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Judgment
S.S. Nijjar, J.—With the consent of learned counsel for the parties, the matter is taken up today itself for final disposal at the motion stage.
The petitioner was appointed as Manager in April, 1994 in the Haryana Financial Corporation, Chandigarh (hereinafter referred to as "the corporation"). According to her, she performed her duties most diligently. No punishment was ever awarded to her, nor any defects were ever pointed out to her during her service career. In September, 1993, a new Division i.e. Leasing Division was created in the Corporation. The petitioner was deputed to work in the aforesaid Division in July, 1995. The petitioner was assigned the following duties in the aforesaid Division:-
"1. Preparation of the appraisal report of the lease cases as allotted by Additional General Manager (Leasing).
Maintaining of accounts of the leasing department.
Follow up for recovery of lease rentals.
Any other job assigned by the Additional General Manager (Leasing)."
Since there were no written orders/instructions for the manner in which the aforesaid duties were to be performed, the petitioner had to merely follow the instructions given by her Controlling Officers which included the Managing Director of the Corporation. The powers of sanctioning loans upto to Rs. 10.00 lacs were vested in the Additional General Manager (Leasing) whereas in the cases of loans above Rs. 10.00 lacs, the same were submitted to the Managing Director, who in turn after scrutinising/examining, placed the same before the Advisory Committee for final view/sanction. The Committee consisted of the following members:-
"i) Managing Director, HFC (Chair Person)
ii) Executive Director.
iii) General Manager (Recovery)
iv) General Manager (Finance)
v) General Manager (Appraisal)
vi) Additional General Manager (Leasing)
In view of the constitution of the Advisory Committee, the petitioner claims that she was not involved in the decision making. Her role was just to collect the data and submit the same before the superior authority for further consideration and necessary action. Between the period of 14.11.1996 and 22.2.1997, 14 charge-sheets were served upon the petitioner which are attached to the writ petition as Annexures P-1/1 to P-1/14. The petitioner submitted the replies to all the charge-sheets. The enquiry reports had been submitted on 8.2.2000, On the basis of the findings recoded in the enquiry report, show cause notice was issued to the petitioner on 6.7.2000. It was mentioned that the inquiry officer has held the petitioner guilty of charges in majority of cases as per specific details given in the enclosed enquiry report/clarification. The petitioner was called upon to show cause as to why she should not be dismissed from service of the Corporation as per Regulation No. 41(1)(e) of the Punjab Financial Corporation (Staff) Regulations, 1961 (hereinafter referred to as "the Staff Regulation"). The aforesaid show cause notice is attached to the writ petition as Annexure P/4. She was asked to submit the reply within 21 days from the date of show cause notice (Annexure P-4). The petitioner submitted the reply to the show cause notice, which is attached to the writ petition as Annexure P/5 (pages 398 to 496 of the paper-book). After considering the reply, the respondents dismissed the petitioner from service by order dated 19.10.2000 (Annexure P-6). The disciplinary authority passed a detailed order setting out the reasons for holding the petitioner guilty against all the specific charges for the various lease finance cases. The petitioner challenged the aforesaid order of dismissal by filing a statutory appeal before, the Board of Directors. The memorandum of appeal has been attached with the writ petition as Annexure P7 (pages 564 to 652 of the paper-book). In the appeal, the petitioner has specifically made a request that personal hearing be granted to her before taking a final decision. The Board of Directors in its 273rd meeting held on 15.6.2001, instead of giving personal hearing to the petitioner, referred the matter to a Sub Committee which would after deliberations, place its recommendations before the Board of Directors. The Sub Committee heard the petitioner and submitted its report before the Board of Directors. The Board of Directors by order dated 4.10.2002 (Annexure P-8) dismissed the appeal filed by the petitioner after concurring with the findings and recommendations of the Sub Committee.
Orders (Annexures P-6 and P-8) have been challenged by the petitioner in this writ petition filed under Articles 226/227 of the Constitution of India. The petitioner seeks the issuance of a writ in the nature of certiorari quashing the order of dismissal from service (Annexure P-6) and the order (Annexure P-8) whereby the appeal of the petitioner has been dismissed.
The respondents have filed written statement. It is stated that the petitioner was to serve the Corporation honestly and faithfully and to promote its interest. She was to show due attention to all the transactions. She was not expected to commit acts of omission and commission detrimental to the interest of the Corporation. It is admitted that no procedure was laid down in the Leasing Division of the Corporation by the Head of the Division, Mr. Anurag Vashishtha, Additional General Manager (leasing) who was later on dismissed from service from his own various acts of omission and commission. The petitioner has not been made a scapegoat, but is fully responsible for various acts which have resulted in showing undue favours to various parties. The punishing authority, after taking into consideration the points raised by the petitioner, dismissed her from service by order dated 19.10.2000. It is stated that the Board of Directors constituted a Sub Committee from amongst its members. The Sub Committee granted personal hearing to the petitioner. The report of the Sub Committee was duly considered by the Board of Directors and the appeal of the petitioner was dismissed. It is denied that the function of the petitioner was only a desk appraisal. It is also stated that the petitioner is misinterpreting the noting dated 8.3.1994 contained in Annexure P-9, the guidelines dated 25.7.1994 (Annexure P-10) and the office noting dated 19.4.1994 (Annexure P-11).
The petitioner has pleaded that he was arbitrarily singled out to save the high ups who were responsible for the actual lapses. The departmental enquiry has been conducted in violation of the Staff Regulation and the principles of natural justice. According to the petitioner, he Enquiry Officer failed to examine the witnesses in her presence and thus, the findings of the enquiry are vitiated. During the enquiry proceedings, the petitioner had requested several times to produce defence witnesses, but the request was not accepted by the Enquiry Officer. The Enquiry Officer was always in a hurry to dispose of the charge-sheets, without following the required procedure. The Enquiry Officer disposed of as many as six charge-sheets (our of the 14 charge-sheets), against the petitioner in a single sitting in one hour. The petitioner was not even allowed to examine the documents tendered by the presenting Officer. It is also pleaded that the enquiry report has been submitted by the Enquiry Officer, without application of mind. The findings are recorded only on the basis of the documents tendered by the Presenting Officer. The findings recorded by the Enquiry Officer are vitiated as they are based on no evidence. It is also pleaded that the Enquiry Officer was himself a member of the sanctioning Committee (Advisory Committee). Therefore, the Enquiry Officer acted as a Judge as well as Prosecutor. Thereafter, the petitioner has elaborately pleaded on merits with regard to each charge.
Mr. Malik, learned counsel appearing for the petitioner has submitted that the whole enquiry proceedings were an eye-wash. The request of the petitioner to call the Investigating Officers of each case for examination and cross-examination in her presence was rejected out of hand. He relies on a judgment of the Single Bench of this Court rendered in the case of J.S. Gulati v. improvement Trust, Ludhiana and Ors. 1983(2) S.L.R. 100. In the aforesaid case, it has been held that a departmental enquiry is a serious and solemn affair. The witnesses are examined and evidence produced to establish the charges. A delinquent is given an opportunity to cross-examine the witnesses and adduce evidence. This process is undergone in order to reach the truth. This is not just a ritual. The evidence has to be examined, and analysed and appraised by the Enquiry Officer. He has to base his conclusion on such appraisal. Mr. Malik, thereafter, submitted that the Enquiry Officer acted as a judge in his own cause as he was the Member of the Advisory Committee which sanctioned the loans for the amounts which were over Rs. 10.00 lacs. Learned counsel has further submitted that the order of dismissal has been passed with a closed mind. The reply submitted by the petitioner to the Enquiry Officer has not been considered at all. Last, but not least, the learned counsel for the petitioner has submitted that the order of dismissal (Annexure P-6) and the order passed in appeal (Annexure P-8) are liable to be quashed, as the petitioner has been condemned unheard. According to the learned counsel, the Board of Directors had to give opportunity of hearing to the petitioner. Admittedly, the Board of Directors acted on the advice of the Sub Committee. The Board of Directors had no power of delegating its functions as the appellate authority to the Sub Committee, Therefore, the order passed by the appellate authority (Annexure P-8) is liable to be quashed on this short ground.
Learned counsel appearing for the respondents has argued that rules of natural justice have been fully complied with by the Enquiry Officer as also the appellate authority. The Sub Committee consisted of Officers who were members of the Board. It was not possible for the entire Board to give an opportunity of hearing to the petitioner. In fact, it was for the benefit of the petitioner that the hearing was given by the Sub Committee which had have the time to hear the petitioner at length. Learned counsel has further submitted that the Board of Directors has the necessary power of delegation u/s 43-A of the State Financial Corporations Act, 1951 (hereinafter referred to as "the Corporation Act") It was in the exercise of these powers that the Sub Committee was constituted.
We have considered the submissions made by the learned counsel for the parties. We are of the opinion that it would be wholly inappropriate for this Court to make any comments on the merits of the submissions made by the learned counsel for the petitioner with regard to the conduct of the departmental enquiry or the findings recorded by the Enquiry Officer as we intend to remand the mater back to the Appellate Authority for a fresh decision. It is not disputed before us that the Board of Directors did not give a hearing to the petitioner. A perusal of the order (Annexure P-8) also shows that the same has been passed after detailed discussions in the matter. The Board of Directors concurred with the findings/recommendations of the Sub Committee and the appeal preferred by the petitioner has been dismissed. We are of the considered opinion that the approach adopted by the respondent-Board is erroneous, Section 43-A of the Corporations Act provides as under;-
"43-A, Delegation of Powers:- The Board may, by general or special order, delegate to the managing director or to any other officer of the Financial Corporation [or to any committee appointed u/s 21], subject to such conditions and limitations, if any, as may be specified in the order such of its powers and duties under this Act as it may deem necessary.]"
A perusal of the aforesaid Section makes it clear that the Board may, by general or special order, delegate such of its powers and duties under the Act as deemed necessary, inter alia to any committee appointed u/s 21 of the Corporations Act. Section 21 of the Corporations Act provides as under;-
"21. Advisory Committee:- The Financial Corporation may appoint [one or more committee or committees consisting wholly of directors or wholly of other persons or partly of directors and partly of other persons for the purpose of assisting the Financial Corporation in the efficient discharge of its functions and in particular for the purpose of securing that those functions are exercised with due regard to the circumstances and conditions prevailing in and the requirements of particular area of industries."
A perusal of this Section shows that the function of the Advisory Committee is to assist the Financial Corporation in the efficient discharge of its functions. Therefore, the final decision making power would remain with the Corporation. The Corporation can delegate its functions to a Committee for assisting the Board of Directors by offering the necessary advice. But the final decision has to be taken by the Board of Directors. Even the delegation to the Sub Committee in the present case shows that "the Board referred the matter to the Sub Committee to place its recommendations before the Board of Directors". The decision taken in the 273rd meeting of the Board of Directors on 15.6.2001 is as follows:-
"After detailed discussions, the Board referred the mater to the Sub Committee comprising of Dr. Harbakhsh Singh, I.A.S., Shri P.E.S. Vidyasagar, Dr. S.S. Dalala and Shri Vineet Virmaani, which after deliberations, would place its recommendations before the Board of Directors."
The recommendations made by the Sub Committee were obviously only of persuasive value. Whether or not the same were to be accepted had to be decided by the Board of Directors after complying with rules of natural justice. This clearly necessitated that the petitioner be confronted with the recommendations of the Advisory Committee and be given an opportunity to offer her explanation to the recommendations. In a matter of such a serious nature where the dismissal of an Officer has already been ordered, it is absolutely essential that the appellate authority should have given an opportunity of hearing to the Officer concerned. The Board of Directors has no power to delegate its decision making power to any Committee. The petitioner was entitled to be heard by the Board of Directors. The hearing cannot be substituted by a hearing provided by a Sub Committee. We find support for the aforesaid view of ours from a Division bench judgment of this Court rendered in the case of Amar Singh, Junior Analyst and Ors. v. The State of Punjab and Ors. 1983(3) S.L.R. (P.& H) 264. In this case, the Division Bench was considering the delegation of power of appointment which was vested in the Director, Food and Supplies Department Punjab, to the Food and Supplies Controllers. The Director, Food and Supplies Department had authorised respective Controllers to constitute a Selection committee comprising of three members one of them would be the Controller himself who would act as the Chairman of the Committee and who would also nominate two other Officers of the Selection Committee. The Controller was further authorised to appoint on ad hoc basis the candidate selected by the Committee and then inform the Head Office. It was observed by the Division Bench that the appointments made by the Controller in compliance with the directions of the Director, Food and Supplies Department can be regarded to have been made by the Director Food and Supplies himself, if in law the Director could delegate his power of making appointment to the Controller. On behalf of the respondents, it was submitted that making of an appointment is an administrative function which can be delegated to a sub-ordinate or any other person. However, on behalf of the petitioners, it was urged that the ultimate responsibility to make appointment cannot be delegated by a statutory functionary to another person. In support of the submission, the learned counsel for the petitioners therein, had relied on a judgment of the Supreme Court rendered in the case of Pradyat Kumar Bose Vs. The Hon''ble The Chief Justice of Calcutta High Court, , and Vine v. National Dock Labour Board (1956)3 All Eng L R 939. Considering the two judgments the Division Bench observed as follows:-
"25. A constitution Bench of five Judges in Pradyat Kumar''s case (supra) while responding through Jagannadhadas, J., who delivered the opinion for the Bench to a contention advanced before them on behalf of the appellant who held the office of the Registrar and Accountant General of the High Court of Calcutta and was dismissed therefrom by an order of the Chief Justice that Chief Justice could not delegate the function of inquiring into the charges against him to another Judge had the following to say:-
"It is well recognised that a statutory functionary exercising such a power cannot be said to have delegated his functions merely by deputing a responsible and competent official to enquire and report. That is the ordinary mode of exercise of any administrative power. What cannot be delegated except where the law so specifically so provides - is the ultimate responsibility for the exercise of such powers."
The underlined portion of the aforementioned observations leaves no scope for doubt that even in the matter of exercise of administrative power what cannot be delegated is the ultimate responsibility for the exercise of such power.
Lord Somervell of Harrow in a concurring opinion in Vine''s case (supra) at page 951 of the report held that in deciding whether a "person" has power to delegate, one has to consider the nature of the duly and the character of the person. There are, on the other hand, many administrative duties which cannot be delegated. Appointment to an office of position is plainly an administrative act. If under a statute a duty to appoint is placed on the holder of an office, whether under the Crown or not, he would normally have no authority to delegate. He could take advice of course but he could not, by a minute, authorise someone else to make the appointment without further reference to him.
Applying the ratio of the aforementioned two case of the facts of the present case one cannot but hold that while it was permissible to the Director Food & Supplies, Punjab to constitute a selection committee with Controller as Chairman envisaged in Annexure P3 and have the candidates interviewed by such a selection committee. It was, however, not permissible to him to authorise respective Controllers to make appointments of the candidates selected by the said selection committee. By authorising the Controller to act on the result of the interview and make appointment, the Director delegated to the respective District Controllers his ultimate responsibility of making appointment."
In the present case, we are also of the considered opinion that the Board of Directors of the Corporation cannot delegate the ultimate responsibility for taking a decision on the appeal submitted by an officer of the Corporation which under the Regulations is to be decided by the Board of Directors. Before accepting the advice of any Sub Committee, it was necessary for the Board of Directors to give an appropriate opportunity of hearing to the Officer concerned. The Officer would be entitled to controvert and challenge the advice given by the Sub Committee or any other authority/office to which the power had been delegated by the Board of Directors, for giving advice. In the present case, admittedly, the petitioner has not been given any opportunity of hearing. In our opinion, the petitioner has been condemned unheard. This view of ours also finds support from a Single Bench judgment of this court rendered in the case of Hans Raj Gupta v. State of Punjab 1992(1) S.L.R. (P & H) 146. In paragraph 9 of the aforesaid judgment, it has been observed as follows:-
"9. It is not disputed before me that the disciplinary Authority of the petitioner is the Secretary to the Government, Punjab, Food and Supplies Department. After the enquiry report was submitted by the Enquiry Officer, a personal hearing was granted to the petitioner by the Director, Food & Supplies and not by the Secretary to Govt. Punjab, Food and Supplies Department. This is even apparent from the impugned order Annexure P-5. Learned counsel submitted that after the submission of the enquiry report, hearing by the Disciplinary Authority is not a mere facrce or just a routine formality. Before the Disciplinary Authority, a delinquent officer, can always show that the enquiry report should not be accepted on various grounds which may be urged in that regard. Hearing by an authority other than disciplinary authority is not a substitute for the hearing which is provided in the Punishment and Appeal Rules as well as under the Rules of natural justice. The petitioner in the present case had to convince the disciplinary authority and not the Director Food and Supplies that the finding recorded by the Enquiry Officer could not be sustained. I find that the submission of the learned counsel for the petitioner is well merited. The petitioner should have been heard by the disciplinary authority after the enquiry report was submitted and he was not to be personally heard by the Director, Food & Supplies. In Union of India and Ors. v. Mohd. Ramzan Khan 1991(1) S.L.R. 159 has held that under the rules of natural justice, copy of the enquiry report which is submitted to the disciplinary authority must be supplied to the delinquent officer for the reason that it is before the disciplinary authority that the delinquent officer is to show that the enquiry report should not be accepted. Consequently, I find that the rules of natural justice have been violated by the disciplinary authority by not affording a personal hearing to the petitioner."
In view of the above discussions, we allow the writ petition and the order dated 4.10.2002 (Annexure P-8) where by the appeal of the petitioner has been dismissed, is quashed and the matter is remanded back to the Board of Directors for passing a fresh order, in accordance with law, after giving adequate opportunity of hearing to the petitioner.