Full Judgment Text
NEUTRAL CITATION NO. 2022/DHC/005271
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
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Pronounced on: 2 December, 2022
+ W.P.(C) 2566/2012 & CM APPL. 5503/2012
VK ARORA ..... Petitioner
Through: Mr. A.K. Singla, Sr. Advocate with
Mr. H.D. Sharma and Mr. Akshit
Sachdeva, Advocates
versus
CEMENT CORPORATION OF INDIA & ORS ..... Respondents
Through: Mr. Arvind Kumar Gupta, Mr. Rishi
Bharadwaj and Mr. Abhiesumat
Gupta, Advocates
CORAM:
HON’BLE MR. JUSTICE CHANDRA DHARI SINGH
J U D G M E N T
CHANDRA DHARI SINGH, J.
FACTUAL MATRIX
1. The instant writ petition under Article 226 of the Constitution of India
has been filed by the Petitioner seeking the quashing of the impugned
disciplinary proceedings initiated against him which culminated into order
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dated 6 July 2011 passed by the Disciplinary Authority by way of which
the Petitioner was dismissed from the services of the Respondent No.1; and
to declare that the withholdings and adjustment of leave encashment and
arrears of revised salary is illegal and arbitrary.
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2. The facts necessary for the disposal of the present writ petition are
that the Petitioner joined the Cement Corporation of India (hereinafter
referred to as the ‘ CCI’ ) as a Joint Senior Manager in the year 1991. In
February 1996, a proposal was mooted for hiring and/or taking on lease
heavy earth moving equipments from the contractors for the purpose of
lifting and transportation of lime stones at different CCI units.
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3. A written proposal dated 8 February 1996 was prepared by the
Geology and Mining Department of CCI for taking administrative approval
for hiring the required numbers of heavy earth moving equipments from the
contractors. The said proposal traveled from Mining Department to the
Material Management Department and was approved by the then Chairman
Managing Director (hereinafter referred to as ‘ CMD ’). An estimate
prepared by the Geology and Mining Department containing the estimated
value of the contract was annexed with the proposal but these estimates
were not scrutinized or vetted by the Finance department of CCI.
4. An exercise of cost estimates was undertaken by the Mining
Department and the contract value of all the units was estimated @ Rs.
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368.94 lacs as per the note dated 20 February 1996, as against estimated
contract value ranging between Rs. 412/- to Rs. 477/- lacs as per the
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proposal dated 8 February 1996. The note dated 20 February 1996 was
not referred anywhere in the entire process of obtaining administrative
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approval of the proposal dated 8 February 1996.
5. On the recommendations of Mr. BB Prasad, Senior Manager
(Mining), Mr. J.K. Kulshreshtra Senior Manager (G&M), Mr. Yash Pal,
General Manager (G&M), Mr. A.S. Prasad Senior Manager (Finance) & Mr.
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B Sahay, Director ( Personnel & Finance), the administrative approval was
given by the CMD, CCI to above proposal for hiring the heavy earth
moving equipments from outside sources. The above proposal was also
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cleared by Board of Directors, CCI in its meeting held on 27 February
1996.
6. Pursuant to the administrative approval of the above proposal by
CMD and Board of Directors of CCI, notice inviting tenders were issued for
eight units. In response, 8 offers were received by CCI and after going
through the techno commercial bids of the tenderers, the Tender Committee
recommended the price bids of six contractors.
7. Since the total value of the contract was more than Rs. 2.50 crores,
the said recommendations of the Tender Committee were placed before the
Committee of Directors headed by the CMD. The said recommendation was
duly approved by the Committee of Directors, clearing the way for opening
the price bids of the six contractors named in the recommendations of the
Tender Committee.
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8. On 1 July 1996, the Petitioner who joined as incharge of Materials
Management Department was inducted as member of the Tender Committee
for the purpose of evaluating the price bids. As per the guidelines laid down
by CCI regarding procedure for tendering and processing of tenders for
purchase and works, the tenders were to be examined and negotiated by a
duly constituted Tender Committee in which the representative of Materials-
Management Department was to act as co-coordinator/ convener of the
Tender Committee and will ensure process of tenders, fixing meetings for
negotiations, preparing minutes of the meetings, obtaining signatures of the
Members etc.
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9. After holding the negotiations with the tenderers, the Tender
Committee unanimously recommended award of contracts to the respective
contractors for Adilabad, Tandur, Mandhar and Nayagaon Units for
different quantities. The recommendations of Tender Committee were
placed before the Committee of Directors headed by CMD which consisted
of Mr. Anand Darbari CMD, Mr. R.K.Agarwal Director (Finance), MR. B.
Sahay, Director (Personnel), Mr. V. Aatray Director (Operations) and Mr.
A. B. Sahay, General Manager Incharge (Marketing) & incharge Director
Marketing and the same were considered and duly approved by the said
Committee of Directors.
10. Pursuant to the acceptance and approval of the recommendations of
the Tender Committee by the Committee of Directors headed by CMD, CCI
awarded the contract for Tandur and Adilabad Units to M/s. A.
Laxminarayana @ Rs. 53/- and Rs. 59.00/- P.M.T. respectively. In
July/August 1997, there was a proposal for increase in the quantity of the
lime stone to be lifted by the contractor with the help of Heavy Earth
Moving Equipments by the Geology & Mining Department. A fresh
proposal was initiated by Tandur Unit for placing repeat order for the
similar work, for the quantity of 3 lacs MT. In the said proposal it was
mentioned that there was no downward trend in the rates of 1996 at which
the contract was awarded in July 1996.
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11. On 28 October 1997, the Tender Committee consisting of the same
officers who were in the Tender Committee of 1996 recommended the
placement of repeat orders at the same rate i.e., Rs. 53/-. These
recommendations were approved by Director (Operations) since the same
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did not require the approval of Committee of Directors as the value of repeat
order was less than Rs. 1.5 Crores.
12. In July 1998, a proposal was initiated by Tandur Unit for increase in
the quantity in respect of repeat order placed by CCI on the contractor in
October 1997. The above proposal was approved by Director (Operations)
and accordingly the order was placed on the contractor for the increased
quantity. In August, 1998 one more proposal was initiated for placing repeat
order(s) for raising the lime stone by hiring Heavy Earth Moving
Equipments. The proposal was also approved by the competent authority on
the same rates.
13. A requisition was initiated by Tandur unit for floating fresh tender for
the similar work. The estimated value of the contract was assessed by taking
Rs. 100/- PMT as estimated rate as against Rs. 53/- at which the contract for
similar work was awarded for Tandur Unit. The corporate office of the CCI
considered the proposal of Tandur Unit and revised the quantity from 4.92
Lacs to 3 Lacs MT and approved floating of tender for the above quantity at
the existing rates i.e. Rs. 53/- PMT instead of the proposed rate of Rs. 100/-
mentioned in the proposal sent by Tandur Unit.
14. Pursuant to the approval given by the competent authorities, an
advertisement was published in the newspapers inviting the quotations for
hiring Heavy Earth Moving Equipments at Tandur Unit only, unlike in the
year 1996 when the tenders were invited for eight units of CCI including
Tandur. However, fresh tender was also floated for Adilabad Unit in 1998
which is also situated in the southern region.
15. For Tandur Unit, the five contractors submitted their quotations, out
of which price bids of three contractors including M/s. A. Laxminaryana
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were considered by the tender committee. The tender committee after
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holding negotiations with the contractors eventually on 24 August 1998
recommended the award of the contract to the above named contractor at
Rs.55.50/- PMT for 3 Lacs MT limestone and rock rejects.
16. The recommendations of the tender committee were placed before the
approving authority i.e. committee of directors headed by CMD and R. K.
Agarwal Director Finance & Marketing, A.K. Sinha Director Operation &
Personnel and after approval of the same, the contract was awarded to M/s.
A. Laxminayarana, Hyderabad at Rs. 55.50/- P.M.T.
17. It was decided by the CCI Management that henceforth all the works
relating to award of contract for hiring the Heavy Earth Moving Equipments
would be handled and executed by the respective Regional Offices of CCI
Units in different parts of the country. Pursuant to the above decision, a
fresh tender was floated by Tandur Unit in September 1999 for hiring the
Heavy Earth Moving Equipments for the purpose of transportation of lime
stone and shale.
18. An objection was raised by the Auditor Board of CCI in respect of the
award of contract by CCI to M/s Laxminarayna for work at Tandur Unit @
Rs.53/-PMT and subsequent order placed in 1998 @ Rs. 55.50/- PMT and a
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detailed reply/explanation was sought from CCI. On 1 July 2001, a detailed
explanation was furnished by CCI.
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19. On 4 September 2002, CCI received a communication from Indian
Auditor and Accounts Department, Hyderabad objecting to the extra
expenditure on raising and transportation of the lime stone with respect to
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the contract awarded to M/s Laxminarayna. On 27 April 2004, the Ministry
of Heavy Industry (Parent Ministry of CCI) sought comments on the
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relevant paragraph of CAG Report concerning avoidable expenditure
allegedly incurred by CCI in awarding the contract @ Rs. 53/- PMT in 1996
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and Rs. 55.50/- in 1998. On 2 June 2004, CCI submitted its comments in
respect of different issues mentioned in the report of the Comptroller and
Auditor General.
20. The above anomalies namely, award of contracts spreading over July
1996 to 1998 for Tandur Unit was investigated by the Vigilance Department
CCI. A case was registered by Central Bureau of Investigation (hereinafter
referred to as ‘CBI’) by registering FIR against all the members of the
Tender Committee including the Petitioner and the then Chairman-cum-
Managing Director under the provisions of Prevention of Corruption Act,
1988. During the course of investigation by the CBI, the Petitioner was
summoned twice and even the house of the Petitioner was raided by the
CBI.
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21. On 3 January 2007, the CBI submitted its closure report against the
members of the Tender Committee and the then CMD, but regular
departmental action was recommended against them. The relevant portion
of the closure report is reproduced below:
"During the investigation, no procedural lapse or illegality was found
on the part of the accused/servant forwarding the contract to M/s. A.
Lakshminarayana, Hyderabad. The contract was awarded to M/s. A.
Lakshminarayana, Hyderabad L-1 party after negotiations. Secondly
the contract was awarded after publishing an open press tender notice
and giving an equal opportunity to all the bidders to compete for the
contract. The prices of commodities and services are governed by
market forces, no connivance of the Officer of CCI with the contractor
was revealed during the investigation."
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22. On 18 September 2007, just 10 days before his superannuation, the
Petitioner received a memorandum along with the Articles of Charges etc.
issued by the Disciplinary Authority in respect of the award of contract for
lifting and transportation of the lime stone at Tandur.
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23. On 27 September 2007, the Petitioner submitted his statement of
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defence in response to the memorandum dated 18 September 2007. On 28
September 2007, relieving order was passed against the Petitioner and CCI
withheld the amount of gratuity, arrears due to revision in pay scale & leave
encashment payable to the Petitioner on the ground of pendency of
disciplinary proceedings.
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24. On 7 December 2009, inquiry report was submitted by the Inquiring
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Authority and on 20 December 2010, the copy of inquiry report was
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received by the Petitioner from CCI. On 19 January 2011, Petitioner
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submitted its representation against the Inquiry Report dated 7 December
2009 to Respondent No.2. On 16th November 2011, Respondent No.2 as
Disciplinary Authority passed the impugned order thereby imposing major
penalty of dismissal against the Petitioner.
25. Aggrieved with the order of dismissal passed by the Disciplinary
Authority, the Petitioner has approached this Court by way of the instant
writ petition.
SUBMISSIONS
Submissions on behalf of Petitioner:
26. Mr. A.K. Singla, learned senior counsel appearing on behalf of the
Petitioner has submitted that the disciplinary proceedings initiated against
the Petitioner were highly belated and suffered from laches and hence, the
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decision to initiate the disciplinary proceedings against the Petitioner just 11
days before his superannuation date was taken whimsically and arbitrarily
and due to some hidden and undisclosed motives.
27. It is further submitted that the initiation of Disciplinary proceedings
against the Petitioner were highly discriminatory and aimed only against the
Petitioner as no action has been taken against any other member of the
tender committee, committee of directors & other officers who
recommended & approved increase in the quantities & repeat order(s).
28. Learned senior counsel has further submitted that that the major
penalty of dismissal and denial of Petitioner's retirement’s dues towards
alleged loss is highly disproportionate in the facts and circumstances of the
present case as no act of the Petitioner has caused any loss to CCI. The
closure report submitted by the CBI has completely absolved the Petitioner
and other officers of CCI who were part of the tender committee and the
Committee of Directors from the charges of corruption and conspiracy.
29. Learned counsel has vehemently stressed that the initiation of the
disciplinary proceedings is contrary to the provisions of the Central
Vigilance Commission Manual (hereinafter referred to as ‘ CVC Manual’ )
as applicable to the Petitioner in the matters where the disciplinary
proceedings are initiated on the basis of recommendations made in CBI
report against the delinquent officials. As in the present case, the CBI has
recommended initiation of regular departmental action but without framing
any articles of charge and statement of imputations which is mandatory
requirement under Article 4.12 of CVC Manual and resultantly, the
initiation of the disciplinary proceedings is not in accordance with law.
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30. It is further submitted that the exercise undertaken by the Tender
Committee in July, 1996 was bona-fide and fair which is clear from the fact
that the Tender Committee did not recommend the award of the contract to
those contractors whose rates quoted for the works at Rajban and Bokajan
were more than the existing rates at which the similar contracts were
awarded by CCI in 1995. The above approach was adopted by the Tender
Committee notwithstanding the fact that the rates quoted by the contractors
in 1996 were the lowest amongst all other contractors.
31. It is further argued that the Tender Committee before recommending
the award of contract in question held detailed negotiations with the
contractor by taking into account the only existing rate of Rs. 50/- PMT
prevailing at that time in Southern Region, recommended the award of
contract @ Rs. 53/- PMT considering the fact that by taking into account
dual mode of payment as against single mode of payment provided in the
contract awarded to the contractor by any other cement manufacturing
company @ Rs. 50/- PMT.
32. It is further argued that the impugned order suffers from non-
consideration of relevant documents on record and statements of the
witnesses which would establish that the costs estimates made by Geology
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& Mining department on 8 February 1996 could not be taken either as
existing rates or estimated rates for the purpose of recommending the rates
by Tender Committee for the purpose of awarding contract at Tandur unit.
This was admitted by Management witness and was also proved before the
inquiring authority by the defense evidence led by the Petitioner.
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33. It is vehemently stressed that the Respondent No. 2 has committed an
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error by placing reliance on the alleged cost estimates dated 8 February
1996 as they were never vetted by the Finance department of CCI.
34. Learned senior counsel has also submitted that the Respondent no. 2
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has failed to notice that the alleged cost details dated 20 February 1996
remained within Geology & Mining Department only and were not
forwarded to any other department for perusal nor the said details formed
part of the notes/documents placed before CMD for giving administrative
approval as would be clear from the records placed before the Inquiring
Authority.
35. It is further argued that the Respondent no. 2 has grossly erred in not
appreciating and noticing the fact that the finding recorded on Article-I of
the Charge Sheet was based on the assumption that the alleged estimated
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rates dated 8 February 1996 were prepared on the basis of last rates
whereas in fact there were no rates prevailing or fixed in respect of Tandur
Unit where the contract for hiring was awarded for the first time in 1996
only.
36. It is also submitted that the major penalty of dismissal from service
could not be imposed on the Petitioner because he was relieved from the
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CCI on attaining the age of superannuation on 28 September 2007 and was
no more in the employment of CCI on the date of passing of the impugned
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order dated 16 November 2011. The continuation of the inquiry
proceedings against the Petitioner was only for limited purpose of
continuing with inquiry proceedings, but such continuity did not empower
Respondent No. 2 to pass a dismissal order four years after the
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superannuation of the Petitioner. Therefore, the dismissal of the Petitioner
cannot be sustained in the eyes of law.
37. Lastly, it is humbly prayed the instant writ petition may be allowed
and all the reliefs may be granted to the Petitioner as prayed.
Submission on behalf of the Respondents:
38. Learned counsel appearing on behalf of the Respondents has
submitted that the instant writ petition is liable to be dismissed as non-
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maintainable because the Petitioner has not challenged the order dated 16
November 2011 passed by the Disciplinary Authority before the Appellate
Authority in spite of the right to appeal in accordance with the provision of
Cement Corporation of India (Conduct, Discipline and Appeal), Rules. Even
otherwise, it is submitted that the contract was awarded to M/s A.
Laxminarayana @ Rs. 53/- PMT against the estimated rate of Rs. 27/- PMT.
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Likewise, vide work order dated 29 December 1998, the contract was
awarded to M/s A. Laxminarayana @ Rs. 55.50/- PMT against the
prevailing rate of Rs. 19.90/- PMT.
39. It is further submitted that the Petitioner has failed to show any
violation of principles of natural justice. In fact, the facts and circumstances
as narrated hereinabove would only show that the Petitioner had ample
opportunity to defend himself before the Inquiry Officer. The Inquiry
Officer after considering the documents and the material placed on record
submitted the report which has been examined by the Respondents while
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imposing the penalty on 16 November 2011.
40. It is also argued that the Competent Authority has come to the
conclusion that the Petitioner being a member of the Tender Committee,
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surreptitiously obtained the consent of the other members of the Tender
Committee. Thus, the penalty order is justified in the facts and
circumstances of the case and more importantly when the Respondent is a
public undertaking.
41. Learned counsel has also argued that the inquiry proceedings were
initiated against the Petitioner upon receipt of the recommendation from the
CBI and sufficient evidence has come on record which substantiates the
charge leveled against the Petitioner. It is submitted that the Competent
Authority has imposed the penalty only after considering the inquiry report.
42. It is further argued that the allegation of the Petitioner that initiation
of the departmental inquiry is highly belated is baseless and misconceived.
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It is stated that after the CBI filed a closure report on 3 January 2007 and
upon coming to know about the same, the Respondents have initiated the
departmental inquiry in September, 2007. Thus, the allegation of the
Petitioner that there was a delay in initiating the departmental inquiry is
frivolous.
43. Lastly, it is submitted that the allegation of violation of CVC Manual
is baseless and the action has been taken in accordance with the procedure.
FINDINGS AND ANALYSIS
44. Heard learned counsel for the parties and perused the record. I have
given thoughtful consideration to the submission made on behalf of the
parties. The issues which arise for consideration in the present case are as
follows:
Issue 1: Whether the disciplinary proceedings initiated against
the Petitioner is without evidence and malicious, so as to warrant
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interference by this Court in exercise of power under Article 226
of the Constitution of India?
Issue 2: Whether is there any delay in the initiation of
disciplinary proceedings by the CCI? If yes, can the disciplinary
proceedings be quashed on that ground?
Issue 3: Whether Paragraph 4.12.2 of the Central Vigilance
Commission Manual has been complied in the facts and
circumstances of the instant case? If no, then whether the
disciplinary proceedings can be quashed on this ground?
Answer to Issue 1
45. The Inquiry Officer has taken a stand that the Petitioner while
functioning as a member of the Tender Committee in the year 1996-1998
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intentionally did not place the estimates dated 8 February 1996 of the
contract awarded to M/s A. Laxminarayana formulated by the Geology &
Mining Department and maliciously ignored them thereby, portraying lack
of integrity as an employee of CCI. It has been alleged that the repeat orders
were approved by the Petitioner in favour of M/s A. Laxminarayana at the
higher rate of Rs.53.00 PMT as against the estimated rate of Rs.27.00 PMT.
46. Inquiry Officer has relied inter alia on the following evidence to
record that the charges stand proved against the Petitioner:
“….Evidence which have come on record both oral and
documentary rebut CO's contention that rate were called on
consolidated basis. In this case reference is made to
comparative statement of original received rate, negotiated
rate as available at Exhb S-5 and D-1 and also to testimony of
SW-I. Contention raised by CO contradicts his own statement.
On the one hand he is taking plea that Committee Members
were aware of these estimates (Page 3 of defence statement of
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CO). That being so why cognizance of these estimates was not
taken during the deliberations of TC meeting held on 4.7.1996
(Ex. S-5). Even if we agree to CO's contention that estimates at
Ex. S- I were not valid, TC consisting of other members as well
as CO should have placed this fact on the record of the TC
proceedings with their justification for ignoring these estimates
of Rs. 24-27 PMT and awarding the contract Rs. 53/- PMT.
Since these facts were not recorded in the TC's proceedings, no
defence is available to the CO for raising this contention which
is only an afterthought.
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Evidentially CO who was aware that the rate at which WO
Ex.S-6 has been issued in favour of party M.s A.
Laxminarayana were exorbitantly high. CO was also well
aware that these rates were finalized on single tender basis.
One of the contentions raised by him for not retendering is the
time involved in finalizing the new tender which would have
caused loss of production. Given this admitted position of the
CO evidentially there was no justification for granting various
extensions to the original WO which were admittedly processed
by him. CO in his defence has repeatedly made reference to D-
39 which is a proposal initiated by Tandur Unit for repeat
order ……..
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From the above, it is evident that there is no comparison
between the cost incurred by CCI on sale and distribution and
the cost to be incurred by the contractor lifting cement in lieu
of payment by cheque. Further, from defence exhibit D- 55 it is
also evident that contractor was given the liberty to lift cement
from any of the marketing zone of the Corporation as per his
economic prudence. Though CO through examination of DW- I
at Q . & Ans. 11 and 31 has tried to make a case on the basis of
difference in terms and conditions of WO under Ex. S-6 and S-
13 on the one hand and S- 14 on the other hand. But from the
examination of DW- 1 contrary fact showing the stiffer nature
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of the terms and conditions under Ex. S-14 vis-a-vis Ex. S-13
have come on record. As per defence witness the payment
terms under the contract of Tandur Unit (Ex.S-14) was within
30 days of submission of bills whereas in the case of Corporate
Office contract (Ex. S-13) it was within 15 days of submission
of bills. Most of the contentions raised by the CO are
hypothetical which were never recorded during the
proceedings of the TC. For example, while stating that non
finalization of the contract and issuing fresh tender notice
would have led to delay in procurement action by about 6
month time adding to the loss of the Corporation. But all these
are an afterthought as the same were never brought on record.
Most importantly CO was required to call for cost benefit
analysis at the time of opening the price bid which he did not
call for. Having intentionally ignored these important records
relevant to arrive at prudent decision, he cannot justify his
decision under the above pleas which are only an afterthought.
Rebuttal to the CO's hypothetical presumptions as came on
record through the cross examination of DW- 1.”
47. In the writ petition, the Petitioner has taken the following stand to
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submit that he did not feel obligatory to point out the estimates dated 8
February 1996. The relevant portion of the writ petition has been
reproduced below:
“…Although an estimate prepared by the G&M department
was also annexed with the proposal containing the estimated
value of the contract but the said estimates were not based on
any prevailing rates or other relevant factors necessary to
reach at some realistic estimates for different locations all over
India. These estimates were not scrutinized or vetted by the
finance department of CCI. The proposal which is vetted by the
finance department, vetting number is entered in the register
specifically maintained for this purpose by finance department
and the reference of such number and vetting is made in the
proposal. Undisputedly, no such exercise was undertaken by
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the finance department in respect of the estimates made by the
G&M department.
Another exercise of cost estimates was undertaken by the
Mining Department while the aforesaid proposal dated 8.2.96
was being processed for administrative approval of CMD, CCI.
As per this exercise the contract value of all the units was
estimated Rs. 368.94 Lacs as against estimated contract value
ranging between Rs. 412 to Rs. 477 Lacs as per the proposal
dated 8.2.1996.
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On the recommendations of Mr. B B.Prasad, Senior Manager
(Mining), Mr. J.K. Kulshreshtra Senior Manager (G&M), Mr.
YashPal, General Manager ( G&M), Mr. A.S. Prasad Senior
Manager (finance)& Mr. B. Sahay, Director ( Personnel &
Finance), the administrative approval was given by the CMD,
CCI to above proposal for hiring the heavy earth moving
equipments from outside sources. Such approval was never
intended to be nor could be construed as acceptance of or
approval to the figures mentioned in the aforesaid estimates
rates dated 8.2.96 which were far from realistic and were not
seen or vetted by the finance department….”
48. In the counter affidavit, the Respondents have imputed misconduct on
the part of the Petitioner and have submitted that there has been intentional
concealment on part of the Petitioner. The relevant portion of the counter
affidavit has been reproduced below:
“Petitioner who had marked proposal note dated 8.2.1996 to
JSM(1) was fully aware about the estimated rate of Rs. 24-27
PMT for Tandur Unit. Therefore, as a Committee Member
representing MM Deptt he was required to place these
estimates for the consideration of other Committee Members
which he did not do. Besides as a Committee Member he was
also required to ascertain the reasonability of rate in respect of
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Tandur Unit also as was done in the case of Rajban and
Bokajan Units before recommending any rate for award of
contract. Since in this case estimated rate of Rs. 24-27 PMT,
duly approved by the Competent Authority on 23.2.1996 were
available in the file the award of contract @ Rs. 53/- PMT was
totally unjustified. Petitioner, therefore intentionally did not
place the above estimate for consideration of the other
committee members and also intentionally overlooked these
estimates and did not ascertain the reasonability of rate
thereby causing award of above contract at exhorbitant rate of
Rs. 53/- PMT against the estimate rate of Rs. 27/- PMT causing
loss of Rs. 1.40,4000/- on the executed qty of 5.40 lakh MT (Rs.
53/- PMT- Rs. 27/- PMT= Rs. 26 PMT) within corresponding
gain to the party M/s A. Laxminarayana, Hyderabad (Exhb. S-6
to S-b).”
49. In the rejoinder affidavit, the Petitioner has taken the following stand:
“That in response to para 2, it is submitted that note dated
20.02.1996 was put up by S.M (Mining) to S.M (Geology &
Mining). The Note did not go to any other officer except the
above said two officers. The Note was not even seen by General
Manager (Geology & Mining), Finance Department, any other
department or CMD. The Note was not vetted by Finance
Department or approved by any other authority. The petitioner
has reason to believe that said Note was subsequently inserted
in the file in as much as same was not referred in any of the
proceedings and was not even seen by the petitioner.”
50. At one stage, the Petitioner in the writ petition has taken a stand
that another cost estimate exercise was undertaken by the Geology &
th
Mining Department while the proposal dated 8 February 1996 was being
processed for administrative approval of CMD of CCI whereas, in the
rejoinder he has taken a stand that the said note might be subsequently
inserted in the file. The stand taken by the Petitioner in the rejoinder
affidavit appears to be an afterthought.
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51. It is not in dispute that the charges in disciplinary proceedings are
not required to be proven to the same extent as in a criminal trial i.e.,
beyond reasonable doubt. The Inquiry Officer is not required to observe
the strict adherence of Indian Evidence Act to arrive at the conclusions
and he has to consider the document/evidence available before him on the
basis of preponderance of probabilities.
52. In the case of M.V. Bijlani vs Union of India , (2006) 5 SCC 88 ,
the Hon’ble Supreme Court held as under:-
“25. It is true that the jurisdiction of the court in judicial
review is limited. Disciplinary proceedings, however, being
quasi-criminal in nature, there should be some evidences to
prove the charge. Although the charges in a departmental
proceedings are not required to be proved like a criminal trial,
i.e., beyond all reasonable doubts, we cannot lose sight of the
fact that the Enquiry Officer performs a quasi-judicial function,
who upon analysing the documents must arrive at a conclusion
that there had been a preponderance of probability to prove the
charges on the basis of materials on record. While doing so, he
cannot take into consideration any irrelevant fact. He cannot
refuse to consider the relevant facts. He cannot shift the burden
of proof. He cannot reject the relevant testimony of the
witnesses only on the basis of surmises and conjectures. He
cannot enquire into the allegations with which the delinquent
officer had not been charged with.”
53. It is settled law that this Court will not act as Appellate Court and
will not reassess the evidence already led during inquiry so as to interfere
on the ground that another view is possible on the basis of material on
record. After perusal of the aforesaid inquiry report and other material on
record, I do not find any force in the argument of the Petitioner that he is
not guilty for the charges which were leveled against him.
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54. The Hon’ble Supreme Court in State Bank of Bikaner and Jaipur
vs. Nemi Chand Nalwaya, (2011) 4 SCC 584, held as under:-
“ 7. It is now well settled that the courts will not act as an
appellate court and reassess the evidence led in the domestic
enquiry, nor interfere on the ground that another view is
possible on the material on record. If the enquiry has been
fairly and properly held and the findings are based on
evidence, the question of adequacy of the evidence or the
reliable nature of the evidence will not be grounds for
interfering with the findings in departmental enquiries.
Therefore, courts will not interfere with findings of fact
recorded in departmental enquiries, except where such findings
are based on no evidence or where they are clearly perverse.
The test to find out perversity is to see whether a tribunal
acting reasonably could have arrived at such conclusion or
finding, on the material on record. The courts will however
interfere with the findings in disciplinary matters, if principles
of natural justice or statutory regulations have been violated or
if the order is found to be arbitrary, capricious, mala fide or
based on extraneous considerations. (Vide B.C. Chaturvedi v.
Union of India [(1995) 6 SCC 749 : 1996 SCC (L&S) 80 :
(1996) 32 ATC 44] , Union of India v. G. Ganayutham [(1997)
7 SCC 463 : 1997 SCC (L&S) 1806] , Bank of India v. Degala
Suryanarayana [(1999) 5 SCC 762 : 1999 SCC (L&S) 1036]
and High Court of Judicature at Bombay v. Shashikant S. Patil
[(2000) 1 SCC 416 : 2000 SCC (L&S) 144] .)”
55. In the case of Union of India vs H.C. Goel , AIR 1964 SC 364,
Hon’ble Supreme Court held as under:-
“ 23 . That takes us to the merits of the respondent's contention
that the conclusion of the appellant that the third charge
framed against the respondent had been proved, is based on no
evidence. The learned Attorney-General has stressed before us
that in dealing with this question, we ought to bear in mind the
fact that the appellant is acting with the determination to root
out corruption, and so, if it is shown that the view taken by the
appellant is a reasonably possible view this Court should not
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sit in appeal over that decision and seek to decide whether this
Court would have taken the same view or not. This contention
is no doubt absolutely sound. The only test which we can
legitimately apply in dealing with this part of the respondent's
case is, is there any evidence on which a finding can be made
against the respondent that Charge No. 3 was proved against
him? In exercising its jurisdiction under Article 226 on such a
plea, the High Court cannot consider the question about the
sufficiency or adequacy of evidence in support of a particular
conclusion. That is a matter which is within the competence of
the authority which deals with the question; but the High Court
can and must enquire whether there is any evidence at all in
support of the impugned conclusion. In other words, if the
whole of the evidence led in the enquiry is accepted as true,
does the conclusion follow that the charge in question is proved
against the respondent? This approach will avoid weighing the
evidence. It will take the evidence as it stands and only examine
whether on that evidence illegally the impugned conclusion
follows or not. Applying this test, we are inclined to hold that
the respondent's grievance in well founded, because, in our
opinion, the finding which is implicit is the appellant's order
dismissing the respondent that charge number 3 is proved
against him is based on no evidence.”
56. In the case of K.L. Tripathi vs State Bank of India and Others,
(1984) SCC 1 43 , the Hon’ble Supreme Court held as under:-
“ 32. The basic concept is fair play in action administrative,
judicial or quasi-judicial. The concept of fair play in action
must depend upon the particular lis, if there be any, between
the parties. If the credibility of a person who has testified or
given some information is in doubt, or if the version or the
statement of the person who has testified, is, in dispute, right of
cross-examination must inevitablly form part of fair play in
action but where there is no lis regarding the facts but certain
explanation of the circumstances there is no requirement of
cross-examination to be fulfilled to justify fair play in action.
When on the question of facts there was no dispute, no real
prejudice has been caused to a party aggrieved by an order, by
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absence of any formal opportunity of cross-examination per se
does not invalidate or vitiate the decision arrived at fairly. This
is more so when the party against whom an order has been
passed does not dispute the facts and does not demand to test
the veracity of the version or the credibility of the statement.
57. In view of the discussion in the foregoing paragraphs, there is no
force in the argument that the entire disciplinary proceedings against the
Petitioner is without evidence and malicious as no other officer of CCI was
charged for the anomalies in the tender process. Hence, issue 1 is decided
accordingly
Answer to Issue 2
58. The genesis of the anomalies in the tender process dates back to the
year 1996-1998 when the contracts were awarded in the favour of M/s A.
Laxminarayana. In July, 2001 the Auditor Board of CCI raised objections
and sought detailed response from CCI with respect to the contracts
awarded in favour of M/s A. Laxminarayana for work at the Tandur Unit, as
in the opinion of the Auditor Board, the contract was awarded at an
exorbitantly high price thereby, causing financial loss to CCI.
59. In September 2002, the CCI received a communication from the
Indian Auditor and Accounts Department, Hyderabad stating that the CCI
incurred an avoidable extra expenditure of Rs. 3.05 crores. The relevant
th
portion of the communication dated 4 September 2002 is reproduced
below:
“The Management stated (August 2001) that the contract
entered into by the Tandur Unit could not be compared with
that entered into by Corporate Office mainly due to the facts (i)
the contract entered into by Tandur unit also included
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transportation of shale; (ii) while the mode of payment by
Corporate Office was generally the issue of credit advices for
lifting cement. the Tandur unit was to release payments by
cheque and (iii) the contract with firm X stipulated the quantity
to be handled as 3.0 lakh MT during a 12 month period while Y
was required to handle 2.40 lakh MT during a period of 6
months; the higher the quantity to be transported and shorter
the time, the lower would be the price. The reply is not tenable.
Even though the scope of work mentioned in the work order
issued to firm X did not include raising/transportation of shale,
the same firm was accorded approval to raise/transpot 10,000
MT of shale on similar terms and conditions as those for
raising/transportation of limestone, (ii) though there was no
mention of any mode of payment in the contract issued to firm
„Y‟, the Tandur unit too issued credit advice for Rs. 1,00,000
for issuing cement; even otherwise whether the payment is
effected by cash or through credit advice, in any case such high
rated on the ground would appear ridiculous (iii) as to the
quantum of work, whereas X handled an aggregate quantity of
6.91 lakh MT over a period of 27.6 months or.025 lakh MT per
month, Y actually handled only 1.84 lakh MT over a period of 7
months @ 0.26 lakh MT per month, thus there was no
appreciable difference in the average quantity handled by the
two firms.
The company has evaded the question as to why they not go for
open tender Further the award of contract directly by
Corporate Office without ascertaining the local market rates
resulted in avoidable extra expenditure of Rs.3.05crore. In the
face of Company facing severe resource crunch and having
been declared sick and referred to BIFR for revival package,
such financial mismanagement only indicate gross negligence
and unprofessional financial standards in the company.”
60. In furtherance of the report of the Comptroller and Auditor General,
th
on 27 April 2004, the Ministry of Heavy Industry sought comments on the
relevant paragraph of CAG Report concerning avoidable expenditure of Rs.
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3.05 Crores allegedly incurred by CCI by awarding the contract @ Rs. 53/-
PMT in 1996 and Rs. 55.50/- PMT in 1998.
61. In the year 2004, these anomalies were investigated by the Vigilance
Department of CCI and a case was registered by CBI which culminated in a
closure report in the year 2007, recommending departmental action against
th
the Petitioner and other erring officials. It is in this background that on 18
September 2007 disciplinary proceedings were initiated against the
th
Petitioner which co-incidentally was also the 10 last working day before
his superannuation.
62. With respect to the delay in the initiation of disciplinary proceedings,
the CCI has taken the following stand:
“The allegation of the petitioner that initiation of the
departmental inquiry is highly belated. In this regard it is
stated that after the CBI filed a closure report on 03.01.2007
and upon coming to know about the same. The respondent have
initiated the departmental inquiry in September, 2007. Thus,
the allegation of the petitioner that there was a delay in
initiating the departmental inquiry is frivolous In fact facts
and circumstances are self- explanatory. It is stated that since
CBI registered the case against all the Members of Tender
Committee & investigating the Role of each Member of the
Committee. When Closure Report was filed and action is
recommended departmentally the respondents took the action.
Hence there is no delay.”
63. CCI has relied on the CBI investigation and the recommendations
made in the closure report to justify the delay in the initiation of
disciplinary proceedings.
64. Every delay in the initiation of the disciplinary proceedings is not
fatal and the Court is duty bound to look into the totality of facts and
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circumstances of each case so as to decipher as to whether any prejudice
has been caused to the Petitioner due to the delay in the initiation of
disciplinary proceedings. From the year 2001 till 2004, the matter was
brought to the notice of CCI and comments were sought by its parent
ministry as well as the Comptroller and Auditor General which shows
that CCI was considering the matter at an internal level before initiating
disciplinary proceedings against the Petitioner. Undoubtedly, financial
irregularities are involved in the present case, but this Court has to ensure
that a holistic view is taken into consideration before coming to a
conclusion.
65. The delay from the year 2004 till 2007 can also be justified as the
investigation was being carried by the CBI. In this regard, it is pertinent
to refer to the decision of the Hon’ble Supreme Court in Food
Corporation of India & Anr. Vs. V.P. Bhatia, (1998) 9 SCC 131,
wherein it was held that:
“4. It is no doubt true that undue delay in initiation of
disciplinary proceedings may cause prejudice to the employee
concerned in defending himself and, therefore, the courts insist
that disciplinary proceedings should be initiated with
promptitude and should be completed expeditiously. The
question as to whether there is undue delay in initiation of
disciplinary proceedings or whether they are being
unnecessarily prolonged has to be considered in the light of the
facts of the particular case. On an examination of the facts of
this case we find that the alleged misconduct came to light in
April 1986 after the CBI carried surprise checks in April 1986
and the samples that were taken were found to be substandard
by the Forest Research Institute, Dehradun. Thereafter, the
CBI took up the investigation in the matter suo motu and
submitted its report on 30-12-1988 wherein it recommended
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the holding of disciplinary proceedings against the employees
concerned including the respondents. Shri Vivek Gambhir, the
learned counsel for the appellants, has invited our attention to
paragraph 1.7 of Chapter III of Volume I of the Vigilance
Manual of the Central Vigilance Commission which has been
adopted by the appellant-Corporation wherein it is stated;
"Once a case has been entrusted to the CBI for investigation
further inquiries should be left to them and departmental
inquiry, whether fact-finding or formal under the Discipline
and Appeal Rules, if any, commenced already, should be held
in abeyance till such time as the investigation by the CBI has
been completed. Parallel investigation of any kind should be
avoided. Further action by the administrative authority should
be taken on the completion of the investigation by the CBI on
the basis of their report.
5 . In view of the said direction contained in the Vigilance
Manual no fault can be found with the appellant-Corporation
in waiting for the investigation report of the CBI and the
High Court was in error in holding that the appellant-
Corporation need not have waited for the report of the CBI
and should have started the disciplinary proceedings
straightaway .”
66. It is appropriate to refer to certain judicial pronouncements which
deal with the delay in the initiation of disciplinary proceedings. In State
of Punjab vs Chaman Lal Goyal , (1995) 2 SCC 570 , the Hon’ble
Supreme Court noted that:
“9. Now remains the question of delay. There is undoubtedly a
delay of five and a half years in serving the charges. The
question is whether the said delay warranted the quashing of
charges in this case. It is trite to say that such disciplinary
proceeding must be conducted soon after the irregularities are
committed or soon after discovering the irregularities. They
cannot be initiated after lapse of considerable time. It would
not be fair to the delinquent officer. Such delay also makes the
task of proving the charges difficult and is thus not also in the
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interest of administration. Delayed initiation of proceedings is
bound to give room for allegations of bias, mala fides and
misuse of power. If the delay is too long and is unexplained, the
court may well interfere and quash the charges. But how long a
delay is too long always depends upon the facts of the given
case. Moreover, if such delay is likely to cause prejudice to the
delinquent officer in defending himself, the enquiry has to be
interdicted. Wherever such a plea is raised, the court has to
weigh the factors appearing for and against the said plea and
take a decision on the totality of circumstances."
67. In State of Madhya Pradesh vs Bani Singh & Anr. , (1990) Supp.
SCC 738 , the Hon’ble Supreme Court held that:
“4…..The irregularities which were the subject matter of the
enquiry is said to have taken place between the years 1975-77.
It is not the case of the department that they were not aware of
the said irregularities, if any, and came to know it only in 1987.
According to them even in April 1977 there was doubt the
involvement of the officer in the said irregularities and the
investigations were going on since then. If that is so, it is
unreasonable to think that they would have taken more than 12
years to initiate the disciplinary proceedings as stated by the
Tribunal. There is no satisfactory explanation for the
inordinate delay in issuing the charge memo and we are also of
the view that it will be unfair to permit the departmental
enquiry to be proceeded with at this stage. In any case there
are no grounds to interfere with the Tribunal‟s orders and
accordingly we dismiss this appeal.”
68. In State of A.P. vs N. Radhakrishnan , (1998) 4 SCC 154 , the
Hon’ble Supreme Court held that:
“19. It is not possible to lay down any predetermined
principles applicable to all cases and in all situations where
there is delay in concluding the disciplinary proceedings.
Whether on that ground the disciplinary proceedings are to be
terminated each case has to be examined on the facts and
circumstances in that case. The essence of the matter is that the
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court has to take into consideration all the relevant factors and
to balance and weigh them to determine if it is in the interest of
clean and honest administration that the disciplinary
proceedings should be allowed to terminate after delay
particularly when the delay is abnormal and there is no
explanation for the delay. The delinquent employee has a right
that disciplinary proceedings against him are concluded
expeditiously and he is not made to undergo mental agony and
also monetary loss when these are unnecessarily prolonged
without any fault on his part in delaying the proceedings. In
considering whether the delay has vitiated the disciplinary
proceedings the court has to consider the nature of charge, its
complexity and on what account the delay has occurred. If the
delay is unexplained prejudice to the delinquent employee is
writ large on the face of it. It could also be seen as to how
much the disciplinary authority is serious in pursuing the
charges against its employee. It is the basic principle of
administrative justice that an officer entrusted with a particular
job has to perform his duties honestly, efficiently and in
accordance with the rules. If he deviates from this path he is to
suffer a penalty prescribed. Normally, disciplinary proceedings
should be allowed to take their course as per relevant rules but
then delay defeats justice. Delay causes prejudice to the
charged officer unless it can be shown that he is to blame for
the delay or when there is proper explanation for the delay in
conducting the disciplinary proceedings. Ultimately, the court
is to balance these two diverse considerations.”
69. In P .V. Mahadevan vs Managing Director, T.N. Housing Board ,
(2005) 6 SCC 636 , the Hon’ble Supreme Court held as follows:
“11. Under the circumstances, we are of the opinion that
allowing the respondent to proceed further with the
departmental proceedings at this distance of time will be very
prejudicial to the appellant. Keeping a higher government
official under charges of corruption and disputed integrity
would cause unbearable mental agony and distress to the
officer concerned. The protracted disciplinary enquiry against
a government employee should, therefore, be avoided not only
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in the interests of the government employee but in public
interest and also in the interests of inspiring confidence in the
minds of the government employees. At this stage, it is
necessary to draw the curtain and to put an end to the enquiry.
The appellant had already suffered enough and more on
account of the disciplinary proceedings. As a matter of fact, the
mental agony and sufferings of the appellant due to the
protracted disciplinary proceedings would be much more than
the punishment. For the mistakes committed by the department
in the procedure for initiating the disciplinary proceedings, the
appellant should not be made to suffer.”
70. In UCO Bank & Ors. vs. Rajender Shankar Shukla , (2018) 14 SCC
92 , the Hon’ble Supreme Court held that:
“12….The first issue of concern is the enormous delay of about
7 years in issuing a charge-sheet against Shukla. There is no
explanation for this unexplained delay. It appears that some
internal discussions were going on within the Bank but that it
took the Bank 7 years to make up its mind is totally
unreasonable and unacceptable. On this ground itself, the
charge-sheet against Shukla is liable to be set aside due to the
inordinate and unexplained delay in its issuance.”
71. In Bhupendra Pal Singh vs. Union of India , 2021 SCC OnLine
Bom 6073 , a Division Bench of the Bombay High Court summarised the
principles in this regard:
“31. The principles that can be culled out from the aforesaid
decisions may be summarized as below:
a. It would always be desirable to initiate disciplinary
proceedings immediately after the alleged misconduct is
detected but if charge-sheet is issued after a considerable
length of time has passed since such detection, it would be
unfair to the charged officer to proceed against him on the
basis of stale charges.
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b. Disciplinary proceedings may not be interdicted at the stage
of charge-sheet and should be allowed to proceed according to
the relevant rules since a charge-sheet does not affect any legal
right of the delinquent unless, of course, it suffers from an
invalidity that strikes at the root of the proceedings.
c. If there is delay in initiation of disciplinary proceedings by
drawing up charges against the delinquent and such
proceedings are challenged, the disciplinary authority is under
an obligation to explain the reasons for the delay; and,
depending upon the worth of such reasons, the Court may
proceed to decide one way or the other.
d. There cannot be any exact measurement of the length of
delay by reference to years to fall into the category of “too
long a delay”, and what would amount to the same has to be
decided depending upon the facts of a given case.
e. Should the delay be found to be too long and unexplained,
that would definitely have a bearing on the seriousness of the
disciplinary authority to pursue the charges against the
charged officer and the Court may, in a fit and proper case,
quash the proceedings because prejudice to the officer in such
case would be writ large on the face of it.
f. Even if, in a given case, the delay is satisfactorily explained,
the charge-sheet could still be quashed if the charged officer
proves to the satisfaction of the Court that he would be severely
prejudiced if the proceedings were allowed to continue, a
fortiori, lending credence to the claim of unfair treatment.
g. For the mistakes committed by the department in the
procedure for initiating disciplinary proceedings, the charged
officer should not be made to suffer.
h. Delay in initiation of disciplinary proceedings per se may
not be a vitiating factor, if the charges are grave and in such
case the gravity of the charges together with the factors, for
and against the continuation of the proceedings, need to be
balanced before arriving at a just conclusion.”
72. The disciplinary proceedings must be conducted soon after the
irregularities are committed or soon after discovering the irregularities.
However, it has been held by the Hon’ble Supreme Court that this
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proposition cannot be a rigid and inflexible guideline restricting the judicial
discretion, when there is an explanation to justify the delay and laches. Issue
2 is decided accordingly.
Answer to Issue 3:
73. The Petitioner has alleged that there has been a violation of the
CVC manual and hence, the proceedings are in the face of mandatory
provisions which go to the root of the matter. The following stand has
been taken by the Petitioner in this regard:
“In the closure report of CBI regular departmental action was
recommended, but the said report was not accompanied by any
Articles of Charge, Statement of Imputations, List of
Documents and Witnesses etc. which was a mandatory
requirement as per clause 4.12.2. Apart from the above, the
CBI report was required to be forwarded to Central Vigilance
Commission ("CVC") for the advice to the Disciplinary
Authority regarding further course of action to be taken.
Petitioner understands that the procedure laid down in CVC
Manual was not followed/adhered by CCI. Therefore, the
initiation of the disciplinary proceedings suffered from a
serious defects going to the root of the matter.”
74. CCI has countered the submissions made by the Petitioner and has
taken the following stand:
“That the contents of ground (f) are wrong and denied. The
allegation of violation of CVC Manual is baseless. It is stated
that 4.12 of the CVC Manual as has been filed on the record
would show that the action has been taken in accordance with
the procedure.”
75. Paragraph 4.12.2 of the CVC Manual reads as follows:
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“4.12.2. In cases in which sufficient evidence is not available
for launching criminal prosecution, the C.B.I. may come to the
conclusion that:
(a) The allegations are serious enough to warrant regular
departmental action being taken against the public servant
concerned. The final report in such cases will be accompanied
by (a) draft article(s) of charge(s) in the prescribed form, (b) a
statement of imputations in support of each charge, and (c)
lists of documents and witnesses relied upon to prove the
charges and imputation; or
(b) Sufficient proof is not available to justify prosecution or
regular departmental action but there is a reasonable suspicion
about tile honesty or integrity of tile public servant concerned.
The final report in such cases will seek to bring to the notice of
the disciplinary authority, the nature of irregularity or
negligence for such administrative 'action as may be
considered feasible or appropriate.”
76. No doubt that the case of the Petitioner is covered by Paragraph
4.12.2 (a) of the Vigilance Manual and the CBI ought to have complied
with the requirements as are mentioned hereinabove, but merely because
the provisions of the CVC manual are not complied will not mechanically
lead to the quashing of the disciplinary proceedings. It is settled principle
of law that prejudice must be shown to have been caused to the Petitioner
due to the non-compliance of such procedural requirements as they are a
part of the broader set of the principles of natural justice.
77. In State Bank of Patiala vs. S.K. Sharma , AIR 1996 SC 1669 , the
Hon’ble Supreme Court while considering an appeal against the quashing
of a Disciplinary Authority held that:
“11. It is not brought to our notice that the State Bank of
Patiala (Officers') Service Regulation contains provision
corresponding to Section 99 C.P.C. or Section 465 Cr. P.C.
Does it mean that any and every violation of the regulations
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renders the enquiry and the punishment void or whether the
principle underlying Section 99 C.P.C. and Section 465 Cr.
P.C. is applicable in the case of disciplinary proceedings as
well. In our opinion, the test in such cases should be one of
prejudice, as would be later explained in this judgment. But
this statement is subject to a rider. The regulations may contain
certain substantive provisions, e.g., who is the authority
competent to impose a particular punishment on a particular
employee/officer. Such provisions must be strictly complied
with. But there may be any number of procedural provisions
which stand on a different footing. We must hasten to add that
even among procedural provisions, there may be some
provisions which are of a fundamental nature in the case of
which the theory of substantial compliance may not be
applicable. For example, take a case where a rule expressly
provides that the delinquent officer/employee shall be given an
opportunity to produce evidence/material in support of his case
after the close of evidence of the other side. If no such
opportunity is given at all in spite of a request therefore, it will
be difficult to say that the enquiry is not vitiated. But in respect
of many procedural provisions, it would be possible to apply
the theory of substantial compliance or the test of prejudice, as
the case may be. The position can be stated in the following
words: (1) Regulations which are of a substantive nature have
to be complied with and in case of such provisions, the theory
of substantial compliance would not be available. (2) Even
among procedural provisions, there may be some provisions of
a fundamental nature which have to be complied with and in
whose case, the theory of substantial compliance may not be
available. (3) In respect of procedural provisions other than of
a fundamental nature, the theory of substantial compliance
would be available. In such cases, complaint/objection on this
scope have to be judged on the touch-stone of prejudice, as
explained later in this judgment. In other words, the test is: all
things taken together whether the delinquent officer/employee
had or did not have a fair hearing. We may clarify that which
provision falls in which of the aforesaid categories is a matter
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to be decided in each case having regard to the nature and
character of the relevant provision.
XXXX
21. Pausing here, we may notice two decisions of this Court
where the test of prejudice was rejected, viz., Chintapalii
Agency T.A.S.C.S. Limited v. Secretary (F&A) Government of
Andhra Pradesh and S.L. Kapoor v. Jagmohan both rendered
by three-Judge Benches. But if one notices the "facts of those
cases, it would be evident that they were cases of total absence
of notice as in the case of Ridge v. Baldwin.
XXXX
33. We may summarise the principles emerging from the above
discussion. (These are by no means intended to be exhaustive
and are evolved keeping in view the context of disciplinary
enquiries and orders of punishment imposed by an employer
upon the employee):
(1) An order passed imposing a punishment on an employee
consequent upon a disciplinary/departmental enquiry in
violation of the rules/regulations/statutory provisions
governing such enquiries should not be set aside automatically.
The Court or the Tribunal should enquire whether (a) the
provision violated is of a substantive nature of (b) whether it is
procedural in character.
(2) A substantive provision has normally to be complied with as
explained hereinbefore and the theory of substantial
compliance or the test of prejudice would not be applicable in
such a case.
(3) In the case of violation of a procedural provision, the
position is this: Procedural provisions are generally meant for
affording a reasonable and adequate opportunity to the
delinquent officer/employee. They are, generally speaking,
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conceived in his interest. Violation of any and every procedural
provision cannot be said to automatically vitiate the enquiry
held or order passed.-Except cases falling under 'no notice', 'no
opportunity' and 'no hearing' categories, the complaint of
violation of procedural provision should be examined from the
point of view of prejudice, viz., whether such violation has
prejudiced the delinquent officer/employee in defending himself
properly and effectively. If it is found that he has been so
prejudiced, appropriate orders have to be made to repair and
remedy the prejudice including setting aside the enquiry and/or
the order of punishment. If no prejudice in established to have
resulted therefrom, it is obvious, no interference is called for.
In this connection, it may be remembered that there may be
certain procedural provisions which are of a fundamental
character, whose violation is by itself proof of prejudice. The
Court may not insist on proof of prejudice in such cases. As
explained in the body of the judgment, take a case where there
is a provision expressly providing that after the evidence of the
employer/government is over, the employee shall be given an
opportunity to lead defence in his evidence and in a given case,
the enquiry officer does not give that opportunity in spite of the
delinquent officer/employee asking for it. The prejudice is sell-
evident. No proof of prejudice as such need be called for in
such a case. To report, the test is one of prejudice, i.e., whether
the person has received a fair hearing considering all things.
Now, this very aspect can also be looked at from the point of
view of directory and mandatory provisions, if one is so
inclined. The principle slated under (4) herein below is only
another way of looking at the same aspect as is dealt with
herein and not a different or distinct principle.
(4)(a) In the case of a procedural provision which is not of a
mandatory character, the complaint of violation has to be
examined from the standpoint of substantial compliance. Be
that as it may, the order passed in violation of such a provision
can be set aside only where such violation has occasioned
prejudice to the delinquent employee.
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(4)(b) In the case of violation of a procedural provision, which
is of a mandatory character, it has to be ascertained whether
the provision is conceived in the interest of the person
proceeded against or in public interest. If it is found to be the
former, then it must be seen whether the delinquent officer has
waived the said requirement, either expressly or by his
conduct. If he is found to have waived it, then the order of
punishment cannot be set aside on the ground of said violation.
If, on the other hand, it is found that the delinquent
officer/employee has not it or that the provision could not be
waived by him, then the Court on Tribunal should make
appropriate directions (include the setting aside of the order of
punishment) keeping in mind the approach adopted by the
Constitution Bench in B. Kaninakar. The ultimate test is always
the same, viz., test of prejudice or the test of fair hearing, as it
may be called.
(5) Where the enquiry is not governed by any
rules/regulations/statutory provisions and the only obligation is
to observe the principles of natural justice or, for that matter,
wherever such principles are held to be implied by the very
nature and impact of the order/action- the Court or the
Tribunal should make a distinction between a total violation of
natural justice (rule of audi alteram partem) and violation of a
facet of the said rule, as explained in the body of the judgment.
In other words, a distinction must be made between "no
opportunity" and no adequate opportunity, i.e., between "no
notice"/no hearing" and "no fair hearing",
(a) In the case of former, the order passed would undoubtedly
be invalid (one may call it "void" or a nullity if one chooses to).
In such cases, normally, liberty will be reserved for the
Authority to take proceedings afresh according to law, i.e., in
accordance with the said rule (audi alteram partem).
(b) But in the latter case, the effect of violation (of a facet of the
rule audi alteram partem) has to be examined from the
standpoint of prejudice; in other words, what the Court or
Tribunal has to see is whether in the totality of the
circumstances, the delinquent officer/employee did or did not
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have a fair hearing and the orders to be made shall depend
upon the answer to the said query. (It is made clear that this
principle (No. 5) does not apply in the case of rule against bias,
the test in which behalf are laid down elsewhere.
(6) While applying the rule of audi alteram partem (the
primary principle of natural justice) the
Court/Tribunal/Authority must always bear in mind the
ultimate and over-riding objective underlying the said rule,
viz., to ensure a fair hearing and to ensure that there is no
failure of justice. It is this objective which should guide them in
applying the rule to varying situations that arises before them.
(7) There may be situations where the interests of state or
public interest may call for a curtailing of the rule of audi
alteram partem. In such situations, the Court may have to
balance public/State interest with the requirement of natural
justice and arrive at an appropriate decision.”
78. In Janakinath Sarangi v. State of Orissa , (1969) 3 SCC 392, the
Hon’ble Supreme Court made the following pertinent observations:
“5. From this material it is argued that the principles of
natural justice were violated because the right of the appellant
to have his own evidence recorded was denied to him and
further that the material which was gathered behind his back
was used in determining his guilt. In support of these
contentions a number of rulings are cited chief among which
are State of Bombay v. Narul Latif Khan; State of Uttar
Pradesh and Anr. v. Sri C.S. Shanna and Union of India v. T.R.
Varma. There is no doubt that if the principles of natural
justice are violated and there is a gross case this Court would
interfere by striking down the order of dismissal; but there are
cases and cases. We have to look to what actual prejudice has
been caused to a person by the supposed denial to him of a
particular right.... Anyway the questions which were put to the
witnesses were recorded and sent to the Chief Engineer and his
replies were received. No doubt the replies were not put in the
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hands of the appellant but he saw them at the time when he was
making the representation and curiously enough, he used those
replies in his defence. In other words, they were not collected
behind his back and could be used to his advantage and he had
an opportunity of so using them in his defence. We do not think
that any prejudice was caused to the appellant in his case by
not examining the two retired Superintending Engineers whom
he had cited or any one of them.”
79. In K.L. Tripathi v. State Bank of India and Ors ., (1984) 1 SCC
43, the Hon’ble Supreme Court held the following:
“32. The basic concept is fair play in action administrative,
judicial or quasi-judicial. The concept of fair play in action
must depend upon the particular lis, if there be any, between
the parties. If the credibility of a person who has testified or
given some information is in doubt, or if the version or the
statement of the person who has testified, is, in dispute, right of
cross-examination must inevitable form part of fair play in
action but where there is no lis regarding the facts but certain
explanation of the circumstances there is no requirement of
cross-examination to be fulfilled to justify fair play in action.
When on the question of facts there was no dispute, no real
prejudice has been caused to a party aggrieved by an order, by
absence of any formal opportunity of cross-examination per se
does not invalidate or vitiate the decision arrived at fairly. This
is more so when the party against whom an order has been
passed does not dispute the facts and does not demand to test
the veracity of the version of the credibility of the statement.
The party who does not want to controvert the veracity of the
evidence from or testimony gathered behind his back cannot
expect to succeed in any subsequent demand that there was no
opportunity of cross-examination specially when it was not
asked for and there was no dispute about the veracity of the
statements. Where there is no dispute as to the facts, or the
weight to be attached on disputed facts but only an explanation
to the acts, absence of opportunity to cross-examination does
not create any prejudice in such cases.
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The principles of natural justice will, therefore, depend upon
the facts and circumstances of each particular case. We have
set out hereinbefore the actual facts and circumstances of the
case. The appellant was associated with the preliminary
investigation that was conducted against him. He does not deny
or dispute that. Information and materials undoubtedly were
gathered not in his presence but whatever information was
there and gathered namely, the versions of the persons, the
particular entries which required examination were shown to
him. He was conveyed the information given and his
explanation was asked for. He participated in that
investigation. He gave his explanation but he did not dispute
any of the facts nor did he ask for any opportunity to call any
evidence to rebut these facts.”
80. In the present case, memorandum of charges along with statement
th
of imputations was issued to the Petitioner by CCI on 18 September
2007 and a statement of defense was called for. It is not the case of the
Petitioner that he was not permitted to lead his evidence, including, the
witnesses to prove his defense or any material was withheld from him but
such material was relied upon by the Disciplinary Authority in arriving at
its findings against the Petitioner.
81. In my opinion, no prejudice has been caused to the Petitioner as
paragraph 4.12.2 (a) envisages procedural provisions which are
substantially complied in the facts and circumstances of the present case
in view of the law laid down in S.K. Sharma (supra) and every non-
compliance cannot mechanically culminate into setting aside of the
disciplinary proceedings. Petitioner has failed to bring out any case
showing infraction of the principles of natural justice leading to prejudice
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being caused to the Petitioner in meeting his defense. This issue is
answered accordingly.
Scope under Article 226 to interfere in the findings of disciplinary
proceedings :
82. It is very much essential to look at the powers of this Court under
Article 226 of the Constitution of India to interfere in the findings of a
Disciplinary Authority which on appeal have been upheld by the
Appellate Authority. Recently, the Hon’ble Supreme Court in State Bank
of India & Anr. v. K.S. Vishwanath , (2022) SCC OnLine SC 667 held
as follows:
“27. Recently in the case of Nand Kishore Prasad (Supra) after
considering other decisions of this Court on judicial review
and the power of the High Court in a departmental enquiry and
interference with the findings recorded in the departmental
enquiry, it is observed and held that the High Court is not a
court of appeal over the decision of the authorities holding a
departmental enquiry against a public servant. It is further
observed and held that the High Court is concerned to
determine whether the enquiry is held by an authority
competent in that behalf, and according to the procedure
prescribed in that behalf, and whether the rules of natural
justice are not violated. It is further observed that if there is
some evidence, that the authority entrusted with the duty to
hold the enquiry has accepted and which evidence may
reasonably support the conclusion that the delinquent officer is
guilty of the charge, it is not the function of the High Court in a
petition under Article 226 of the Constitution of India to
review/reappreciate the evidence and to arrive at an
independent finding on the evidence…..”
83. In State of A.P. v. S Sree Rama Rao, AIR 1963 SC 1723, a three
judge bench of the Hon’ble Supreme Court observed as follows:
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“7. … The High Court is not constituted in a proceeding under
Article 226 of the Constitution a court of appeal over the
decision of the authorities holding a departmental enquiry
against a public servant : it is concerned to determine whether
the enquiry is held by an authority competent in that behalf,
and according to the procedure prescribed in that behalf, and
whether the rules of natural justice are not violated. Where
there is some evidence, which the authority entrusted with the
duty to hold the enquiry has accepted and which evidence may
reasonably support the conclusion that the delinquent officer is
guilty of the charge, it is not the function of the High Court in a
petition for a writ under Article 226 to review the evidence and
to arrive at an independent finding on the evidence…...”
84. In B.C. Chaturvedi v. Union of India, (1995) 6 SCC 749 , again a
three judge bench of the Hon’ble Supreme Court held as under:
“12. Judicial review is not an appeal from a decision but a
review of the manner in which the decision is made. Power of
judicial review is meant to ensure that the individual receives
fair treatment and not to ensure that the conclusion which the
authority reaches is necessarily correct in the eye of the court.
When an inquiry is conducted on charges of misconduct by a
public servant, the Court/Tribunal is concerned to determine
whether the inquiry was held by a competent officer or whether
rules of natural justice are complied with. Whether the findings
or conclusions are based on some evidence, the authority
entrusted with the power to hold inquiry has jurisdiction,
power and authority to reach a finding of fact or conclusion.
But that finding must be based on some evidence. Neither the
technical rules of the Evidence Act nor of proof of fact or
evidence as defined therein, apply to disciplinary proceeding.
When the authority accepts that evidence and conclusion
receives support there from, the disciplinary authority is
entitled to hold that the delinquent officer is guilty of the
charge. The Court/Tribunal in its power of judicial review does
not act as appellate authority to re-appreciate the evidence and
to arrive at its own independent findings on the evidence. The
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Court/Tribunal may interfere where the authority held the
proceedings against the delinquent officer in a manner
inconsistent with the rules of natural justice or in violation of
statutory rules prescribing the mode of inquiry or where the
conclusion or finding reached by the disciplinary authority is
based on no evidence. If the conclusion or finding be such as
no reasonable person would have ever reached, the
Court/Tribunal may interfere with the conclusion or the
finding, and mould the relief so as to make it appropriate to the
facts of each case.
13. The disciplinary authority is the sole judge of facts. Where
appeal is presented, the appellate authority has co-extensive
power to re-appreciate the evidence or the nature of
punishment. In a disciplinary inquiry, the strict proof of legal
evidence and findings on that evidence are not relevant.
Adequacy of evidence or reliability of evidence cannot be
permitted to be canvassed before the Court/Tribunal. In Union
of India v. HC Goel this Court held at p. 728 that if the
conclusion, upon consideration of the evidence reached by the
disciplinary authority, is perverse or suffers from patent error
on the face of the record or based on no evidence at all, a writ
of certiorari could be issued.”
85. In State Bank of Bikaner & Jaipur v. Nemi Chand Nalwaya ,
(2011) 4 SCC 584 , the Hon’ble Supreme Court held as under:
“7. It is now well settled that the courts will not act as an
appellate court and reassess the evidence led in the domestic
enquiry, nor interfere on the ground that another view is
possible on the material on record. If the enquiry has been
fairly and properly held and the findings are based on
evidence, the question of adequacy of the evidence or the
reliable nature of the evidence will not be grounds for
interfering with the findings in departmental enquiries.
Therefore, courts will not interfere with findings of fact
recorded in departmental enquiries, except where such findings
are based on no evidence or where they are clearly perverse.
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The test to find out perversity is to see whether a tribunal
acting reasonably could have arrived at such conclusion or
finding, on the material on record. The courts will however
interfere with the findings in disciplinary matters, if principles
of natural justice or statutory regulations have been violated or
if the order is found to be arbitrary, capricious, mala fide or
based on extraneous considerations….”
86. In Union of India v. P Gunasekaran, (2015) 2 SCC 610, the
Hon’ble Supreme Court delineated the parameters as to when the High
Court shall not interfere in the disciplinary proceedings:
“13. Under Articles 226/227 of the Constitution of India, the
High Court shall not:
(i) reappreciate the evidence;
(ii) interfere with the conclusions in the enquiry, in case the
same has been conducted in accordance with law;
(iii) go into the adequacy of the evidence;
(iv) go into the reliability of the evidence;
(v) interfere, if there be some legal evidence on which findings
can be based.
(vi) correct the error of fact however grave it may appear to
be;
(vii) go into the proportionality of punishment unless it shocks
its conscience.”
87. Therefore, this Court cannot act as an appellate authority over the
findings as recorded by the Disciplinary Authority. This Court cannot re-
appreciate the evidence on the basis of which the authorities below have
come to a conclusion and interfere in the findings so recorded by the
authorities below unless they are perverse or suffer from gross illegality.
CONCLUSION
88. In view of the above said discussion on facts as well as law, I do not
find any perversity or gross illegality in the orders passed by the
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Disciplinary Authority. The Disciplinary Authority has acted on the basis of
material evidence on record and have come to a reasoned reasonable
conclusion after giving the Petitioner a detailed opportunity of hearing in
accordance with the principles of natural justice. No infraction of principles
of natural justice can be said to have been proved by the Petitioner to call
for the interference by this Court.
89. Accordingly, the challenge to the impugned disciplinary proceedings
fails and the present writ petition is dismissed as being devoid of merits.
90. Pending applications, if any, also stand dismissed.
91. The judgment be uploaded on the website forthwith.
(CHANDRA DHARI SINGH)
JUDGE
DECEMBER 2, 2022
Dy/mg
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