Full Judgment Text
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CASE NO.:
Appeal (civil) 4041-4042 of 2007
PETITIONER:
M.P. STATE AGRO INDUSTRIES DEVELOPMENT CORPORATION LTD. & ANR
RESPONDENT:
JAHAN KHAN
DATE OF JUDGMENT: 05/09/2007
BENCH:
DR. ARIJIT PASAYAT & D.K. JAIN
JUDGMENT:
J U D G M E N T
CIVIL APPEAL NOS.4041-4042 OF 2007
(Arising out of SLP (C) Nos. 14853-14854 of 2005)
D.K. JAIN, J.:
Leave granted.
1. The M.P. State Agro Industries Development
Corporation (hereinafter referred to as ’the Corporation’)
has preferred these appeals, questioning the correctness
of the two orders dated 4th August, 2003 and 19th
January, 2005 passed by the learned Single Judge of the
High Court of Judicature at Jabalpur, in a writ petition
filed by one of its employees’ (the respondent herein), and
the review application filed by the Corporation
respectively. By the former order, the High Court has set
aside order dated 19th December, 1989 passed by the
Managing Director, in his capacity as the disciplinary
authority of the Corporation, imposing a penalty on the
respondent in the form of recovery of an amount
equivalent to the monetary loss suffered by the
Corporation and stoppage of three increments with
cumulative effect. By the latter order, the High Court has
dismissed the application for review filed by the
Corporation.
2. A few material facts, giving rise to the appeals, are
as follows:
While working as the Branch Manager of the
Corporation at its Satna Branch, the respondent entered
into an agreement for letting out some machinery
belonging to the Corporation, to one M/s. Universal
Construction Company. It was alleged that the
respondent failed to recover the rent/charges under the
said agreement and thereby caused loss to the
Corporation. Consequently, a notice was issued to the
respondent to show cause as to why the loss of
Rs.16,903.41 caused to the Corporation due to
dereliction of duty on account of non-recovery of the
estimated amount of rent and the interest be not
recovered from him and a penalty of stoppage of three
increments with cumulative effect be not imposed. In his
reply to the show cause notice, the respondent, inter alia,
stated that since he had been transferred from the said
Branch and his successor had not taken any steps to
recover rent etc. from the said Company, he was not
responsible for the loss caused to the Corporation. The
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disciplinary authority, found the explanation to be
unsatisfactory. He observed that the respondent had let
out the machinery contrary to the instructions from the
Headquarters as a result whereof the Corporation had
suffered financial loss of the aforesaid amount.
Accordingly, vide a composite order dated 19th December,
1989, he directed the recovery of Rs.16,903.41 from the
salary of the respondent at 20% per month and stoppage
of three increments with cumulative effect.
3. Being aggrieved, the respondent challenged the
order by way of a writ petition filed under Articles
226/227 of the Constitution mainly on the ground that
the penalty of stoppage of three increments with
cumulative effect being a major penalty, it could not be
imposed without holding a regular departmental enquiry
as per the procedure laid down for imposition of a major
penalty. The plea found favour with the High Court. The
High Court was of the view that as per the
Rules/Regulations, the stoppage of three increments with
cumulative effect was a major penalty and, therefore,
could not be imposed without holding a proper enquiry.
Accordingly, the order passed by the disciplinary
authority was quashed. Nevertheless, leave was granted
to the Corporation to proceed against the respondent, if
so advised. Not being satisfied with the order, the
Corporation moved an application for review of the said
order but without any success. As noted above, both the
said orders are under challenge in these appeals.
4. Learned counsel for the Corporation has submitted
that under M.P. State Agro Industries Development
Corporation Limited Service (Recruitment and Selection)
Regulations of 1976 (for short ’the Regulations’),
punishment of stoppage of increments with cumulative
effect is a minor penalty and, therefore, no regular
enquiry is contemplated thereunder. It is contended that
the High Court, lost sight of the relevant Regulations and
going by the general notions, without referring to any
other statutory provision, has erred in holding that the
penalty imposed on the respondent was a major penalty.
Learned counsel has also urged that an efficacious
alternative remedy by way of an appeal being available to
the respondent, the High Court should not have
entertained the writ petition.
5. It is trite that the power of punishment to an
employee is within the discretion of the employer and
ordinarily the courts do not interfere, unless it is found
that either the enquiry, proceedings or punishment is
vitiated because of non-observance of the relevant Rules
and Regulations or principles of natural justice or denial
of reasonable opportunity to defend etc. or that the
punishment is totally disproportionate to the proved
misconduct of an employee. All these principles have
been highlighted in Indian Oil Corporation Ltd. & Anr.
Vs. Ashok Kumar Arora and Lalit Popli Vs. Canara
Bank & Ors.
6. Thus, the short question that arises for
consideration is whether in the context of the Regulations
governing the service conditions of the respondent, the
recovery of the aforementioned amount and stoppage of
three increments with cumulative effect is a major
penalty and if so, the order of punishment is vitiated on
any of the grounds noted above, warranting interference
by the Court?
7. The Regulations relevant for the purpose of the
instant case are as under:
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"If the Managing Director is satisfied
about the charges levied, he shall grant a
personal hearing to the employee
concerned, and if necessary, take oral
examination of the witnesses named by
the employee in his reply before taking a
final decision.
An appeal shall
(a) Against orders of the Managing
Director to the Chairman.
(b) Against the order of the Chairman to
the Board.
(c) An aggrieved employee shall have a
right to appeal provided it is
preferred within 30 days of the
receipt of the order against which
the appeal is preferred. The
appellate authority (except Board)
shall decide the case within, 2
months from the date of the receipt
of the appeal.
The following punishments may be
awarded for good and sufficient reasons,
including breaches of any rules of
conduct or for committing any of the
offences mentioned in the Schedule
according to gravity of each case:-
"Class of
misconduct
Punishment
Appealable or
Non-appealable
Minor Lapses
and
delinquencies
(a) Warning
(b) Reprimand
(c) Fine upto
1/10th of pay
(d) Recovery from
pay of whole or
part of pecuniary
loss caused to
the corporation
by negligence or
breach of orders
if within Rs.50/-
Non-Appealable
Non-appealable
if the amount is
not more than
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Rs.5/-
Non-Appealable
Acts of
misconduct
(a) Recovery
from pay of whole
or part of
pecuniary loss
caused to the
corporation by
negligence or
breach of orders
if within
Rs.50/-
(b)withholding
increment for
specific period
(c) stoppage of
promotion
(d) reduction to a
lower post or
lower level pay
(e) termination of
service
(f) removal
(g) discharge
(h) dismissal
(i) disqualifying
the incumbent
from any
employment in
the Agro Ind.
Corpn.
Appealable
Appealable
Appealable
Appealable
Appealable
Appealable
Appealable
Appealable
Appealable"
8. A bare reading of the scheme of the afore-extracted
Regulations would show that there is a clear demarcation
of quantum of punishment between the minor lapses,
delinquencies and acts of misconduct. It is evident that
having regard to the nature of acts of omission and
commission, the punishment prescribed for minor lapses,
and delinquencies, ostensibly not having perpetual effect,
have been made non-appealable in comparison to the
punishments for acts of misconduct, which include
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recovery of whole or a part of pecuniary loss, exceeding
Rs.50/-, caused to the Corporation, withholding of
increments for a specific period, termination of services,
removal etc., which can all be characterized as major
punishments. Precisely for this reason, all punishments
falling in the latter category have been made appealable.
The perceptive distinction in two sets of penalties, in our
view, makes it abundantly clear that the Corporation has
treated the punishments/penalties falling in the first
category as minor punishments/penalties and the acts of
misconduct, falling in the second category as major
penalties. We may, however, hasten to add that it cannot
be laid as a hard and fast rule that stoppage of
increments, with or without hedge over it, is always to be
treated as a major penalty, necessitating regular enquiry.
It would depend on the Rules and Regulations governing
the service conditions of the employee, though ordinarily,
in the absence of specific Regulations, withholding of
increments with cumulative effect is treated as a major
penalty because it has a perpetual effect on the entire
tenure of service of the employee.
9. Be that as it may, we are of the opinion that in the
light of our interpretation of the aforenoted Regulations,
the imposition of penalty vide composite order dated
19th December, 1989, directing recovery of loss of
Rs.16903.41 and stoppage of three increments with
cumulative effect, is a major penalty, clearly envisaging a
regular enquiry before punishing the respondent. Since
admittedly this procedure was not followed, the High
Court was justified in coming to the conclusion that
imposition of the impugned penalty without holding
enquiry was illegal and without jurisdiction.
10. Before parting with the case, we may also deal with
the submission of learned counsel for the appellants that
a remedy by way of an appeal being available to the
respondent, the High Court ought not to have entertained
his petition filed under Articles 226/227 of the
Constitution. There is no gainsaying that in a given case,
the High Court may not entertain a writ petition under
Article 226 of the Constitution on the ground of
availability of an alternative remedy, but the said rule
cannot be said to be of universal application. The rule of
exclusion of writ jurisdiction due to availability of an
alternative remedy is a rule of discretion and not one of
compulsion. In an appropriate case, in spite of the
availability of an alternative remedy, a writ court may
still exercise its discretionary jurisdiction of judicial
review, in at least three contingencies, namely, (i) where
the writ petition seeks enforcement of any of the
fundamental rights; (ii) where there is failure of principles
of natural justice or (iii) where the orders or proceedings
are wholly without jurisdiction or the vires of an Act is
challenged. In these circumstances, an alternative
remedy does not operate as a bar. (See: Whirpool
Corporation Vs. Registrar of Trade Marks ,
Harbanslal Sahnia & Anr. Vs. Indian Oil Corporation
Ltd. & Ors. , State of H.P. Vs. Gujarat Ambuja
Cement Ltd. and Sanjana M. Wig Vs. Hindustan
Petroleum Corporation Ltd. ).
11. In the instant case, though it is true that the
penalty order impugned in the writ petition was
appealable in terms of the aforenoted Regulations but
having coming to the conclusion that the order was per
se illegal being violative of the principles of natural
justice, it cannot be said that the High Court fell into an
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error in entertaining the writ petition filed by the
respondent.
12. For the foregoing reasons, the appeals are devoid of
any merit and consequently the same deserve to be
dismissed, which we hereby do, leaving the parties to
bear their own costs.