2011. It has also been stated in Counter Affidavit that when loss is caused to the Employer and such act or omission comes to the knowledge of the Employer after retirement of the employee, enquiry proceedings can be initiated by the employer against the employee for determining the responsibility of the employee and then amount in question i.e. loss suffered by the employer due to wrongful act or omission of the employer, can be recovered from the employee. The employee cannot be allowed to keep the money/funds of the employer illegally by misappropriating the same only for the reason that the employee has retired from the service of the employer which would be against the public policy. In the present case, due to illegal act of the petitioner, the Federation sustained financial losses, and, as such, enquiry proceedings were initiated against the petitioner when it came to the knowledge of the Federation, though at that time petitioner stood retired from the service. The issuance of ''No Objection Certificate'' to the petitioner will not preclude the Federation from instituting departmental enquiry proceedings against him once it comes to the knowledge of the Federation that due to wrongful act or omission of the petitioner, the Federation sustained financial losses. On conclusion of the departmental enquiry proceedings, an amount of Rs. 08,07,637.00 was found recoverable from the petitioner and, as such, the post retiral benefits were adjusted against the outstanding dues and further order has been passed to recover the remaining amount. Petitioner was given full opportunity of hearing during the inquiry and there is no illegality in the action taken by the opposite parties. Present writ petition is, therefore, misconceived and deserves to be dismissed.

While refuting the submissions of opposite parties made in counter affidavit, learned counsel for the petitioner submitted that no financial irregularities were committed by the petitioner during his posting at Hardoi as District Manager instead the Federation earned the profit of Rs. 44.15 lakhs during his period. The whole action was taken without jurisdiction and, therefore, the impugned orders deserve to be quashed and a direction may be issued to the opposite parties to release all post retirement dues of the petitioner forthwith.

I have considered the submissions of learned counsel for parties and gone through the record.

It is admitted position that the petitioner attained the age of superannuation on 31st August, 2009, while working on the post of District Manager in P.C.F. and accordingly he was issued No Dues Certificate by the authority concerned and certain service dues have also been released in his favour. It is also admitted position that the decision to initiate the departmental proceedings was taken by the Managing Director of the Federation vide order dated 6.11.2009 i.e. after retirement of the petitioner i.e. on 31.8.2009.

A specific query was made from Sri Shireesh Kumar, learned counsel for opposite parties no. 2 to 4 as to whether there is any provision analogous to the provisions of Rule 351-A of Civil Service Regulations in the Service Rules of the Federation. Sri Shireesh Kumar very fairly accepted that there is no provision in the Service Regulations to initiate the departmental proceedings against an employee after retirement.

The Hon''ble Apex Court in the case of C.L. Verma Vs. State of M.P. and another, , examined the issue of initiating the departmental proceedings in absence of any specific provision and held that no disciplinary proceeding may be initiated against the retired employee because after retirement, relationship between master and servant comes to an end. The relevant para 6 of the judgment reads as under:

The question which arose for consideration in the writ petition before the High Court at the instance of the appellant was whether in the face of the mandate in R. 29 the administrative order could operate. It is not the stand of the State Government that the order dated 15th of May, 1981, is one under the proviso to R. 29. In fact, the tenor of the proviso clearly indicates that it is intended to cover specific cases and individual employee. An administrative instruction cannot compete with a statutory rule and if there be contrary provisions in the rule the administrative instructions must give way and the rule shall prevail. We are, therefore, of the view that the appellant, in terms of R. 29, ceased to be a Government employee on his attaining the age of 58 years, two days prior to the order of dismissal. In view of the fact that he had already superannuated, Government had no right to deal with him in its disciplinary jurisdiction available in regard to employees. The ratio of the decision in AIR 1937 27 (Privy Council) supports the position.

The Hon''ble Apex Court reiterated the aforesaid proposition of law in the case of Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and Others, , and held that the disciplinary proceedings cannot continue after superannuation unless it is provided under the Service Rules or Regulation. Relevant portion from the judgment of Bhagirathi Jena (supra) is reproduced as under:

In view of the absence of such provision in the above said regulations, it must be held that the Corporation had no legal authority to make any reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant and nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired from service on 30.06.1995, there was no authority vested in the Corporation for continuing the departmental enquiry even for the purpose of imposing any reduction in the retiral benefits payable to the appellant. In the absence of such authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.

This Court in the case of Bhagirathi Jena Vs. Board of Directors, O.S.F.C. and Others, , while dismissing the writ petition upheld the order of learned Tribunal placing reliance upon decisions of Hon''ble Apex Court in the case of C.L. Verma vs. State of Madhya Pradesh and another and Bhagirathi Jena vs. Board of Directors, O.S.F.C. and others (Supra).

Recently, in the case of Girijan Cooperative Corporation Ltd., Andhra Pradesh vs. K. Satyanarayana Rao, reported in (2010) 15 SCC 322 the Hon''ble Apex Court held that the departmental proceedings can be initiated and continued only in terms of rules framed by employer. The relevant paras 14 & 15 of the said judgment read as under:

There cannot be any doubt or dispute that an employer can initiate a departmental proceedings and/or continue the same only in terms of the rules framed by it. It is also a well settled law that the disciplinary proceedings are initiated only when a charge-sheet is issued. [See Union of India v. K.V. Jankiraman]

This Court in UCO Bank vs. Rajinder Lal Capoor has held as under:

The aforementioned Regulation, however, could be invoked only when the disciplinary proceedings had clearly been initiated prior to the respondent''s ceasing to be in service. The terminologies used therein are of seminal importance. Only when a disciplinary proceeding has been initiated against an officer of the bank despite his attaining the age of superannuation, can the disciplinary proceeding be allowed on the basis of the legal fiction created there under i.e. continue "as if he was in service". Thus, only when a valid departmental proceeding is initiated by reason of the legal fiction raised in terms of the said provision, the delinquent officer would be deemed to be in service although he has reached his age of superannuation. The departmental proceedings, it is trite law, is not initiated merely by issuance of a show-cause notice. It is initiated only when a chargesheet is issued (see Union of India vs. K.V. Jankiraman). This aspect of the matter has also been considered by this Court recently in Coal India Ltd. vs. Saroj Kumar Misra wherein it was held that date of application of mind on the allegations levelled against an officer by the competent authority as a result whereof a chargesheet is issued would be the date on which the disciplinary proceedings are said to have been initiated and not prior thereto. Pendency of a preliminary enquiry, therefore, by itself cannot be a ground for invoking Clause 20 of the Regulations.

On basis of the aforesaid analysis as well as the fair admission of Sri Shireesh Kumar, learned counsel for opposite parties no. 2 to 5 this Court comes to the conclusion that there is no service rules of the opposite parties which may permit them to initiate the departmental proceedings against a retired/superannuated employee as it is well settled proposition of law that in absence of any rules, the disciplinary proceedings against a retired employee cannot be initiated or continued.

In the result, the appeal is allowed. The orders dated 6th November, 2009, issued on 09.11.2009 (Annexure No. 7), orders dated 6.4.2011 and 13.4.2011 and 13.4.2011 (Annexures No. 22, 23 & 24) are hereby quashed. Opposite Parties are directed to release his post retiral dues i.e. gratuity, leave encashment, arrears of salary w.e.f. 01.01.1996 to November, 1999 on account of the revision of the scale of pay, balance pay from 01.4.2000 to 30.11.2000 and arrears of salary of 6th Pay Commission w.e.f. 1.1.2006 etc. within period of three months from the date of receipt of certified copy of this order.