Inquiry Must Be Conducted Before Imposing Minor Penalty if Factual Allegations Are Denied

The petitioners, a Seed Production Assistant and a retired Senior Agriculture Development Officer, challenged recovery orders issued by the Chhattisgarh Rajya Beej Evam Krishi Vikas Nigam Limited.

The recovery was based on allegations that during 2012-2014, advance payments were made to farmers for seeds that were subsequently found to be sub-standard and failed testing.

The respondent authorities issued show-cause notices and, after considering the petitioners' denials, passed final recovery orders without conducting a formal departmental inquiry.

The petitioners contended that the recovery amounts were pre-determined and the procedure violated statutory rules.

1. Whether the respondent authorities were required to conduct a full-fledged departmental inquiry under the Rules of 1966 before imposing a minor penalty of recovery when the factual charges were denied by the employees.

2. Whether a writ petition is maintainable against a show-cause notice or recovery order where the penalty amount appears to be pre-determined/pre-meditated.

Rule 16 of the Chhattisgarh Civil Services (Classification, Control and Appeal) Rules, 1966, which mandates that while imposing minor penalties, an inquiry in the manner laid down in Sub-rules (3) to (23) of Rule 14 must be held if the disciplinary authority deems it necessary or if the charges are factual and denied.

The court relied on M/s. Siemens Limited v. State of Maharashtra regarding the maintainability of writs against pre-meditated show-cause notices.

The court relied on O.K. Bhardwaj v. Union of India, which establishes that if factual charges for minor penalties are denied, an inquiry is a minimum requirement of natural justice.

The court reasoned that although recovery is classified as a minor penalty under Rule 10, the procedure under Rule 16 cannot be bypassed when allegations are contested.

The court found that the petitioners had explicitly denied the factual allegations regarding the seed procurement and payments.

Relying on O.K. Bhardwaj, the court held that an inquiry is indispensable when charges are factual and denied.

Furthermore, the court observed that the show-cause notices were issued with "pre-meditation" because the recovery amounts were pre-determined, vitiating the fairness of the proceedings as per the Siemens Limited doctrine.

The failure to follow the inquiry procedure prescribed in Rule 14 (as cross-referenced by Rule 16) rendered the impugned orders unsustainable.

The High Court quashed the impugned recovery orders and inquiry reports.

The respondents were directed to refund any recovered amounts to the petitioners forthwith.

The respondent authorities were granted liberty to conduct a fresh inquiry strictly in accordance with Rules 14 and 16 of the 1966 Rules.

The petitions were allowed with no order as to costs.