Ravuru Babu Rao vs General Manager, Oriental Insurance Co. Ltd.

N.Y. Hanumanthappa, J.—The appellant preferred this writ appeal questioning the judgment and order dated 16-7-1991 passed by the learned single Judge in Writ Petition No. 9488 of 1987 refusing to grant writ of prohibition restraining the respondent from proceeding further in pursuance of the order dated 31-3-1987 of the Manager, Oriental Insurance Company Limited, Regional Office, Madras and to further direct the respondent to treat the period of suspension between 8-11-1979 and 8-3-1985 as regular and pay the salary for the said period and grant such other benefits as the appellant is entitled to. For the purpose of disposal of this writ appeal, the ranks of the parties have been mentioned as they were arrayed in the writ petition.

The petitioner was appointed as Junior Inspector, Oriental Insurance Company on 5-8-1976. In the year 1979, he was promoted as Grade I Inspector with effect from 5-8-1978. On 10-5-1979, newspapers reported the progress of cyclonic storm and about the possibility of heavy rainfall. On 11-5-1979, the press reported that a cyclonic storm was likely to cross coast at Nellore by Friday morning and tidal waves about 2 metres above normal were expected. At that time, the petitioner was working as Probationary Inspector, Grade I and he issued two cover notes for a total sum of Rs. 2,41,35,000/-on 11-5-1979. The respondent found that the petitioner acted in excess of his authority and in the manner prejudicial to the interests of the Insurance Company and that he was negligent in the performance of his duties. Disciplinary proceedings were initiated against him on 8-11-1979 and he was suspended from service on the same day.

When the disciplinary proceedings were initiated, the respondent also launched criminal proceedings against the petitioner in C.C.No. 13 of 1981 before the Principal Special Judge for S.P.E and A.C.B. Cases, Hyderabad for offences punishable Under Sections 420 read with 511 IPC, 120B read with Section 420 of I.P.C. and 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, and for specific offences u/s 420 of I.P.C. read with Sections 511 and 34 of I.P.C. and Sections 466, 467, 471 and 477A Indian Penal Code, and tinder Section 5(3-A) read with 5(1)(d) of the Prevention of Corruption Act. On the basis of the complaint, the following charges were framed:

" Charge u/s 120B read with Section 420 IPC and 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act (Act 11 of 1947) against A-1 to A.19.

Charges u/s 420 read with Section 511 IPC read with Section 34 IPC of the Prevention of Corruption Act, Section 467 IPC and Section 471, IPC u/s 109, IPC Section 5(1)(d) of the Prevention of Corruption Act, Section 467 and 471 IPC against A-1."

Evidence was given on both sides. On behalf of prosecution one L.K. Narasimha Rao, Branch Manager was examined as PW.1 apart from 21 others. No evidence was adduced on behalf of defence. After going through the evidence, the Court below found, that the primary and most important circumstance on which reliance placed by the prosecution is, that the Insurance Inspector or the Rural representative have no authority to issue the cover notes. On this point, it referred to the evidence of PW.1 who spoke about the procedure to be followed in issuing cover notes. The prosecution also examined PW.11 G. Srinivasan, Assistant Divisional Manager, Oriental Insurance Company, Vijayawada who also deposed the procedure for issuing cover notes. On consideration of the evidence, the Court below/held that the prosecution has thoroughly failed to prove any of the offences charged against the accused, and accordingly acquitted the accused, by its judgment dated 6-3-1984 of all the charges levelled against them. Subsequent to this acquittal, the order of suspension of the petitioner was revoked on'' 8-3-1995 (sic. 8-3-1985). Challenging the order passed by learned Principal Special Judge for SPE and ACB Cases, State filed Criminal Appeal No. 869 of 1984, before this Court and this Court dismissed the said appeal by its judgment dated 11-9-1986 on merits. Challenging the judgment of this Court, Criminal Appeal No. 487 of 1987 was preferred before the Supreme Court and the same was dismissed on 19-10-1994. In the meanwhile, the Department proceeded with disciplinary proceedings by appointing an Enquiry Officer to enquire into the charges levelled against the petitioner. Challenging the initiation of enquiry proceedings, the petitioner filed Writ Petition No. 9488 of 1987 before this Court. The learned Single Judge stayed the enquiry pending disposal of the writ petition. Raising similar contentions, as urged in the Criminal case, the respondent-department had also filed two suits viz., O.S.Nos. 127 and 128 of 1982 on the file of learned Subordinate Judge, Ongole for declaration that the cover notes issued by the petitioner dated 11-5-1979 are null and void and are not binding on the company. Earlier O.S.Nos. 52 and 53 of 1980 on the file of learned Subordinate Judge, Ongole were filed by M/s. Anjaneya Tobbacco Company ''Private Limited against the Insurance Company claiming insurance amount for the damage suffered due to floods. The Petitioner was third defendant in the said suits. The Insurance Company filed a detailed written statement in O.S.Nos. 52 and 53 of 1980 denying the claim of the Tobacco Company both for insurance amount and the damages. The petitioner also filed his written statements in all the four suits, two filed by the Tobacco Company and two filed by the Insurance Company. Issues were framed in all those suits. Among other issues, one issue was whether there is authority on the part of the petitioner to issue such cover notes? On merits, O.S. Nos. 52 and 53 of 1980 were decreed and O.S.Nos. 127 and 128 of 1982 were dismissed on 22-9-1989. In the Civil proceedings, the Sub-Court held that the petitioner had the necessary authority to issue the cover notes and had not committed any breach of instructions or rules and that the cover notes were legal and binding on the Company. Challenging these orders, appeals were filed before this Court in A.S.Nos. 2186, 2187,2204 and 2205 of 1989 and they were dismissed by this Court on 5-10-1993. Challenging the orders of this Court, Special Leave Petitions Nos. 1911, 1912, 1913 and 1914 were preferred before the Supreme Court and the same were dismissed on 20-3-1995.

It is relevant to state here that before disposal of the Civil Appeals against the judgment and decree passed by the Sub-Court, Writ Petition No. 9488 of 1987 was heard on merits. The learned Single Judge referring to the contentions raised by both sides and placing reliance on earlier decisions of this Court and other Courts, though agreed with the petitioner that when there is order of acquittal in criminal case for the same purpose by a competent criminal Court, it is not proper for the department to enquire into the same charge once again, but rejected the writ petition on 16-7-1991 on the ground that the objects to launch criminal proceedings and to initiate disciplinary proceedings against the same employee are quite different. Challenging the same, this writ appeal is preferred by the appellant.

Sri E. Manohar, learned senior counsel appearing for the petitioner urged that the findings given by the learned single Judge to approve the departmental enquiry are quite incorrect, when the petitioner was tried before the trial Court for the same charge. The learned counsel also urged that proceeding with further enquiry against the same issue, decided by competent criminal Court, amounts to harassing the petitioner. According to him, when there is an order of acquittal on the charge, which was common, in criminal case, in departmental enquiry and also before the Civil Court, it is not fair to proceed with further enquiry. On the other hand it amounts to harassment of the Officer, and extending negative attitude on the part of the employee. To support his contentions, the learned counsel placed reliance on the decision of the Supreme Court in R.P. Kapur Vs. Union of India (UOI) and Another, , wherein it is observed as follows:

"If the trial of the criminal charge results in conviction, disciplinary proceedings are bound to follow against the public servant so convicted, even in case of acquittal proceedings may follow where the acquittal is other than honourable"

Sri E. Manohar, learned senior counsel submits that the subsequent view of the Supreme Court in State of Rajasthan Vs. B.K. Meena and others, has no application on facts with the present case, as it is not his client''s case that there cannot be any parallel proceedings. He further submits that as the respondent department having failed in its attempts to get the orders in their contention that cover notes issued by the petitioner were not authorised, proceeding with the disciplinary enquiry or taking any decision in disciplinary enquiry is incorrect and the same be declared as illegal.

As an answer to these contentions, Sri G.V.L.N. Murthy, learned Advocate appearing for the department supported the judgment and order passed by the learned Single Judge. According to him the object before the Criminal Court, case before the Civil Court and point raised before the learned Single Judge are altogether different. All the issues in the above cases are dealt with separately. Again the charge framed against the petitioner in departmental enquiry is to know how far the presence of the petitioner in the department is advisable. He contended that there is no bar to initiate proceedings by different agencies for similar charge. According to him the law laid down by the Supreme Court in the decision cited at (2) supra is the complete answer to the contentions of the learned counsel for the petitioner. He also contended that during the pendency of the writ appeal, there was an interim direction granted by this Court permitting to proceed with the departmental enquiry, but stayed the announcement of the result. Accordingly enquiry was completed, but the result of the enquiry is not announced. According to the learned counsel for the respondent-department, both the proceedings, either departmental or criminal, initiated simultaneously or alternatively will not amount to harassing the delinquent official and the said circumstances cannot be brought within the ambit of double jeopardy. The learned counsel mainly relied upon the decision of the Supreme Court cited at (2) supra wherein it is observed that the standard of proof, the mode of enquiry and the rules governing the enquiry and trial in both the cases are entirely distinct and different. The learned counsel lastly urges that the appeal should be dismissed.

The short point that arises for consideration in this writ appeal is whether both the departmental and criminal proceedings can be pursued simultaneously and whether the orders passed by the competent Court constituted under the Cr. P.C. and C.P.C. on the same issue will bar the departmental enquiry. The object of holding departmental enquiry is not really to punish the guilty, but to keep the administrative machinery unsullied by getting rid of bad elements. The interest of administration demands that undesirable elements are thrown out and any misdemeanour is enquired into promptly. In holding the departmental enquiry, the interest of the delinquent officer also lies in a prompt conclusion of the disciplinary proceedings. If he is not guilty of the charges, his honour should be vindicated at the earliest possible moment and if he is guilty, he should be dealt with promptly according to law. Thus there is no bar to initiate both the proceedings.

But in identical circumstances, the Supreme Court in Corporation of the City of Nagpur, Civil Lines, Nagpur and another Vs. Ramchandra and others, held as under:

" The question whether or not the departmental inquiry pending against the employee involved in the criminal case should be continued even after his acquittal in criminal cases is a matter which is to be decided by the department after considering the nature of the findings given by the Criminal Court. Normally where the accused is acquitted honourably and completely exonerated of the charges it is not expedient to continue a departmental inquiry on the very same charges or grounds of evidence. However, merely because the accused is acquitted, the power of the authority to continue the departmental inquiry is not taken away nor its discretion in any way fettered."

The decisions referred to above clearly answer all the contentions raised by both the parties and there is no need to multiply the decisions to know how the issues have been explained in other decisions.

In the background of the principles laid down in the decisions referred to above, if we examine the facts and circumstances which led us to consider this appeal, it is clear that the issue involved in the departmental enquiry and in the criminal proceedings and issues raised in all the four suits referred to above are one and the same. The documents relied upon in both the proceedings are also one and the same. When there is an order of acquittal by a competent Criminal Court, and on merits, when the Civil Court held that the petitioner is not liable to answer for the issue of the cover notes, it is not proper to once again drive him to face the departmental enquiry. It is not fair on the part of the authorities to resort to departmental enquiry having regard to the findings of the Courts constituted under Cr.P.C. and C.P.C. It is open for the department to take a decision on the continuance of the petitioner or otherwise, but not on the basis of the charge now referred to against the petitioner.

If there was only a finding given in favour of the petitioner and if the same issue was not decided by the Civil Court, we would have held that the departmental enquiry may be proceeded with and we are prevented from directing the respondent to proceed with the departmental enquiry. If the department is of the opinion it is not worthwhile to continue the petitioner in the department, the department is at liberty to take such decision on any other charge against the petitioner, but not on the basis of the charge now referred to. In spite of the decisions rendered by the Civil Court and the Criminal Courts, in favour of the petitioner, if the departmental enquiry is allowed, it amounts to not accepting the verdicts of the competent Courts. The judgment under appeal is quashed. The Writ Appeal is accordingly allowed. No costs.