IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 11.11.2009
CORAM
THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYA
and
THE HONOURABLE MR. JUSTICE M. DURAISWAMY
W.A.Nos.615 of 2004 and 577 of 2005 &
W.A.M.P.No.1090 of 2004
1.Tamil Nadu Magnesite Limited
(A Govt. Of Tamil Nadu Undertaking),
Rep. By its Board of Directors,
5/53, Omalur Main Road,
Jagir Ammapalayam, Salem 636 302.
2.The Managing Director,
Tamil Nadu Magnesite Limited
(A Govt. Of Tamil Nadu Undertaking),
Rep. By its Board of Directors,
5/53, Omalur Main Road,
Jagir Ammapalayam, Salem 636 302.
.. Appellants in W.A.No.615/2004
R.Mahamani .. Appellant in W.A.No. 577/2005
vs
R.Mahamani .. Respondent in W.A.No.615/2004
1.Tamil Nadu Magnesite Limited
(A Govt. Of Tamil Nadu Undertaking),
Rep. By its Board of Directors,
5/53, Omalur Main Road,
Jagir Ammapalayam,
Salem 636 302.
2.The Managing Director,
Tamil Nadu Magnesite Limited
(A Govt. Of Tamil Nadu Undertaking),
Rep. By its Board of Directors,
5/53, Omalur Main Road,
Jagir Ammapalayam,
Salem 636 302.
.. Respondents in W.A.No.577/20045
Writ Appeals filed under Clause 15 of Letters Patent against order of Hon'ble Mr.Justice F.M.Ibrahim Kaifulla made in W.P.No.15693 of 2001 dated 25.11.2003.
For Appellant
in W.A.615/2004 : Mr.A.Jinasenan
For Appellant
in W.A.577/2005 : Mr.N.R.Chandran, Sr. counsel
for Mr.T.P.Manoharan
For Respondents : Mr.N.R.Chandran, Sr. counsel
in W.A.615/2004 for Mr.T.P.Manoharan
For Respondent
in W.A.577/2005 : Mr.A.Jinasenan
J U D G E M E N T
(Judgement of the Court was delivered
by M. DURAISWAMY,J)
The above Writ Appeals arises against the order of the learned single Judge made in W.P.No.15693 of 2001 dated 25.11.2003.
2. The appellants in W.A.No.615 of 2004 are the respondents in the writ petition. The appellant in W.A.No.577 of 2005 is the petitioner in the writ petition.
3. The brief case which leads to the filing of the writ petition is as follows:
(i) A notification was issued on 31.7.1979 for the post of Financial Controller-cum-Secretary by the first respondent company. The qualification prescribed was “a degree in Arts, Science or Commerce from a recognized University, a company Secretary and Chartered Accountant”. The petitioner applied for the said post on 4.8.1979 along with his Bio-Data. In the Bio-Data, the petitioner had mentioned that he passed B.Com examination in the year 1966, passed final examination of the Institute of Chartered Accountants of India in 1971 and passed final examination of the Institute of Company Secretaries of India in 1978
(ii) The petitioner attended the interview and he was selected and was issued with an order of appointment on 5.3.1980. The petitioner joined the duty on 2.5.1980. Though the petitioner passed final examination of the Institute of Company Secretaries of India in June 1978, he was yet to become a Associate Member of the Institute of Company Secretaries of India. Under Section 2(45) of the Companies Act, 1956, the qualifications for the post of Company Secretary is to be an Associate Member of the Institute of Company Secretaries of India. Therefore, the petitioner on the date of his joining the duty was not qualified to hold the post of Company Secretary. When the above factor came to light in December 1981, the Board of Directors of the first respondent company passed a resolution to redesignate the petitioner as Acting Secretarycum-Financial Controller retrospectively from the date on which he assumed Office i.e. 2.5.1980. The Board also asked the petitioner to complete all the formalities within a period of 6 months and the Managing Director was authorised to redesignate the petitioner as Acting Secretary-cum-Financial Controller on completion of the formalities. By letter dated 12.4.1982, the Institute of Company Secretaries of India admitted the petitioner as an Associate Member of the Institute with effect from 12.4.1982. On 16.6.1982, the Registrar of Companies pointed out to the first respondent company about the appointment of the unqualified person to the post of Company Secretary. By reply dated 26.6.1982, the first respondent company clarified the position. Therefore, on and after 21.4.1982, the petitioners appointment as Secretary-cum-Financial Controller by the first respondent company came to be regularised.
(iii) Subsequently on 17.12.1985, the petitioner was suspended from the service. He was also issued with the charge memo dated 13.1.1986. Against the said proceedings, the petitioner filed writ petitions and against the orders passed in the writ petitions, Writ Appeal Nos.2325 & 2326 of 1987 were filed and the writ appeals came to be allowed on 3.5.1988. When the writ appeals came to be allowed, this court gave liberty to the first respondent company to proceed afresh against the petitioner. Therefore, the petitioner was suspended again by a fresh order of suspension dated 9.5.1988 by the first respondent Board. Further, a fresh charge memo dated 19.5.1988 was also issued to the petitioner.
(iv) The petitioner filed W.P.No.8420 of 1988 challenging the order of suspension dated 9.5.1988. In the said writ petition, this Court passed an interim order to the effect that “the petitioner need not report for duty. However, he should be paid full salary.” When the matter went on appeal in Writ Appeal No.1143 of 1988, the Division Bench of this Court, while upholding the order of the learned single Judge, observed that in the event of the order of suspension ultimately being upheld, it would be open for the first respondent to recover the excess payment made from the amounts due to the petitioner.
(v) The petitioner submitted his explanation to the charge memo on 21.7.1989. On Enquiry, the Enquiry Officer gave his findings on 4.10.1993. The Enquiry Officer found that, out of the five charges framed against the petitioner, only the second part of Charge No.1 and charge No.2 were proved, while the rest of the charges were not proved. Based on the findings of the Enquiry Officer, the petitioner was issued with punishment order dated 3.12.1993, by which, he was imposed with punishment of reduction in rank from ‘General Manager’ to ‘Manager for a period of three years’ while he was allowed to continue as ‘Company Secretary’. The period of suspension was to be treated as ‘leave’ to which he was eligible.
(vi) Aggrieved by the order dated 3.12.1993, the petitioner filed writ petition in W.P.No.1219 of 1994. The said writ petition was disposed of on 29.1.2001 holding that the order of dismissal without furnishing a copy of the findings of the Enquiry Officer was not justified and further it was held that, the first respondent was at liberty to issue a second show cause notice along with the report of the Enquiry Officer to the petitioner.
(vii) On 5.4.2001, the petitioner was issued with second show cause notice along with a copy of the Enquiry Officer’s report. The petitioner submitted his explanation to the show cause notice on 25.4.2001. Thereafter, the present proceedings came to be issued on 7.8.2001.
(viii) Subsequent to the order of the second respondent dated 7.8.2001, by proceedings dated 10.08.2001, a sum of Rs.10,360/- sought to be recovered from the petitioner towards pay and allowances paid over and above his entitlement during the period of suspension. Aggrieved over the order dated 7.8.2001 and 10.8.2001, the petitioner filed W.P.No.15693 of 2001.
4. The first respondent filed his counter and opposed the petition on various grounds. The first respondent specifically stated that the deliberate conduct of the petitioner in not having disclosed his lack of qualification to hold the post of ‘Company Secretary’ at the time of his entry into service and also his failure to disclose the same for more than a year, can be construed as misconduct. The second charge is that the appellant had failed to safeguard the interest of the respondents’ company while releasing the amount belonging to the contractors which are available with the company. The charge also refers that the deposits were purchased from the appellant’s wife and therefore, the appellant has not properly safe-guarded the interest of the company with malafide intention. Therefore, according to the respondents, the impugned orders are just and proper.
5. The learned single Judge after taking into consideration the submissions made by both the learned counsel found “that the punishment imposed in para 19.1 ordering imposition of penalty of fixation of pay at the start of the scale of General Manager till the date of his retirement” was fully warranted and upheld the said punishment. So far as the punishment is para 19.2 is concerned, the learned single Judge set aside the same holding that the period of suspension undergone by the petitioner cannot be treated as leave to which he is eligible and pay and allowances paid over and above his entitlement during the period should not be adjusted from his salary or other dues.
6. Aggrieved over the order of the learned single Judge, in confirming the punishment in para 19.1 of the order dated 7.8.2001, the petitioner filed Writ Appeal in W.A.NO.615 of 2004.
7. Aggrieved over the order of the learned single Judge, setting aside the punishment in para 19.2 of the order dated 7.8.2001, the respondents filed Writ Appeal in W.A.NO.577 of 2005.
8. The issues involved in both the Writ Appeals are one and the same. Both the Writ Appeals arise against the order passed in W.P.No.15693 of 2001. Therefore, they are taken up together.
9. Heard Mr.N.R.Chandran, learned senior counsel learned counsel appearing for the appellant/petitioner and Mr.A.Jinasenan, learned counsel appearing for the respondents/respondents.
10. Mr.N.R.Chandran, learned senior counsel appearing for the appellant/petitioner submitted that the appellant/petitioner had undergone the punishment between 1993 and 2001 and therefore, the imposition of the present punishment in the order dated 7.8.2001 is not warranted. Further, the learned senior counsel contended that the punishment imposed in para 19.1 was disproportionate to the charges proved.
11. Countering the submissions made by the learned senior counsel, learned counsel appearing for the respondents/respondents contended that the petitioner’s act of gaining entry into service by suppressing his qualification is a conduct for which action can be taken by the first respondent-Management at any point of time. Learned counsel also submitted that considering the gravity of the charge found proved against the petitioner, the imposition of punishment, fixation of pay at the start of the scale of General Manager till the date of his retirement cannot be held to be disproportionate.
12. As far as the treatment of suspension as held in para 19.2, the learned counsel submitted that the imposition of such a punishment is permissible under the rules and does not call for any interference. The learned counsel for the respondents/respondents also submitted that the appellant/petitioner resigned from service on 6.6.2002.
13. On a careful consideration of the materials available on record and the submissions made by the learned senior counsel appearing for the appellant/petitioner and the learned counsel appearing for the respondents/respondents, it could be seen that the appellant/petitioner was issued with second show cause notice dated 5/6.4.2001 enclosing a copy of the findings of the Enquiry Officer. The appellant submitted his explanation on 25.04.2001. By his representationS dated 9.5.2001, 8.6.2001 and 18.07.2001, the appellant requested the respondents to pass suitable orders based on the orders of this court. By order dated 7.8.2001 of the second respondent, it could be seen that the explanation submitted by the appellant on 25.4.2001 was not taken into consideration. The second respondent ought to have taken into consideration the explanation submitted by the appellant on 25.4.2001 before passing the order of punishment on 7.8.2001.
14. Now, it would be appropriate to extract para 19.1 of the order dated 7.8.2001, which reads as follows:
“19.1 The Board found Thiru P.Mahamani guilty of misconduct set out in Clause (c) of Rule 5.2 of “Service Rules of the Tamil Nadu Magnesite Limited” in regard to charge 1 and Clause (c) and (k) of the same Rules in regard to charge 2 and to have contravened Rule 5.1 of the said Rules in respect of those two charges and ordered the imposition of penalty of fixation of pay at the start of the scale of General Manger till the date of retirement. Accordingly his basic pay is fixed at rs.15,000.0 per month in the time scale of pay of rs.15000-400-18600 till the date of his retirement.”
From the above paragraph, it could be seen that the appellant/petitioner was fixed in the time scale pay till the date of his retirement, i.e., for an indefinite period. Further, the appellant/petitioner had undergone the punishment of reduction in rank for a period of three years pursuant to the earlier order dated 3.12.1993. The punishment of reducing the scale of pay without any increment till the date of retirement has not been contemplated under the rules. Further, there cannot be any permanent reduction in lower rank. Similarly, there cannot be a permanent reduction to a lower time scale of pay. If such punishment is imposed for an indefinite period, it will amount to enhancing the earlier punishment which will not only be arbitrary, but will be against the spirit of the order of this Court, passed earlier. Therefore, we are of the view that the punishment made in para 19.1 of the order dated 7.8.2001 cannot be sustained and is liable to be set aside.
15. The second respondent imposed the punishment based on the report of the Enquiry Officer who held both the charges were proved. Learned single Judge set aside the findings of the enquiry in respect of Charge No.1. So far as the Charge No.2 is concerned, the Enquiry Officer and the learned single Judge concurrently found the said charge as proved. It is settled law that under article 226 of the constitution of India, we cannot reappraise the evidence let in before the Enquiry Officer. Therefore, the factual finding of the Enquiry Officer and the disciplinary authority cannot be re-appreciated.
16. In this back ground, so far as para 19.2 of the order dated 7.8.2001 is concerned, on a perusal of Rule 5.6.1 of the service Rules of the company, it could be seen that in the event of punishment being imposed, it is incumbent on the part of the first respondent in Rule 5.6.1(b) to state that such a proportion of pay and allowance that would became payable or not payable which is to be prescribed by the disciplinary authority. It is also appropriate to extract Rule 5.6.1 and Rule 5.6.2 of the service rules of the Company, which reads as follows:
“5.6.1 TREATMENT OF THE PERIOD OF SUSPENSION When the suspension of an employee is held to be unjustified or not wholly justified or when an employee who has been dismissed or suspended is reinstated the disciplinary appellate or reviewing authority as the case may be whose decision shall be final may be granted to him for the period of his absence from duty.
a) If he is honourably acquitted the full pay and allowances which he would have been entitled to, if he had not been dismissed or suspended less the subsistence allowance.
b) If otherwise such proportion of pay and allowance as the disciplinary, appellate or reviewing authority may prescribe.
5.6.2 In case falling under clause (a), the period of absence from duty will be treated as a period spent on duty. In case falling under cause (b), it will not be treated as a period spent on duty unless the disciplinary, appellate or reviewing authority as the case may be whose decision will be final, so direct.”
When the appellant has been imposed with a punishment, it is open for the first respondent to either state as to beyond the subsistence allowance whether any amount would be payable towards pay and allowance or by invoking Rule 5.3 and state that the period of suspension would also be treated as one of the punishment and also whether by virtue of such decision, the petitioner would be either paid any subsistence allowance or it would be treated as one without pay. The first respondent treated the suspension undergone by the appellant for the period from 9.8.1988 to 9.12.1993 as leave and the pay and allowance paid over and above his entitlement during the period is to be adjusted against the monthly salary payable to him or other dues if any due from the company. The learned single Judge set aside the punishment made in para 19.2 of the order.
17. Having regard to the fact that part of the charges were proved against the appellant/petitioner, which rendered the period of suspension justified, it is perfectly correct for the management to treat the said period as leave and recover all amounts paid in excess to the leave period to which the appellant/petitioner was entitled to. The decision, as taken in para 19.2 cannot be said to be a punishment. Further, in para 19.2, it could be seen that the order does not contemplate any recovery or refund of subsistence allowance payable or paid under the rules. Therefore, the order of the learned single Judge setting aside the decision taken in para 19.2 of the order dated 7.8.2001 also cannot be sustained and is liable to be set aside.
18. So far as arrears of salary is concerned, it is to be calculated in accordance with law. By impugned order contained in para 19.2, the period of suspension from the post is only treated as leave. Therefore, from the date of order of revocation of suspension, the appellant-petitioner will be entitled to receive full salary of the post with usual increments, etc. Such salary to be paid upto the date of retirement, i.e., 6.2.2002. Therefore, the management of the company is directed to pay the difference of salary of the aforesaid period, i.e., from the date of revocation of suspension till the date of retirement, after deducting the salary already paid to him, within a period of one month from the date of receipt of a copy of this order.
19. The order passed by learned single Judge is modified to the extent above. The order dated 7.8.2001 passed by the management so far as para 19.1 is set aside, but the decision taken in para 19.2 is upheld. W.A. Nos. 615/04 and 577/05 are allowed to the extent above. Consequently, connected miscellaneous petition is closed. In view of the order passed in the writ appeals, W.A.M.P. No.1090/04 is also closed. But there shall be no order as to costs.
rj
To
1.The Board of Directors,
Tamil Nadu Magnesite Limited
(A Govt. Of Tamil Nadu Undertaking),
5/53, Omalur Main Road,
Jagir Ammapalayam, Salem 636 302.
2.The Managing Director,
Tamil Nadu Magnesite Limited
(A Govt. Of Tamil Nadu Undertaking),
Rep. By its Board of Directors,
5/53, Omalur Main Road,
Jagir Ammapalayam,
Salem 636 302