Full Judgment Text
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CASE NO.:
Appeal (civil) 6269 of 2003
PETITIONER:
Punjab State Civil Supplies Corp. Ltd
RESPONDENT:
Sikander Singh
DATE OF JUDGMENT: 24/02/2006
BENCH:
S.B. Sinha & P.P. Naolekar
JUDGMENT:
J U D G M E N T
WITH CIVIL APPEAL NOS. 6271 AND 6273 OF 2003
S.B. SINHA, J :
These appeals arising out of a common judgment and order dated
6.7.2001 passed by the High Court of Punjab and Haryana at Chandigarh
were taken up for hearing together and are being disposed of by this
common judgment.
The Respondents herein were at all material times working as
Inspector and Field Officer/Supervisor. They were posted at Moga. A
physical verification of stocks was carried out from 21st June, 1985 to 26th
June, 1985; pursuant whereto shortages of 4513 bags of wheat were said to
have been found.
Allegedly, Tilak Raj, defendant No. 1 deposited in two instalments
2400 bags and 210 bags of wheat. In an audit report shortages of stock of
articles were said to have been highlighted.
It was alleged that, thus, shortages of wheet took place due to lack of
proper supervision on the part of the Respondents. It was furthermore
alleged that whereas the defendant No. 1 was the actual holder of the stock,
the defendant No. 2 being Senior Superintendent was negligent in making
proper supervision of the godowns.
Departmental proceedings were initiated against both of them. They
were dismissed from services. In the departmental proceedings, against the
defendant No.1, indisputably the appellate authority directed his
reinstatement subject to his depositing remaining 400 bags of wheat, found
to be short. He complied with the said direction of the appellate authority.
As despite the same, he was not reinstated, a writ petition was filed by him
before the High Court wherein the High Court directed his reinstatement.
The matter came up before this Court in SLP(C) No.5609 of 1989 and by a
judgment and order dated 23.8.1989, while upholding the direction of the
High Court as regard his reinstatement the relief of backwages was denied.
So far as the order of dismissal passed in the departmental enquiry
against the defendant No. 2 is concerned, he filed a suit which was the
subject matter of R.S.A. No. 2232 of 1998 before the High Court; the suit as
also the first appeal having been dismissed by orders dated 19.11.1992 and
23.2.1998 respectively.
The Appellant herein filed a civil suit before the Civil Judge, Moga
against the Respondents herein for recovery of the price of the quantity of
wheat which had been found to be short.
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In its plaint, the Appellant contended:
"\005The loss has been suffered by Punsup on account of
mis-appropriation and unauthorized use of stocks by the
defendant No. 1 & 2 for their own interest and benefit.
Both the defendants are therefore equally responsible to
make good the shortages and loss suffered by the
plaintiffs on this account."
Defendant No. 1 in his written statement denied and disputed the said
allegation stating that he had been made a scapegoat. Defendant No. 2 in his
written statement averred that defendant No. 1 being Inspector was the
custodian of the stock and took over the charge from the previous Inspector
and it was he who handed over the charge to the successor and, thus,
responsible for the stocks hold by him and as a supervisor he had nothing to
do with holding of actual stock.
The said civil suit was dismissed as against the defendant \026
Respondent No. 2 whereas the same was allowed as against defendant \026
Respondent No. 1. A Regular First Appeal was filed in the High Court by
the Appellant thereagainst which was marked as RFA No. 1780 of 1997.
Defendant No. 1 also filed an appeal thereagainst which was marked as 347
of 1997. Defendant No. 2, as noticed before, also filed a second appeal,
which was marked as RFA No. 2232 of 1998. By reason of the impugned
judgment the High Court as regard the liability of defendant No. 1 held:
"\005It has been admitted that Shri Tilak Raj defendant No.
1 after having conceded the shortage of the bags has been
directed by the Appellate Committee to deposit 2/3rd of
the said bags and that had been made the condition
precedent for reinstatement in service. As a sequel
thereto, Tilak Raj has deposited the said bags and has
been reinstated accordingly. PUNSUP has not been able
to address meaningful arguments for establishing the fact
that the claim is in exclusion of the said bags or is in
inclusion of the said bags. It is also the admitted case
that Tilak Raj had joined the duty at the place of posting
on April 6, 1984 and nothing has been brought on record
as to whether the stocks etc. were in order on the date of
his posting as the reliance has been placed upon the audit
report for fixing the liability. However, there is
divergence vis-‘-vis the physical verification which has
been carried out and the audit report which has been
relied upon. Thus, PUNSUP has not been able to
establish the clear cut liability against defendant No. 1. It
shall not be fair to rely upon the audit report as the
contents thereof have not been proved by way of any
supportive evidence brought on record by PUNSUP. It is
the settled law that liability cannot be fastened only on
the statement of account/ audit reports as it is not
discernible as to at what stage such kind of loss had been
suffered and at whose hands as nothing has been brought
on record that on the date of joining by defendant No. 1
the shortages were in existence or came into existence
thereafter."
So far as Defendant No. 2 is concerned, it was opined:
"\005It is a separate matter that he has been held liable for
dereliction of duty vis-‘-vis supervisory control but that
too has been interpreted differently in view of the
judgments rendered by the Courts below. Even
otherwise from the facts brought on record, the
supervisory control of defendant No. 2 came into force
w.e.f. December 21, 1984 and that prior thereto, the
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articles being in actual factual control of defendant No. 1,
the dereliction of supervisory control could not have been
attributed to defendant No. 2. It is also the admitted case
of the parties that defendant No. 2 submitted a complaint
which is dated April 10, 1985 to the immediate superior
i.e. the District Manager and that the entire action was
started on the basis of the said complaint. In this view of
the facts, dereliction of duty vis-‘-vis supervisory control
is not attributable to defendant No. 2."
As regard the suit arising out of departmental proceeding against the
defendant no. 2, which was the subject matter of the Second Appeal, the
High Court held:
"\005However, the appeal filed by Sikander Singh has been
dismissed as has been dismissed from service only on
account of dereliction of duty of supervisory control.
However, the admitted case is that the control of stocks
was that of defendant No. 1 and not that of defendant No.
2. Since I have concluded that dereliction of duty vis-‘-
vis supervisory control is not attributable to defendant
No. 2, as such the order of dismissal passed against
defendant No. 2 is not sustainable."
It was directed:
"In view of the above discussions, RFA No. 1780 of
1997 filed by PUNSUP fails and is hereby dismissed and
the RFA No. 347 of 1997 filed by Shri Tilak Raj
defendant No. 1 is allowed and the suit filed by PUNSUP
is dismissed. RSA No. 2232 of 1998 filed by Sikander
Singh is also allowed in view of the fact that it has been
held that dereliction of duty vis-‘-vis supervisory control
is not attributable to defendant No. 2 \026 appellant in RSA
No. 2232 of 1998."
The learned counsel appearing on behalf of the Appellant would
submit that although the Defendant Nos. 1 and 2 were the employees of the
Appellant, a civil suit was maintainable against them for recovery of money
as shortage of wheat took place due to their negligence. So far as, defendant
No. 2 is concerned, it was submitted that although he had no direct role to
play but in view of his acts of non-feasance, he will be liable therefor as he
had a duty to supervise the godowns.
The Trial Court in its judgment proceeded on the basis that the
defendant No. 1 was incharge of the godown and the defendant No. 2 was to
act as a supervisor and in view of the fact that admittedly shortages were
found during physical verification of the stock in the godown, the defendant
No. 1 alone was found guilty of mis-appropriation thereof. In support of the
said finding, reliance was placed on the audit report which was proved by
PW-1, Ashok Grover. Apart from an inference drawn on the said audit
report, no other evidence was adduced by the appellant to show that the
defendant No.1 in fact mis-appropriated the said stocks. On the said finding,
the trial court came to the conclusion that the Appellant was entitled to
recover a sum of Rs. 10,80,140.12 towards the price of the articles. The
Appellant was also held to be entitled to Rs. 5,67,873.88 by way of interest
at the rate of 18% per annum. Further interest of 18% per annum on the
principal amount was also directed to be paid.
The High Court, on the other hand, as noticed hereinbefore, arrived at
a finding of fact that audit report could not be said to be admissible in
evidence as the contents thereof were not proved by any supportive evidence
therefor. The High Court, further, opined that in any event, no interest was
payable on the amount of damages.
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The contention which has, however, been raised in these appeals, as
noticed hereinbefore, is that the Respondents are jointly and severally liable
for their acts of negligence.
The Appellant is a ’State’ within the meaning of Article 12 of the
Constitution of India. The terms and conditions of service by and between
the Appellants and the Respondents herein are governed by the service rules
and/or terms and conditions of contract. If the Respondents herein had
committed misconduct they could have been and in fact were departmentally
proceeded with. In the said departmental proceedings appropriate
punishments had been imposed upon them. So far as defendant No. 1 is
concerned, therein his negligence had been held to have contributed to the
loss of 2/3rd of the shortages and by way of penalty, he was asked by the
appellate authority to deposit the requisite number of bags of wheat and/ or
pay the price thereof. The said order having been complied with attained
finality. It is binding on the appellant. The dispute cannot, therefore, be
permitted to be reopened.
If the Appellant herein intended to proceed further against the
defendant No. 1, it could have done so by questioning the correctness or
otherwise of the said order of the appellate authority before an appropriate
forum. Deposit of the requisite number of bags of wheat and/or price
thereof resulted in the defendant no.’s 1 reinstatement pursuant to an order
passed by the High Court as also this Court. For his act of misconduct, he
had also been denied backwages. If in the departmental proceedings,
defendant No. 1 had been asked to pay a penalty by way of recovery of loss
to the extent of which he was found responsible, we are of the opinion that
no civil suit could have been maintained for the self-same cause of action.
So far as the defendant No. 2 is concerned, no finding of fact has been
arrived at that he for any intent and purport appropriated any article to his
advantage. In absence of such a finding, we fail to understand as to how
under the common law, he could be proceeded against by way of a civil suit
for recovery of money. A civil suit for recovery might have been
maintainable only if he was found to have misappropriated the goods.
Admittedly he has not. He was said to be negligent in performing his duties.
It is now well-settled that negligence simpliciter may or may not
amount to misconduct. In Union of India and others v. J. Ahmed, [(1979) 2
SCC 286], this Court stated the law thus :
"\005The High Court has noted the definition
of misconduct in Stroud’s Judicial Dictionary
which runs as under:
"Misconduct means, misconduct arising
from ill motive; acts of negligence, errors of
judgment, or innocent mistake, do not constitute
such misconduct."
In industrial jurisprudence amongst others,
habitual or gross negligence constitute misconduct
but in Utkal Machinery Ltd. v. Workmen, Miss
Shanti Patnaik5 in the absence of standing orders
governing the employee’s undertaking,
unsatisfactory work was treated as misconduct in
the context of discharge being assailed as punitive.
In S. Govinda Menon v. Union of India6 the
manner in which a member of the service
discharged his quasi judicial function disclosing
abuse of power was treated as constituting
misconduct for initiating disciplinary proceedings.
A single act of omission or error of judgment
would ordinarily not constitute misconduct though
if such error or omission results in serious or
atrocious consequences the same may amount to
misconduct as was held by this Court in P.H.
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Kalyani v. Air France, Calcutta7 wherein it was
found that the two mistakes committed by the
employee while checking the load-sheets and
balance charts would involve possible accident to
the aircraft and possible loss of human life and,
therefore, the negligence in work in the context of
serious consequences was treated as misconduct. It
is, however, difficult to believe that lack of
efficiency or attainment of highest standards in
discharge of duty attached to public office would
ipso facto constitute misconduct. There may be
negligence in performance of duty and a lapse in
performance of duty or error of judgment in
evaluating the developing situation may be
negligence in discharge of duty but would not
constitute misconduct unless the consequences
directly attributable to negligence would be such
as to be irreparable or the resultant damage would
be so heavy that the degree of culpability would be
very high. An error can be indicative of negligence
and the degree of culpability may indicate the
grossness of the negligence. Carelessness can often
be productive of more harm than deliberate
wickedness or malevolence\005"
A suit for damages would be maintainable only on the ground of
breach of the terms and conditions of the contract and when there are acts of
mal-feasance, mis-feasance and non-feasance.
A suit for damages for breach of contract under common law can be
decreed only when the damages are found to have occurred by reason of
such breaches on the part of the defendant. For the said purpose, the extent
of damages suffered must be proved in terms of Section 73 of the Indian
Contract Act.
The Appellants have not and in law could not have filed any suit
against the Respondents herein alleging any tortious act on their part. A suit
for damages by way of tortiuous claim is maintainable only when someone
has a duty to perform towards others under a statute or otherwise. In this
case, we are not dealing with any case of tortious act on the part of
Respondents herein.
The learned counsel appearing on behalf of the Appellant, however,
has placed strong reliance on Dr. H. Mukherjee v. S.K. Bhargava [(1996) 4
SCC 542]. The said decision runs counter to the submissions of the learned
counsel. In that case a suit was filed as damages for harassment meted out
to the plaintiff. It was contended by the Appellant that the Civil Court had
no jurisdiction to entertain the suit in view of the Administrative Tribunals
Act, 1985. Rejecting the said contention, it was held:
"The Tribunals under the Act are thus conferred with the
exclusive jurisdiction, powers and authority exercisable
immediately before the appointed day by all courts
(except the Supreme Court) in relation to the matters set
out in clauses (a), (b) and (c) of sub-section (1) of
Section 14. The question is whether the present suit does
fall under any of the said clauses. We do not think that it
does. The suit appears to be one based on alleged tortious
acts of the defendant committed with a view to harass the
plaintiff and cause him mental pain and injury. At this
stage, it is not our province to say whether the allegations
are true or false. We have to take the plaint allegations as
they stand. We also assume for the purpose of this appeal
that such a suit does lie according to law since no
contention to the contrary has been urged before us nor
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was urged before the civil court or the High Court. This
is a pure action for damages for deliberately harassing the
plaintiff by passing several vindictive and mala fide
orders and proceedings and also by fabricating official
records. Such a suit for damages is certainly not within
the province of Section 14.
Thus, tortious acts, being not the ones which could be subject matter
of departmental proceedings or negligence under a contract of employment,
cannot give rise to a civil liability by way of monetary compensation to the
employer except in certain circumstances.
We may at this juncture notice some other decisions relied upon by
the learned counsel for the Appellant.
In Depot Manager, A.P.S.R.T. Corpn. v. N. Ramulu and Another
[(1997) 11 SCC 319], the pecuniary loss caused to the employer was ordered
to be recovered from the delinquent by way of punishment and not in a civil
suit.
In this case, we have noticed that the losses caused by reason of
misconduct on the part of the defendant No.1 had been directed to be
recovered in the departmental proceedings and the same stood recovered.
In Union of India and Others v. B. Dev [(1998) 7 SCC 691], this
Court upheld the plea of Union of India that in terms of the provisions of
CCS (Pension) Rules, 1972, in the event a gross misconduct or negligence
committed by the employer during the period of his service is proved, entire
amount of pension or a part thereof can be directed to be withheld. Therein,
however, the question which arose for consideration was as to whether in
absence of any pecuniary loss, Rule 9 of the CCS (Pension) Rules could be
invoked or not. Such a question does not arise for consideration in the
present case.
In Official Liquidator, Supreme Bank Ltd. v. P.A. Tendolkar (Dead)
By L.Rs. [(1973) 3 SCR 364], the question which arose for consideration
was as to whether a director having regard to the provisions of Section 235
of the Companies Act, committed acts of misfeasance. The said decision ex
facie has no application in the present case. Therein, this Court was
concerned with a case where the director was held to be not merely
cognizant of but guilty of commission of fraud in the conduct of the business
of a company even though no specific act of dishonesty was proved against
him personally. The duties of a Managing Director are provided for in the
Companies Act as also Articles of Association of the Company. He, thus,
holds a position of trust vis-‘-vis the shareholders of the company. In that
case all the directors were found to have committed acts of fraud. The court
took recourse to the provisions of Section 45H of the Companies Act
wherein special provisions for assessing damages against delinquent
directors have been laid down.
Reliance has also been placed on M.S. Grewal and Another v. Deep
Chand Sood and Others[(2001) 8 SCC 151] wherein in a case where several
school children died of drowning due to negligence on the part of the
teachers; this Court, having regard to the provisions of the Fatal Accidents
Act, 1855, opined that the school is vicariously liable for the acts of
negligence of the teachers.
In Jay Laxmi Salt Works (P) Ltd. v. State of Gujarat [(1994) 4 SCC
1], this Court again was considering a case under tortious law held that ’tort’
dictionarily means "breach of duty leading to damage". Negligence has
further been defined to mean ’failure to do statutory duty or otherwise giving
rise to damage’.
Negligence in the performance of a duty under a contract of
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employment may give rise to a disciplinary proceeding but as at present
advised, in a case of this nature, we are of the opinion that the same would
not give rise to a cause of action for recovery of money for the goods lost as
in the disciplinary proceeding itself recovery of money from the delinquent
can be directed by way of punishment.
In Jay Laxmi Salt Works (supra), this Court observed:
"\005In Dunlop v. Woollahra Municipal Council14 it was
held that without malice the claim for misfeasance could
not be accepted. Non-feasance on the other hand is
omission to discharge duty. But the omission to give rise
to action in torts must be impressed with some
characteristic, namely, malice or bad faith. The
expressions ’malfeasance’, ’misfeasance’ and ’non-
feasance’ would, therefore, apply in those limited cases
where the State or its officers are liable not only for
breach of care and duty but it must be activated (sic
actuated) with malice or bad faith. The defective
planning in construction of a bundh, therefore, may be
negligence, mistake, omission but to say that it can only
be either malfeasance, misfeasance and non-feasance is
not correct\005"
In Poonam Verma v. Ashwin Patel and Others [(1996) 4 SCC 332],
this Court was concerned with negligence of medical practitioners giving
rise to a cause of action under the provisions of Consumer Protection Act.
We are, therefore, of the opinion that in view of the findings arrived at
by the High Court, the suit filed by the Appellant herein being not
maintainable have rightly been dismissed.
So far as the second appeal preferred by the Defendant No. 2 being
RSA No. 2232 of 1998 is concerned, it appears, that no substantial question
of law had been framed by the High Court as was mandatorily required to be
done in terms of Section 100 of the Code of Civil Procedure. We have
noticed hereinbefore that the Defendant No. 2 filed a suit questioning the
order imposing punishment of removal or dismissal from his service. The
said suit was dismissed. The appeal preferred by the Defendant No. 2 was
also dismissed. In the second appeal, indisputably, the High Court was
obligated to formulate a substantial question of law. The High Court
proceeded to allow the appeal preferred by the Defendant No. 2 only on the
premise that the dereliction of duty vis-a-vis supervisory control is not
attributable to him. The effect of the judgment in the civil suits filed by the
Corporation would require consideration in the light of the findings arrived
at in the disciplinary proceedings.
The High Court failed to consider that the question of negligence in a
departmental proceedings and a suit for recovery of money must be viewed
differently. In a disciplinary proceeding, the provisions of the Evidence Act
are not applicable unlike in a civil suit. In the suit filed by the Defendant
No.2, the only question which arose for consideration was different from the
issues which arose in the civil suit of the Corporation. The scope and ambit
of the suit filed by the Respondent No. 2 herein questioning the order of
dismissal from services was limited.
The civil court could interfere with the said order in the event, inter
alia, it was found that the order of dismissal by way of punishment has been
imposed in violation of the procedures laid down in the statutory rules or in
violation of the principles of natural justice or suffered from illegalities or
procedural irregularities were committed by the enquiry officer or the
disciplinary authority in holding the departmental proceedings. In view of
the fact that the suit of the Defendant No. 2 was dismissed and the appeal
preferred thereagainst had also been dismissed, it was obligatory on the part
of the High Court to formulate a substantial question of law. Without
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formulating such substantial question of law in a case of this nature the High
Court could not have set aside the concurrent findings of two courts.
R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P.
Temple and Another [(2003) 8 SCC 752] whereupon reliance has been
placed by the learned counsel for the Respondent, has no application in the
instant case. Therein, this Court although held that a substantial question of
law was required to be framed but in view of the fact that on merit it was
found that no substantial question of law arose for consideration refused to
remit the matter back holding:
"The offshoot of the above discussion is that no question
of law much less a substantial question of law arose in
the case worth being gone into by the High Court in
exercise of its second appellate jurisdiction under Section
100 CPC. The High Court was bound by the findings of
fact arrived at by the two courts below and should not
have entered into the exercise of reappreciating and
evaluating the evidence. The findings of facts arrived at
by the courts below did not suffer from any perversity.
There was no non-reading or misreading of the evidence.
A high degree of preponderance of probability proving
title to the suit property was raised in favour of the
appellant and the courts below rightly concluded the
burden of proof raised on the plaintiff having been
discharged while the onus shifting on the defendant
remaining undischarged\005"
For the reasons aforementioned, the impugned judgment cannot be
sustained. It is set aside accordingly and the matter is remitted to the High
Court for consideration of the matter afresh in accordance with law.
For the reasons aforementioned, Civil Appeal Nos. 6271 and 6273 of
2003 are dismissed and Civil Appeal No. 6269 of 2003 is allowed. No costs.