Ved Parkash Gupta vs Haryana State Federation of Consumers Co-operative Wholesale Stores Limited and Another

M.M. Kumar, J.—The petitioner has approached this Court by filing instant petition under Article 226 of the Constitution with a prayer for

quashing order dated 21.9.2005 (P-7) passed by the Managing Director of the Haryana State Federation of Consumers Co-operative Wholesale

Stores Limited (for brevity, ''the Con-fed), dismissing him from service. The aforementioned order has also been upheld by the Appellate

Authority-Board of Directors.

Brief facts of the case, which has led to the filing of the instant petition, are that the petitioner was appointed on the post of General Manager on

27.10.1975 in the Con-fed-respondent. In the year 2001-2002 when he was posted as District Manager in the District Office Karnal, he was

placed under suspension vide order dated 11.6.2002 in contemplation of a regular departmental inquiry. On 15.12.2003, a charge-sheet was

issued to him under Rule 26.1 of the Staff Service Rules of the Haryana State Federation of Consumers Co-operative Wholesale Stores Limited

(for brevity ''the Rules). It was alleged that he had committed various acts of omission and commission like negligence in performance of duty,

which led to causing of loss to the Confed, which is misconduct, under Rule 26.1 of the Rules. A departmental enquiry was held and the petitioner

was found guilty of those charges by the Enquiry Officer. He was given a show cause notice by the punishing authority provisionally expressing the

opinion that the findings recorded by the Enquiry Officer were agreeable and the penalty of dismissal from service is liable to be inflicted. The

petitioner replied to the show cause notice which was duly considered by the Managing Director-cum-Punishing Authority after granting him

personal hearing. The view expressed by the Managing Director-cum-Punishing Authority is discernible from the last two paras of his order, which

reads thus:

Shri V.P. Gupta GM (u/s) was present on 17.8.2005 in connection with the Show Cause Notice issued to him vide letter No. Estt./EA-2/5551-

52, dated 11.7.2005. I heard Shri V.P. Gupta, G.M. (u/s) and during personal hearing, he pleaded for his innocence. I have gone through the

record and I agree with the findings of Enquiry Officer. He failed to produce any cogent proof in his defence. Due to the negligence of Shri V.P.

Gupta, Confed suffered a loss of approximately Rs. 92.00 lacs as Shri V.P. Gupta executed an agreement with M/s Mahabir Rice Mill, Indri,

which was defective/not proper as not signed by the partner. He failed to execute proper agreement with M/s Mahabir Rice Mill, Indri, which

resulted into non-delivery of CMR. He also failed to take approval from District Milling Committee headed by Deputy Commissioner, Karnal

which was mandatory before giving stocks of paddy to the mill.

He made correct (?) with the firm, which was not even registered. Hence the firm was bogus. Secondly, he did not bother to convene a meeting,

which was to be headed by Deputy Commissioner. Thirdly, he also did not send this to Head Office for final approval. All this establishes his total

connivance with the parties. Had this all not happened Confed would have been saved from incurring losses to the tune of Rs. 1.00 crore

(Approx.). Such personnel are rogue in the service and they have no right to continue in service.

Keeping in view the gravity of the charges proved and his past unsatisfactory service record, the proposed punishment of dismissal is confirmed

and Shri V.P. Gupta, GM is dismissed from service of Confed with immediate effect.

I order accordingly.

The petitioner feeling aggrieved by the order of dismissal filed an appeal under Rule 30 of the Rules. The Board of Directors-Appellate

Authority has dismissed the appeal in its meetings held on 13.12.2006 and 28.12.2006. The Agenda Item No. 3 was taken up and the Board of

Directors had taken the decisions which reads as under:

Board considered the matter alongwith the submissions made by Shri V.P. Gupta in his appeal as well as additional points raised in his

representation submitted to the Board during personal hearing on 13.12.2006. The contents of the dismissal order dated 21.9.2005 were perused

and the reasoning given by the then Managing Director for holding Shri V.P. Gupta guilty of the charges were discussed in detail. After due

deliberations, it was resolved that there is no infirmity in the dismissal orders passed by the then Managing Director and there are no valid grounds

to interfere in this order. Board, therefore, resolved to reject the appeal of Shri V.P. Gupta.

The petitioner has pleaded that the order dated 21.9.2005 (P-7) was passed by Shri R.R. Jowel, who was the Managing Director at that time.

A perusal of Ground (b) para 11 shows that by the time the appeal of the petitioner was to be considered, Shri R.R Jowel, was appointed as

Registrar, Co-operative Societies, Haryana and he was Ex-Officio member of the Board of Directors-Appellate Authority. It is also the case of

the petitioner that Shri R.R. Jowel participated in the proceedings while deciding his appeal. The aforementioned averments made by the petitioner

have not been disputed by the respondents in the written statement.

Mr. Anurag Goyal, learned Counsel for the petitioner has made two submissions before us. Firstly, he submits that the doctrine of bias would

creep in, once Shri R.R. Jowel has participated in the proceedings while hearing the appeal of the petitioner. He has further submitted that

according to Rule 30 of the Rules, the Board was required to consider the case of the petitioner by recording the reasons. According to the

learned Counsel, the order is cryptic and without any reasons. In support of his submissions, learned Counsel has placed reliance on a judgment of

Honble the Supreme Court in the case of Amar Nath Chowdhury Vs. Braithwaite and Company Ltd. and Others, and a Division Bench Judgment

of this Court in the case of Hari Singh v. State of Punjab 2004(4) S.C.T. 413, and argued that on both the issues, the case is covered in favour of

the petitioner and against the respondent.

Mr. Rajesh Garg, learned Counsel for respondent Nos. 1 and 2, has, however, argued that no detailed reason was required to be recorded

once an appellate order is an order of affirmation. According to the learned Counsel, the Board has considered the case of the petitioner in detail,

which satisfies the requirement of Rule 30 of the Rules. Mr. Garg has further submitted that there is no illegality or bias merely because of the

presence of Shri R.R. Jowel because other members of the board were also present during the deliberations.

After hearing learned Counsel for the parties and perusing the paper book with their able assistance, we are of the view that this petition merits

acceptance to the extent that the appellate order has not been passed in accordance with the provisions of Rule 30 of the Rules. It would be

apposite to examine Rule 30 of the Rules, which reads thus:

Appeal.

30.1. An appeal against the orders of the competent authority imposing a penalty under rule 20 shall lie with the authorities mentioned in column 3

of Rule 29.

30.2 No appeal shall be entertained unless it is made within 30 days from the date of the communication of the order. The appellate authority may,

however, entertain any appeal within 60 days of the said date if the appellant has sufficient cause for not submitting the appeal in time.

30.3. The appellate authority may after consideration of the case:

i. Set aside, reduce, confirm or enhance the penalty; or

ii. Submit the case to the authority who imposed penalty with such directions as it may deem fit in the case.

30.4. All appeals shall ordinarily be decided within a period of 4 months from the date of receipt of the appeal.

A perusal of Rule 30 of the Rules makes it evident that an appeal would be competent and the same is to be entertained within a period of 30

days from the date of communication of the order of the disciplinary authority. However, an appeal can also be entertained within 60 days if the

appellant has sufficient cause for not submitting the appeal within 30 days itself. According to Rule 30.3 of the Rules, the appellate authority is

required to consider the case of a delinquent officer before setting aside, reducing, confirming or enhancing the penalty. The use of expression

''consideration imposes an obligation on the Board of Directors-Appellate Authority to record reasons. In the case of Ram Chander Vs. Union of

India (UOI) and Others, . Honble the Supreme Court interpreted Rule 22(2) of the Railway Servants (Disciplinary and Appeal) Rules, 1968,

which also used the expression ''consider''. While interpreting the aforementioned rule, their Lordships has observed as under:

...in the absence of a requirement in the statute or the rules, there is no duty cast on an appellate authority to give reasons where the order is one of

affirmance. Here, Rule 22(2) of the Railway Servants Rules in express terms requires the Railway Board to record its findings on the three aspects

stated therein. Similar are the requirements under Rule 27(2) of the Central Civil Services (Classification, Control and Appeal) Rules, 1965. Rule

22(2) provides that in the case of an appeal against an order imposing any of the penalties specified in Rule 6 or enhancing any penalty imposed

under the said rule, the appellate authority shall ''consider'' as to the matters indicated therein. The word ''consider has different shades of meaning

and must in Rule 22(2), in the context in which it appears, mean an objective consideration by the Railway Board after due application of mind

which implies the giving of reasons for its decision.

It is, thus, evident that Rule 30.3 of the Rules imposes an obligation of consideration of the case by the appellate authority, which would mean an

objective consideration by it after due application of mind, which implies recording of reason for its decision. The duty to record has become even

more pronounced after the amendment carried in Article 311(2) abolishing the right of a delinquent employee to show cause against the quantum of

punishment. The aforementioned provision has been interpreted by Hon''ble Supreme Court in the judgment rendered in the case of Union of India

and Another Vs. Tulsiram Patel and Others, . Adverting to the aforementioned aspect, their Lordships has further observed in the case of Ram

Chander (supra) as under:

After the amendment, the requirement of Clauses (2) will be satisfied by holding an inquiry in which the Government Servant has been informed of

the charges against him and given a reasonable opportunity of being heard. But the essential safeguard of showing his innocence at the second

stage i.e. after the disciplinary authority has come to a tentative conclusion of guilt up on a perusal of findings reached by the inquiry Officer on the

basis of the evidence, adduced as also against the proposed punishment, has been removed to the detriment of the delinquent officer....

We are further of the view that the obligation to record reason has to be insisted upon because the appellate authority is the final forum for

recording findings of fact. The Courts are not permitted to tinker with the findings recorded by the disciplinary authority and affirmed or dissented

by the appellate authority. Therefore, it is incumbent on the appellate authority to record reasons which provide necessary links between evidence

before the appellate authority and the conclusions reached. In that regard reliance may be placed on a judgment of Honble the Supreme Court in

the case of Union of India (UOI) Vs. Mohan Lal Capoor and Others, wherein their Lordships has observes as under:

....Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is

applied to the subject matter for a decision whether it is purely administrative or quasi-judicial. They should reveal a rational nexus between the

facts considered and the conclusions reached. Only in this way can opinions or decisions recorded be shown to be manifestly just and reasonable.

We think that it is not enough to say that preference should be given because a certain kind of process was gone through by the Selection

Committee. This is all that the supposed statement of reasons amounts to. We, therefore, think that the mandatory provisions of Regulation 5(5)

were not complied with. We think that reliance was rightly placed by respondents on two decisions of this Court relating to the effect of non-

compliance with such mandatory provisions. These were Associated Electrical Industries (India) Private Ltd., Calcutta Vs. Its Workmen, and The

Collector of Monghyr and Others Vs. Keshav Prasad Goenka and Others, .

The aforementioned discussion shows that the argument raised by the learned Counsel for the petitioner is meritorious and his reliance on the

judgment of Hon''ble Supreme Court in the case of Amar Nath Chowdhary (supra) is also acceptable.

The second issue concerning participation of Shri R.R. Jowel, is also liable to be answered in favour of the petitioner because Shri R.R. Jowel

could not have participated in the meeting of the Board of Directors while hearing the appeal of the petitioner. His participation has prejudicial

effect on the rights of the petitioner who could not have fair hearing. It is well settled that no person can be a Judge in his own cause. It is in

somewhat similar circumstances that in Amar Nath Chowdharys case (supra), the decision taken by the appellate authority was set aside and the

following observations were made:

One of the principles of natural justice is that no person shall be a judge in his own cause or the adjudication authority must be impartial and

must act without any kind of bias. The said rule against bias has its origin from the maxim known as nemo debet esse judex inpropria causa, which

is based on the principle that justice not only be done but should manifestly be seen to be done. This could be possible only when a judge or an

adjudicating authority decides the matter impartially and without carrying any kind of bias. Bias may be of different kind and form. It may be

pecuniary personal or there may be bias as to the subject-matter etc. In the present case, we are not concerned with any of the aforesaid form of

bias. What we are concerned with in the present case is whether an authority can sit in appeal against its own order passed in the capacity of

Disciplinary authority. In The Financial Commissioner (Texation) Punjab and others Vs. Harbhajan Singh, , it was held that the Settlement Officer

has no jurisdiction to sit over the order passed by him as an Appellate Authority. In the present case, the subject-matter of appeal before the

Board was whether the order of removal passed by the Disciplinary Authority was in conformity with law. It is not disputed that Shri S.

Krishnaswami, the then Chairman-cum-Managing Director of the Company acted as a Disciplinaryy Authority as well as an Appellate Authority

when he presided over and participated in the deliberations of the meeting of the Board while deciding the appeal of the appellant. Such a dual

function is not permissible on account of established rule against bias.

(underlining for emphasis)

When the facts of the present case are examined in the light of the principles laid down by Honble the Supreme Court then no doubt is left that

Shri R.R. Jowel was not competent to sit in the meeting of the Board of Directors-Appellate Authority because the himself has passed the order of

punishment, which was subject-matter of appeal before the Board of Directors. It would tantamount becoming a judge in his own cause which is

impermissible in law.

For the reasons aforementioned the writ petition succeeds to the extent that the appellate order has not been passed in accordance with law.

Accordingly, the appellate order dated 29.12.2006 (P-9) is set aside. The matter is remanded back to the Board of Directors for decision afresh

in accordance with law. The Board of Directors shall decide the matter expeditiously preferably within a period of four months from the date of

receipt of a certified copy of this order.

The writ petition stands disposed of in the above terms.